Table of Contents

Delaware		5600		52-2150697
(State or other jurisdiction of incorporation or organization)		(Primary standard industrial classification code number)		(IRS employer identification number)

William F. Schwitter, Esq.		Richard C. Tilghman, Jr., Esq.
Paul, Hastings, Janofsky & Walker LLP		Wm. David Chalk, Esq.
75 East 55th Street		DLA Piper Rudnick Gray Cary US LLP
New York, New York 10022		6225 Smith Avenue
(212) 318-6000		Baltimore, Maryland 21209
(212) 319-4090 (fax)		(410) 580-3000
		(410) 580-3001 (fax)

Title of Each Class of			Proposed Maximum			Amount of
Securities to be Registered			Aggregate Offering Price(1)(2)			Registration Fee(3)
Common Stock, par value $.01 per share			$57,500,000			$6,767.75

(1)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
(2)	Includes shares of common stock subject to the underwriters’ over-allotment option.
(3)	Previously paid.

---

Table of Contents

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

		Per Share				Total
Price to the public		$				$
Underwriting discount		$				$
Proceeds to Citi Trends, Inc.		$				$
Proceeds to the selling stockholders		$				$

Piper Jaffray	SG Cowen & Co.	Wachovia Securities

---

Table of Contents

---

		Page
Prospectus Summary			1
Risk Factors			6
Special Note Regarding Forward-Looking Statements			16
Use of Proceeds			17
Dividend Policy			17
Capitalization			18
Dilution			19
Selected Financial and Operating Data			20
Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Business			33
Management			42
Related Party Transactions			55
Principal and Selling Stockholders			57
Description of Capital Stock			58
Shares Eligible for Future Sale			62
Underwriting			64
Legal Matters			67
Experts			67
Where You Can Find More Information			67
Index to Financial Statements			F-1
FORM OF NOMINATING AGREEMENT
AMENDED AND RESTATED CONSULTING AGREEMENT
CONSENT OF KPMG LLP

---

Table of Contents

1

---

Table of Contents

2

---

Table of Contents

3

---

Table of Contents

4

---

Table of Contents

5

---

Table of Contents

6

---

Table of Contents

	•	identifying suitable markets and sites within those markets for new store locations and negotiating acceptable lease terms for new store locations;
	•	hiring, training and retaining competent sales and store management personnel;
	•	obtaining adequate capital;
	•	effectively managing higher levels of inventory to meet the needs of new and existing stores on a timely basis;
	•	maintaining a merchandise mix that appeals to cultural and fashion preferences and/or climate differences in new markets that are different from those in our existing markets;
	•	maintaining the appropriate proportion of new stores to existing stores in a particular market so that sales at existing stores do not decline due to a lack of new customers and a dispersion of existing customers;

7

---

Table of Contents

	•	fostering existing and new relationships with suppliers capable of providing us with a sufficient amount of merchandise to meet our growing needs as we increase the number of our stores;
	•	successfully integrating the new stores into our existing operations and expanding our infrastructure to accommodate our growing number of stores; and
	•	developing and operating additional distribution capacity as we increase the number of stores.

8

---

Table of Contents

	•	fashion trends, including consumer response to new and existing styles;
	•	seasonal demand for apparel;
	•	calendar shifts of holidays;
	•	our merchandise mix and the gross margins we achieve on the various merchandise we sell;
	•	our ability to source, manage and distribute merchandise effectively;
	•	changes in general economic conditions, the retail sales environment and consumer spending patterns;
	•	weather conditions, natural disasters, acts of war or terrorism and other events outside of our control;
	•	actions of our competitors or anchor tenants in the strip shopping centers where our stores are located;
	•	the timing and effectiveness of our advertising and other marketing campaigns;
	•	the level of pre-opening expenses associated with new stores; and
	•	the timing of new store openings and the relative proportion of new stores to existing stores.

9

---

Table of Contents

	•	political instability or the threat of terrorism, in particular in countries where our vendors source merchandise such as Taiwan and the Philippines;
	•	enhanced security measures at United States and foreign ports, which could delay delivery of imports;

10

---

Table of Contents

	•	imposition of new or supplemental duties, taxes, and other charges on imports;
	•	delayed receipt or non-delivery of goods due to the failure of foreign-source suppliers to comply with applicable import regulations;
	•	delayed receipt or non-delivery of goods due to organized labor strikes or unexpected or significant port congestion at United States ports; and
	•	local business practice and political issues, including issues relating to compliance with domestic or international labor standards which may result in adverse publicity.

11

---

Table of Contents

12

---

Table of Contents

	•	actual or anticipated fluctuations in our operating results;
	•	changes in securities analysts’ recommendations or estimates of our financial performance;
	•	publication of research reports by analysts;
	•	changes in market valuations of companies similar to ours;
	•	announcements by us, our competitors or other retailers;
	•	the trading volume of our common stock in the public market;
	•	changes in economic conditions;
	•	financial market conditions; and
	•	the realization of some or all of the risks described in this section entitled “Risk Factors.”

13

---

Table of Contents

14

---

Table of Contents

15

---

Table of Contents

	•	implementation of our growth strategy;
	•	our ability to anticipate and respond to fashion trends;
	•	competition in our markets;
	•	consumer spending patterns;
	•	actions of our competitors or anchor tenants in the strip shopping centers where our stores are located;
	•	anticipated fluctuations in our operating results; and
	•	economic conditions in general.

16

---

Table of Contents

	•	approximately $3.5 million to redeem all of our outstanding Series A Preferred Stock and to pay all accrued and unpaid dividends thereon;
	•	approximately $1.6 million to repay all outstanding indebtedness under the loan from National Bank of Commerce to us, which is secured by our Savannah, Georgia headquarters, bears interest at a fixed rate of 6.80% and matures on July 12, 2007;
	•	to repay all outstanding indebtedness under our $3.0 million revolving line of credit with Bank of America that, as of January 29, 2005, bears interest at a rate of 4.56% per annum;
	•	to repay all outstanding indebtedness under our $25.0 million revolving line of credit with Congress Financial that, as of January 29, 2005, bears interest at a rate of 5.25% per annum; and
	•	any remaining net proceeds for new store openings, the acquisition or design and construction of a new distribution center in fiscal 2006 and general corporate purposes.

17

---

Table of Contents

	•	on an actual basis; and
	•	as adjusted to give effect to (a) the sale by us of shares of common stock in this offering, (b) the receipt and application of net proceeds of $      million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and the repayment of indebtedness described under the section entitled “Use of Proceeds” and (c) the filing of our second amended and restated certificate of incorporation upon consummation of this offering.

					As of January 29, 2005
					Actual				As Adjusted
					(in thousands, except share and per
					share amounts)
Cash and cash equivalents					$	11,801			$
Long-term debt (including current portion)					$	1,605			$	-
Capital lease obligations (including current portion)					$	1,407			$
Preferred shares subject to mandatory redemption:
	Series A preferred stock, $.01 par value per share, 3,500 shares authorized, issued and outstanding, actual; none authorized, issued or outstanding, as adjusted(1)					3,985				-
Stockholders’ equity:
	Common stock, $.01 par value per share,            shares authorized,            issued and outstanding, actual;            issued or outstanding, as adjusted					4
	Preferred stock, $.01 par value per share, none authorized, issued or outstanding, actual;      authorized, none issued or outstanding, as adjusted					-				-
	Additional paid-in capital					4,121
	Subscription receivable					(24	)			-
	Retained earnings					19,829
	Treasury stock					(165	)
		Total stockholders’ equity				23,765
			Total capitalization		$	30,762			$

(1)	Our Series A Preferred Stock, which will be redeemed using a portion of the net proceeds from this offering, was reclassified as debt as of the second quarter of fiscal 2003, in accordance with SFAS No. 150.

18

---

Table of Contents

	•	an increase in our total assets to reflect the net proceeds from this offering (assuming an initial public offering price of $          per share); and
	•	the issuance of an additional                      shares of common stock in this offering.

Assumed initial public offering price per share of common stock			$
	Pro forma net tangible book value per share of common stock as of January 29, 2005		$
	Increase in net tangible book value per share of common stock attributable to this offering		$
Pro forma net tangible book value per share of common stock as of January 29, 2005 after giving effect to adjustments related to this offering			$
Dilution per share of common stock to new investors in this offering			$		(1)

(1)	Assuming exercise of all exercisable options to purchase common stock outstanding as of             , 2005, the dilution per share of common stock to new investors in this offering would be $        .

Share Purchased

Total Consideration

Average Price

Number

Percent

Amount

Percent

Per Share

Existing stockholders(1)

%

$

%

$

New investors

%

$

%

$

Totals

%

$

%

$

(1)	Does not give effect to sales of shares by the selling stockholders in this offering.

19

---

Table of Contents

				Fiscal Year Ended(1)
				February 3,				February 2,				February 1,				January 31,				January 29,
				2001				2002				2003				2004				2005
				(dollars in thousands, except per share amounts)
Statement of Operations Data:
	Net sales			$	80,939			$	97,933			$	124,951			$	157,198			$	203,442
	Cost of sales				51,762				62,050				77,807				98,145				127,308
	Gross profit				29,177				35,883				47,144				59,053				76,134
	Selling, general and administrative expenses				26,834				31,405				38,760				48,845				63,594
	Income from operations				2,343				4,478				8,385				10,208				12,540
	Interest expense(2)				787				455				256				563				732
	Income before income taxes				1,556				4,023				8,129				9,645				11,808
	Income tax expense				358				1,566				3,101				3,727				4,551
	Net income			$	1,198			$	2,457			$	5,028			$	5,918			$	7,257
	Net income per common share:
		Basic		$				$				$				$
		Diluted		$				$				$				$
	Weighted average shares used to compute net income per share:
		Basic
		Diluted
Additional Operating Data:
	Number of stores:
		Opened during period			23				12				16				25				40
		Closed during period			–				4				2				1				1
		Open at end of period			115				123				137				161				200
	Selling square footage at end of period				786,534				891,843				1,043,713				1,290,039				1,715,943
	Comparable store sales increase(3)				17.6%				6.5%				14.6%				5.5%				3.0%
	Average sales per store(4)			$	782			$	818			$	961			$	1,055			$	1,127

20

---

Table of Contents

			Fiscal Year Ended(1)
			February 3,				February 2,				February 1,				January 31,				January 29,
			2001				2002				2003				2004				2005
			(dollars in thousands)
Balance Sheet Data:
	Cash and cash equivalents		$	1,496			$	4,098			$	5,825			$	9,954				11,801
	Total assets			25,023				29,733				36,127				49,213				70,790
	Total liabilities			17,404				19,489				20,693				32,709				47,025
	Total stockholders’ equity			3,471				5,736				10,598				16,504				23,765

(1)	Our fiscal year ends on the Saturday closest to January 31 of each year. Fiscal years 2001, 2002, 2003 and 2004 comprise 52 weeks. Fiscal year 2000 comprises 53 weeks.
(2)	Our Series A Preferred Stock, which will be redeemed using a portion of the net proceeds from this offering, was reclassified as debt as of the second quarter of fiscal 2003, in accordance with SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. The amount of dividends treated as interest expense in fiscal 2004 was $324,450, fiscal 2003 was $189,000 and none in fiscal 2002.
(3)	Stores included in the comparable store sales calculation for any period are those stores that were opened prior to the beginning of the preceding fiscal year and were still open at the end of such period. Relocated stores and expanded stores are included in the comparable store sales results.
(4)	Average sales per store is defined as net sales divided by the average of stores open at the end of the prior period and stores open at the end of the current period.

21

---

Table of Contents

22

---

Table of Contents

23

---

Table of Contents

		Fiscal Year Ended
		February 1,								January 31,								January 29,
		2003								2004								2005
		(dollars in thousands)
Statements of Income Data
Net sales		$	124,951				100.0	%		$	157,198				100.0	%		$	203,442				100.0	%
Cost of sales			77,807				62.3				98,145				62.4				127,308				62.6
Gross profit			47,144				37.7				59,053				37.6				76,134				37.4
Selling, general and administrative expenses			38,760				31.0				48,845				31.1				63,594				31.3
Income from operations			8,385				6.7				10,208				6.5				12,540				6.1
Interest expense			256				0.2				563				0.4				732				0.3
Income before income taxes			8,129				6.5				9,645				6.1				11,808				5.8
Income tax expense			3,101				2.5				3,727				2.4				4,551				2.2
Net income		$	5,028				4.0	%		$	5,918				3.8	%			7,257				3.6	%

		Fiscal Year Ended
		February 1,				January 31,				January 29,
		2003				2004				2005
Total stores open, beginning of period			123				137				161
New stores			16				25				40
Closed stores			2				1				1
Total stores open, end of period			137				161				200
Comparable store sales increase			14.6	%			5.5	%			3.0	%

24

---

Table of Contents

25

---

Table of Contents

26

---

Table of Contents

			Quarter Ended
			May 3,				Aug. 2,				Nov. 1,				Jan. 31,				May 1,				July 31,				Oct. 30,				Jan. 29,
			2003				2003				2003				2004				2004				2004				2004				2005
			(dollars in thousands)
Statement of Operations Data:
	Net sales		$	37,575			$	34,209			$	36,168			$	49,246			$	48,069			$	43,011			$	46,049			$	66,313
	Cost of sales			22,023				22,452				22,991				30,679				29,034				28,095				29,159				41,020
	Gross profit			15,552				11,757				13,177				18,567				19,035				14,916				16,890				25,293
	Selling, general and administrative expenses			11,719				11,655				12,558				12,913				15,221				14,806				16,413				17,154
	Income from operations			3,833				102				619				5,654				3,814				110				477				8,139
	Interest expense			57				98				160				248				173				176				208				175
	Earnings (loss) before income taxes			3,776				4				459				5,406				3,641				(66	)			269				7,964
	Income tax expense (benefit)			1,459				1				177				2,090				1,402				(25	)			104				3,070
	Net income (loss)		$	2,317			$	2			$	282			$	3,317			$	2,239			$	(41	)		$	165			$	4,894
Additional Operating Data:
	Number of Stores:
	Open, beginning of quarter			137				147				154				159				161				178				182				195
	Opened during quarter			10				7				6				2				17				5				13				5
	Closed during quarter			-				-				1				-				-				1				-				-
	Total open at end of period			147				154				159				161				178				182				195				200
	Comparable store sales increase			3.2%				3.2%				6.9%				8.9%				3.5%				0.3%				3.0%				4.6%

27

---

Table of Contents

28

---

Table of Contents

		Payments Due by Period
						Less than												More than
		Total				1 Year				1-3 Years				3-5 Years				5 Years
		(in thousands)
Contractual obligations:
Series A Preferred Stock(1)		$	5,364			$	-			$	-			$	5,364			$	-
Long-term debt(2)			1,822				181				1,641				-				-
Capital leases			1,528				801				727				-				-
Operating leases(3)			29,262				8,224				13,351				7,072				615
Purchase obligations			39,237				39,237				-				-				-
Consulting fee(4)			960				240				480				240				-
Total contractual cash obligations		$	78,773			$	48,683			$	16,200			$	12,676			$	615

(1)	Includes Series A Preferred Stock of $3.6 million, accrued dividends of approximately $380,000 as of January 29, 2005 and dividends of $1.4 million accruing through maturity in April 2009. The board of directors approved a resolution whereby we began making payments of approximately $500,000 per quarter beginning in the second quarter of fiscal 2004. Our Series A Preferred Stock will be redeemed using a portion of the net proceeds from this offering.
(2)	Our outstanding long-term debt will be repaid using a portion of the net proceeds from this offering.
(3)	Represents fixed minimum rentals in stores and does not include incremental rents which are computed as a percentage of net sales. For example, in fiscal 2004 incremental percentage rent was approximately $723,000 which represented 8.6% of total rent expense.
(4)	Represents minimum payments for the four year term of a management consulting agreement that is subject to automatic annual renewals unless terminated with 60 days notice by either party. Upon consummation of this offering, the parties shall terminate the consulting agreement and we will recognize an expense for a termination fee of $1.2 million. The Company is obligated to make such payment no later than December 31, 2005; accordingly, such payment will not be made from the proceeds of this offering.

29

---

Table of Contents

30

---

Table of Contents

31

---

Table of Contents

32

---

Table of Contents

	•	focusing our merchandise offerings on more urban fashion apparel for the entire family, with greater emphasis on nationally recognized brands;
	•	accelerating and completing the remodeling of virtually all of the 85 stores acquired in 1999 to create a more appealing shopping environment;
	•	refining our new store model and implementing a real estate approach focused on locating stores in low to moderate income neighborhoods close to our core customers;
	•	rebranding our stores and our company to Citi Trends in order to convey more effectively our positioning to consumers;
	•	investing in infrastructure to support growth, including opening an additional distribution center and installing new point of sale systems in all of our stores; and
	•	implementing an aggressive growth strategy, including entering several new markets such as Houston, Norfolk and, most recently, Baltimore and Washington, D.C.

33

---

Table of Contents

34

---

Table of Contents

35

---

Table of Contents

36

---

Table of Contents

Alabama—17			Louisiana—23		South Carolina—32
	Birmingham—4		Shreveport—3		Charleston—2
	Montgomery—2		Baton Rouge—2		Columbia—2
	Mobile—2		Monroe—2		Orangeburg—2
	Single store locations—9		New Orleans—2		Single store locations—26
Arkansas—4			Single store locations—14		Tennessee—9
	Little Rock—3		Maryland—3		Memphis—6
	Single store locations—1		Baltimore—2		Nashville—2
Florida—14			Single store locations—1		Single store locations—1
	Jacksonville—3		Mississippi—17		Texas—6
	Tampa—2		Jackson—2		Houston—6
	Single store locations—9		Single store locations—15		Virginia—11
Georgia—44			North Carolina—28		Norfolk—6
	Atlanta—9		Charlotte—2		Richmond—4
	Albany—2		Durham—2		Single store locations—1
	Augusta—2		Fayetteville—2
	Macon—2		Greensboro—2
	Savannah—2		Single store locations—20
	Single store locations—27

37

---

Table of Contents

		Percentage of
		Net Sales
Women’s		38%
Children’s		27%
Men’s		21%
Accessories		13%
Home décor		1%

38

---

Table of Contents

39

---

Table of Contents

40

---

Table of Contents

41

---

Table of Contents

Name		Age				Position
R. Edward Anderson			55			Chief Executive Officer and Director
George A. Bellino*			57			President, Chief Merchandising Officer and Director
Thomas W. Stoltz			44			Chief Financial Officer
James A. Dunn			48			Vice President of Store Operations
Gregory P. Flynn			48			Chairman of the Board of Directors
Laurens M. Goff*			32			Director
John S. Lupo			58			Director
Tracy L. Noll			56			Director
**						Director Nominee

	*	Will resign from our board of directors upon the consummation of this offering.

**	Will join our board of directors upon the consummation of this offering.

42

---

Table of Contents

43

---

Table of Contents

	Audit Committee

	•	have direct responsibility for the selection, compensation, retention, replacement and oversight of the work of our independent auditors, including prescribing what services are allowable and approve in advance all services provided by the auditors;
	•	set clear hiring policies for employees or former employees of the independent auditors;
	•	review all proposed company hires formerly employed by the independent auditors;
	•	have direct responsibility for ensuring its receipt from the independent auditors at least annually of a formal written statement delineating all relationships between the auditor and us, consistent with Independence Standards Board Standard No. 1;
	•	discuss with the independent directors any disclosed relationships or services that may impact the objectivity and independence of the auditor and for taking, or recommending that the full board of directors take, appropriate action to oversee the independence of the independent auditor;
	•	discuss with the internal auditors and the independent auditors the overall scope and plans for their respective audits including the adequacy of staffing, compensation and resources;
	•	review, at least annually, the results and scope of the audit and other services provided by our independent auditors and discuss any audit problems or difficulties and management’s response;
	•	review our annual audited financial statement and quarterly financial statements and discuss the statements with management and the independent auditors (including disclosures in our Exchange Act reports in response to Item 303, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Regulation S-K);
	•	review and discuss with management, the internal auditors and the independent auditors the adequacy and effectiveness of our internal controls, including our ability to monitor and manage business risk, legal and ethical compliance programs and financial reporting;
	•	review and discuss separately with the internal auditors and the independent auditors, with and without management present, the results of their examinations;
	•	review our compliance with legal and regulatory independence;

44

---

Table of Contents

	•	review and discuss our interim financial statements and the earnings press releases prior to the filing of our quarterly reports on Form 10-Q, as well as financial information and earnings guidance provided to analysts and rating agencies;
	•	review and discuss our risk assessment and risk management policies;
	•	prepare an audit committee report required by the Securities and Exchange Commission to be included in our annual proxy statement;
	•	engage independent counsel and other advisors to assist the audit committee in carrying out its duties;
	•	review and approve all related party transactions consistent with the rules applied to companies listed on the Nasdaq National Market; and
	•	establish procedures regarding complaints received by us or our employees regarding accounting, accounting controls or accounting matters.

	Compensation Committee

	•	review and approve corporate goals and objectives relevant to our Chief Executive Officer’s and other named executive officers’ compensation;
	•	evaluate the Chief Executive Officer’s performance in light of these goals and objectives;
	•	either as a committee, or together with the other independent directors, determine and approve the Chief Executive Officer’s compensation;
	•	make recommendations to our board of directors regarding the salaries, incentive compensation plans and equity-based plans for our employees; and
	•	produce a compensation committee report on executive compensation as required by the Commission to be included in our annual proxy statements or annual reports on Form 10-K filed with the Commission.

	Compensation Committee Interlocks and Insider Participation

	Nominating and Corporate Governance Committee

	•	identify individuals qualified to become board members, consistent with criteria approved by the board of directors;
	•	recommend the individuals identified be selected as nominees at annual meetings of our stockholders;

45

---

Table of Contents

	•	develop and recommend to the board of directors a set of corporate governance principles applicable to us; and
	•	oversee the evaluation of the board of directors and management.

	Code of Ethics

	•	honest and ethical conduct;
	•	full, fair, accurate, timely and understandable disclosure in reports and documents that we file with the Commission and in our other public communications;
	•	compliance with applicable laws, rules and regulations, including insider trading compliance; and
	•	accountability for adherence to the code and prompt internal reporting of violations of the code, including illegal or unethical behavior regarding accounting or auditing practices.

															Long-Term
			Annual Compensation(1)												Compensation				All
															Securities				Other
Name and Principal Position			Fiscal Year				Salary				Bonus				Underlying Options				Compensation
R. Edward Anderson				2004			$	327,693			$	144,000				$619			$	2,837
	Chief Executive Officer
George A. Bellino				2004			$	248,077			$	114,000			$	1,342			$	2,525
	President and Chief
	Merchandising Officer
Thomas W. Stoltz				2004			$	173,769			$	40,000				—				—
	Chief Financial Officer
James A. Dunn				2004			$	140,769			$	39,900				—				$885
	Vice President of Store Operations

(1)	Excludes perquisites and other benefits, which for each named individual are less than 10% of the sum of such individual’s annual salary and bonus.

