p r e v i o u s		n e x t
		1 9 9 8   A n n u a l   R e p o r t	c o n t e n t s

January 30,		January 31,
In Thousands	1999	1998
Equipment notes, interest at 11% to 11.25% maturing
December 12, 2000 to December 30, 2001	$433	$  1,127
General corporate debt:
Medium term notes, interest at 5.87% to 7.97%, $15 million maturing on
October 21, 2003 and $5 million on September 20, 2004	20,000	20,000
6 5/8% unsecured notes, maturing June 15, 2000	100,000	100,000
7% unsecured notes, maturing June 15, 2005 (effective interest rate
of 7.02% after reduction of the unamortized debt discount of
$89,000 and $103,000 in fiscal 1999 and 1998, respectively)	99,911	99,897
Total general corporate debt	219,911	219,897
Long-term debt, exclusive of current installments	$220,344	$221,024

The aggregate maturities of long-term debt, exclusive of current installments, at January 30, 1999 are as follows:

In Thousands	Equipment Notes	General Corporate Debt	Total
Fiscal Year
2001	$348	$100,000	$100,348
2002	85	-	85
2003	-	-	-
2004	-	15,000	15,000
Later years	-	104,911	104,911
Aggregate maturities of long-term debt,
exclusive of current installments	$433	$219,911	$220,344

On September 16, 1996, pursuant to a call for redemption, the Company prepaid $88.8 million of its 9 1/2% sinking fund debentures. The Company recorded an after-tax extraordinary charge of $2.9 million, or $.01 per common share, related to the early retirement of this debt. The Company paid the outstanding balance of $8.5 million during fiscal 1998 utilizing an optional sinking fund payment under the indenture.

In June 1995, the Company filed a shelf registration statement with the Securities and Exchange Commission which provided for the issuance of up to $250 million of long-term debt. This shelf registration statement was replaced by a new shelf registration statement filed in fiscal 1997 which currently provides for the issuance of up to $600 million of debt, common stock or preferred stock. In June 1995, the Company issued $200 million of long-term notes under the original registration statement; $100 million of 6 5/8% notes due June 15, 2000 and $100 million of 7% notes due June 15, 2005. The proceeds were used in part to repay short-term borrowings and for general corporate purposes, including the repayment of scheduled maturities of other outstanding long-term debt and for new store and other capital expenditures.

On November 17, 1995, the Company entered into an unsecured $875 million bank credit agreement under which the Company borrowed $375 million on a term loan basis to fund the cash portion of the Marshalls purchase price. During the fourth quarter of the fiscal year ended January 25, 1997, the Company prepaid the outstanding balance of the $375 million term loan and recorded an after-tax extraordinary charge of $2.7 million, or $.01 per share, for the early retirement of this debt. The agreement also allowed the Company to borrow up to an additional $500 million on a revolving loan basis to fund the working capital needs of the Company. In September 1997, the Company replaced this $500 million revolving credit agreement with a new five year $500 million revolving credit facility. The Company recorded an extraordinary charge of $1.8 million associated with the write-off of deferred financing costs of the former agreement. The new agreement provides for reduced commitment fees on the unused portion of the line, as well as lower borrowing costs and has certain financial covenants which include a minimum net worth requirement, and certain leverage and fixed charge covenants.

As of January 30, 1999, all $500 million of the revolving credit facility was available for use. Interest is payable on borrowings at rates equal to or less than prime. The revolving credit facility is used as backup to the Company’s commercial paper program. The Company had no short-term borrowings under this facility or its commercial paper program during fiscal 1999 or 1998. Excluding the Company’s foreign subsidiaries, the weighted average interest rate on the Company’s short-term borrowings under the former agreement was 5.81% in fiscal 1997. The Company does not have any compensating balance requirements under these arrangements. The Company also has C$40 million of credit lines for its Canadian operation, all of which were available as of January 30, 1999.

C. F i n a n c i a l    I n s t r u m e n t s 

The Company periodically enters into forward foreign exchange contracts to hedge firm U.S. dollar merchandise purchase commitments made by its foreign subsidiaries. As of January 30, 1999, the Company had $18.8 million of such contracts outstanding for its Canadian subsidiary and $3.3 million for its subsidiary in the United Kingdom. The contracts cover certain commitments for the first quarter of fiscal 2000 and any gains or losses on the contracts will ultimately be reflected in the cost of the merchandise. Deferred gains and losses on the contracts as of January 30, 1999 were immaterial.

The Company also has entered into several foreign currency swap and forward contracts in both Canadian dollars and British pounds sterling. Both the swap and forward agreements are accounted for as a hedge against the Company’s investment in foreign subsidiaries; thus, foreign exchange gains and losses on the agreements are recognized in shareholders’ equity thereby offsetting translation adjustments associated with the Company’s investment in foreign operations. The gains and losses on this hedging activity as of January 30, 1999 are immaterial.

The Canadian swap and forward agreements will require the Company to pay C$41.7 million in exchange for $31.2 million in U.S. currency between October 2003 and September 2004. The British pounds sterling swap and forward agreements will require the Company to pay £59.9 million between October 1999 and September 2002 in exchange for $94.1 million in U.S. currency.

The agreements contain rights of offset which minimize the Company’s exposure to credit loss in the event of nonperformance by one of the counterparties. The interest rates payable on the foreign currency swap agreements are slightly higher than the interest rates receivable on the currency exchanged, resulting in deferred interest costs which are being amortized to interest expense over the term of the related agreements. The premium costs or discounts associated with the forward contracts are being amortized over the term of the related agreements and are included with the gains or losses of the hedging instrument. The unamortized balance of the net deferred costs was $3.2 million and $4.3 million as of January 30, 1999 and January 31, 1998, respectively.

The counterparties to the exchange contracts and swap agreements are major international financial institutions. The Company periodically monitors its position and the credit ratings of the counterparties and does not anticipate losses resulting from the nonperformance of these institutions.

The fair value of the Company’s long-term debt, including current installments, is estimated using discounted cash flow analysis based upon the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The fair value of long-term debt, including current installments, at January 30, 1999 is estimated to be $234.7 million compared to a carrying value of $221.0 million. These estimates do not necessarily reflect certain provisions or restrictions in the various debt agreements which might affect the Company’s ability to settle these obligations.

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