10-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 31, 2004

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File No. 0-11682

S&K FAMOUS BRANDS, INC.

(Exact name of registrant as specified in its charter)

Virginia	54-0845694
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

11100 West Broad Street, P. O. Box 31800, Richmond, Virginia 23294-1800

(Address of principal executive offices)

Registrant’s telephone number, including area code: (804) 346-2500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
None	Not applicable

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.50 par value

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $11,922,000.

This figure was calculated by multiplying (i) the mean between the high and low prices for the registrant’s common stock on August 2, 2003, as reported by The Nasdaq Stock Market, by (ii) the number of shares of the registrant’s common stock not held by the officers or directors of the registrant or any persons known to the registrant to own more than five percent of the outstanding common stock of the registrant. Such calculation does not constitute an admission or determination that any such officer, director or holder of more than five percent of the outstanding common stock of the registrant is an affiliate of the registrant.

As of April 7, 2004, 2,497,511 shares of the registrant’s Common Stock, $0.50 par value were outstanding.

Documents Incorporated by Reference

The portions of the 2003 Annual Report to Shareholders (“2003 Annual Report”) for the fiscal year ended January 31, 2004, referred to in Part II, are incorporated by reference into Part II. The portions of the Proxy Statement for the Company’s Annual Meeting of Shareholders to be held on May 20, 2004, referred to in Part III, are incorporated by reference into Part III.

PART I.

Item 1. Business

(a) General Development of Business

S&K Famous Brands, Inc. (the “Company”) has been in business for over 36 years. The Company began operations with one store and, as of April 2, 2004, operates 240 stores. The Company was incorporated in Virginia in 1970, as the successor to a business established in 1967. As used herein, the term “Company” includes the Company and its predecessors. The Company’s corporate headquarters is located at 11100 West Broad Street, Richmond, Virginia; the telephone number is (804) 346-2500. For a discussion of the Company’s business and its development during the fiscal year ended January 31, 2004 (“fiscal 2004”), see “Narrative Description of Business.”

(b) Financial Information about Industry Segments

The Company operates in one segment, the retail sale of men’s tailored clothing, furnishings, sportswear, outerwear, shoes and accessories. Accordingly, data with respect to separate industry segments is not applicable and has not been reported herein.

(c) Narrative Description of Business

General

The Company is engaged in the retail sale of men’s apparel, including a full line of men’s suits, sportcoats, slacks, shirts, ties, sportswear, outerwear, shoes and related accessories, through stores trading as S&K Famous Brand Menswear (S&K). The Company sells in-season, first-quality, men’s apparel, with nationally recognized brand names, 20% to 40% less than regular, full-priced department and specialty store prices. Additionally, the tuxedo rental business was expanded to approximately 65% of the stores in fiscal 2004 and will be fully expanded to substantially all stores in fiscal 2005.

As of April 2, 2004 there are 240 stores in 27 states: Virginia, Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, West Virginia and Wisconsin. Except for three locations, all of the S&K stores are located either in strip shopping centers or enclosed shopping malls.

During fiscal 2004, the Company opened eleven new S&K stores, totaling approximately 37,300 square feet, in the following localities:

Georgia:	Commerce(1)
New York:	Buffalo(1), Rochester(1), Victor (1)
North Carolina:	Charlotte, Greensboro, Winston-Salem
South Carolina:	Mt. Pleasant, Summerville
Tennessee:	Nashville
Virginia:	Leesburg

⁽¹⁾ These new stores were relocated from previous locations which were closed.

Additionally, in fiscal 2004, the Company closed nine under-performing stores (four of which were relocations), approximating 36,700 square feet, which were at the end of their lease term and which had not met the Company’s sales and profitability expectations: Commerce, Georgia; Buffalo, Rochester (2 stores) and Victor, New York; Knoxville, Tennessee; Austin (2 stores), Texas; and Fredericksburg, Virginia.