46

---

Table of Contents

Potential

Realizable Value

at Assumed

Rates of Stock

Price

% of Total Options

Appreciation for

Number of Securities

Granted to

Exercise

Option Term(1)

Underlying Options

Employees in

Price Per

Expiration

Name

Granted

Fiscal Year

Share

Date

5%

10%

R. Edward Anderson

12

0.3

%

10/30/14

George A. Bellino

26

0.7

%

10/30/14

Thomas W. Stoltz

–

–

James A. Dunn

–

–

(1)

Potential realizable value is based upon the assumed initial public offering price of our common stock of $            . Potential realizable values are net of exercise price, but before taxes associated with exercise. Amounts representing hypothetical gains are those that could be achieved if options are exercised at the end of the option term. The assumed 5% and 10% rates of stock price appreciation are provided in accordance with rules of the Commission, based on the assumed initial public offering price of $        per share and do not represent our estimate or projection of the future stock price.

		Number of Securities Underlying
		Unexercised Options at Fiscal Year												Value of Unexercised
		End												In-the-Money Options(1)
Name		Total				Exercisable				Unexercisable				Exercisable				Unexercisable
R. Edward Anderson			16,827				16,827				—								—
George A. Bellino			13,904				13,904				—								—
Thomas W. Stoltz			3,000				3,000				—								—
James A. Dunn			2,500				1,975				525
			36,231				35,706				525

(1)

The options were granted under our Amended and Restated 1999 Stock Option Plan. These options generally vest in equal installments over four years from the date of grant and are generally exercisable up to ten years from the date of grant. The fair value of the options granted during the year ended January 31, 2004 was $34.18 using the Black-Scholes option-pricing model, with weighted average assumptions: no dividend yield; 50% expected volatility; 2.50% risk-free interest rate; ten year expected life and a 10% forfeiture rate.

47

---

Table of Contents

	Shares Subject to the Plan

	Administration

48

---

Table of Contents

	Eligibility

	Stock Options

	Stock Appreciation Rights (SARs)

	Exercise Price for Stock Options and SARs

	Exercise and Term of Options and SARs

49

---

Table of Contents

	Restricted Shares

	Performance Awards

50

---

Table of Contents

	Tandem Awards

	Income Tax Withholding

	Transferability

	Certain Corporate Transactions

51

---

Table of Contents

	•	conviction or guilty plea to a serious felony, a crime of moral turpitude or other specified financial offenses,
	•	a board determination that Mr. Bellino has committed a crime of moral turpitude,

52

---

Table of Contents

	•	a board determination that Mr. Bellino knowingly breach his fiduciary obligations to us, subject to notice and a cure period,
	•	Mr. Bellino’s failure to discharge his duties under the agreement or substance abuse which materially interferes with the discharge of his duties, subject to notice and a cure period,
	•	Mr. Bellino’s material violation of any non-competition or confidentiality agreement with us,
	•	Mr. Bellino’s material violation of any other personal obligations under his agreement, subject to notice and a cure period, and
	•	any other violation of law by Mr. Bellino that could have a material adverse effect on us, subject to notice and a cure period.

	•	own, manage, operate, control, invest or acquire an interest in, or otherwise engage or participate in, whether as a proprietor, partner, stockholder, lender, director, officer, employee, joint venturer, investor, lessor, agent, representative or other participant, in any business which competes with us in any state where we operate.
	•	Recruit, solicit or otherwise induce or influence any proprietor, partner, stockholder, lender, director, officer, employee, sales agent, joint venturer, investor, lessor, customer, agent, representative or any other person with a business relationship with us to discontinue, reduce or modify their relationship with us.

	•	any breach of the director’s duty of loyalty to us or our stockholders;
	•	any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
	•	any act related to unlawful stock repurchases, redemptions or other distributions or payment of dividends; or
	•	any transaction from which the director derived an improper personal benefit.

53

---

Table of Contents

	•	we may indemnify our directors, officers and employees to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions;
	•	we may advance expenses to our directors, officers and employees in connection with a legal proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions; and
	•	the rights provided in our bylaws are not exclusive.

54

---

Table of Contents

	•	four members of our board of directors may be designated by the owners of the majority of the voting stock beneficially owned by Hampshire Equity Partners and its affiliates,
	•	our stockholders have agreed generally not to transfer their shares,
	•	our management stockholders have been granted tag-along rights in the event of the sale of more than 50% of our common stock,
	•	our management stockholders have agreed to cooperate in any sale of the company by Hampshire Equity Partners, and
	•	we have agreed to register shares of our common stock held by the stockholder parties in the event that we register additional shares of our common stock under the Securities Act, other than on a registration statement on Form S-4 or S-8, or in connection with an exchange offer, merger, acquisition, dividend reinvestment plan, stock option or other employee benefit plan.

55

---

Table of Contents

56

---

Table of Contents

	•	each stockholder known by us to own beneficially more than 5% of our common stock;
	•	each of our directors and named executive officers;
	•	all directors and executive officers as a group; and
	•	each of the selling stockholders.

Number of

Number of

Shares

Percentage

Shares

Beneficially

of Shares

Percentage of

Beneficially

Number of

Owned

Outstanding

Shares

Owned Prior

Shares Being

After the

Before the

Outstanding After

Name of Beneficial Owner

to the Offering

Offered

Offering

Offering

the Offering

Directors and Named Executive Officers:

R. Edward Anderson

George A. Bellino

Thomas W. Stoltz

James A. Dunn

Tracy L. Noll

John S. Lupo

Gregory P. Flynn

Laurens Goff

Directors and executive officers as a group (eight persons)

5% Stockholder:

Hampshire Equity Partners II, L.P. (1)

(1)

The address of Hampshire Equity Partners II, L.P. is 625 Madison Avenue, New York, New York 10022. Lexington Equity Partners II, L.P., or Lexington L.P., is the general partner of Hampshire Equity Partners II, L.P. and has ultimate voting and investment control over our common stock. The general partner of Lexington L.P. is Lexington Equity Partners II, Inc., or Lexington Inc. Tracey Rudd, an employee of Hampshire Equity Partners, is the President of Lexington Inc. and Mr. Flynn, one of our directors, is the Vice President of Lexington Inc.

57

---

Table of Contents

58

---

Table of Contents

	•	the business combination, or the transaction in which the stockholder became an interested stockholder, is approved by our board of directors prior to the time the interested stockholder attained that status;
	•	upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding those shares owned by persons who are directors and also officers and by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
	•	at or after the time a person became an interested stockholder, the business combination is approved by our board of directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

59

---

Table of Contents

	•	for breach of duty of loyalty;
	•	for acts or omissions not in good faith or involving intentional misconduct or knowing violation of law;
	•	under Section 174 of the Delaware General Corporation Law (unlawful dividends or stock repurchases); or
	•	for transactions from which the director derived improper personal benefit.

	•	the prohibition on stockholder action by written consent;
	•	the ability to call a special meeting of stockholders being vested solely in (1) the chairman of our board of directors, (2) our board of directors pursuant to a resolution adopted by our board of directors and (3) our board of directors upon a request by holders of at least 50% in voting power of all the outstanding shares entitled to vote at that meeting;

60

---

Table of Contents

	•	the provisions relating to the classification of our board of directors;
	•	the provisions relating to the size of our board of directors;
	•	the provisions relating to the quorum requirements for stockholder action and the removal of directors;
	•	the limitation on the liability of our directors to us and our stockholders;
	•	the provisions granting authority to our board of directors to amend or repeal our by-laws without a stockholder vote, as described in more detail in the next succeeding paragraph; and
	•	the supermajority voting requirements listed above.

61

---

Table of Contents

62

---

Table of Contents

63

---

Table of Contents

Underwriters			Number of Shares
CIBC World Markets Corp.
Piper Jaffray & Co.
SG Cowen & Co.
Wachovia Capital Markets, LLC
	Total

Total Without

Total With Full

Exercise of Over-

Exercise of Over-

Per Share

Allotment Option

Allotment Option

Citi Trends, Inc.

$

$

Selling Stockholders

64

---

Table of Contents

	•	the history and prospects for the industry in which we compete;
	•	our past and present operations;
	•	our historical results of operations;
	•	our prospects for future business and earning potential;
	•	our management;
	•	the general condition of the securities markets at the time of this offering;
	•	the recent market prices of securities of generally comparable companies; and
	•	the market capitalization and stages of development of other companies which we and the representative believe to be comparable to us.

	•	Stabilizing transactions—The representative may make bids or purchases for the purpose of pegging, fixing or maintaining the price of the shares, so long as stabilizing bids do not exceed a specified maximum.
	•	Over-allotments and syndicate covering transactions—The underwriters may sell more shares of our common stock in connection with this offering than the number of shares than they have committed to purchase. This over-allotment creates a short position for the underwriters. This short sales position may involve either

65

---

Table of Contents

		“covered” short sales or “naked” short sales. Covered short sales are short sales made in an amount not greater than the underwriters’ over-allotment option to purchase additional shares in this offering described above. The underwriters may close out any covered short position either by exercising their over-allotment option or by purchasing shares in the open market. To determine how they will close the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market, as compared to the price at which they may purchase shares through the over-allotment option. Naked short sales are short sales in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that, in the open market after pricing, there may be downward pressure on the price of the shares that could adversely affect investors who purchase shares in this offering.

	•	Penalty bids—If the representative purchases shares in the open market in a stabilizing transaction or syndicate covering transaction, they may reclaim a selling concession from the underwriters and selling group members who sold those shares as part of this offering.

66

---

Table of Contents

67

---

Table of Contents

FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED JANUARY 29, 2005, JANUARY 31, 2004 AND FEBRUARY 1, 2003
Report of Independent Registered Public Accounting Firm		F-2
Balance Sheets as of January 29, 2005 and January 31, 2004		F-3
Statements of Income for the Years Ended January 29, 2005, January 31, 2004 and February 1, 2003		F-4
Statements of Cash Flows for the Years Ended January 29, 2005, January 31, 2004 and February 1, 2003		F-5
Statements of Stockholders’ Equity for the Years Ended January 29, 2005, January 31, 2004 and February 1, 2003		F-6
Notes to Financial Statements for the Years Ended January 29, 2005, January 31, 2004 and February 1, 2003		F-7

F-1

---

Table of Contents

F-2

---

Table of Contents

				January 29,				January 31,
				2005				2004
Assets
Current assets:
	Cash and cash equivalents			$	11,801,442			$	9,954,232
	Inventory				36,172,832				22,712,369
	Prepaid and other current assets				2,600,933				1,770,998
	Deferred tax asset				1,139,000				530,604
		Total current assets			51,714,207				34,968,203
Property and equipment, net					17,573,767				12,749,601
Goodwill					1,371,404				1,371,404
Other assets					130,182				123,992
		Total assets		$	70,789,560				49,213,200
Liabilities and Stockholders’ Equity
Current liabilities:
	Borrowings under revolving lines of credit			$	—			$	—
	Accounts payable				28,132,301				19,577,370
	Accrued expenses				3,199,772				2,121,520
	Accrued compensation				2,537,643				1,669,462
	Current portion of long-term debt				78,953				74,762
	Current portion of capital lease obligations				718,425				566,667
	Income tax payable				2,455,247				331,342
	Layaway deposits				252,791				133,028
		Total current liabilities			37,375,132				24,474,151
Long-term debt, less current portion					1,526,110				1,494,302
Capital lease obligations, less current portion					688,473				494,547
Preferred shares subject to mandatory redemption					3,984,763				5,160,313
Deferred tax liability					818,000				333,445
Other long-term liabilities					2,632,113				752,574
		Total liabilities			47,024,591				32,709,332
Stockholders’ equity:
	Common stock, $0.01 par value. Authorized 500,000 shares; 363,875 and 363,275 shares issued in 2005 and 2004				3,639				3,633
	Paid-in-capital				4,120,894				4,011,601
	Retained earnings				19,828,629				12,571,384
	Treasury stock, at cost; 6,375 and 5,775 shares in 2005 and 2004				(164,550	)			(57,750	)
	Subscription receivable				(23,643	)			(25,000	)
		Total stockholders’ equity			23,764,969				16,503,368
Commitments and contingencies (notes 9 and 10)
		Total liabilities and stockholders’ equity		$	70,789,560			$	49,213,200

F-3

---

Table of Contents

				Fiscal				Fiscal				Fiscal
				2004				2003				2002
Net sales				$	203,441,772			$	157,198,306			$	124,950,935
Cost of sales					127,307,594				98,145,216				77,806,541
		Gross profit			76,134,178				59,053,090				47,144,394
Selling, general and administrative expenses					63,593,731				48,844,888				38,759,624
		Income from operations			12,540,447				10,208,202				8,384,770
Interest expense, including redeemable preferred stock dividend					732,202				563,342				255,708
		Income before provision for income taxes			11,808,245				9,644,860				8,129,062
Provision for income taxes					4,551,000				3,726,914				3,101,237
		Net income		$	7,257,245			$	5,917,946			$	5,027,825
Basic income per common share				$	19.95			$	15.92			$	12.95
Diluted income per common share				$	17.10			$	13.77			$	11.21
Average number of shares outstanding
	Basic				363,825				363,275				363,275
	Diluted				424,463				420,060				419,510

F-4

---

Table of Contents

						Fiscal 2004				Fiscal 2003				Fiscal 2002
Operating activities:
	Net income					$	7,257,245			$	5,917,946			$	5,027,825
	Adjustment to reconcile net income to net cash provided by operating activities:
		Dividends on preferred shares subject to mandatory redemption					324,450				189,263				—
		Depreciation and amortization					4,871,682				4,032,602				3,014,549
		Deferred income taxes					(123,841	)			161,883				541,742
		Loss on disposal of fixed assets					80,719				23,396				93,189
		Interest on Subscription Receivable					(9,643	)			—				—
		Noncash compensation expense					103,299				123,273				161,882
		Changes in assets and liabilities:
			Inventory				(13,460,463	)			(5,669,857	)			(2,110,472	)
			Prepaid and other current assets				(845,787	)			(577,991	)			374,919
			Income tax receivable				—				195,068				60,795
			Other assets				(29,334	)			(16,020	)			(39,294	)
			Accounts payable				8,554,931				6,108,110				1,956,945
			Accrued expenses and other long-term liabilities				2,823,842				647,045				576,631
			Accrued compensation				868,181				(247,906	)			880,225
			Income tax payable				2,123,905				331,342				—
			Layaway deposits				119,763				(28,761	)			(82,278	)
				Net cash provided by operating activities			12,658,949				11,189,393				10,456,658
Investing activities:
	Purchase of property and equipment						(8,631,233	)			(6,117,954	)			(5,926,622	)
Financing activities:
	Fee paid for continuance of revolving line of credit						—				—				(50,000	)
	Borrowings under revolving line of credit						37,716,044				26,295,521				133,369,853
	Repayments under revolving line of credit						(37,716,044	)			(26,295,521	)			(137,059,791	)
	Repayments on long-term debt and capital lease obligations						(831,456	)			(942,054	)			(742,969	)
	Proceeds from issuance of long-term debt						—				—				1,680,000
	Payment of dividends on preferred shares subject to mandatory redemption						(1,366,050	)			—				—
	Proceeds from payment of shareholder note receivable						11,000				—				—
	Proceeds from sale of stock						6,000				—				—
				Net cash used in financing activities			(2,180,506	)			(942,054	)			(2,802,907	)
				Net increase in cash and cash equivalents			1,847,210				4,129,385				1,727,129
Cash and cash equivalents:
	Beginning of period						9,954,232				5,824,847				4,097,718
	End of period					$	11,801,442			$	9,954,232			$	5,824,847
Supplemental disclosures of cash flow information:
	Cash paid for interest					$	518,557			$	352,933			$	255,708
	Cash paid for income taxes					$	2,550,938			$	3,036,620			$	2,498,700
Supplemental disclosures of noncash activities:
	Dividends accrued on redeemable preferred stock					$	—			$	135,187			$	327,713
	Purchases of property and equipment financed by entering into capital leases					$	1,106,338			$	670,503			$	660,012
	Insurance settlement not yet received related to loss of fixed assets and inventory related to store fire						—				192,384				—

F-5

---

Table of Contents

		Common Stock																Treasury Stock
										Paid-in				Retained												Subscription
		Shares				Amount				Capital				Earnings				Shares				Amount				Receivable				Total
Balance—February 2, 2002			363,275				3,633				3,726,446				2,088,513				5,775				(57,750	)			(25,000	)			5,735,842
Expense recorded in connection with issuance of stock options											161,882																				161,882
Accrued preferred stock dividends															(327,713	)															(327,713	)
Net income															5,027,825																5,027,825
Balance— February 1, 2003			363,275				3,633				3,888,328				6,788,625				5,775				(57,750	)			(25,000	)			10,597,836
Expense recorded in connection with issuance of stock options											123,273																				123,273
Accrued preferred stock dividends															(135,187	)															(135,187	)
Net income															5,917,946																5,917,946
Balance— January 31, 2004			363,275				3,633				4,011,601				12,571,384				5,775				(57,750	)			(25,000	)			16,503,868
Exercise of stock options			600				6				5,994																				6,000
Expense recorded in connection with issuance of stock options											103,299																				103,299
Purchase of 600 shares of common stock in exchange for a 3 year note																			600				(106,800	)							(106,800	)
Interest recorded on subscription receivable																											(9,643	)			(9,643	)
Payment received on subscription receivable																											11,000				11,000
Net income															7,257,245																7,257,245
Balance— January 29, 2005			363,875				3,639				4,120,894				19,828,629				6,375				(164,550	)			(23,643	)			23,764,969

F-6

---

Table of Contents

(1)	Organization and Business

(2)	Summary of Significant Accounting Policies

(a)	Fiscal Year

(b)	Cash and Cash Equivalents

(c)	Inventory

(d)	Property and Equipment, net

(e)	Goodwill

(f)	Impairment of Long-Lived Assets

F-7

---

Table of Contents

(g)	Stock-Based Compensation

			2004				2003				2002
Net income, as reported			$	7,257,245			$	5,917,946			$	5,027,825
Add stock-based employee compensation expense included in reported net income, net of tax of $39,791, $45,855 and $62,729, respectively				63,508				77,415				99,153
Deduct total stock-based employee compensation expense determined under fair-value-based method for all awards, net of tax of $86,829, $68,120 and $47,157, respectively				(138,583	)			(114,997	)			(74,538	)
	Pro forma net income		$	7,182,170			$	5,880,364			$	5,052,440
As reported basic income per common share			$	19.95			$	15.92			$	12.15
Pro forma Basic Income per common share			$	19.74			$	15.81			$	13.01
As reported diluted income per common share			$	17.10			$	13.77			$	11.21
Pro forma Diluted Income per common share			$	16.92			$	13.68			$	11.27

(h)	Revenue Recognition

F-8

---

Table of Contents

(i)	Cost of Sales

(j)	Certain Financial Instruments with Characteristics of Liabilities and Equity

			2004				2003				2002
Net income, as reported			$	7,257,245			$	5,917,946			$	5,027,825
Add dividends on preferred shares subject to mandatory redemption				324,450				189,263				—
	Pro forma net income		$	7,581,695			$	6,107,209			$	5,027,825

(k)	Earnings per Share

			2004				2003				2002
Net income, as reported			$	7,257,245			$	5,917,946			$	5,027,825
Subtract dividends on preferred shares subject to mandatory redemption				—				135,188				324,450
	Numerator for EPS Calculation		$	7,257,245			$	5,782,758			$	4,703,375

F-9

---

Table of Contents

		2004				2003				2002
Average number of common shares outstanding			363,825				363,275				363,275
Incremental shares from assumed exercises of stock options			60,638				56,785				56,235
Average number of common shares and common stock equivalents outstanding			424,463				420,060				419,510

(l)	Advertising

(m)	Operating Leases

(n)	Store Opening and Closing Costs

(o)	Income Taxes

F-10

---

Table of Contents

(p)	Use of Estimates

(q)	Business Reporting Segments

(r)	Other Comprehensive Income

(s)	Recently Issued Accounting Standards Not Currently Effective

F-11

---

Table of Contents

(3)	Property and Equipment, Net

		January 29,				January 31,
		2005				2004
Land		$	810,000			$	810,000
Building			1,340,000				1,340,000
Leasehold improvements			12,134,815				8,885,163
Furniture, fixtures, and equipment			13,660,714				9,000,105
Computer equipment			6,535,924				4,823,922
			34,481,453				24,859,190
Accumulated depreciation and amortization			16,907,686				12,109,589
		$	17,573,767			$	12,749,601

(4)	Revolving Lines of Credit

(5)	Long-term Debt and Capital Lease Obligations

F-12

---

Table of Contents

		January 29,				January 31,
		2005				2004
Mortgage payable issued to finance purchase of land and building; payable in monthly installments of $14,913, including interest, through June 2007 with a balloon payment of $1,303,412 due July 2007; interest at a fixed rate of 6.80%; secured by land and building		$	1,496,121			$	1,569,064
Non-negotiable three year junior subordinated note payable on September 30, 2007 issued in exchange for 600 shares of common stock			108,942				—
Capital lease obligations issued to finance purchase of computer equipment; payable in monthly installments averaging approximately $68,092, $45,357 and $15,889 in 2005, 2006 and 2007, with maturity dates ranging from March 2005 to December 2007; interest at rates ranging from 7.2% to 11.5%; secured by computer equipment			1,406,898				1,061,214
			3,011,961				2,630,278
Less current portion of long-term debt and capital lease obligations			797,378				641,429
		$	2,214,583			$	1,988,849

		Long-term				Capital Lease
Fiscal Year		Debt				Obligations
2005		$	78,953			$	801,112
2006			85,984				544,278
2007			1,440,126				182,639
			1,605,063				1,528,029
Less portion attributable to future interest payments (at rates ranging from 7.2% to 11.5%)			—				(121,131	)
		$	1,605,063			$	1,406,898

(6)	Income Taxes

			2004				2003				2002
Current:
	Federal		$	3,910,115			$	2,987,496			$	2,136,445
	State			764,726				577,535				423,050
				4,674,841				3,565,031				2,559,495
Deferred:
	Federal			(104,170	)			135,658				465,423
	State			(19,671	)			26,225				76,319
				(123,841	)			161,883				541,742
			$	4,551,000			$	3,726,914			$	3,101,237

F-13

---

Table of Contents

			2004				2003				2002
Statutory rate applied to income before income taxes			$	4,014,803			$	3,279,252			$	2,763,881
State income taxes, net of federal benefit				491,736				385,794				329,584
General business credits				(182,000	)			(161,023	)			(117,004	)
Dividends on preferred stock				110,313				66,240				—
Other				116,148				156,651				124,776
	Provision for income taxes		$	4,551,000			$	3,726,914			$	3,101,237

