27 Selling, General and Administrative (“SG&A”)

Selling, General and Administrative (“SG&A”) Expenses. SG&A expenses consist of compensation and benefit-related costs for sales and store operations personnel, administrative personnel and other employees not associated with the functions described above under cost of goods sold. SG&A expenses also include advertising and marketing costs, information technology and communication costs, supplies for our stores and administrative facilities, utility costs, insurance costs, legal costs and costs related to other administrative services.

SG&A expenses increased by $161.9 million, or 23.5%, to $852.1 million in Fiscal 2011 from $690.2 million in Fiscal 2010. The increase was primarily due to the inclusion of Justice for the full-year period compared to a partial period in the prior year, which only included SG&A expenses from the merger date of November 25, 2009.

SG&A expenses as a percentage of net sales increased by 10 basis points to 29.2% in Fiscal 2011 from 29.1% in Fiscal 2010. The increase was mainly due to an increase in store payroll and related benefits, which primarily resulted from the store unit growth. Also contributing to the increase in SG&A expenses as a percentage of sales were increased marketing and incentive compensation costs related to the better than planned earnings results, an increase in the professional services related to e-commerce growth, as well as an increase in operating expenses attributable to our cost-savings initiatives, which we believe will lead to increased efficiency in future periods.

Depreciation and Amortization Expense. Depreciation and amortization expense increased by $18.2 million, or 25.4%, to $89.8 million in Fiscal 2011 from $71.6 million in Fiscal 2010. The increase was primarily due to the inclusion of Justice for the full-year period compared to a partial period in the prior year, which only included depreciation and amortization expense from the merger date of November 25, 2009. Justice depreciation and amortization expense increased by $15.3 million in Fiscal 2011. Also contributing to the higher depreciation and amortization expense in Fiscal 2011 were increases of $1.5 million at dressbarn and $1.4 million at maurices primarily due to capital expenditures.

Operating Income. Operating income increased by $72.3 million, or 33.2%, to $289.8 million in Fiscal 2011 from $217.5 million in Fiscal 2010. Operating income as a percentage of net sales increased 70 basis points, to 9.9% in Fiscal 2011 from 9.2% in Fiscal 2010. The increase was primarily due to higher gross profit resulting from a combination of higher merchandise margins and higher sales levels. Partially offsetting the increase in gross profit was the slight deleveraging of SG&A expenses.

Operating income data for our three business segments is presented below.

Fiscal Years Ended July 30, July 31, 2011 2010 $ Change % Change (millions) Operating income: dressbarn $ 37.4 $ 59.8 $ (22.4) (37.5%) maurices 114.6 93.0 21.6 23.2% Justice 137.8 64.7 73.1 113.0% Total operating income $ 289.8 $ 217.5 $ 72.3 33.2%

dressbarn operating income decreased by approximately $22.4 million primarily as a result of an increase in SG&A expenses, which more than offset a modest increase in gross profit. The increase in SG&A expenses during Fiscal 2011 was due to a number of factors including the following; an increase in expenses related to our cost-saving initiatives, consisting of the distribution center consolidation, payroll department consolidation and information technology center consolidation; an increase in the professional services related to the establishment of e-commerce operations; increased marketing expenses; and increased home office expenses as dressbarn experienced higher payroll and incentive based compensation expense. maurices operating income increased by approximately $21.6 million primarily as a result of higher sales and related gross profit, offset in part by an increase in SG&A expenses in Fiscal 2011 that resulted from the increased sales levels.

Justice operating income increased by approximately $73.1 million during Fiscal 2011. The increase was primarily due to the inclusion of Justice for the full-year period in Fiscal 2011 as compared to a partial period in the prior year, which only included operations of Justice from the merger date of November 25, 2009. Excluding the effect of the merger, Justice operating income benefited from higher operating income associated with its sales and gross profit performance, offset in part by higher SG&A costs that resulted from the increased sales levels.

Interest Expense. Interest expense decreased by $4.1 million, or 62.1%, to $2.5 million in Fiscal 2011 from $6.6 million in Fiscal 2010. The decrease was primarily the result of the Fiscal 2011 prepayment of mortgage debt on our Suffern, New York facility and 27