2

The following table summarizes information concerning store openings and closings during the fiscal years presented:

	Fiscal Year Ended
	1/31/04	2/01/03	2/02/02	2/03/01	1/29/00
Stores:
Open at beginning of year	236	237	238	240	233
Closed during year	9	10	11	17	15
Opened during year	11	9	10	15	22
Open at end of year	238	236	237	238	240
Relocations	4	4	4	7	1

During fiscal 2005, the Company plans to open approximately 15 new stores and close or relocate five other locations. So far, as of April 2, 2004, the Company has opened three new stores: Tuscaloosa, Alabama; Durham, North Carolina and Myrtle Beach, South Carolina and closed one store, Tuscaloosa, Alabama, which was a relocation.

Average sales per selling square foot for the stores included in comparable store sales statistics were: $216, $207, $204, $213 and $214, in the fiscal years ended 2004 through 2000, respectively. Other than the general economic and competitive environment, average sales per selling square foot are primarily influenced by three factors: sales levels in existing stores from year to year; the proportion of newer stores which, although profitable, might not have reached sales levels of more mature stores; and an increasing number of additional stores in existing markets, where the Company does not expect sales levels to be as high as in markets in which the Company operates a single store. New stores opened in existing markets may negatively impact existing store sales while increasing total market sales. The number of stores opened in existing markets were 11, 8, 9, 14 and 18 in fiscal years ended 2004 through 2000, respectively.

Merchandise and Marketing

The merchandise offered in the Company’s stores feature a wide variety of nationally recognized labels from America’s leading manufacturers as well as the Company’s exclusive, private labels. This first-quality merchandise is purchased directly from manufacturers or produced to S&K’s specifications and sold at prices substantially lower than those regularly charged by department and specialty stores. The Company does not purchase any “seconds” or “irregulars”. S&K offers a complete line of men’s apparel: suits, sportcoats, furnishings, casual clothing, outerwear, shoes and accessories. Additionally, the Company offers a custom-order program for the hard-to-fit customer with an emphasis toward the “Big & Tall” market. The Company’s “Corporate Casual” collection is sportcoat driven, with a coordinating slack and “dressier” sportswear focus, and responds to the relaxed dress codes found in a number of workplaces.

S&K’s sales associates provide the level and quality of customer service generally found in exclusive men’s clothing stores. These services include providing basic alterations at modest cost, soliciting comments from customers as to their satisfaction with the merchandise and services, maintaining customer files on special preferences, and offering a liberal refund policy for returned merchandise, including a money-back guarantee.

S&K promotes its Premier Club program for those customers who shop with the Company on a repeat basis. Members of the Premier Club receive periodic mailings throughout the year, which may contain special promotional opportunities, advance sales notices or just a “thank you” for shopping with S&K. Additionally, customers who reach certain purchase levels may receive incremental mailings containing special offers.

3

The Company offers the S&K Premier Charge Card as a payment option for its customers and believes this also enhances its customer service. Customers pay no annual fee and may even have special financing arrangements. Additionally, this program allows S&K to communicate regularly with S&K Premier Charge Card customers via their monthly statement.

S&K uses television as its primary advertising medium. The Company uses direct mail for periodic promotions and prospective customer mailings. The direct mail programs allow the Company to target Premier Club customers who have been the most responsive and loyal to S&K in the past or potential customers who fit the Company’s demographic profile. Additionally, newspaper advertising may be used occasionally for certain promotions or special events such as grand openings or holiday sales.

Purchasing and Distribution

Purchasing for all of the Company’s stores is directed from the Company’s headquarters in Richmond, Virginia, by its Senior Vice President – Merchandise/Divisional Merchandise Manager.

The Company purchases branded merchandise directly from a number of nationally recognized manufacturers that produce labels such as Jones New York, Chaps by Ralph Lauren, Albert Nipon, Bert Pulitzer, Oleg Cassini, Vanetti and Mossimo. These purchases consist primarily of merchandise produced specifically from orders placed by S&K well in advance of manufacturers’ production cycles allowing them to purchase fabrics advantageously and schedule production during off-peak manufacturing periods. The Company believes these buying practices enable it to sell this merchandise at prices generally 20% to 40% below prices regularly offered by full-priced department and specialty stores.