				2005				2004
Deferred tax assets:
	Deferred rent amortization			$	518,531			$	189,682
	Inventory capitalization				850,156				572,515
	Vacation liability				177,333				61,750
	Stock compensation				171,477				129,071
	Other				56,000				16,000
					1,773,497				969,018
Deferred tax liabilities:
	Book and tax depreciation differences				(681,945	)			(188,881	)
	Prepaid expenses				(462,832	)			(309,464	)
	Goodwill				(170,652	)			(129,612	)
	Other				(137,068	)			(143,902	)
					(1,452,497	)			(771,859	)
		Net deferred tax asset		$	321,000			$	197,159

(7)	Preferred Shares Subject to Mandatory Redemption

F-14

---

Table of Contents

(8)	Stockholders’ Equity

(a)	Stockholders Agreement

(b)	Equity Transactions with Officer

(c)	Equity Transactions with Majority Stockholder

(d)	Stock Options

F-15

---

Table of Contents

		2004								2003								2002
						Wtd Avg								Wtd Avg								Wtd Avg
						Exercise								Exercise								Exercise
		Shares				Price				Shares				Price				Shares				Price
Outstanding at beginning of period			68,899			$	20				66,496			$	11				66,096			$	10
Granted			4,799				176				7,403				99				1,800				54
Exercised			(600	)			10				—				—				—				—
Forfeited			(1,500	)			87				(5,000	)			18				(1,400	)			10
Outstanding end of period			71,598				29				68,899				20				66,496				11
Options exercisable end of period			62,173			$	18				55,024			$	13				37,035			$	10

						Weighted Average
		Number				Remaining				Number
Exercise Price		Outstanding				Contractual Life				Exercisable
$ 10			59,696				5.4				57,621
$ 50			800				7.0				400
$ 70			400				7.5				100
$ 94			3,903				8.4				2,253
$ 99			1,000				8.6				250
$116			1,000				8.8				250
$170			1,400				9.2				—
$177			800				9.3				—
$178			2,599				9.6				1,199
			71,598								62,173

		2005				2004				2003
Dividend yield			0.00%				0.00%				0.00%
Expected volatility			50.00%				50.00%				50.00%
Risk-free interest rate			2.50%				2.50%				3.60%
Expected life, in years			10  years				10  years				10  years
Forfeiture rate			10.00%				10.00%				10.00%

F-16

---

Table of Contents

(9)	Commitments and Contingencies

Fiscal Year:
2005			$	8,223,506
2006				7,318,638
2007				6,032,679
2008				4,706,191
2009				2,365,894
Thereafter				614,920
	Total future minimum lease payments		$	29,261,828

(10)	Related Party Transactions

	Term and Termination

F-17

---

Table of Contents

	Compensation

(11)	Valuation and Qualifying Accounts

			Inventory
			Shrinkage
			Reserve
Balance at February 2, 2002			$	806,367
	Additions charged to costs and expenses			2,066,634
	Deductions			(1,808,188	)
Balance at February 1, 2003			$	1,064,813
	Additions charged to costs and expenses			2,541,749
	Deductions			(2,672,235	)
Balance at January 31, 2004			$	934,327
	Additions charged to costs and expenses			2,917,053
	Deductions			(2,629,883	)
Balance at January 29, 2005			$	1,221,497

(12)	Subsequent Events

F-18

---

Table of Contents

---

Table of Contents

---

Table of Contents

Item 13.	Other Expenses of Issuance and Distribution.

SEC Registration fee		$	6,767.75
NASD filing fee			6,250.00
Nasdaq national market listing fee			5,000.00
Printing			*
Legal fees and expenses			*
Accounting fees and expenses			*
Transfer agent and registrar fees			*
Miscellaneous			*
Total		$	*

*	To be provided by amendment

Item 14.	Indemnification of Directors and Officers.

	•	any breach of the director’s duty of loyalty to us or our stockholders;
	•	any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
	•	any act related to unlawful stock repurchases, redemptions or other distributions or payment of dividends; or
	•	any transaction from which the director derived an improper personal benefit.

	•	we may indemnify our directors, officers and employees to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions;
	•	we may advance expenses to our directors, officers and employees in connection with a legal proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions; and
	•	the rights provided in our amended and restated by-laws are not exclusive.

II-1

---

Table of Contents

Item 15.	Recent Sales of Unregistered Securities.

II-2

---

Table of Contents

Item 16.	Exhibits and Financial Statement Schedules

Exhibit No.				Description
	1.1			Form of Underwriting Agreement***
	3.1			Form of Second Amended and Restated Certificate of Incorporation***
	3.2			Form of Amended and Restated By-laws***
	4.1			Specimen certificate for shares of common stock, $.01 par value**
	5.1			Opinion of Paul, Hastings, Janofsky & Walker LLP**
	10.1			Letter Agreement by and between R. Edward Anderson and Citi Trends, Inc., dated November 16, 2001***
	10.2			Employment and Non-Interference Agreement by and between George Bellino and Citi Trends, Inc., dated as of April 13, 1999***
	10.3			Amendment No. 1 to the Employment and Non-Interference Agreement by and between George Bellino and Citi Trends, Inc., dated as of December 2001***
	10.4			The Loan and Security Agreement, dated as of April 2, 1999, by and between Congress Financial Corporation (Southwest) and Allied Fashion, Inc.***
	10.5			First Amendment to Loan and Security Agreement, dated as of June 28, 2000, by and between Congress Financial Corporation (Southwest) and Allied Fashion, Inc.***
	10.6			Second Amendment to Loan and Security Agreement, dated as of November 30, 2000, by and between Congress Financial Corporation (Southwest) and Allied Fashion, Inc.***
	10.7			Third Amendment to Loan and Security Agreement, dated as of January 2003, by and between Congress Financial Corporation (Southwest) and Citi Trends, Inc.***
	10.8			Fourth Amendment to Loan and Security Agreement, dated as of February 9, 2005, by and between Congress Financial Corporation (Southwest) and Citi Trends, Inc.***
	10.9			Lease Agreement, dated as of September 30, 2004, by and between Meyer Warehouse, LLC, as landlord, and Citi Trends, Inc., as tenant***
	10.1	0		$3.0 Million Promissory Note of Citi Trends, Inc. payable to Bank of America issued on June 21, 2004***
	10.1	1		Form of 2005 Long Term Incentive Plan***
	10.1	2		Form of Nominating Agreement by and between Citi Trends, Inc. and Hampshire Equity Partners II, L.P.*
	10.1	3		Registration Rights Agreement, dated as of           , 2005, by and between Citi Trends, Inc. and Hampshire Equity Partners II, L.P.**

II-3

---

Table of Contents

Exhibit No.				Description
	10.1	4		Amended and Restated Hampshire Management Consulting Agreement, effective as of February 1, 2004 by and between Citi Trends, Inc. and Hampshire Management Company LLC*
	10.1	5		Termination Agreement, dated as of           , 2005, by and between Citi Trends, Inc. and Hampshire Management Company LLC**
	14.1			Citi Trends, Inc. Code of Business Conduct and Ethics**
	23.1			Consent of KPMG LLP*
	23.2			Consent of Paul Hastings, Janofsky & Walker LLP (included in Exhibit 5.1)**
	24.1			Power of Attorney (included on the signature page hereto)***

Item 17.	Undertakings.

	(1)     For purposes of determining any liability under the Securities Act of 1933, as amended, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933, as amended, shall be deemed to be part of this registration statement as of the time it was declared effective.
	(2)     For the purpose of determining any liability under the Securities Act of 1933, as amended, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-4

---

Table of Contents

	CITI TRENDS, INC.

	By:	/s/ R. Edward Anderson

	R. Edward Anderson
	Chief Executive Officer (Principal Executive Officer)

	By:	/s/ Thomas W. Stoltz

	Thomas W. Stoltz
	Chief Financial Officer (Principal Financial and Accounting Officer)

Signature		Title		Date
/s/ R. Edward Anderson   R. Edward Anderson, on behalf of himself as well as attorney-in-fact		Chief Executive Officer (Principal Executive Officer)		April 7, 2005
/s/ Thomas W. Stoltz   Thomas W. Stoltz, on behalf of himself as well as attorney-in-fact		Chief Financial Officer (Principal Financial and Accounting Officer)		April 7, 2005
*   George A. Bellino		Director		April 7, 2005
*   Gregory P. Flynn		Director		April 7, 2005
*   Laurens M. Goff		Director		April 7, 2005
*   John S. Lupo		Director		April 7, 2005
*   Tracy L. Noll		Director		April 7, 2005
*By: /s/ R. Edward  Anderson   R. Edward Anderson Attorney-in-Fact
*By: /s/ Thomas W. Stoltz   Thomas W. Stoltz Attorney-in-Fact

II-5

---

Table of Contents

Exhibit No.				Description
	1.1			Form of Underwriting Agreement***
	3.1			Form of Second Amended and Restated Certificate of Incorporation***
	3.2			Form of Amended and Restated By-laws***
	4.1			Specimen certificate for shares of common stock, $.01 par value**
	5.1			Opinion of Paul, Hastings, Janofsky & Walker LLP**
	10.1			Letter Agreement by and between R. Edward Anderson and Citi Trends, Inc., dated November 16, 2001***
	10.2			Employment and Non-Interference Agreement by and between George Bellino and Citi Trends, Inc., dated as of April 13, 1999***
	10.3			Amendment No. 1 to the Employment and Non-Interference Agreement by and between George Bellino and Citi Trends, Inc., dated as of December 2001***
	10.4			The Loan and Security Agreement, dated as of April 2, 1999, by and between Congress Financial Corporation (Southwest) and Allied Fashion, Inc.***
	10.5			First Amendment to Loan and Security Agreement, dated as of June 28, 2000, by and between Congress Financial Corporation (Southwest) and Allied Fashion, Inc.***
	10.6			Second Amendment to Loan and Security Agreement, dated as of November 30, 2000, by and between Congress Financial Corporation (Southwest) and Allied Fashion, Inc.***
	10.7			Third Amendment to Loan and Security Agreement, dated as of January 2003, by and between Congress Financial Corporation (Southwest) and Citi Trends, Inc.***
	10.8			Fourth Amendment to Loan and Security Agreement, dated as of February 9, 2005, by and between Congress Financial Corporation (Southwest) and Citi Trends, Inc.***
	10.9			Lease Agreement, dated as of September 30, 2004, by and between Meyer Warehouse, LLC, as landlord, and Citi Trends, Inc., as tenant***
	10.1	0		$3.0 Million Promissory Note of Citi Trends, Inc. payable to Bank of America issued on June 21, 2004***
	10.1	1		Form of 2005 Long Term Incentive Plan***
	10.1	2		Form of Nominating Agreement by and between Citi Trends, Inc. and Hampshire Equity Partners II, L.P.*
	10.1	3		Registration Rights Agreement, dated as of           , 2005, by and between Citi Trends, Inc. and Hampshire Equity Partners II, L.P.**
	10.1	4		Amended and Restated Hampshire Management Consulting Agreement, effective February 1, 2004, by and between Citi Trends, Inc. and Hampshire Management Company LLC*

---

Table of Contents

Exhibit No.				Description
	10.1	5		Termination Agreement, dated as of           , 2005, by and between Citi Trends, Inc. and Hampshire Management Company LLC**
	14.1			Citi Trends, Inc. Code of Business Conduct and Ethics**
	23.1			Consent of KPMG LLP*
	23.2			Consent of Paul Hastings, Janofsky & Walker LLP (included in Exhibit 5.1)**
	24.1			Power of Attorney (included on the signature page hereto)***

                                                                   EXHIBIT 10.12


                          FORM OF NOMINATING AGREEMENT


            THIS NOMINATING AGREEMENT (this "Agreement"), dated as of April __,
2005, is entered into by and between Citi Trends, Inc., a Delaware corporation
(the "Company"), and Hampshire Equity Partners II, L.P., a Delaware limited
partnership ("Hampshire").

            WHEREAS, as of the date hereof and immediately prior to the
consummation of the Company's initial public offering of its common stock, par
value $.01 per share (the "Common Stock"), Hampshire owns in the aggregate
______________ shares (collectively, the "Shares") of Common Stock; and

            WHEREAS, Hampshire and the Company wish to make certain agreements
with respect to the nomination of candidates for election to the board of
directors of the Company, upon the terms and conditions set forth in this
Agreement.

            NOW, THEREFORE, in consideration of the premises and the mutual
covenants and considerations herein set forth, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

            1. Board of Directors. The size of the Board of Directors of the
Company (the "Board") shall be established in accordance with the Certificate of
Incorporation and By-Laws of the Company. The members of the Board shall be
nominated and elected in accordance with the Certificate of Incorporation and
By-Laws of the Company, and the provisions of this Agreement. "Certificate of
Incorporation" shall mean the Second Amended and Restated Certificate of
Incorporation of the Company, as filed with the Secretary of State of the State
of Delaware and effective as of the date hereof, as the same may be amended from
time to time. "By-Laws" shall mean the Amended and Restated By-Laws of the
Company, effective as of the date hereof, as the same may be amended from time
to time.

            2. Staggered Board. The Certificate of Incorporation and By-Laws of
the Company shall provide that the Board shall be divided into three classes, as
nearly equal in number as possible, as follows: (A) one class initially
consisting of one director ("Class I"), the initial term of which shall expire
at the first annual meeting of the stockholders to be held after the date
hereof; (B) a second class initially consisting of two directors ("Class II"),
the initial term of which shall expire at the second annual meeting of the
stockholders to be held after the date hereof and (C) a third class initially
consisting of two directors ("Class III"), the initial term of which shall
expire at the third annual meeting of the stockholders to be held after the date
hereof, with each class to hold office until its successors are elected and
qualified. At each annual meeting of the stockholders of the Company, the
successors of the members of the class of directors whose term expires at that
meeting shall be elected to hold office for a term expiring at the third
succeeding annual meeting of stockholders. On the date hereof, the Board shall
consist of: (i) _______________ in Class I, (ii) Tracy Noll and John Lupo in
Class II and (iii) R. Edward Anderson and Gregory Flynn in Class III.

            3. Designees. Upon expiration of the respective terms of the initial
Board members set forth in Section 2 above, and subject to the provisions of
Section 4 hereof, Hampshire shall have the right to designate individuals for
nomination for election to the Board as set forth below and the Company shall,
acting through its Nominating and Corporate Governance Committee, cause such
individuals to be nominated for election to the Board as set forth below;
provided that the Nominating and Corporate Governance Committee's obligations
under this Agreement are subject to the requirements of their fiduciary duties
as directors and the Delaware General Corporation Law.

                  (a) For so long as Hampshire (together with any of its
respective successors and permitted assigns) owns, in the aggregate, at least
forty percent (40%) of the Shares, Hampshire shall be entitled to designate two
persons for nomination for election to the Board; or

                  (b) For so long as Hampshire (together with any of its
respective successors and permitted assigns) owns, in the aggregate, less than
forty percent (40%), but at least fifteen percent (15%), of the Shares,
Hampshire shall be entitled to designate one person for nomination for election
to the Board.

            4. Mechanics of Designation.

                  (a) In order to nominate an individual for election to the
Board, Hampshire must submit to the Company a prior written notice at least
ninety (90) days prior to the date of the next scheduled annual meeting of the
Company's stockholders in accordance with the notice provisions set forth in
Section 11 hereof, which notice shall include (i) the name of the designee, (ii)
a current resume and curriculum vitae of the designee, (iii) a statement
describing the designee's qualifications and (iv) contact information for
personal and professional references. At least one hundred and twenty (120) days
prior to the date of such annual meeting of the Company's stockholders, the
Company shall provide Hampshire with written notice of the expected date of such
meeting in accordance with the notice provisions set forth in Section 11 hereof.

                  (b) At each meeting of the Company's stockholders at which the
directors of the Company are to be elected, the Company agrees to recommend that
the stockholders elect to the Board each designee of Hampshire nominated for
election at such meeting in accordance with the provisions of Section 3 above.

            5. Vacancies.

                  (a) At any time at which a vacancy shall be created on the
Board in any class as a result of the death, disability, retirement,
resignation, removal or otherwise of a designee of Hampshire and Hampshire
maintains the right to designate a person for nomination for election to the
Board, as specified in Section 3 above, Hampshire shall have the right to
designate for appointment by the remaining directors of the Company under the
Certificate of Incorporation an individual to fill such vacancy and to serve as
a director on the Board in such class.

                  (b) In connection with the foregoing, Hampshire must submit to
the Company written notice of such designee or designees in accordance with the
notice provisions set forth in


                                      -2-

Section 11 hereof, which notice shall include (i) the name of the designee, (ii)
a current resume and curriculum vitae of the designee, (iii) a statement
describing the designee's qualifications and (iv) contact information for
personal and professional references. The Company agrees to take such actions as
will result in the appointment to the Board as soon as practicable of any
individual so designated by Hampshire.

            6. Modification, Amendment, Waiver. No modification, amendment or
waiver of any provision of this Agreement shall be effective unless approved in
writing by the Company and Hampshire. The failure of any party at any time to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provisions and shall not affect the rights of the party
thereafter to enforce the provisions of this Agreement in accordance with its
terms.

            7. Invalid or Unenforceable Provisions. Whenever possible, each
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any term or provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
and this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein. The parties further agree that any court of competent jurisdiction is
expressly authorized to modify any such unenforceable provision of this
Agreement in lieu of severing such unenforceable provision from this Agreement
in its entirety, whether by rewriting the offending provision, deleting any or
all of the offending provision, adding additional language to this Agreement, or
by making such other modifications as it deems warranted to carry out the intent
and agreement of the parties as embodied herein to the maximum extent permitted
by law. The parties expressly agree that this Agreement as so modified by a
court of competent jurisdiction shall be binding upon and enforceable against
each of them.

            8. Entire Agreement. Except as otherwise expressly set forth herein,
this document embodies the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or between
the parties, written or oral, which may have related to the subject matter
hereof in any way.

            9. Binding Effect; Assignment. All of the terms of this Agreement
shall inure to the benefit of and shall be binding upon the Company and
Hampshire and their respective successors and permitted assigns; provided,
however, that this Agreement may not be assigned without the prior written
consent of the other party hereto.

            10. Remedies. The parties hereto will be entitled to enforce their
rights under this Agreement specifically (without posting a bond or other
security), to recover damages by reason of any material breach of any provision
of this Agreement and to exercise all other rights existing in their favor. The
parties hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that any party may
in its sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief in order to
enforce or prevent any violation of the


                                      -3-

provisions of this Agreement. In the event of any dispute involving the terms of
this Agreement, the prevailing party shall be entitled to collect reasonable
fees and expenses incurred by the prevailing party in connection with such
dispute from the other parties to such dispute.

            11. Notices. Any notice or other communication in connection with
this Agreement or the Shares shall be deemed to be delivered and received if in
writing (or in the form of a telex or telecopy) addressed as provided below (a)
when actually delivered, in person, (b) if telexed or telecopied to said
address, when electronically confirmed, (c) when delivered if delivered by
overnight courier or (d) in the case of delivery by mail, five (5) business days
shall have elapsed after the same shall have been deposited in the United States
mails, postage prepaid and registered or certified:

                  If to the Company, to:

                  Citi Trends, Inc.
                  102 Fahm Street
                  Savannah, Georgia 31401
                  Attention:  R. Edward Anderson
                  Facsimile:  (912) 443-3674

                  with a copy to:

                  Paul, Hastings, Janofsky & Walker LLP
                  75 East 55th Street
                  New York, New York  10022
                  Attention: William F. Schwitter, Esq.
                  Facsimile: (212) 319-4090

                  If to Hampshire, to:

                  Hampshire Equity Partners II, L.P.
                  520 Madison Avenue, 33rd Floor
                  New York, New York 10022
                  Attention:  Laurens M. Goff
                  Facsimile:  (415) 362-1192

            12. Term. The term of this Agreement shall terminate upon the
earlier to occur of: (i) the mutual consent in writing of the parties hereto or
(ii) the date on which Hampshire (together with any of its respective
successors and permitted assigns) owns, in the aggregate, less than fifteen
percent (15%) of the Shares.

            13. Governing Law; Submission to Jurisdiction. All questions
concerning the construction, validity and interpretation of this Agreement will
be governed by the internal laws of the State of Delaware, without giving effect
to principles of conflicts of law. The parties hereby irrevocably and
unconditionally consent to submit to the exclusive jurisdiction of the courts of
the State of Delaware or the United States of America located in the State of
Delaware for any actions, suits or proceedings arising out of or relating to
this Agreement and the


                                      -4-

transactions contemplated hereby (and the parties agree not to commence any
action, suit or proceeding relating hereto except in such courts), and further
agree that service of any process, summons, notice or documents by United States
registered mail to a party in accordance with Section 11 hereof shall be
effective service of process for any action, suit or proceeding brought against
such party in any such court and, absent any statute, rule or order to the
contrary, that each party shall have thirty (30) days from actual receipt of any
complaint to answer or otherwise plead with respect thereto. The parties hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of Delaware or the United States
of America located in the State of Delaware, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.

            14. Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.

            15. Counterparts. This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
will constitute one and the same agreement.



                            (Signature Pages Follow)


                                      -5-

            IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.



                                    COMPANY:

                                    CITI TRENDS, INC., a Delaware corporation

                                    By:
                                         -------------------------------
                                         Name:  R. Edward Anderson
                                         Title: Chief Executive Officer


                                    HAMPSHIRE:

                                    HAMPSHIRE EQUITY PARTNERS II, L.P., a
                                    Delaware limited partnership

                                    By: Lexington Equity Partners II, L.P.,
                                    its General Partner

                                    By: Lexington Equity Partners Inc.,
                                    its General Partner

                                    By:
                                         -------------------------------
                                         Name:
                                         Title:


                         [Nominating Agreement]

                                                                   EXHIBIT 10.14

                              AMENDED AND RESTATED

                    HAMPSHIRE MANAGEMENT CONSULTING AGREEMENT

      THIS AMENDED AND RESTATED HAMPSHIRE MANAGEMENT CONSULTING AGREEMENT (this
"Agreement") is executed as of February 28, 2005 and is effective as of February
1, 2004 (the "Effective Date"), by and between HAMPSHIRE MANAGEMENT COMPANY LLC,
a Delaware limited liability company and affiliate of Hampshire Equity Partners
II, L.P. (the "Consultant") and CITI TRENDS, INC., a Delaware corporation (the
"Company").

                              W I T N E S S E T H:

      WHEREAS, the Company previously entered into a Management Consulting
Agreement with an affiliate of the Consultant, Lexington Equity Partners II,
L.L.C., on April 13, 1999 (the "Original Agreement");

      WHEREAS, Lexington Equity Partners II, L.L.C. has been dissolved;

      WHEREAS, the Company desires to retain Consultant to provide business and
financial advice to the Company and to amend and restate the Original Agreement;
and

      WHEREAS, the Consultant wishes to provide such business and financial
advice to the Company.

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein set forth, the parties hereto do hereby agree follows:

      Section 1. The Company hereby retains the Consultant, through the
Consultant's own personnel or through personnel available to the Consultant, to
render consulting services from time to time to the Company and its subsidiaries
(whether now existing or hereafter acquired), in connection with their financial
and business affairs, their relationships with their lenders, stockholders and
other third-party associates or affiliates, and the expansion of their
businesses. Consultant shall render such services to the Company in good faith
and in accordance with professional standards and applicable law. Consultant
shall report directly to the Board of Directors of the Company (the "Board of
Directors") and, when appropriate in conjunction with management, shall prepare
reports and provide other documentation for review by the Board of Directors as
to its work on behalf of the Company. The Board of Directors shall in its sole
discretion determine the scope and breadth of the Consultant's responsibilities
and duties hereunder. The terms of this Agreement shall commence on the date
hereof and continue until February 1, 2009, unless extended, or sooner
terminated, as provided in Section 5 below. The Consultant's personnel shall be
reasonably available to the Company's Board of Directors, managers, auditors and
other personnel for consultation and advice to be rendered pursuant to this
Agreement, subject to Consultant's reasonable convenience and scheduling.
Services may be rendered at the Consultant's offices or at such other locations
selected by the Consultant as the Company and the Consultant shall from time to
time agree.

      Section 2. The Company shall pay the Consultant a management fee equal to
$240,000 per year from the Effective Date through the termination of this
Agreement. The Company shall pay the Consultant such management fee in monthly
installments on the last day of each month during the term of this Agreement.
The Company and the Consultant acknowledge and agree that all fees and other
amounts due and owing to the Consultant for all periods prior to the Effective
Date have been paid in full.

      Section 3. Subject to the approval of the Board of Directors, the Company
shall reimburse Consultant for reasonable out-of-pocket expenses and any
reasonable, direct, allocable costs incurred by the Consultant and its personnel
in performing services hereunder to the Company and its subsidiaries upon the
Consultant's rendering of a statement therefor, together with supporting data as
the Company shall reasonably require.

      Section 4. Notwithstanding the foregoing, the Company shall not pay the
fees under Section 2 and such fees shall accrue pursuant to the second sentence
of this Section 4, if and to the extent expressly prohibited by the provisions
of any credit, stock, financing or other agreements or instruments binding upon
the Company, its subsidiaries or properties, if the Company has not paid cash
interest on any interest payment date or has postponed or not made any principal
payments with respect to any of their indebtedness on any scheduled payment
dates, or if the Company has not paid cash dividends on any dividend payment
date as set forth in its certificate of incorporation or as declared by its
Board of Directors, or has postponed or not made any redemptions on any
redemption date as set forth in its certificate of incorporation or any
certificate of designation with respect to its preferred stock, if any. Any
payments otherwise owed hereunder, which are not made for any of the
above-mentioned reasons, shall not be canceled but rather shall accrue, without
interest, and shall be payable by the Company promptly when, and to the extent,
that the Company is no longer prohibited from making such payments. This Section
4 will not, in any event, restrict or limit the Company's obligations under
Sections 3, 8 and 9 which will be absolute and not subject to set-off.

      Section 5. This Agreement shall be automatically renewed for successive
one (1) year terms starting February 1, 2008 unless either party hereto, within
sixty (60) days prior to the scheduled renewal date, notifies the other party as
to its election to terminate this Agreement. Notwithstanding the foregoing, this
Agreement may be terminated by not less than ninety (90) days' prior written
notice from the Company to the Consultant at any time after (a) substantially
all of the stock or substantially all of the assets of the Company are sold to
any entity unaffiliated with the Consultant and/or a majority of the Company's
stockholders immediately prior to such sale or (b) the Company is merged or
consolidated into another entity unaffiliated with the Consultant and/or a
majority of the Company's stockholders immediately prior to such merger and the
Company is not the survivor of such transaction, or (c) the consummation of a
public offering and sale of equity securities of the Company pursuant to an
effective registration statement under the Securities Act of 1933, as amended.

      Section 6. The Consultant shall have no liability to the Company on
account of (a) any advice which it renders to the Company, provided the
Consultant believed in good faith that such advice was useful or beneficial to
the Company at the time it was rendered, or (b) the Consultant's inability to
obtain financing or achieve other results desired by the Company or Consultant's
failure to render services to the Company at any particular time or from time to

time, (c) the failure of any transaction to meet the financial, operating or
other expectations of the Company. The Company's sole remedy for any claim under
this Agreement shall be termination of this Agreement.

      Section 7. Notwithstanding anything contained in this Agreement to the
contrary, the Company agrees and acknowledges that the Consultant, Hampshire
Equity Partners II, L.P., their respective affiliates, members, employees, and
directors (the "Hampshire Affiliates") intend to engage and participate in
acquisitions and business transactions outside of the scope of the relationship
created by this Agreement and the Hampshire Affiliates shall not be under any
obligation whatsoever (except to the extent that fiduciary duty principles under
Delaware corporate law may be applicable to individual directors and officers of
the Company) to make such acquisitions, business transactions or other
opportunities through the Company or offer such acquisitions, business
transactions or other opportunities to the Company.

      Section 8. The Company will, to the fullest extent permitted by applicable
law, indemnify and hold harmless the Consultant, its affiliates and associates,
each of the Hampshire Affiliates, and each of the respective owners, partners,
officers, directors, members, employees and agents of each of the foregoing (the
"Indemnified Parties"), from and against any loss, liability, damage, claim or
expenses (including the fees and expenses of counsel) arising as a result of or
in connection with this Agreement; provided, however, that the Company shall not
indemnify any of the Indemnified Parties for any losses, liabilities, damages,
claims or expenses arising as a result of the Consultant's breach (or alleged
breach) of its obligations under Section 10 of this Agreement.

      Section 9. Any payments paid by the Company under this Agreement shall not
be subject to set-off and shall be increased by the amount, if any, of any taxes
(other than income taxes) or other governmental charges levied in respect of
such payments, so that the Consultant is made whole for such taxes or charges.

      Section 10. (a) This Agreement sets forth the entire understanding of the
parties with respect to the Consultant's rendering of services to the Company.
This Agreement may not be modified, waived, terminated or amended except
expressly by an instrument in writing signed by the Consultant and the Company.

            (b) This Agreement may be assigned by either party hereto without
the consent of the other party, provided, however, such assignment shall not
relieve such party from its obligations hereunder. Any assignment of this
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns.

            (c) In the event that any provision of this Agreement shall be held
to be void or unenforceable in whole or in part, the remaining provisions of
this Agreement and the remaining portion of any provision held void or
unenforceable in part shall continue in full force and effect.

            (d) Except as otherwise specifically provided herein, notice given
hereunder shall be deemed sufficient if delivered personally or sent by
registered or certified mail to the

address of the party for whom intended at the principal executive offices of
such party, or at such other address as such party may hereinafter specify by
written notice to the other party.

            (e) If at any time after the date upon which this Agreement is
executed, the Company acquires or creates one or more subsidiary corporations (a
"Subsequent Subsidiary"), the Company shall cause such Subsequent Subsidiary to
be subject to this Agreement and all references herein to the Company's "direct
and indirect subsidiaries" shall be interpreted to include all Subsequent
Subsidiaries.

            (f) Each subsidiary of the Company shall be jointly and severally
liable and obligated hereunder with respect to each obligation, responsibility
and liability of the Company as if a direct obligation of such subsidiary.

            (g) No waiver by either party of any breach of any provision of this
Agreement shall be deemed a continuing waiver or a waiver of any preceding or
succeeding breach of such provision or of any other provision herein contained.

            (h) The Consultant and its personnel shall, for purposes of this
Agreement, be independent contractors with respect to the Company.

            (i) This Agreement shall be governed by the internal laws (and not
the law of conflicts) of the State of New York.

      Section 11. The parties shall keep the terms of this Agreement strictly
confidential and shall not reveal them to any person, except as may be necessary
in any proceeding to enforce the terms of this Agreement or as consented to by
the parties hereto.

      Section 12. This Agreement supersedes all prior agreements between the
parties in the entirety with respect to the subject matter hereof, including the
terms of the Original Agreement, and no agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.

                            [Signature Page Follows]

                                                           [Hampshire Management
                                                           Consulting Agreement]

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.



                                   HAMPSHIRE MANAGEMENT COMPANY LLC,
                                   a Delaware limited liability company


                                   By: /s/ Thomas J. Walker
                                       -------------------------------------
                                       Name:  Thomas J. Walker
                                       Title: Vice President



                                   CITI TRENDS, INC., a Delaware corporation


                                   By: /s/ Thomas W. Stoltz
                                       -------------------------------------
                                       Name:  Thomas W. Stoltz
                                       Title: Chief Financial Officer

                                                                    Exhibit 23.1



            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
Citi Trends, Inc.:


We consent to the use of our report dated March 30, 2005, with respect to the
balance sheets of Citi Trends, Inc. as of January 29, 2005 and January 31, 2004,
and the related statements of income, stockholders' equity, and cash flows for
the years ended January 29, 2005, January 31, 2004 and February 1, 2003,
incorporated herein by reference and to the reference to our firm under the
heading "Experts" in the prospectus.

Our report refers to the adoption of Statement of Financial Accounting
Standards No. 150, "Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity".



KPMG LLP

Jacksonville, Florida
April 6, 2005

April 7, 2005

VIA EDGAR AND U.S. MAIL

Securities and Exchange Commission
Division of Corporate Finance
450 Fifth Street, N.W.
Mail Stop 0308
Washington, D.C. 20549
Attn: H. Christopher Owings, Assistant Director



      RE:   CITI TRENDS, INC.
            REGISTRATION STATEMENT ON FORM S-1
            INITIALLY FILED FEBRUARY 28, 2005
            FILE NO. 333-123028

Dear Mr. Owings:

      On behalf of Citi Trends, Inc., a Delaware corporation (the "Company"), we
hereby submit three copies of the Company's responses to the Staff's comments
conveyed in a letter to the Company dated March 28, 2005 in connection with the
Staff's review of the Company's Registration Statement on Form S-1 initially
filed with the Securities and Exchange Commission (the "Commission") on February
28, 2005 (the "Registration Statement").

      This letter is submitted along with four copies of Amendment No. 1 to Form
S-1 Registration Statement ("Amendment No. 1"). All such copies have been marked
to show changes from the Registration Statement. Amendment No. 1 was transmitted
for filing with the Commission as of the date hereof.

      Capitalized terms used herein and not otherwise defined have the meanings
specified in the Registration Statement. For your convenience, we have repeated
each of the Staff's comments in bold prior to the Company's response. Unless
otherwise indicated, all page number references in the responses below are to
the internal pages of Amendment No. 1.

PART I

General

      1.    PLEASE FILE ALL REQUIRED EXHIBITS IN A TIMELY MANNER SO THAT WE MAY
            HAVE SUFFICIENT TIME TO REVIEW THEM BEFORE YOU REQUEST EFFECTIVENESS
            OF YOUR REGISTRATION STATEMENT. ALSO, PLEASE CONFIRM THAT ANY
            PRELIMINARY PROSPECTUS

Securities and Exchange Commission
April 7, 2005
Page 2


            YOU CIRCULATE WILL DISCLOSE ALL NON-RULE 430A INFORMATION, INCLUDING
            THE PRICE RANGE AND RELATED INFORMATION BASED ON A BONA FIDE
            ESTIMATE OF THE PUBLIC OFFERING PRICE WITHIN THAT RANGE.

            The Company will comply with the Staff's comment and provide all
            required exhibits in a timely manner before requesting effectiveness
            of the Registration Statement. The Company has filed several
            additional exhibits with Amendment No. 1 and will file the remaining
            exhibits in a subsequent amendment.

            The Company is currently establishing the price range and the
            offering price with the underwriters. Upon agreeing on a price range
            with the underwriters, the Company will file a subsequent amendment
            to revise the disclosure to include the price range and the per
            share data in the prospectus. The Company confirms that any
            preliminary prospectus that is circulated will disclose all non-Rule
            430A information, including the price range and the related
            information based on a bona fide estimate of the public offering
            price within that range.

      2.    PLEASE PROVIDE US WITH COPIES OF ANY ADDITIONAL ARTWORK YOU INTEND
            TO USE AS SOON AS POSSIBLE FOR OUR REVIEW AND COMMENT. PLEASE KEEP
            IN MIND THAT WE MAY HAVE COMMENTS ON THESE MATERIALS AND YOU SHOULD
            CONSIDER WAITING FOR THESE COMMENTS BEFORE PRINTING AND CIRCULATING
            ANY ARTWORK.

            The Company has complied with the Staff's comment by including the
            additional artwork on the inside front and inside back cover of the
            prospectus.

      3.    PLEASE REVIEW YOUR DISCLOSURE AND ENSURE THAT YOU IDENTIFY THE
            SOURCE FOR THE STATEMENTS YOU PROVIDE. CURRENTLY, YOU INCLUDE MANY
            FACTUAL STATEMENTS, BUT YOU HAVE NOT INDICATED WHETHER THE SOURCE OF
            THIS INFORMATION IS BASED UPON MANAGEMENT'S BELIEF, INDUSTRY DATA,
            REPORTS/ARTICLES, OR ANY OTHER SOURCE. IF THE STATEMENTS ARE BASED
            UPON MANAGEMENT'S BELIEF, PLEASE INDICATE THAT THIS IS THE CASE AND
            INCLUDE AN EXPLANATION FOR THE BASIS OF THAT BELIEF. ALTERNATIVELY,
            IF THE INFORMATION IS BASED UPON REPORTS OR ARTICLES, PLEASE
            SUPPLEMENTALLY PROVIDE THESE DOCUMENTS TO US (APPROPRIATELY MARKED
            AND DATED). THE FOLLOWING ARE EXAMPLES ONLY OF THE STATEMENTS FOR
            WHICH YOU NEED SOURCES:

                  -     "WE PROVIDE THIS OFFERING AT COMPELLING VALUES WITH
                        NATIONALLY RECOGNIZED BRANDED MERCHANDISE OFFERED AT 20%
                        TO 60% DISCOUNTS TO DEPARTMENT AND SPECIALTY STORES'
                        REGULAR PRICES." BUSINESS, PAGE 33.

                  -     "ACCORDING TO A NATIONALLY RECOGNIZED FIRM THAT
                        SPECIALIZES IN APPAREL RESEARCH, RETAIL SALES OF
                        OFF-PRICE APPAREL TOTALED $16.5 BILLION IN THE U.S. IN
                        2004, UP MORE THAN 15% FROM 2003." BUSINESS, PAGE 33.

                  -     "THE OFF-PRICE APPAREL MARKET IS DOMINATED BY LARGE
                        FORMAT, NATIONAL APPAREL COMPANIES[.]" BUSINESS, PAGE
                        33.

Securities and Exchange Commission
April 7, 2005
Page 3


            WE MAY HAVE FURTHER COMMENTS ONCE WE EXAMINE YOUR REVISIONS.

            The Company has complied with the Staff's comment by revising its
            disclosure in several locations to identify the source of various
            factual statements. For example, please see the revised version of
            the second bullet above on page 33 of the prospectus in which the
            Company has identified NPD Fashionworld, a division of The NPD
            Group, or NPD, as the source of the statement. The Company has also
            indicated in several instances where a factual statement is based
            upon the Company's belief.

            The Company supplementally informs the Staff that a substantial
            majority of its merchandise contains a MSRP number on the price tag,
            and the Company believes such merchandise is offered at that price
            in department or specialty stores. The Company's customary pricing
            process is to leave the department or specialty store price on the
            price tag of the Company for the nationally recognized branded
            merchandise and to establish the Company's price for such
            merchandise at 20% to 60% discounts to such department or specialty
            store prices. The Company believes many manufacturers supply such
            merchandise with a suggested retail price on the price tags.

            Additionally, the Company supplementally informs the Staff that
            according to information provided by NPD, the Company estimates the
            size of the off-price apparel retail market in 2004 totaled $16.5
            billion. NPD includes within this market the large retail chains
            owned by Burlington Coat Factory Warehouse Corporation, Ross Stores,
            Inc., including Ross Dress For Less, and The TJX Companies, Inc.,
            such as Marshalls and T.J. Maxx. For the reported twelve-month
            periods closest to December 31, 2004, sales for these three retail
            companies, including sales from non-apparel items such as household
            goods and accessories, totaled approximately $22.1 billion.
            Specifically, The TJX Companies, Inc. reported net sales of $14.9
            billion for the fiscal year ended January 29, 2005, Ross Stores,
            Inc. reported net sales of $4.2 billion for the fiscal year ended
            January 29, 2005, and Burlington Coat Factory Warehouse Corporation
            reported net sales of $3.0 billion for the twelve-month period ended
            November 27, 2004. Although none of these retailers have
            specifically reported apparel net sales as a percentage of their
            total net sales during these periods, the Company's management
            believes that apparel sales represent a majority of total net sales
            for the three retailers, representing at least $11.1 billion or over
            two-thirds of the total off-price apparel retail market.

      4.    PLEASE NOTE THE UPDATING REQUIREMENTS OF RULE 3-12 OF REGULATION
            S-X.

            The Company confirms that it will comply with all updating
            requirements of Rule 3-12 of Regulation S-X. The Company has
            included in Amendment No. 1 audited financial statements for the
            fiscal year ended January 29, 2005 and has provided updated
            information throughout the prospectus relating to that financial
            data, including under Management's Discussion and Analysis of
            Financial Condition and Results of Operations.

Securities and Exchange Commission
April 7, 2005
Page 4


Table of Contents

      5.    THE FOREPART OF YOUR DOCUMENT SHOULD CONSIST OF THE COVER PAGE,
            SUMMARY AND RISK FACTORS. PLEASE MOVE THE PARAGRAPHS BENEATH THE
            TABLE OF CONTENTS TO A MORE APPROPRIATE LOCATION IN YOUR PROSPECTUS.

            The Company has complied with the Staff's comment by revising the
            disclosure to delete the paragraphs beneath the table of contents
            within the prospectus. The first such paragraph appears on the back
            cover of the prospectus, and the information contained in the second
            such paragraph appears in the Business section under the heading
            "Intellectual Property" on page 41 of the prospectus.

Prospectus Summary, page 1

      6.    THE SUMMARY SECTION IS INTENDED TO PROVIDE A BRIEF OVERVIEW OF THE
            KEY ASPECTS OF YOUR OFFERING. CURRENTLY, YOUR SUMMARY IS TOO LONG
            AND REPEATS MUCH OF THE INFORMATION FULLY DISCUSSED IN YOUR BUSINESS
            SECTION. FOR EXAMPLE, YOU SHOULD REMOVE THE INDUSTRY SECTION FROM
            THE SUMMARY SINCE IT ALSO APPEARS IN THE BUSINESS SECTION. ALSO,
            PLEASE REMOVE OR SUBSTANTIALLY SHORTEN YOUR DISCUSSION OF YOUR
            DIFFERENTIATION STRATEGY, BUSINESS STRENGTHS AND GROWTH STRATEGY. AT
            A MINIMUM, THESE SECTIONS SHOULD NOT REPEAT OTHER DISCLOSURE IN THE
            SUMMARY. THE SUMMARY IS ONLY INTENDED TO PROVIDE A BRIEF SNAPSHOT OF
            THE OFFERING. SEE INSTRUCTION TO ITEM 503(A) OF REGULATION S-K.

            The Company has complied with the Staff's comment by revising the
            Summary section of the prospectus to provide a brief overview of the
            key aspects of the offering, including the increase in average sales
            per store over the last five years, and to delete the Industry
            section from the Summary.

Risk Factors, page 6

      7.    YOUR RISK FACTORS SECTION SHOULD BE A DISCUSSION OF THE MOST
            SIGNIFICANT FACTORS THAT MAKE YOU OFFERING SPECULATIVE OR RISKY. YOU
            SHOULD PLACE RISK FACTORS IN CONTEXT SO YOUR READERS CAN UNDERSTAND
            THE SPECIFIC RISK AS IT APPLIES TO YOU. SEE SEC RELEASE NO. 33-7497.
            ALSO, YOU SHOULD NOT PRESENT RISKS THAT ARE GENERIC OR CONTAIN
            BOILERPLATE LANGUAGE THAT COULD APPLY TO ANY ISSUER OR ANY OFFERING.
            WE BELIEVE A DISCUSSION OF RISK IN GENERIC TERMS DOES NOT TELL YOUR
            READERS HOW THE RISK MAY AFFECT THEIR INVESTMENT IN YOU. PLEASE
            REVISE YOUR RISK FACTORS SECTION GENERALLY TO WRITE EACH RISK FACTOR
            IN PLAIN ENGLISH AND AVOID USING BOILERPLATE OR GENERIC RISK
            FACTORS. SEE ITEM 503(C) OF REGULATION S-K. AS EXAMPLES, PLEASE
            CONSIDER THE FOLLOWING RISK FACTORS:

                  -     "EXPANSION INTO NEW MARKETS MAY PRESENT RISKS DIFFERENT
                        FROM OUR EXISTING MARKETS, AND WE MAY HAVE DIFFICULTY
                        OVERCOMING THEM."

Securities and Exchange Commission
April 7, 2005
Page 5


                  -     "OUR BUSINESS AND GROWTH STRATEGIES DEPEND ON OUR
                        ABILITY TO OBTAIN A SUFFICIENT AMOUNT OF MERCHANDISE,
                        AND OUR FAILURE TO MEET CURRENT AND INCREASED
                        MERCHANDISING NEEDS COULD HAVE A MATERIAL ADVERSE EFFECT
                        ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF
                        OPERATIONS."

                  -     "CHANGES IN THE REGULATORY ENVIRONMENT GOVERNING OUR
                        BUSINESS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
                        BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

            FURTHER, SOME OF YOUR RISK FACTOR DISCUSSIONS DO NOT CLEARLY AND
            CONCISELY CONVEY THE ACTUAL RISK, SUCH AS THE SECOND RISK FACTOR ON
            PAGE 8 AND THE LAST RISK FACTOR ON PAGE 10. CONSIDER WHETHER OTHER
            SUBSECTIONS OR ELEMENTS OF A DISCUSSION WITHIN A SUBSECTION ARE
            NECESSARY FOR THIS SECTION, AND WHETHER CERTAIN RISK FACTORS CAN BE
            COMBINED SO THEY ARE NOT REPETITIVE. ACCORDINGLY, PLEASE THOROUGHLY
            REVISE THIS SECTION TO MORE PRECISELY ARTICULATE THE RISKS TO YOUR
            OFFERING FROM EACH RISK FACTOR, AND TO ENSURE THAT EACH FACTOR IS
            WRITTEN IN PLAIN ENGLISH. WE MAY HAVE ADDITIONAL COMMENTS BASED UPON
            YOUR REVISIONS.

            The Company has complied with the Staff's comment by revising the
            Risk Factors section (i) to indicate the risks that relate
            specifically to the Company and (ii) to remove boilerplate or
            generic risk factors. The Company has also revised the Risk Factors
            section to indicate the risks by related categories. Additionally,
            the Company has revised the Risk Factors section so that each risk
            factor is presented fully in plain English. Please see the revised
            Risk Factors section on pages 6 to 15 of the prospectus.

Our business and growth strategies depend on our ability to obtain a sufficient
amount..., page 7

      8.    PLEASE CONSIDER BREAKING UP THIS RISK FACTOR TO INCLUDE AN
            ADDITIONAL RISK FACTOR DISCUSSING YOUR RISKS IN RECEIVING PRODUCTS
            THAT YOU ARE PROHIBITED FROM SELLING OR THAT ARE COUNTERFEIT BRANDS
            OR UNLICENSED GOODS.

            The Company has complied with the Staff's comment by revising the
            risk factor to discuss the Company's risk in receiving products it
            is prohibited from selling or that comprise counterfeit brands or
            unlicensed goods. Please see page 7 of the prospectus.

We rely on only two distribution centers, one of which also serves as..., page 7

      9.    PLEASE QUANTIFY, TO THE EXTENT POSSIBLE, HOW MUCH OF YOUR TOTAL
            OPERATIONS DEPEND ON EACH DISTRIBUTION CENTER.

            The Company supplementally informs the Staff that the Company
            currently operates two distribution centers, the Fahm facility,
            which the Company owns,

Securities and Exchange Commission
April 7, 2005
Page 6


            and the Coleman facility, which the Company leases. Both
            distribution centers perform critical processes of the Company's
            total distribution function. The Coleman building handles all of the
            Company's receiving functions, while the Fahm building handles all
            of the Company's shipping functions. Therefore, all of the Company's
            operations depend on both facilities.

We depend on the experience and expertise of our senior management team..., page
9

      10.   PLEASE IDENTIFY ALL THE KEY PERSONNEL UPON WHOM YOU DEPEND.

            The Company has complied with the Staff's comment by revising the
            risk factor on page 11 of the prospectus to reflect that R. Edward
            Anderson and George A. Bellino are the only key personnel upon whom
            the Company depends.

Our failure to protect our trademarks could have a negative effect..., page 9

      11.   PLEASE STATE WHICH OTHER ENTITIES HAVE TRADEMARKS THAT CONTAIN THE
            WORD "CITI" OR SIMILAR MARKS FOR APPAREL AND CLOTHING. ALSO, PLEASE
            DISCLOSE THE LIKELIHOOD THAT OTHERS WILL TRY TO PREVENT YOUR
            MANUFACTURING OR SALE OF YOUR PRIVATE LABEL MERCHANDISE BY CLAIMING
            THAT YOUR MERCHANDISE VIOLATES THEIR TRADEMARKS OR OTHER PROPRIETARY
            RIGHTS. FURTHER, PLEASE DISCUSS THE LIKELIHOOD OF THE OTHER
            ENTITIES' SUCCESS. IF YOU DO NOT KNOW WHICH ENTITIES HAVE THESE
            RIGHTS, OR THE LIKELIHOOD OF A SUCCESSFUL LAWSUIT IS SMALL, PLEASE
            CONSIDER DELETING THIS PORTION OF THE RISK FACTOR.

            The Company has complied with the Staff's comment by revising the
            disclosure in the risk factor on page 10 of the prospectus.
            Based on informal trademark searches conducted by the Company,
            other entities, including Apparel Resources, Inc., Citicraze
            Casualware, Inc., T. Juniors Inc. and Citicorp Corp., have live
            federal trademark registrations that include the word "Citi" for
            use in connection with clothing generally or women's clothing
            specifically.  Other entities also have cancelled registrations
            and abandoned applications for marks that include the word "Citi".

Adverse trade restrictions may disrupt our supply of merchandise..., page 12

      12.   PLEASE SPECIFY THE FOREIGN COUNTRIES IN WHICH YOUR MERCHANDISE IS
            CURRENTLY MANUFACTURED, AND PLEASE DISCLOSE ANY SPECIFIC POLITICAL
            RISKS THAT WOULD EFFECT YOUR BUSINESS OPERATIONS IN THESE COUNTRIES.

            The Company has complied with the Staff's comment by revising the
            disclosure on page 10 of the prospectus to indicate that the
            Company currently receives merchandise from China, Taiwan, the
            Philippines and other areas of the Far East. The Company
            respectfully submits that it is difficult to assess and predict the
            specific political risks that may arise in the future within these
            foreign countries and negatively impact the Company's business
            operations.

Use of Proceeds, page 17

      13.   YOU STATE THAT WITH YOUR PROCEEDS YOU INTEND TO REPAY YOUR
            OUTSTANDING INDEBTEDNESS TO NATIONAL BANK OF COMMERCE, BANK OF
            AMERICA, AND CONGRESS FINANCIAL. PLEASE DISCLOSE THE AMOUNTS YOU
            CURRENTLY OWE TO EACH OF

Securities and Exchange Commission
April 7, 2005
Page 7


            THESE BANKS AND WHETHER YOU WILL REPAY THE DEBTS IN FULL. ALSO,
            PLEASE TELL US IF THESE DEBTS WERE INCURRED WITHIN THE LAST YEAR. IF
            SO, PLEASE DESCRIBE THE USE OF THE PROCEEDS OF THIS INDEBTEDNESS
            OTHER THAN SHORT-TERM BORROWINGS USED FOR WORKING CAPITAL. SEE
            INSTRUCTION 4 TO ITEM 504 OF REGULATION S-K.

            The Company has complied with the Staff's comment by revising the
            Use of Proceeds disclosure on page 17 of the prospectus to state
            that the Company will repay all outstanding indebtedness to National
            Bank of Commerce, Bank of America and Congress Financial. Also, the
            Company has complied with the Staff's comment by revising the Use of
            Proceeds disclosure to state the approximate dollar amounts owed to
            National Bank of Commerce; however, the amounts owed by the Company
            to each of Bank of America and Congress Financial is unknown at this
            time due to the revolving nature of the facilities.

            The Company supplementally advises the Staff that the indebtedness
            under its $3.0 million line of credit with Bank of America and its
            $25.0 million line of credit with Congress Financial that is being
            repaid with a portion of the net proceeds from this offering
            consists of short-term indebtedness incurred for the purchase of
            inventory and other working capital purposes.

      14.   YOU STATE THAT IF YOU HAVE ANY REMAINING NET PROCEEDS YOU WILL USE
            THE PROCEEDS FOR NEW STORE OPENINGS, INCLUDING THE ACQUISITION OR
            DESIGN AND CONSTRUCTION OF A NEW DISTRIBUTION CENTER IN FISCAL 2006.
            SINCE THIS IS AN UNDERWRITTEN OFFERING, IT CAN REASONABLY BE
            EXPECTED THAT THE ACTUAL PROCEEDS WILL NOT BE SUBSTANTIALLY LESS
            THAN YOUR AGGREGATE PROCEEDS. THEREFORE, PLEASE TELL US WHY YOU HAVE
            NOT DETERMINED APPROXIMATELY HOW MUCH OF THE REMAINING PROCEEDS YOU
            WILL SPEND ON NEW STORE OPENINGS OR A NEW DISTRIBUTION CENTER.

            The Company supplementally informs the Staff that the extent to
            which the Company will finance the opening of its new stores with
            internally generated cash flows depends, in part, on its results of
            operations and therefore it is not possible to establish the precise
            level of net proceeds from this offering that will be used by the
            Company for new store openings. In addition, the timing of the
            Company's design and construction, lease or purchase of a new
            distribution center is indeterminable at this time. The Company has
            hired a third party to conduct a site and feasibility study
            regarding the necessary size and location of the new distribution
            facility.

      15.   ALSO, SINCE THESE PROCEEDS WILL BE USED TO ACQUIRE ASSETS, OTHERWISE
            THAN IN THE ORDINARY COURSE OF BUSINESS, PLEASE DESCRIBE BRIEFLY AND
            STATE THE COST OF THESE ASSETS. FURTHER, IF ANY OF THESE ASSETS ARE
            TO BE ACQUIRED FROM YOUR AFFILIATES OR THEIR ASSOCIATES, PLEASE GIVE
            THE NAMES OF THE PERSONS FROM WHOM THEY ARE TO BE ACQUIRED AND SET
            FORTH THE PRINCIPLE FOLLOWED IN DETERMINING THEIR COST. SEE
            INSTRUCTION 5 TO ITEM 504 OF REGULATION S-K.

Securities and Exchange Commission
April 7, 2005
Page 8


            The Company supplementally informs the Staff that the costs related
            to the potential design and construction or purchase of a new
            distribution center are costs that are incurred in the ordinary
            course of business of a growth retailer's life cycle. Other than the
            potential acquisition of the distribution center as discussed above
            and as specifically disclosed in the prospectus, the Company does
            not plan to acquire assets other than in the ordinary course of
            business. The Company additionally informs the Staff that the
            Company has no current agreement, arrangement, understanding or
            intention to acquire any assets through or from any affiliates of
            the Company or any of their associates.

Selected Financial and Operating Data, page 20

      16.   PLEASE INCLUDE THE AMOUNTS FOR THE "NET INCOME PER COMMON SHARE" AND
            "WEIGHTED AVERAGE SHARE."

            For the reasons indicated in the Company's response to Staff comment
            #1, the Company has not revised the disclosure within the prospectus
            to include the per share data in Amendment No. 1, but will comply
            with the Staff's comment and revise the disclosure in a subsequent
            amendment to include the amounts for the net income per common share
            and weighted average share.

      17.   PLEASE EXPAND THE BALANCE SHEET DATA ON PAGE 21 TO SHOW THE
            MANDATORY REDEEMABLE PREFERRED STOCK AS A LIABILITY FOR THE YEARS
            PRIOR TO THE RECLASSIFICATION.

            The Company has complied with the Staff's comment by revising the
            disclosure within the balance sheet data on page 21 of the
            prospectus to show mandatory redeemable preferred stock as a
            liability for all periods presented.

Management's Discussion and Analysis of Financial Condition and Results...,
page 22

      18.   WE NOTE FROM THE DISCLOSURE ON PAGE 12 THAT YOU ARE INSTITUTING
            CHANGES TO ADDRESS AND IMPROVE YOUR INTERNAL CONTROL PROCEDURES AND
            COMPLIANCE CAPABILITIES. IN THIS SECTION, PLEASE DISCUSS THE
            IMPROVEMENTS THAT YOU MUST MAKE TO YOUR INTERNAL AND DISCLOSURE
            CONTROLS TO THE EXTENT THAT YOU BELIEVE YOU WILL HAVE DIFFICULTY
            IMPLEMENTING THESE CHANGES AND THAT THESE AREAS WILL REMAIN A RISK
            TO YOUR FINANCIAL REPORTING OBLIGATIONS.

            The Company has complied with the Staff's comment by adding
            disclosure on page 23 of the prospectus relating to the Company's
            internal control procedures and compliance capabilities. The Company
            supplementally informs the Staff that it has hired RSM McGladrey, a
            professional consulting firm, to assist the Company in the
            compliance process. The Company has revised the disclosure on page
            23 of the prospectus to indicate that the Company anticipates
            retaining additional personnel to assist the Company in satisfying
            its Section 404 compliance obligations, and is currently evaluating
            whether such personnel will be retained as consultants or employees
            of the Company. The Company has experienced difficulty in hiring
            individuals with experience in financial reporting and compliance
            with the accounting rules and regulations of the Commission. The
            Company believes that consultants can fill any short fall related
            to such employees. Although the Company is instituting changes to
            address and improve internal control procedures and

Securities and Exchange Commission
April 7, 2005
Page 9


            compliance capabilities, the Company is not aware of any difficulty
            in implementing these changes and believes that the implementation
            process presents no material risks to the Company's financial
            reporting obligations.

      19.   PLEASE EXPAND THIS SECTION TO DISCUSS KNOWN MATERIAL TRENDS AND
            UNCERTAINTIES THAT WILL HAVE, OR ARE REASONABLY LIKELY TO HAVE, A
            MATERIAL IMPACT ON YOUR REVENUES OR INCOME OR RESULT IN YOUR
            LIQUIDITY DECREASING OR INCREASING IN ANY MATERIAL WAY. PLEASE
            PROVIDE ADDITIONAL INFORMATION ABOUT THE QUALITY AND VARIABILITY OF
            YOUR EARNINGS AND CASH FLOWS SO THAT INVESTORS CAN ASCERTAIN THE
            LIKELIHOOD OF THE EXTENT PAST PERFORMANCE IS INDICATIVE OF FUTURE
            PERFORMANCE. WE NOTE, FOR EXAMPLE, THAT YOUR COMPARABLE STORES SALES
            HAVE DECLINED SIGNIFICANTLY FOR THE 39 WEEKS ENDED OCTOBER 30, 2004
            TO LEVELS BELOW THOSE FOLLOWING YOUR REMODELING INITIATIVES. PLEASE
            DISCUSS WHETHER YOU EXPECT LEVELS TO REMAIN AT THIS LEVEL OR TO
            INCREASE OR DECREASE. ALSO, YOU SHOULD CONSIDER DISCUSSING THE
            IMPACT OF ANY CHANGES ON YOUR EARNINGS. FURTHER, PLEASE DISCUSS IN
            REASONABLE DETAIL:

                  -     ECONOMIC OR INDUSTRY-WIDE FACTORS RELEVANT TO YOUR
                        COMPANY, AND

                  -     MATERIAL OPPORTUNITIES, CHALLENGES, AND RISKS IN SHORT
                        AND LONG TERM AND THE ACTIONS YOU ARE TAKING TO ADDRESS
                        THEM.

            SEE ITEM 303 OF REGULATION S-K AND SEC RELEASE NO. 33-8350.

            The Company has evaluated the known material trends and
            uncertainties that have, or are reasonably likely to have, a
            material impact on the Company's revenues or income or result in the
            Company's liquidity decreasing or increasing in any material way and
            respectfully submits that it believes that it has addressed the
            Staff's comment in its disclosure. The Company also submits that the
            trends in comparable stores sales growth are discussed throughout
            Management's Discussion and Analysis of Financial Condition and
            Results of Operations with specific emphasis in the fifth and sixth
            paragraphs of the "Overview" of that section.

      20.   WE NOTE THAT MANAGEMENT USES OPERATING STATISTICS, SUCH AS CUSTOMER
            COUNTS, ITEMS PURCHASED PER CUSTOMER, AND AVERAGE ITEM PRICE. PLEASE
            CONSIDER PROVIDING THESE METRICS AND ANY OTHER STATISTICS, SUCH AS
            SALES PER SQUARE FOOT AND AVERAGE AMOUNT OF CUSTOMER PURCHASES, TO
            ENABLE INVESTORS TO VIEW YOUR OPERATIONS THROUGH MANAGEMENT'S EYES.

            With respect to the operating statistics referred to in the Staff's
            comment, the Company respectfully submits that disclosing such
            statistics would place the Company at a competitive disadvantage.
            In addition, the Company disfavors the disclosure of such operating
            statistics within the prospectus, as the data underlying such
            statictics is subjective and imprecise. Although operating
            statistics such as customer counts, items per customer and average
            item price are useful to management in analyzing operating
            performance, without knowledge of and experience in the retail
            apparel industry such operating

Securities and Exchange Commission
April 7, 2005
Page 10


            statistics could be potentially confusing and misleading to
            investors given the subjectivity of the analysis of such data. In
            addition, management believes that publicly disclosing such
            operating statistics would place the Company at a competitive
            disadvantage to other companies in the discount retail business as
            other companies do not make such disclosures. However, in response
            to the Staff's comment, the Company has revised its disclosure on
            pages 22 and 23 to include information related to average sales per
            store.

      21.   IF YOU CHOOSE TO PRESENT THE NON-GAAP MEASURE OF "AVERAGE STORE
            LEVEL CASH FLOW" SHOWN ON PAGE 22, PLEASE REVISE TO INCLUDE ALSO THE
            DISCLOSURES REQUIRED BY ITEM 10(E) OF REGULATION S-K.

            The Company has complied with the Staff's comment by replacing the
            disclosure on pages 22 and 36 of the prospectus pertaining to
            "average store level cash flow" with disclosures relating to "store
            operating profit", including the manner in which store operating
            profit is calculated.

Overview, page 22

      22.   PLEASE DISCLOSE THE STATUS OF ANY ACTIONS YOU HAVE COMPLETED IN
            FURTHERANCE OF ACQUIRING OR DESIGNING AND CONSTRUCTING A NEW
            DISTRIBUTION CENTER IN SOUTHEASTERN GEORGIA IN FISCAL YEAR 2006.
            ALSO, PLEASE STATE THE LIKELIHOOD THAT A NEW DISTRIBUTION CENTER
            WILL BE OPERATIONAL BY THAT TIME.

            The Company supplementally informs the Staff that the Company is in
            the needs assessment and site location process relative to its new
            distribution center. As noted in the Company's response to Staff
            comment #14 above, the Company believes it will need additional
            distribution capacity for the spring of 2007 and therefore intends
            to have a new facility operational by the end of 2006. The Company
            has hired a third party to conduct a site and feasibility study
            regarding the necessary size and location of the new distribution
            facility. The Company expects to receive the results of the study in
            the near future, and the Company expects that after receipt of the
            report, the Company will determine whether to design and construct,
            purchase or lease a new distribution center and will select a
            suitable location.

      23.   PLEASE FURTHER EXPLAIN THE IMPACT THAT THE WTO AGREEMENT ON TEXTILES
            AND CLOTHING WILL HAVE ON YOUR OPERATIONS. WE NOTE THAT EVEN THOUGH
            THE AVERAGE DOLLAR AMOUNT OF SALES PER CUSTOMER SPENT IN YOUR STORES
            WOULD BE REDUCED, APPARENTLY, SO WOULD YOUR COST IN PURCHASING YOUR
            STOCK GOODS. ALSO, WHAT "VARIOUS ACTIONS" HAVE BEEN TAKEN OR
            THREATENED BY PARTIES AFFECTED BY THE REMOVAL OF THE QUOTAS, AND WHO
            ARE THE PARTIES TO WHOM YOU ARE REFERRING?

            The Company respectfully submits that, while the Company's goods
            could become less expensive, competition will likely require most
            apparel retailers to decrease proportionately the prices they charge
            customers for such goods. As a result of the removal of the quotas,
            the Company may have to sell significantly

Securities and Exchange Commission
April 7, 2005
Page 11


            more merchandise in order to achieve the same amount of total sales
            as in prior periods, which could significantly impact the Company's
            profit margins.

            At the end of 2004, the U.S. textile and apparel industry petitioned
            the U.S. government to impose "safeguards" (special quantitative
            restrictions) on twelve categories of textile and apparel based upon
            the "threat" being posed by the removal of quotas on January 1,
            2005. The U.S. government did impose the safeguard measures, but an
            injunction was imposed by the U.S. Court of International Trade
            because the actions had been based only on "threat" data. It is
            expected that the injunction will be reconsidered by the court in
            late April or mid-May. On April 4, 2005, the U.S. Department of
            Commerce initiated safeguard proceedings with respect to three
            products (cotton knit shirts and blouses, cotton trousers and cotton
            and man-made fiber underwear) to evaluate the effect of removal of
            the quotas and the necessity of any remedial action.

Results of Operations, page 24

      24.   PLEASE DISCUSS ANY OFF-BALANCE SHEET ARRANGEMENTS THAT HAVE, OR ARE
            REASONABLY LIKELY TO HAVE, A CURRENT OR FUTURE EFFECT ON YOUR
            FINANCIAL CONDITION, REVENUES OR EXPENSES, RESULTS OF OPERATIONS,
            LIQUIDITY OR CAPITAL RESOURCES. SEE ITEM 303(A)(4) OF REGULATION
            S-K.

            The Company has complied with the Staff's comment by revising the
            disclosure on page 30 of the prospectus to state that, other than
            the Company's store operating leases, which are described in the
            prospectus, the Company does not have any off-balance sheet
            arrangements that have, or are reasonably likely to have, a current
            or future effect on its financial condition, revenue, expenses,
            results of operations, liquidity or capital resources.

Quarterly Results of Operations, page 26

      25.   PLEASE ADD PER SHARE DATA TO YOUR QUARTERLY RESULTS OF OPERATIONS AS
            REQUIRED BY ITEM 302(A)(L) OF REGULATION S-K.

            For the reasons indicated in the Company's response to Staff comment
            #1, the Company has not revised the disclosure to include the per
            share data in Amendment No. 1, but will comply with the Staff's
            comment and revise the disclosure in a subsequent amendment to add
            the per share data to the Company's quarterly results of operations.

Liquidity Sources,  Requirements and Contractual Cash Requirements..., page 28

      26.   IN THIS SECTION, YOU STATE THAT "[S]OME OPERATING LEASES PROVIDE FOR
            FIXED MONTHLY RENTALS WHILE OTHERS PROVIDE FOR RENTALS COMPUTED AS A
            PERCENTAGE OF NET SALES." ON PAGE 40, YOU SAY THAT YOUR "TYPICAL
            STORE LEASE" REQUIRES YOU TO PAY "PERCENTAGE RENT." PLEASE REVISE
            ONE OR BOTH OF THESE STATEMENTS SO THAT YOUR DOCUMENT REFLECTS
            CONSISTENTLY HOW YOUR LEASES ARE STRUCTURED. TO THE EXTENT
            PRACTICABLE, QUANTIFY THE NUMBER OF LEASES WITH FIXED MONTHLY

Securities and Exchange Commission
April 7, 2005
Page 12


            RENTALS COMPARED TO THOSE FOR WHICH RENTALS ARE COMPUTED AS A
            PERCENTAGE OF SALES.

            The Company has complied with the Staff's comment by revising the
            statements on pages 29 and 30 of the prospectus to ensure the
            disclosures within the prospectus reflect consistently the manner in
            which the Company's leases are structured. In addition, on page 41
            of the prospectus the Company has added disclosure regarding the one
            store with a fixed monthly rental as compared to the rest of the
            Company's stores for which rentals are computed as a percentage of
            sales.

      27.   PLEASE INCLUDE CONTINGENT LEASE PAYMENTS IN THE CONTRACTUAL
            OBLIGATIONS SCHEDULE, IF ESTIMABLE, ALONG WITH DISCLOSURE OF THE
            ASSUMPTIONS USED TO CALCULATE THE ESTIMATE.

            The Company has not revised the disclosure to reflect the Staff's
            comment, as the amount of contingent lease payments for future years
            is not estimable, in part due to the inability to accurately
            estimate sales on a per store basis. The Company has added
            disclosure within footnote 3 on page 29 of the prospectus to
            reflect the amount recognized by the Company in fiscal 2004.

      28.   IN FOOTNOTE 5, PLEASE EXPAND YOUR DISCLOSURE TO INDICATE IF THE
            TERMINATION FEE TO BE PAID UPON CONSUMMATION OF THE OFFERING HAS
            BEEN PAID OR WILL BE PAID FROM THE PROCEEDS.

            The Company has complied with the Staff's comment by revising the
            disclosure in what is now footnote 4 on page 29 of the prospectus to
            state that the termination fee will be paid no later than December
            31, 2005, will be recognized as an expense upon consummation of the
            offering and will not be paid from the proceeds of the offering.

Critical Accounting Policies, page 30

      29.   PLEASE REVISE YOUR DISCLOSURE TO PRESENT A MORE ROBUST DISCUSSION AS
            TO WHY THESE ARE CRITICAL ACCOUNTING POLICIES. THIS DISCLOSURE
            SHOULD SUPPLEMENT, NOT DUPLICATE, THE DESCRIPTION OF ACCOUNTING
            POLICIES THAT ARE ALREADY DISCLOSED IN THE NOTES TO THE FINANCIAL
            STATEMENTS. THE DISCLOSURE SHOULD PROVIDE GREATER INSIGHT INTO THE
            QUALITY AND VARIABILITY OF INFORMATION REGARDING FINANCIAL CONDITION
            AND OPERATING PERFORMANCE. THE DISCUSSION IN YOUR MANAGEMENT'S
            DISCUSSION AND ANALYSIS SHOULD PRESENT YOUR ANALYSIS OF THE
            UNCERTAINTIES INVOLVED IN APPLYING A PRINCIPLE AT A GIVEN TIME OR
            THE VARIABILITY THAT IS REASONABLY LIKELY TO RESULT FROM ITS
            APPLICATION OVER TIME. ADDITIONALLY, PLEASE UNDERTAKE THE FOLLOWING:

                  -     DISCUSS WHY MANAGEMENT BELIEVES THE ACCOUNTING POLICY IS
                        CRITICAL;

Securities and Exchange Commission
April 7, 2005
Page 13


                  -     DISCUSS HOW ACCURATE YOUR ESTIMATES AND ASSUMPTIONS HAVE
                        BEEN IN THE PAST, HOW MUCH THEY HAVE CHANGED IN THE
                        PAST, AND WHETHER THEY ARE LIKELY TO CHANGE IN THE
                        FUTURE; AND

                  -     INCLUDE QUANTITATIVE DISCLOSURE OF YOUR SENSITIVITY TO
                        CHANGE BASED ON OTHER OUTCOMES THAT ARE REASONABLY
                        LIKELY TO OCCUR AND THAT WOULD HAVE A MATERIAL EFFECT ON
                        THE COMPANY.

            FOR EXAMPLE, FOR YOUR REVENUE RECOGNITION POLICY YOU COULD DISCUSS
            THE PROVISION FOR SALES RETURNS AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
            BOTH ON A TOTAL COST BASIS AS WELL AS ON A PERCENTAGE OF REVENUES.
            YOUR DISCUSSION COULD FURTHER ADDRESS VARIANCES THAT HAVE OCCURRED
            IN HISTORIC RESULTS, TRENDS, AND FUTURE EXPECTATIONS, AS WELL AS THE
            IMPACT TO THE STATEMENT OF OPERATIONS RESULTING FROM HYPOTHETICAL
            CHANGES. SEE ITEM V OF RELEASE NOS. 33-8350/34-48960.

            The Company has complied with the Staff's comment by revising the
            disclosure within Critical Accounting Policies on pages 30 and 31 of
            the prospectus to include only those accounting policies that
            require substantive management judgment and that have the potential
            to materially affect the Company's financial results.

            With respect to the third bullet point of the Staff's comment, the
            Company respectfully submits that it would not be practicable to
            present quantitative information with respect to the Company's
            critical accounting policies and that such information would not be
            useful to investors given the nature of such policies.

Business, page 33

      30.   SINCE THE STRENGTH OF YOUR BUSINESS OPERATIONS IS IN OFFERING YOUR
            MERCHANDISE AT DISCOUNTS TO YOUR CUSTOMERS, PLEASE DETAIL YOUR PLANS
            IF YOU ARE UNABLE TO "OPPORTUNISTICALLY" PURCHASE MERCHANDISE AT
            REDUCED PRICES AND THROUGH CLOSE-OUTS.

            The Company supplementally informs the Staff that the Company has no
            alternative plans to being an off-price opportunistic and/or
            close-out buyer. The Company anticipates being able
            opportunistically to purchase merchandise at reduced prices and
            through close-outs. Other large retailers, such as TJ Maxx, have
            operated for many years as off-price, close-out retailers.

      31.   YOU STATE THAT YOU DO NOT SPEND LARGE SUMS ON FIXTURING, LEASEHOLD
            IMPROVEMENTS, EQUIPMENT, OR OTHER START UP COSTS, YET ON PAGE 22,
            YOU STATE THAT YOUR AVERAGE INVESTMENT FOR THE 40 STORES OPENED IN
            FISCAL 2004 WAS APPROXIMATELY $280,000. PLEASE PROVIDE SUPPORT THAT
            THIS IS NOT A COMPARATIVELY "LARGE SUM" IN YOUR INDUSTRY.

            The Company has complied with the Staff's comment by revising the
            disclosure on page 22 of the prospectus to delete the statement that
            the amount was not a comparatively "large sum" in the retail
            industry.

Securities and Exchange Commission
April 7, 2005
Page 14


Growth Strategy, page 35

      32.   PLEASE EXPLAIN WHAT YOU MEAN BY "MERCHANDISING ENHANCEMENTS" AND THE
            "EXPANSION OF ADJACENT PRODUCT CATEGORIES." ALSO, PLEASE IDENTIFY
            THE GEOGRAPHIC AREAS IN WHICH YOU EXPECT TO EXPAND.

            The Company has complied with the Staff's comment by revising the
            disclosure on pages 22 and 35 of the prospectus to expand on the use
            of both of the terms. The Company supplementally informs the Staff
            that the Company uses the term "merchandising enhancements" to
            describe its strategy to increase the assortment and amount of
            inventory in certain existing categories for which recent sales
            and/or sales trends are encouraging. The Company intends to continue
            to expand its relationships with important vendors and brokers. The
            phrase "expansion of adjacent product categories" refers to the
            Company's intention further to expand certain new product areas,
            such as the Company's home decor, gifts and accessories and intimate
            apparel product categories, as specifically disclosed on pages 2, 22
            and 35 of the prospectus. Based upon an analysis of the Company's
            target customer, the Company has identified potential store
            locations and expansion into each of Delaware, Illinois, Indiana,
            Kentucky, Michigan, Missouri, New Jersey, Ohio, Pennsylvania and
            Wisconsin by calendar 2008.

Store Operations, page 35

      33.   PLEASE DISCUSS HOW YOUR LAYAWAY PROGRAM COMPARES TO INDUSTRY
            PRACTICE. SEE ITEM L01(C)(1)(VI) OF REGULATION S-K. ALSO, PLEASE
            DISCLOSE THE AMOUNT OF THE RE-STOCKING FEE.

            The Company supplementally informs the Staff that the Company's
            management believes competitors in the industry have instituted
            similar layaway programs. The Company directs the Staff to the
            Annual Report on Form 10-K filed on April 22, 2004 by one of its
            direct competitors, The Cato Corporation (the parent company of It's
            Fashions), which discusses a similar layaway program. The Company
            has complied with the Staff's comment by revising the disclosure to
            include the amount of the re-stocking fee.

Product Merchandising and Pricing, page 37

      34.   PLEASE IDENTIFY THE MANUFACTURERS OF THE PRODUCTS THAT ARE TYPICALLY
            REPRESENTED BY NATIONALLY RECOGNIZED BRANDS TO THE EXTENT THAT THESE
            BRANDS INDIVIDUALLY REPRESENT A MATERIAL PORTION OF YOUR SALES.

            The Company supplementally provides the following list of
            manufacturers that typically provide nationally recognized brands:
            Baby Phat, Dickies, FuBu, Phat Farm, Rocawear, South Pole and US
            Polo Association. Although these brands collectively represent a
            material portion of the Company's sales, no single brand represents
            a material portion of the Company's sales. The Company has
            determined not to include the list of manufacturers in the
            prospectus for several reasons, including the fact that no single
            brand represents a material portion of the

Securities and Exchange Commission
April 7, 2005
Page 15


            Company's sales, the requirement to obtain the manufacturers'
            consent to include them within such a list and the fact that the
            common practice in the retail industry is not to identify the
            manufacturers.

Sourcing and Allocation, page 38

      35.   PLEASE DISCLOSE THE NAMES OF YOUR TWO INDEPENDENT FASHION CONSULTING
            FIRMS. ALSO, IF YOU HAVE ANY MATERIAL AGREEMENTS WITH THESE FIRMS,
            PLEASE FILE THEM AS MATERIAL CONTRACTS. SEE ITEM 601(B)(10) OF
            REGULATION S-K.

            The Company has complied with the Staff's comment by revising the
            disclosure on page 38 of the prospectus to identify the two
            independent fashion consulting firms. The Company supplementally
            informs the Staff that the Company does not have any agreements with
            these fashion consulting firms.

      36.   PLEASE DISCLOSE WHY YOU BELIEVE ALTERNATE SOURCES OF MERCHANDISE FOR
            ALL PRODUCT CATEGORIES ARE AVAILABLE AT COMPARABLE PRICES SHOULD YOU
            CHANGE YOUR SUPPLIERS; ESPECIALLY IF YOUR SALES ARE DEPENDENT ON
            "NATIONALLY RECOGNIZED BRANDS." FURTHER, PLEASE DISCUSS ANY OTHER
            FACTORS THAT MAY DISRUPT THE AVAILABILITY OF YOUR PRODUCTS, AND YOUR
            ALTERNATIVES SHOULD A DISRUPTION OCCUR. SEE ITEM 101(C)(1)(III) OF
            REGULATION S-K.

            As disclosed on page 37 in the prospectus, approximately 30% of the
            merchandise that the Company sells is from nationally recognized
            brands. The Company purchases this nationally recognized brand
            merchandise from approximately 30 to 50 vendors. The Company
            believes that alternate sources of merchandise for all product
            categories are available at comparable prices, as thousands of
            vendors are available to supply the Company with merchandise. In
            addition, the Company strives to maintain strong relationships with
            its vendors in order to obtain quality merchandise in acceptable
            price ranges.

Distribution, page 39

      37.   IN THIS SECTION, YOU DESCRIBE YOUR PRACTICES REGARDING HOW YOU
            HANDLE WORKING CAPITAL ITEMS. IN ADDITION, PLEASE DISCUSS INDUSTRY
            PRACTICES IN HANDLING WORKING CAPITAL ITEMS. FOR EXAMPLE, PLEASE
            DISCLOSE HOW YOU COMPARE WITH OTHERS IN YOUR INDUSTRY IN CARRYING
            THE PROPER AMOUNT OF INVENTORY TO MEET YOUR DELIVERY REQUIREMENTS
            AND ASSURE YOURSELF OF A CONTINUOUS ALLOTMENT OF GOODS FROM
            SUPPLIERS. ALSO, PLEASE DISCUSS YOUR CUSTOMERS' RIGHTS TO RETURN
            PURCHASED MERCHANDISE, IF ANY, AND HOW YOUR POLICIES COMPARE WITH
            INDUSTRY PRACTICE. SEE ITEM 101(C)(1)(VI) OF REGULATION S-K.

            The Company supplementally informs the Staff that the Company
            handles working capital items by establishing and maintaining target
            inventory turn ratios to measure management's performance. The
            Company's buyers continuously search for merchandise in the apparel
            markets on behalf of the Company. The Company supplementally informs
            the Staff that the Company does not compare

Securities and Exchange Commission
April 7, 2005
Page 16


            its targets with other retailers, as most retailers have unique ways
            of calculating inventory performance through inventory turns, weeks
            of supply or other measures. Overall, the Company's existing and new
            store sales growth suggests that its has not had significant
            difficulties in carrying appropriate inventory levels. Additionally,
            the Company's gross margins have remained consistent from 2000 to
            2004, indicating that the Company does not carry an excess of
            inventory.

            The Company has complied with the Staff's comment by including
            disclosure about our return policies on page 38 of the prospectus.

Information Technology and Systems, page 39

      38.   WE NOTE THAT YOU ANTICIPATE SELLING SELECTED BRANDED APPAREL
            PROVIDED BY THIRD PARTIES ON YOUR WEBSITE. PLEASE CONSIDER
            DISCUSSING IN MANAGEMENT'S DISCUSSION AND ANALYSIS YOUR EXPECTATIONS
            REGARDING THE EFFECT OF THESE SALES ON YOUR RESULTS OF OPERATIONS
            FOR FUTURE PERIODS TO THE EXTENT THAT YOU BELIEVE THESE SALES WILL
            HAVE A MATERIAL EFFECT ON YOUR OPERATIONS.

            The Company has not revised its disclosure within the prospectus in
            response to the Staff's comment because the selling of selected
            branded apparel on the Company's website is expected to be
            immaterial in the near term.

Competition, page 40

      39.   PLEASE ESTIMATE YOUR COMPETITIVE POSITION RELATIVE TO THE
            COMPETITORS YOU MENTION. ALSO, PLEASE DISCUSS THE PRINCIPAL METHODS
            OF COMPETITION AND THE POSITIVE AND NEGATIVE FACTORS PERTAINING TO
            YOUR COMPETITIVE POSITION. SEE ITEM 101(C)(1)(X) OF REGULATION S-K.

            The Company has complied with the Staff's comment by revising the
            disclosure in the Business section under the heading "Competition"
            on page 40 of the prospectus.

Legal Proceedings, page 41

      40.   FOR THE TWO PROCEEDINGS THAT YOU MENTION, PLEASE INCLUDE THE NAME OF
            THE COURT, THE PRINCIPAL PARTIES, A DESCRIPTION OF THE FACTUAL BASIS
            ALLEGED TO UNDERLIE THE PROCEEDINGS, AND THE RELIEF SOUGHT BY THE
            PLAINTIFFS. SEE ITEM 103 OF REGULATION S-K.

            The Company has complied with the Staff's comment by revising the
            disclosure on page 41 of the prospectus to include the name of the
            court, the principal parties, a description of the factual basis
            alleged to underlie the proceedings and the relief sought by the
            plaintiffs.

Executive Officers and Directors, page 42

      41.   ON PAGE 52, YOU STATE THAT MR. BELLINO WAS YOUR CHIEF EXECUTIVE
            OFFICER AND PRESIDENT FROM APRIL 1999 TO DECEMBER 2001. HOWEVER, IN
            THIS SECTION, YOU STATE THAT MR. BELLINO HAS BEEN YOUR PRESIDENT AND
            CHIEF MERCHANDISING OFFICER SINCE JANUARY 1997. PLEASE REVISE OR
            ADVISE.

Securities and Exchange Commission
April 7, 2005
Page 17


            The Company has complied with the Staff's comment by revising the
            disclosure on page 42 of the prospectus to reflect that Mr. Bellino
            served as the Company's Chief Executive Officer and President from
            April 1999 to December 2001.

      42.   PLEASE DISCLOSE HOW MR. GOFF HAS BEEN "ASSOCIATED" WITH HAMPSHIRE
            EQUITY PARTNERS SINCE AUGUST 1998. SEE ITEM 401(E) OF REGULATION
            S-K.

            The Company has complied with the Staff's comment by revising the
            disclosure on page 43 of the prospectus to delete the words
            "associated with" and insert the words "employed by" to indicate
            that Mr. Goff has been employed by Hampshire Equity Partners since
            August 1998.

Board of Directors Composition After the Offering, page 43

      43.   YOU STATE THAT YOU INTEND TO AVAIL YOURSELF OF THE NASDAQ RULE
            4350(C) CONTROLLED COMPANY EXCEPTION THAT APPLIES TO COMPANIES WHERE
            MORE THAN 50% OF THE STOCKHOLDER VOTING POWER IS HELD BY AN
            INDIVIDUAL, GROUP, OR ANOTHER COMPANY. PLEASE DISCLOSE THE
            INDIVIDUAL, GROUP, OR COMPANY THAT HAS THE 50% VOTING POWER IN YOU.
            ALSO, PLEASE DISCLOSE YOUR PLANS FOR COMPLYING WITH NASDAQ RULES
            SHOULD THE ENTITY'S OWNERSHIP INTEREST FALL BELOW THE 50% OWNERSHIP
            THRESHOLD.

            The Company has complied with the Staff's comment by revising the
            disclosure on page 43 of the prospectus to indicate that Hampshire
            Equity Partners II, L.P. holds more than 50% of the voting power in
            the Company. The Company has also disclosed that the Company intends
            to comply with the Nasdaq rules in the event Hampshire's ownership
            falls below 50% and, as stated on pages 43 and 44 of the prospectus,
            has established the necessary governance structure to ensure
            compliance with applicable rules, including the establishment of a
            board of directors with a majority of independent directors and the
            establishment of an audit committee chaired by a "financial expert"
            as defined under the Nasdaq rules.

      44.   PLEASE DISCLOSE WHETHER ANY OF THE FIVE DIRECTORS THAT WILL TAKE
            OFFICE FOLLOWING THE OFFERING ARE HAMPSHIRE'S NOMINATED DIRECTORS.
            IF SO, PLEASE STATE WHICH DIRECTORS WERE NOMINATED BY HAMPSHIRE.
            ALSO, PLEASE TELL US HOW MR. FLYNN SATISFIES THE INDEPENDENCE
            REQUIREMENTS OF THE NASDAQ RULES.

            The Company has complied with the Staff's comment by revising the
            disclosure on page 43 of the prospectus to indicate that the sole
            Hampshire-nominated director will be Gregory Flynn. The majority of
            the board of directors will be independent, and the three
            independent directors will be John Lupo, Tracy Noll and the director
            nominee. The Company does not intend for Gregory Flynn to satisfy
            the independence requirements of the Nasdaq rules and, because the
            majority of the board of directors comprises independent directors,
            the Company does not believe it is necessary for Mr. Flynn to
            satisfy such requirements.

Securities and Exchange Commission
April 7, 2005
Page 18


Director Compensation, page 46

      45.   PLEASE DISCLOSE THE AMOUNT OF OPTIONS GIVEN TO YOUR DIRECTORS AS
            COMPENSATION FOR THEIR SERVICES AND THE EXERCISE PRICE OF THE
            OPTIONS. SEE ITEM 402(G) OF REGULATION S-K.

            The Company has complied with the Staff's comment by revising the
            disclosure on page 46 of the prospectus to include the amount of
            options given to the Company's independent directors as compensation
            for their services and the exercise price of such options.

Management Consulting Agreement, page 55

      46.   PLEASE FILE YOUR AMENDED AND RESTATED MANAGEMENT CONSULTING
            AGREEMENT, EFFECTIVE FEBRUARY 1, 2004, AS AN EXHIBIT TO THIS
            DOCUMENT. ALSO, PLEASE DISCLOSE WHETHER THE TERMS OF THIS AGREEMENT
            ARE COMPARABLE TO THOSE YOU COULD HAVE OBTAINED FROM AN UNAFFILIATED
            THIRD PARTY.

            The Company has complied with the Staff's comment by filing with
            Amendment No. 1 the Amended and Restated Management Consulting
            Agreement, effective February 1, 2004, as Exhibit 10.14. The Company
            has also complied with the Staff's comment by revising the
            disclosure on page 55 of the prospectus to state that the Company
            believes the terms of the Amended and Restated Management Consulting
            Agreement are comparable to those the Company could have obtained
            from an unaffiliated third party.

      47.   IN YOUR STOCKHOLDERS AGREEMENT DATED APRIL 13, 1999, YOU STATE THAT
            FOUR MEMBERS OF YOUR BOARD MAY BE DESIGNATED BY THE OWNERS OF THE
            MAJORITY OF THE VOTING STOCK BENEFICIALLY OWNED BY HAMPSHIRE EQUITY
            PARTNERS AND ITS AFFILIATES. HOWEVER, ACCORDING TO YOUR NOMINATING
            AGREEMENT WITH HAMPSHIRE EQUITY PARTNERS, HAMPSHIRE IS PERMITTED TO
            DESIGNATE ONLY UP TO TWO DIRECTORS TO BE NOMINATED, DEPENDING ON THE
            HAMPSHIRE'S STOCK OWNERSHIP. PLEASE CLARIFY WHETHER THE NOMINATING
            AGREEMENT WILL SUPERSEDE THIS PROVISION OF THE STOCKHOLDERS
            AGREEMENT.

            The Company has complied with the Staff's comment by revising the
            disclosure on page 55 of the prospectus to clarify the fact that,
            pursuant to its terms, all of the provisions of the stockholders
            agreement will terminate upon consummation of the offering, other
            than the registration rights described under "Related Party
            Transactions - Stockholders Agreement." In addition, as described in
            the prospectus the parties thereto intend to terminate the
            stockholders agreement in connection with the offering.

Principal and Selling Stockholders, page 57

      48.   PLEASE IDENTIFY THE BENEFICIAL OWNER THAT HAS THE ULTIMATE VOTING OR
            INVESTMENT CONTROL OVER THE SHARES OF HAMPSHIRE EQUITY PARTNERS II,
            L.P. LISTED IN YOUR SELLING SHAREHOLDER TABLE ON PAGE 57. SEE
            INTERPRETATION 60 UNDER SECTION I. REGULATION S-K IN THE DIVISION OF
            CORPORATION FINANCE'S

Securities and Exchange Commission
April 7, 2005
Page 19


            MANUAL OF PUBLICLY AVAILABLE TELEPHONE INTERPRETATIONS (JULY 1997).
            PLEASE UPDATE THIS INFORMATION SO IT IS PRESENTED AS OF THE MOST
            RECENT PRACTICABLE DATE. SEE ITEM 403 OF REGULATION S-K.

            The Company has revised the disclosure on page 57 of the prospectus
            to comply with the Staff's comment.

Lock-Up Agreements, page 62

      49.   PLEASE TELL US WHAT FACTORS CIBC WORK MARKETS CORP. WOULD TAKE INTO
            CONSIDERATION IN DECIDING WHETHER TO CONSENT TO A DISPOSITION OF
            SECURITIES PRIOR TO THE EXPIRATION OF THE LOCK-UP.

            The Company has been advised by CIBC World Markets Corp. that the
            release of any lock-up agreement by it will be considered on a
            case-by-case basis. Factors in any such decision may include the
            length of time before the lock-up agreement expires, the number of
            shares involved, the reason for the requested release, market
            conditions, the trading price of the Company's common stock, and the
            identity of the person or entity seeking the release (i.e. the
            Company or one of the Company's affiliates, shareholders, executive
            officers or directors). The Company has been advised by the
            underwriters that the underwriters have no current intention of
            waiving the lock-ups.

Underwriting, page 64

      50.   PLEASE DISCLOSE WHICH OF YOUR SELLING SHAREHOLDERS ARE AFFILIATES,
            AND DISCLOSE THAT AN AFFILIATE MAY BE DEEMED TO BE AN UNDERWRITER
            UNDER THE FEDERAL SECURITIES LAWS.

            The Company has complied with the Staff's comment by revising the
            disclosure on page 66 of the prospectus in accordance with the
            Staff's comment.

      51.   PLEASE IDENTIFY ANY MEMBERS OF THE UNDERWRITING SYNDICATE THAT WILL
            ENGAGE IN ANY ELECTRONIC OFFER, SALE, OR DISTRIBUTION OF THE SHARES
            AND DESCRIBE THEIR PROCEDURES TO US SUPPLEMENTALLY. IF YOU BECOME
            AWARE OF ANY MEMBERS OF THE UNDERWRITING SYNDICATE THAT MAY ENGAGE
            IN ELECTRONIC OFFERS, SALES, OR DISTRIBUTIONS AFTER YOU RESPOND TO
            THIS COMMENT, PLEASE SUPPLEMENT YOUR RESPONSE PROMPTLY TO IDENTIFY
            THOSE MEMBERS AND PROVIDE US WITH A DESCRIPTION OF THEIR PROCEDURES.
            ALSO, PLEASE BRIEFLY DESCRIBE ANY ELECTRONIC DISTRIBUTION IN THE
            FILING. IN YOUR DISCUSSION OF THE PROCEDURES, TELL US HOW THEY
            ENSURE THAT THE DISTRIBUTION COMPLIES WITH SECTION 5 OF THE
            SECURITIES ACT. IN PARTICULAR, PLEASE ADDRESS:

                  -     THE COMMUNICATION USED;

                  -     THE AVAILABILITY OF THE PRELIMINARY PROSPECTUS;

Securities and Exchange Commission
April 7, 2005
Page 20


                  -     THE MANNER OF CONDUCTING THE DISTRIBUTION AND SALE, SUCH
                        AS THE USE OF INDICATIONS OF INTEREST OR CONDITIONAL
                        OFFERS; AND

                  -     THE FUNDING OF AN ACCOUNT AND PAYMENT OF THE PURCHASE
                        PRICE.

            FINALLY, PLEASE TELL US WHETHER YOU OR THE UNDERWRITERS HAVE ANY
            ARRANGEMENTS WITH A THIRD PARTY TO HOST OR ACCESS YOUR PRELIMINARY
            PROSPECTUS ON THE INTERNET. IF SO, IDENTIFY THE PARTY AND THE
            WEBSITE, DESCRIBE THE MATERIAL TERMS OF YOUR AGREEMENT AND PROVIDE
            US WITH A COPY OF ANY WRITTEN AGREEMENT. PROVIDE US ALSO WITH COPIES
            OF ALL INFORMATION CONCERNING YOUR COMPANY OR PROSPECTUS THAT HAS
            APPEARED ON THEIR WEBSITE. AGAIN, IF YOU SUBSEQUENTLY ENTER INTO ANY
            SUCH ARRANGEMENTS, PROMPTLY SUPPLEMENT YOUR RESPONSE. WE MAY HAVE
            FURTHER COMMENT.

            Based on information provided to the Company by CIBC World
            Markets Corp., Wachovia Capital Markets, LLC, SG Cowen & Co., LLC
            and Piper Jaffray & Co., neither they nor any of their affiliates
            intend to engage in any electronic offer, sale or distribution in
            connection with the offering.

            The Company has also been informed by CIBC World Markets Corp.,
            Wachovia Capital Markets, LLC, SG Cowen & Co., LLC and Piper Jaffray
            & Co. (collectively, the "Representatives") that they do not
            currently have any arrangement or intention to host or provide
            access to the preliminary prospectus on the Internet. If any of the
            Representatives chooses to host or provide access to the preliminary
            prospectus on the Internet, they will do so on a password protected
            website such as Yahoo! Net RoadShow, inform the Commission of their
            intention and inform the Commission on which website they intend to
            host or provide access to the preliminary prospectus.

      52.   PLEASE TELL US WHETHER YOU PLAN TO HAVE A DIRECTED SHARE PROGRAM FOR
            EMPLOYEES AND OTHERS. IF SO, PLEASE SUPPLEMENTALLY TELL US THE
            MECHANICS OF HOW AND WHEN THESE SHARES WILL BE OFFERED AND SOLD TO
            PERSONS IN THE DIRECTED SHARE PROGRAM. FOR EXAMPLE, PLEASE EXPLAIN
            FOR US HOW YOU WILL DETERMINE THE PROSPECTIVE RECIPIENTS OF RESERVED
            SHARES. TELL US WHEN AND HOW THEY WILL INDICATE THEIR INTEREST IN
            PURCHASING SHARES. ALSO, PLEASE TELL US HOW AND WHEN THE ISSUER AND
            UNDERWRITERS WILL CONTACT THE DIRECT SHARE INVESTORS, INCLUDING THE
            TYPES OF COMMUNICATIONS USED. WHEN WILL THE SHARES AND MONEY BE
            EXCHANGED? WHEN DO PURCHASERS BECOME COMMITTED TO PURCHASE THEIR
            SHARES? HOW AND WHEN WILL THE NUMBER OF SHARES OFFERED BE
            DETERMINED? WILL THE PROCEDURES FOR THE DIRECTED SHARE PROGRAM
            DIFFER FROM THE PROCEDURES FOR THE GENERAL OFFERING TO THE PUBLIC?

            The Company does not plan to have a directed share program for
            employees or others in connection with the offering.

      53.   PLEASE TELL US WHETHER ONE OF THE UNDERWRITERS, OTHER THAN CIBC
            WORLD MARKETS CORP., WILL ACT AS A QUALIFIED INDEPENDENT
            UNDERWRITER.

Securities and Exchange Commission
April 7, 2005
Page 21


            The Company has been advised by the Representatives that there is no
            "conflict of interest" or any other situation described by the
            Conduct Rules of the National Association of Securities Dealers,
            Inc. (the "Conduct Rules") that would necessitate a "qualified
            independent underwriter" for the offering as prescribed by Conduct
            Rule 2720(c)(3).

FINANCIAL STATEMENTS

Note 2, Summary of Significant Accounting Policies, page F-7

General

      54.   WE NOTE YOUR DISCLOSURE ON PAGE 23 THAT HANDLING AND DISTRIBUTION
            CENTER COSTS ARE INCLUDED IN SELLING, GENERAL, AND ADMINISTRATIVE
            EXPENSES. PLEASE EXPAND YOUR DISCLOSURE IN THAT SECTION AND IN THE
            NOTES TO THE FINANCIAL STATEMENTS TO DESCRIBE THE COSTS INCLUDED IN
            COSTS OF SALES. PLEASE INDICATE SPECIFICALLY WHETHER YOU INCLUDE
            PURCHASING AND RECEIVING COSTS, INSPECTION COSTS, INTERNAL TRANSFER
            COSTS, AND OTHER COSTS OF YOUR DISTRIBUTION NETWORK. FOR THOSE COSTS
            YOU EXCLUDED, SUCH AS THE DISTRIBUTION CENTER COSTS, PLEASE TELL US
            WHY THE COSTS ARE EXCLUDED AND DISCLOSE:

                  -     THE LINE ITEM THAT THE EXCLUDED COSTS ARE INCLUDED IN,
                        FOR EXAMPLE, SELLING GENERAL, AND ADMINISTRATIVE, AND
                        THE AMOUNTS INCLUDED IN EACH LINE ITEM FOR EACH PERIOD
                        PRESENTED; AND

                  -     IN YOUR MANAGEMENT'S DISCUSSION AND ANALYSIS SECTION,
                        THAT YOUR GROSS MARGINS MAY NOT BE COMPARABLE TO OTHERS,
                        SINCE SOME ENTITIES INCLUDE THE COSTS RELATED TO THEIR
                        DISTRIBUTION NETWORK IN COST OF GOODS SOLD AND OTHERS,
                        LIKE YOU, EXCLUDE ALL OR A PORTION OF THEM FROM GROSS
                        MARGIN, INCLUDING THEM INSTEAD IN A LINE ITEM SUCH AS
                        SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES.

            The Company has complied with the Staff's comment by revising the
            disclosures within Management's Discussion and Analysis of Financial
            Condition and Results of Operations and the notes to the financial
            statements to describe the distribution center costs included in
            costs of sales.

Note 2(c), Inventory, page F-7

      55.   WE NOTE THAT YOU RECORD A PROVISION FOR INVENTORY SHRINKAGE. PLEASE
            INCLUDE THE ACTIVITY IN THAT RESERVE IN SCHEDULE II - VALUATION AND
            QUALIFYING ACCOUNTS, UNLESS SUBSTANTIALLY THE SAME INFORMATION IS
            PRESENTED IN THE FINANCIAL STATEMENTS. SEE RULES 5-04 AND 12-09 OF
            REGULATION S-X.

            The Company has complied with the Staff's comment by including the
            activity in Note 11 to the financial statements on page F-18 of the
            prospectus.

Securities and Exchange Commission
April 7, 2005
Page 22


Note 2(g),  Stock-Based Compensation, page F-8

      56.   PLEASE ADD BASIC AND DILUTED EARNINGS PER SHARE AS REPORTED AND THE
            PER SHARE EFFECT OF THE APPLICATION OF FAS 123 TO THE
            RECONCILIATION. SEE PARAGRAPH 45(C)(1) OF FAS 123.

            The Company has complied with the Staff's comment by revising the
            disclosure within Note 2 of the financial statements on page F-7 of
            the prospectus to include the per share data.

Note 2(h), Revenue Recognition, page F-8

      57.   PLEASE DISCLOSE HOW YOU ACCOUNT FOR SALES RETURNS AND YOUR
            METHODOLOGY FOR DETERMINING A RESERVE FOR SALES RETURNS, IF ANY. IN
            ADDITION, IF CHANGES IN ESTIMATED RETURNS RECOGNIZED ARE MATERIAL,
            PLEASE DISCLOSE. SEE PARAGRAPHS 6-8 OF FAS 48. PLEASE INCLUDE THE
            ACTIVITY IN THE RESERVE IN SCHEDULE II - VALUATION AND QUALIFYING
            ACCOUNTS, UNLESS SUBSTANTIALLY THE SAME INFORMATION IS PRESENTED IN
            THE FINANCIAL STATEMENTS. SEE RULES 5-04 AND 12-09 OF REGULATION
            S-X.

            The Company has complied with the Staff's comment by adding
            disclosure on page F-18 of the prospectus regarding how the Company
            accounts for sales returns and its methodology for determining a
            reserve for sales returns. The Company does not believe that the
            reserve for sales returns is material. As of January 29, 2005 and
            January 31, 2004, the Company's reserves for sales returns was
            $70,000 and $40,000, respectively.

Note 2(o), Business Reporting Segments, page F-l0

      58.   WE NOTE THAT YOU REPORT ONLY ONE OPERATING SEGMENT. IN THE BUSINESS
            SECTION ON PAGE 37, YOU DISPLAY REVENUES BY MERCHANDISE ASSORTMENT,
            INCLUDING WOMEN'S, CHILDREN'S, MEN'S, ETC. THEREFORE, IT APPEARS
            THAT DISCRETE FINANCIAL INFORMATION IS AVAILABLE. IN ADDITION, YOU
            MENTION THROUGHOUT THE REGISTRATION STATEMENT THAT ONE OF YOUR
            GROWTH STRATEGIES INVOLVES THE EXPANSION OF ADJACENT PRODUCT
            CATEGORIES, SUCH AS HOME DECOR AND INTIMATE APPAREL. PLEASE TELL US
            HOW YOU CONSIDERED PARAGRAPH 10 OF FAS 131 IN YOUR DETERMINATION
            THAT YOU HAVE ONLY ONE REPORTABLE OPERATING SEGMENT AND WHETHER YOU
            HAVE AGGREGATED SEGMENTS. WE MAY HAVE FURTHER COMMENTS UPON REVIEW
            OF YOUR RESPONSE.

            The Company supplementally informs the Staff that the Company has
            one operating segment with different merchandise categories. The
            Company does not maintain profit and loss statements or cost centers
            by merchandising categories. Although the Company reviews sales by
            merchandise categories, it does not consider them to be separate,
            reportable segments in relation to FAS 131.

Securities and Exchange Commission
April 7, 2005
Page 23


Note 8, Stockholders' Equity, page F-13

      59.   WE NOTE YOU HAVE A STOCK OPTION PLAN THAT PERMITS UP TO
            APPROXIMATELY 75,000 SHARES TO BE GRANTED THROUGH THE ISSUANCES OF
            OPTIONS. WE ASSUME THAT THE ESTIMATE OF FAIR VALUE OF THE UNDERLYING
            STOCK AT THE GRANT DATE IS AT THE DISCRETION OF THE BOARD OF
            DIRECTORS. ALSO, WE NOTE THAT YOU RECORDED COMPENSATION EXPENSE FOR
            THE INTRINSIC VALUE OF OPTIONS GRANTED BASED ON YOUR FAIR VALUE
            ESTIMATE. PLEASE PROVIDE THE FOLLOWING INFORMATION:

                  -     THE ESTIMATED OFFERING RANGE THAT WAS INITIALLY
                        DISCUSSED WITH THE LEAD UNDERWRITER OR SYNDICATE,
                        INCLUDING THE DATE THE OFFERING PRICE WAS FIRST
                        DISCUSSED EITHER FORMALLY OR INFORMALLY. SPECIFICALLY,
                        TELL US WHETHER THIS WOULD HAVE DIFFERED FROM THE
                        OFFERING PRICE RANGE THAT WOULD NORMALLY HAVE APPEARED
                        ON PAGE 1 OF THE PROSPECTUS IN YOUR INITIAL FILING;

                  -     FOR THE MOST RECENT FISCAL YEAR TO THE LATEST
                        PRACTICABLE DATE, A LISTING OF OPTIONS OR OTHER EQUITY
                        INSTRUMENTS GRANTED TO EMPLOYEES THAT INDICATES THE DATE
                        OF GRANT/ISSUANCE, THE EXERCISE/PURCHASE PRICE, AND THE
                        AMOUNT OF DEFERRED COMPENSATION RECORDED ON EACH
                        GRANT/ISSUANCE;

                  -     OBJECTIVE EVIDENCE OF FAIR VALUE OF THE UNDERLYING
                        SHARES SUPPORTING THE OPTIONS OR SHARE GRANTS. THIS
                        INFORMATION WOULD INCLUDE THE PRICES AT WHICH
                        CONTEMPORANEOUS SALES OF COMMON OR CONVERTIBLE PREFERRED
                        SECURITIES TOOK PLACE, INDEPENDENT APPRAISALS OBTAINED
                        PRIOR TO OPTION GRANTS, OR ANY OTHER INFORMATION THAT
                        SUPPORTS YOUR DETERMINATION OF FAIR VALUE;

                  -     A TIME LINE OF COMPANY SPECIFIC EVENTS THAT SUPPORTS THE
                        RELATIVE INCREASE/DECREASE IN FAIR VALUE OF YOUR EQUITY
                        SECURITIES BASED ON COMPANY SPECIFIC MILESTONES OR OTHER
                        ECONOMIC EVENTS. NOTE THAT THIS TIME LINE SHOULD
                        CULMINATE IN THE OFFERING RANGE INITIALLY DISCUSSED AND
                        CURRENTLY DISCUSSED; AND

                  -     ANY OTHER PERTINENT INFORMATION NECESSARY FOR US TO MAKE
                        AN INDEPENDENT EVALUATION OF YOUR JUDGMENTS/ESTIMATES
                        SURROUNDING THE ISSUE OF STOCK COMPENSATION.

            WE MAY HAVE FURTHER COMMENT UPON REVIEW OF YOUR RESPONSE.

            The Company supplementally informs the Staff that the Company's
            Board of Directors has determined the fair value of the Company's
            stock on a quarterly basis since the year ended January 2002 by
            using a consistent formula based on the twelve-month rolling EBITDA
            of the Company multiplied by a private company multiple less
            outstanding debt. The price multiple, equal to 5.5 times EBITDA, is
            based on other private transactions observed during the past year.

Securities and Exchange Commission
April 7, 2005
Page 24


            Please see Exhibit A attached hereto for the calculation of the
            Company's valuation as of the beginning of fiscal 2004 and as of
            the end of each of the first three quarters of fiscal 2004, and see
            Exhibit B attached hereto for the comparable private company price
            multiples on private transactions.

            The Company supplementally informs the Staff that the Company
            selected CIBC as the lead underwriter during August 2004. The
            estimated offering range initially discussed with CIBC at that time
            was a total market cap value of $160 million to $200 million, based
            upon the Company's projected 2006 earnings. This price range has not
            varied significantly during the Company's relationship with CIBC as
            the lead underwriter. The Company's 2004 actual performance (as now
            shown in the prospectus) did not deviate significantly from the
            range of expected earnings for 2004 during the initial pricing
            discussions.

            Per your request, the Company has supplementally attached a listing
            of all stock option grants from January 1, 2004 to present. No
            options have been granted since October 31, 2004. See Exhibit C
            attached hereto for the grant listing and Exhibit D attached hereto
            for the Black-Scholes calculation of the compensation expense
            required to be disclosed in the financial statements for fiscal
            2004.

            Although no independent appraisals have been conducted in support
            of the Company's valuations for stock option grants, the Company
            believes that Exhibits A and B hereto support the enterprise
            valuations that the Company utilized in assigning appropriate
            values to the 2004 grants. Exhibit A also serves as a timeline of
            "milestones or economic events" as it shows the consistent
            quarterly valuation of the Company's stock based on quarterly
            earnings performance. Please note that the Company did not make a
            determination to proceed with the initial public offering process
            until December 2004. Also, please note that, consistent with many
            other apparel companies operating in the retail industry, the
            Company earned approximately 67% of its net income for fiscal 2004
            during the fourth quarter and, therefore, would realize a
            significant increase in valuation upon the achievement of this
            level of sales and earnings performance in the fourth quarter.

            Based on the above, the Company believes that it has properly valued
            it stock transactions during fiscal 2004.

Note 10, Related Party Transactions, page F-16

      60.   PLEASE EXPAND YOUR DISCLOSURE TO INDICATE HOW MANAGEMENT FEES ARE
            DETERMINED AND THE NATURE OF THE CONSULTING SERVICES PROVIDED BY THE
            AFFILIATE. ALSO, PLEASE DISCLOSE THE TERMINATION FEE AND ANY OTHER
            PERTINENT TERMS OF THE AGREEMENT.

            The Company has complied with the Staff's comment by revising the
            disclosure in the revised notes to the financial statements. See
            Note 11 on page F-18.

Securities and Exchange Commission
April 7, 2005
Page 25


39 Weeks Ended October 30, 2004 and November 1, 2003
Condensed Statements of Cash Flows, page F-31

      61.   WE NOTE THE MATURITIES OF YOUR REVOLVING LINES OF CREDIT ARE 12
            MONTHS AND MORE. PLEASE ADVISE OR REVISE TO SHOW CASH BORROWINGS AND
            REPAYMENTS GROSS. SEE PARAGRAPH 13 OF SFAS 95.

            The Company has complied with the Staff's comment by revising the
            Statements of Cash Flows on page F-5 of the prospectus to show cash
            borrowings and gross repayments.

PART II

Signatures, page II-5

      62.   IN ADDITION TO THOSE WHO HAVE SIGNED YOUR DOCUMENT ALREADY, PLEASE
            HAVE YOUR CONTROLLER OR PRINCIPAL ACCOUNTING OFFICER SIGN YOUR
            DOCUMENT, OR IDENTIFY THE PERSON WHO IS FULFILLING THAT FUNCTION.
            SEE INSTRUCTIONS TO THE SIGNATURES SECTION OF FORM S-1.

            The Company has complied with the Staff's comment by revising the
            disclosure to indicate Thomas Stoltz is the Company's principal
            accounting officer. Please see the reference to Thomas Stoltz as the
            Company's principal accounting officer on page II-5.

                          *    *    *    *    *    *

      We would greatly appreciate your prompt attention in resolving any
remaining open issues. If you have any questions regarding the responses to the
Staff's comments, please do not hesitate to contact the undersigned at (212)
318-6400.

      Kindly acknowledge receipt of the foregoing responses by stamping the
enclosed additional copy of this letter and returning the same to the
undersigned.

Sincerely,



/s/ William F. Schwitter
for PAUL, HASTINGS, JANOFSKY & WALKER LLP


cc:   R. Edward Anderson
      John Fieldsend, Staff Attorney

                                   EXHIBIT A
                                   ---------

CITI TRENDS, INC.
COMMON STOCK VALUATION ANALYSIS

($000's Except Shares Outstanding)



                                                                        Fourth           First          Second           Third
                                                                        Quarter         Quarter         Quarter         Quarter
                                                                         2003            2004            2004            2004
                                                                        Actual          Actual          Actual          Actual
                                                                       31-JAN-04       1-MAY-04        31-JUL-04       30-OCT-04
                                                                       VALUATION       VALUATION       VALUATION       VALUATION
                                                                       ---------       ---------       ---------       ---------
                                                                                                           
Operating Data -- EBITDA                                                $ 14,130        $ 14,728        $ 14,780        $ 15,121
Multiple                                                                    5.5X            5.5X            5.5X            5.5X
Enterprise Value                                                        $ 77,715        $ 81,004        $ 81,290        $ 83,166

Cash from Option Proceeds                                               $    567        $    712        $    776        $  1,028
Revolver Balance & Lease Obligations                                       3,481           3,820           3,721           2,675
Preferred Stock                                                            5,160           5,241           4,823           4,404
Equity Value                                                            $ 69,641        $ 72,655        $ 73,522        $ 77,115

Primary Shares Outstanding                                               357,500         357,500         357,500         357,500
Options                                                                   53,596          54,724          55,899          57,823

Ex. Price ($10/share, divided by 1,000 for presentation in '000s)       $   0.01        $   0.01        $   0.01        $   0.02
Exercise Proceeds                                                       $    567        $    712        $    776        $  1,028

Fully Diluted Shares Outstanding                                         411,096         412,224         413,399         415,323

Per Share Value - Pre Liquidity Discount                                $ 169.40        $ 176.25        $ 177.85        $ 185.67
Liquidity Discount (Based on Ibbotson's Size Premium)                        0.0%            0.0%            0.0%            0.0%
Per Share Value                                                         $ 169.40        $ 176.25        $ 177.85        $ 185.67
USE                                                                     $ 170.00        $ 177.00        $ 178.00        $ 186.00


                                   EXHIBIT B
                                   ---------
CITI TRENDS, INC.

COMPARABLE SPECIALTY RETAIL TRANSACTION LISTING



                                                                  TRANSACTION
                                                                     VALUE
                                                                     AS A
                                                                   MULTIPLE
                                                                    OF LTM
     BUYER                              SELLER                      EBITDA
- ------------------------      -------------------------------    ---------------
                                                           
Crescent Capital              Loehman's                             7.10x

Saunders Karp & Megrue        CoMark                                4.10x

Saunders Karp & Megrue        Ollies                                5.90x

Kids Outlet LLC               W&W Wholesale Inc.                    5.60x

Casual Male Retail Group      Rochester Big and Tall Clothing       5.70x

Sun Capital & Cerberus        Mervyns Inc. (Target)                 5.90x

Genesco                       Hat World                             7.50x

Gart Sports                   Sports Authority                      4.60x

Advance Auto                  Discount Auto Parts                   6.60x

Gart Sports                   Oshmans                               3.10x

Bon-Ton Stores                Elder-Beerman Stores                  5.90x

Retail Brand Alliance         Brooks Brothers                       4.80x

                              AVERAGE                               5.56X



                                   EXHIBIT C
                                   ---------

CITI TRENDS, INC.

Option Worksheet



                                                                                        First Quarter 2004
                                                                            ------------------------------------------
                                                      Date of     Strike     Options              Granted      Balance
                                                                            ---------  -------  -----------
Name                 Title                             Grant      Price      Forfeits    Exerc    Additions   5/1/2004
- --------------       --------------                   -------    ---------  ---------  -------  ------------  ---------
                                                                                         
John Lupo            Director                         3/10/2004   $170.00                             100        100
Tracy Noll           Director                         3/10/2004   $170.00                             100        100
Chris Bergen         Contoller                        3/23/2004   $170.00                             200        200
Charles Cheeseman    Director of DC                   4/19/2004   $170.00                             400        400
S.L. Timberman       Buyer                            4/29/2004   $170.00                             400        400
Amanda Beggs         Buyer                            4/29/2004   $170.00                             200        200
Rimma Shusterman     Buyer                            5/3/2004    $177.00
Jack O'Hara          VP of Real Estate                5/26/2004   $177.00
Diane Coker          District Manager                 5/30/2004   $178.00
Eliza Lowery         District Manager                 5/30/2004   $178.00
Debbie Addison       District Manager                 5/30/2004   $178.00
Paula Allen          Buyer                            9/17/2004   $178.00
Chris Hutton         Dirctor of IS                    9/29/2004   $178.00
Jane Neville         Divisional Merchandise Manager   10/14/2004  $178.00
HEP                  Shareholder                      10/30/2004  $178.00
Bellino              Shareholder                      10/30/2004  $178.00
Anderson             Shareholder                      10/30/2004  $178.00
Dillon               Shareholder                      10/30/2004  $178.00
Noll                 Shareholder                      10/30/2004  $178.00

Total Options                                                                     -         -        1,400      1,400
                                                                             =========  =========   ==========  ========




                                                                                         Second Quarter 2004
                                                                              ------------------------------------------
                                                       Date of     Strike     Options               Granted       Balance
                                                                              ----------  -------  ----------
Name                 Title                              Grant      Price       Forfeits    Exerc    Additions    7/31/2004
- --------------       --------------                    -------    ---------   ----------  -------  ------------  ---------
                                                                                            
John Lupo            Director                          3/10/2004   $170.00                                          100
Tracy Noll           Director                          3/10/2004   $170.00                                          100
Chris Bergen         Contoller                         3/23/2004   $170.00                                          200
Charles Cheeseman    Director of DC                    4/19/2004   $170.00                                          400
S.L. Timberman       Buyer                             4/29/2004   $170.00                                          400
Amanda Beggs         Buyer                             4/29/2004   $170.00                                          200
Rimma Shusterman     Buyer                             5/3/2004    $177.00                                600       600
Jack O'Hara          VP of Real Estate                 5/26/2004   $177.00                                200       200
Diane Coker          District Manager                  5/30/2004   $178.00
Eliza Lowery         District Manager                  5/30/2004   $178.00
Debbie Addison       District Manager                  5/30/2004   $178.00
Paula Allen          Buyer                             9/17/2004   $178.00
Chris Hutton         Dirctor of IS                     9/29/2004   $178.00
Jane Neville         Divisional Merchandise Manager    10/14/2004  $178.00
HEP                  Shareholder                       10/30/2004  $178.00
Bellino              Shareholder                       10/30/2004  $178.00
Anderson             Shareholder                       10/30/2004  $178.00
Dillon               Shareholder                       10/30/2004  $178.00
Noll                 Shareholder                       10/30/2004  $178.00

Total Options                                                                     -        -              800     2,200
                                                                              =========  =========   ==========  ========




                                                                                           Third Quarter 2004
                                                                               ------------------------------------------
                                                       Date of      Strike     Options              Granted       Balance
                                                                               -----------  ------ ----------
Name                 Title                              Grant       Price       Forfeits    Exerc   Additions   10/30/2004
- --------------       --------------                    -------     ---------   -----------  ------ -----------  ----------
                                                                                             
John Lupo            Director                          3/10/2004    $170.00                                         100
Tracy Noll           Director                          3/10/2004    $170.00                                         100
Chris Bergen         Contoller                         3/23/2004    $170.00                                         200
Charles Cheeseman    Director of DC                    4/19/2004    $170.00                                         400
S.L. Timberman       Buyer                             4/29/2004    $170.00                                         400
Amanda Beggs         Buyer                             4/29/2004    $170.00                                         200
Rimma Shusterman     Buyer                             5/3/2004     $177.00                                         600
Jack O'Hara          VP of Real Estate                 5/26/2004    $177.00                                         200
Diane Coker          District Manager                  5/30/2004    $178.00                              200        200
Eliza Lowery         District Manager                  5/30/2004    $178.00                              200        200
Debbie Addison       District Manager                  5/30/2004    $178.00                              200        200
Paula Allen          Buyer                             9/17/2004    $178.00                              200        200
Chris Hutton         Dirctor of IS                     9/29/2004    $178.00                              200        200
Jane Neville         Divisional Merchandise Manager    10/14/2004   $178.00                              400        400
HEP                  Shareholder                       10/30/2004   $178.00                            1,137     1 ,137
Bellino              Shareholder                       10/30/2004   $178.00                               26         26
Anderson             Shareholder                       10/30/2004   $178.00                               12         12
Dillon               Shareholder                       10/30/2004   $178.00                               18         18
Noll                 Shareholder                       10/30/2004   $178.00                                6          6

Total Options                                                                      -        -          2,599      4,799
                                                                               =========  =========   ==========  ========






                                                                                          Fourth Quarter 2004
                                                                               ------------------------------------------
                                                       Date of      Strike     Options               Granted       Balance
                                                                               ---------  -------  -----------
Name                 Title                              Grant       Price       Forfeits    Exerc    Additions    1/29/2004
- --------------       --------------                    -------     ---------   ---------  -------  ------------  ----------
                                                                                             
John Lupo            Director                          3/10/2004    $170.00                                          100
Tracy Noll           Director                          3/10/2004    $170.00                                          100
Chris Bergen         Contoller                         3/23/2004    $170.00                                          200
Charles Cheeseman    Director of DC                    4/19/2004    $170.00                                          400
S.L. Timberman       Buyer                             4/29/2004    $170.00                                          400
Amanda Beggs         Buyer                             4/29/2004    $170.00                                          200
Rimma Shusterman     Buyer                             5/3/2004     $177.00                                          600
Jack O'Hara          VP of Real Estate                 5/26/2004    $177.00                                          200
Diane Coker          District Manager                  5/30/2004    $178.00                                          200
Eliza Lowery         District Manager                  5/30/2004    $178.00                                          200
Debbie Addison       District Manager                  5/30/2004    $178.00                                          200
Paula Allen          Buyer                             9/17/2004    $178.00                                          200
Chris Hutton         Dirctor of IS                     9/29/2004    $178.00                                          200
Jane Neville         Divisional Merchandise Manager    10/14/2004   $178.00                                          400
HEP                  Shareholder                       10/30/2004   $178.00                                       1 ,137
Bellino              Shareholder                       10/30/2004   $178.00                                           26
Anderson             Shareholder                       10/30/2004   $178.00                                           12
Dillon               Shareholder                       10/30/2004   $178.00                                           18
Noll                 Shareholder                       10/30/2004   $178.00                                            6

Total Options                                                                      -          -           -        4,799
                                                                               =========  =========   ==========  ========


                                   EXHIBIT D
                                   ---------
FAS 123 Pro Forma Net Income Disclosures:



                                                              Compensation                     Fiscal 2004
                                           FYE 1/29/05          Expense                          Grants
                                                          Pre-Tax     After-Tax           Pre-Tax     After-Tax
                                                                                    
Net Income As Reported                       7,257,245
                                        ---------------

Addback:
  Option expense recorded by CitiTrends         44,627                                                           Expensed
  Option expense recorded for Hampshire         58,672     103,299       63,508             58,672       36,072  in Income Statement

Deduct:
 Management 123 expense                       (153,672)                             1      (85,824)     (52,765)
 Director 123 expense                           (9,869)                             2       (9,869)      (6,068)
 Anti-Dilutive expense                         (61,871)   (225,412)    (138,583)    3      (61,871)     (38,038)
                                        ----------------------------------------      --------------------------
Net effect                                    (122,113)                                   (157,564)     (96,870)
                                                                                                                 Footnote
123 Tax Impact                                  47,038    (122,113)     (75,075)           (98,892)     (60,799) Disclosure
                                                                                                                 Only
                                        ---------------
FAS 123 Pro Forma Income                     7,182,170
                                        ===============


Tax Rate                                        38.52%


1    SEE DETAILED SCHEDULE ATTACHED
2    SEE DETAILED SCHEDULE ATTACHED
3    SEE DETAILED SCHEDULE ATTACHED




                                   SCHEDULE 1

Note: The following schedule calculates compensation expense to be recognized
for management's options under FAS 123.



                                         EMPLOYEE COMPENSATION DATA INPUTS
                      -----------------------------------------------------------------
                      Number of
                      Options    Grant   Exercise  Stock    Expiration  Max   Vesting
  Name       Type     Granted    Date     Price    Price       Date     Life    Date
  ----       ----     -------    ----     -----    -----       ----     ----    ----
                                                      
FISCAL YEAR ENDING 1/29/05

Citi Trds  Non Quals    300      5/1/04  $170.00   $170.00    5/1/13    10.0  5/1/05
Citi Trds  Non Quals    300      5/1/04  $170.00   $170.00    5/1/13    10.0  5/1/06
Citi Trds  Non Quals    300      5/1/04  $170.00   $170.00    5/1/13    10.0  5/1/07
Citi Trds  Non Quals    300      5/1/04  $170.00   $170.00    5/1/13    10.0  5/1/08
- ---------------------------------------------------------------------------------------
All Total               1,200
- ---------------------------------------------------------------------------------------
Weighted Average                         $170.00   $170.00
- ---------------------------------------------------------------------------------------
Totals for FY2004       1,200


FISCAL YEAR ENDING 1/29/05

Citi Trds  Non Quals    200     7/31/04  $177.00   $177.00   7/31/13    10.0  7/31/05
Citi Trds  Non Quals    200     7/31/04  $177.00   $177.00   7/31/13    10.0  7/31/06
Citi Trds  Non Quals    200     7/31/04  $177.00   $177.00   7/31/13    10.0  7/31/07
Citi Trds  Non Quals    200     7/31/04  $177.00   $177.00   7/31/13    10.0  7/31/08
- ---------------------------------------------------------------------------------------
All Total               800
- ---------------------------------------------------------------------------------------
Weighted Average                         $177.00   $177.00
- ---------------------------------------------------------------------------------------
Totals for FY2004       800


FISCAL YEAR ENDING 1/29/05

Citi Trds  Non Quals    350    10/30/04  $178.00   $178.00  10/30/13    10.0  10/30/05
Citi Trds  Non Quals    350    10/30/04  $178.00   $178.00  10/30/13    10.0  10/30/06
Citi Trds  Non Quals    350    10/30/04  $178.00   $178.00  10/30/13    10.0  10/30/07
Citi Trds  Non Quals    350    10/30/04  $178.00   $178.00  10/30/13    10.0  10/30/08
- ---------------------------------------------------------------------------------------
All Total               1,400
- ---------------------------------------------------------------------------------------
Weighted Average                         $178.00   $178.00
- ---------------------------------------------------------------------------------------
Totals for FY2004       1,400





                                          EMPLOYEE COMPENSATION DATA INPUTS
                      -----------------------------------------------------------------------
                      Number of
                      Options    Vesting  Expected  Risk-free              Dividend  Option
  Name       Type     Granted    Period    Life       Rate     Volatility   Yield     Value
  ----       ----     -------    ------    ----       ----     ----------   -----     -----
                                                             
FISCAL YEAR ENDING 1/29/05

Citi Trds  Non Quals    300        1.0     2.0       1.91%       50.00%      0.0%    $49.35
Citi Trds  Non Quals    300        2.0     3.0       2.44%       50.00%      0.0%    $61.12
Citi Trds  Non Quals    300        3.0     4.0       2.86%       50.00%      0.0%    $71.13
Citi Trds  Non Quals    300        4.0     4.0       2.86%       50.00%      0.0%    $71.14
- ---------------------------------------------------------------------------------------------
All Total               1,200
- ---------------------------------------------------------------------------------------------
Weighted Average                           3.3       2.5%        50.0%       0.0%    $63.18
- ---------------------------------------------------------------------------------------------
Totals for FY2004       1,200


FISCAL YEAR ENDING 1/29/05

Citi Trds  Non Quals    200        1.0     2.0       1.91%       50.00%      0.0%    $51.38
Citi Trds  Non Quals    200        2.0     3.0       2.44%       50.00%      0.0%    $63.64
Citi Trds  Non Quals    200        3.0     4.0       2.86%       50.00%      0.0%    $74.06
Citi Trds  Non Quals    200        4.0     4.0       2.86%       50.00%      0.0%    $74.07
- ---------------------------------------------------------------------------------------------
All Total               800
- ---------------------------------------------------------------------------------------------
Weighted Average                           3.3       2.5%        50.0%       0.0%    $65.79
- ---------------------------------------------------------------------------------------------
Totals for FY2004       800


FISCAL YEAR ENDING 1/29/05

Citi Trds  Non Quals    350        1.0     2.0       1.91%       50.00%      0.0%    $51.67
Citi Trds  Non Quals    350        2.0     3.0       2.44%       50.00%      0.0%    $64.00
Citi Trds  Non Quals    350        3.0     4.0       2.86%       50.00%      0.0%    $74.48
Citi Trds  Non Quals    350        4.0     4.0       2.86%       50.00%      0.0%    $74.48
- ---------------------------------------------------------------------------------------------
All Total               1,400
- ---------------------------------------------------------------------------------------------
Weighted Average                           3.3       2.5%        50.0%       0.0%    $66.16
- ---------------------------------------------------------------------------------------------
Totals for FY2004       1,400





                                        TOTAL FAIR MARKET VALUE INPUTS
                      -----------------------------------------------------------------
                      Number of    Annual     Total     Estimated      Total
                      Options    Forfeiture  Survival  Total Options   Fair
  Name       Type     Granted       Rate      Rate      Exercised      Value
  ----       ----     -------       ----      ----      ---------      -----
                                                           
FISCAL YEAR ENDING 1/29/05

Citi Trds  Non Quals    300        10.0%      90.0%        270        $13,323
Citi Trds  Non Quals    300        10.0%      81.0%        243        $14,853
Citi Trds  Non Quals    300        10.0%      72.9%        219        $15,556
Citi Trds  Non Quals    300        10.0%      65.6%        197        $14,002
- ---------------------------------------------------------------------------------------
All Total               1,200                              929        $57,734   FY 2004
- ---------------------------------------------------------------------------------------
Weighted Average                   10.0%      77.4%                              Total
- ---------------------------------------------------------------------------------------
Totals for FY2004       1,200


FISCAL YEAR ENDING 1/29/05

Citi Trds  Non Quals    200        10.0%      90.0%        180         $9,248
Citi Trds  Non Quals    200        10.0%      81.0%        162        $10,310
Citi Trds  Non Quals    200        10.0%      72.9%        146        $10,798
Citi Trds  Non Quals    200        10.0%      65.6%        131         $9,719
- ---------------------------------------------------------------------------------------
All Total               800                                619        $40,074   FY 2004
- ---------------------------------------------------------------------------------------
Weighted Average                   10.0%      77.4%                              Total
- ---------------------------------------------------------------------------------------
Totals for FY2004       800


FISCAL YEAR ENDING 1/29/05

Citi Trds  Non Quals    350        10.0%      90.0%        315        $16,275
Citi Trds  Non Quals    350        10.0%      81.0%        284        $18,144
Citi Trds  Non Quals    350        10.0%      72.9%        255        $19,002
Citi Trds  Non Quals    350        10.0%      65.6%        230        $17,104
- ---------------------------------------------------------------------------------------
All Total               1,400                              1,083      $70,526   FY 2004
- ---------------------------------------------------------------------------------------
Weighted Average                   10.0%      77.4%                              Total
- ---------------------------------------------------------------------------------------
Totals for FY2004       1,400





                          EXPENSE TO BE RECOGNIZED (FOOTNOTE DISCLOSURE ONLY)
                      ------------------------------------------------------------
                      Number of
                      Options
  Name       Type     Granted     2004    2005   2006   2007     Totals
  ----       ----     -------     ----    ----   ----   ----     ------
                                          
FISCAL YEAR ENDING 1/29/05

Citi Trds  Non Quals    300      13,323                           13,323
Citi Trds  Non Quals    300       7,426   7,426                   14,853
Citi Trds  Non Quals    300       5,185   5,185  5,185            15,556
Citi Trds  Non Quals    300       3,500   3,500  3,500   3,500    14,002
- ----------------------------------------------------------------------------------
All Total               1,200    29,435  16,112  8,686   3,500  $ 57,734
- ---------------------------------
Weighted Average                     --      --                       --
- ---------------------------------
Totals for FY2004       1,200


FISCAL YEAR ENDING 1/29/05

Citi Trds  Non Quals    200       9,248                            9,248
Citi Trds  Non Quals    200       5,155   5,155                   10,310
Citi Trds  Non Quals    200       3,599   3,599  3,599            10,798
Citi Trds  Non Quals    200       2,430   2,430  2,430   2,430     9,719
- ----------------------------------------------------------------------------------
All Total               800      20,432  11,184  6,029   2,430  $ 40,074
- ---------------------------------
Weighted Average                     --      --                       --
- ---------------------------------
Totals for FY2004       800


FISCAL YEAR ENDING 1/29/05

Citi Trds  Non Quals    350      16,275                           16,275
Citi Trds  Non Quals    350       9,072   9,072                   18,144
Citi Trds  Non Quals    350       6,334   6,334   6,334           19,002
Citi Trds  Non Quals    350       4,276   4,276   4,276  4,276    17,104
- ----------------------------------------------------------------------------------
All Total               1,400    35,957  19,682  10,610  4,276  $ 70,526
- ---------------------------------
Weighted Average                     --      --                      --
- ---------------------------------
Totals for FY2004       1,400    85,824  46,978  25,325 10,206   168,333






                                   SCHEDULE 2

NOTE: NEW DIRECTOR OPTIONS WERE ISSUED IN FISCAL YEAR ENDING 1/29/05:



                                                      EMPLOYEE COMPENSATION DATA INPUTS
          --------------------------------------------------------------------------------------------------------------------
                       Number of
                         Options       Grant  Exercise    Stock  Expiration  Maximum  Vesting  Vesting  Expected  Risk-free
Name             Type   Granted         Date     Price    Price        Date     Life     Date   Period      Life       Rate
- ----             ----   --------        ----     -----    -----        ----     ----     ----   ------      ----       ----
                                                                                 


Citi Trds   Non Quals        200 A   3/10/04   $170.00  $170.00     3/10/14     10.0  3/10/05      1.0       2.0      1.91%


            EMPLOYEE COMPENSATION DATA INPUTS           TOTAL FAIR MARKET VALUE INPUTS                    EXPENSE TO BE RECOGNIZED
         -------------------------------------- --------------------------------------------             -------------------------
                                                      Annual        Total         Estimated      Total
                        Dividend        Option    Forfeiture     Survival     Total Options       Fair
Name      Volatility       Yield         Value          Rate         Rate         Exercised      Value                     2004
- ----      ----------       -----         -----          ----         ----         ---------      -----                     ----
                                                                                                  


Citi Trds     50.00%        0.0%        $49.35          0.0%       100.0%               200     $9,869                     9,869



                                   SCHEDULE 3

NOTE: ANTI-DILUTIVE OPTIONS WERE ISSUED IN THIRD QUARTER FISCAL 2004 ONLY:



                                                  EMPLOYEE COMPENSATION DATA INPUTS
          ---------------------------------------------------------------------------------------------------------------------
                     Number of
                       Options        Grant   Exercise    Stock  Expiration  Maximum    Vesting  Vesting  Expected  Risk-free
Name            Type  Granted          Date      Price    Price        Date     Life       Date   Period      Life       Rate
- ----            ----  --------         ----      -----    -----        ----     ----       ----   ------      ----       ----
                                                                                   


Citi Trds  Non Quals     1,137 A   10/30/04    $178.00  $178.00    10/30/13     10.0   10/30/04      0.0       2.0      1.86%
Citi Trds  Non Quals        62 A   10/30/04    $178.00  $178.00    10/30/13     10.0   10/30/04      0.0       2.0      1.86%


             EMPLOYEE COMPENSATION DATA INPUTS          TOTAL FAIR MARKET VALUE INPUTS                      EXPENSE TO BE RECOGNIZED
           -----------------------------------   ------------------------------------------                -------------------------
                                                     Annual        Total         Estimated          Total
                         Dividend       Option   Forfeiture     Survival     Total Options           Fair
Name       Volatility       Yield        Value         Rate         Rate         Exercised          Value        2004         2005
- ----       ----------       -----        -----         ----         ----         ---------          -----        -----        ----
                                                                                                   


Citi Trds      50.00%        0.0%       $51.60         0.0%       100.0%             1,137        $58,672       58,672
Citi Trds      50.00%        0.0%       $51.60         0.0%       100.0%                62         $3,199        3,199

                                                                                                                ------
                                                                                              Annual Expense    61,871
                                                                                                                ======