The Company also uses a number of high-quality men’s clothing factories which manufacture goods to its specifications for Company-owned labels, such as Roberto Villini, Kilburne & Finch, Daniel Gray, and others. The Roberto Villini label is carried on suits, sportcoats and dress slacks tailored in Italy from some of the finest Italian fabrics and imported exclusively for S&K, as well as on complementing shirts and ties. The Kilburne & Finch label is carried on the Company’s opening price point suit programs, and on a complementing assortment of opening price sportcoats, slacks, shirts, ties and sportswear. The Daniel Gray label (replacing the “Tailors Row” label), is found on suits, sportcoats, slacks and complementing shirts, ties and sportswear and is priced between the Kilburn & Finch and Villini labeled merchandise offering the customer a mid price-range assortment. The various manufacturing programs enable the Company to better control the quality, selection and depth of its merchandise and supplement apparel purchased from brand name manufacturers.

S&K works diligently to establish and maintain good vendor relationships. The Company purchases merchandise from approximately 120 vendors. Except for one vendor who accounted for approximately 22%, no other vendors exceeded 10% of the Company’s purchases in fiscal 2004. S&K does not believe that the loss of any vendor would significantly impact the Company. The Company does not maintain any long-term purchase commitments or arrangements with any supplier and believes that there will be sufficient sources of merchandise to support its expansion plans with no adverse effect on its purchasing practices.

The Company’s merchandise is primarily received centrally at its 110,000 square foot distribution center in Richmond, Virginia where the merchandise is sorted, inspected and then allocated to the appropriate store locations. S&K’s stores within an average 200 mile radius of Richmond receive merchandise once a week with deliveries generally made by the Company’s own trucks. Stores outside of that delivery route radius receive their merchandise weekly from common carriers or package delivery companies. A small amount of merchandise is shipped direct to the stores from selected vendors. The Company is capable of expanding this practice to other vendors which meet specified criteria.

4

S&K has replenishment programs with its major suppliers for the merchandise it considers to be “basics”. These replenishment programs allow the Company to automatically create replacement purchase orders for the merchandise which has just sold, increasing the Company’s inventory turnover. The majority of the Company’s replenishment vendors operate under its EDI (electronic data interchange) program. EDI allows the Company to electronically communicate with selected vendors thereby shortening delivery time. The Company currently has approximately 20 vendors operating under this program and has shortened the time to replenish their products to the stores by seven to ten days. Currently four of its replenishment vendors ship direct to stores. The Company continually enhances and refines its allocation and distribution processes (generally through technology improvements). The Company believes that through these enhancements and the availability of direct vendor shipments to its stores that there is sufficient capacity for receiving, storing and shipping merchandise to support the Company’s future expansion plans.

In fiscal 2004, the Company’s tuxedo rental program was expanded from approximately 25 stores to approximately 150 stores by year-end. In fiscal 2005 the program will be expanded to substantially all locations. This program is sourced by an outside vendor who owns the inventory and fulfills all orders. The Company works with the vendor on the particular products offered under S&K’s rental program. The tuxedos and related accessories are delivered to the Company’s stores via the vendor’s delivery trucks or small package delivery on a weekly basis and returned in the same manner after the rental is complete. Currently, the rental program is most active during the spring high school prom season but the Company is seeing some increased activity in wedding party rentals. For the current fiscal year, the Company expects these trends to continue.

Store Operations

Each store is under the direction of a general manager who is supervised by a district or market manager. The district managers generally supervise ten to fifteen stores while market managers supervise two to three stores while maintaining general manager responsibilities for their home store. The district and market managers visit the stores frequently to review merchandise needs, personnel training and performance, and adherence to the Company’s operating procedures. The Company has initiated some programs which it believes will assist in further developing individuals for promotion to district or market manager.

In fiscal 2004, the Company redesigned a number of its training programs, which are specifically developed for S&K associates. Its Management Skills Seminars (MSS) are 2-day regional seminars conducted by the Sr. Vice President –Training & Associate Development or the Vice President – Training and attended by store management, and full-time or part-time associates looking to improve their management skills. In fiscal 2004, the Company also introduced its “8-Step Selling System”, a customer-friendly selling process in which every selling associate is trained. This program is supported by video and audio training modules available for all associates to use for self-instruction and is reinforced by on-the-job training. This program sets personalized standards of performance for each sales associate and closely monitors their progress. All developmental programs are enhanced by continuous on-the-job training, video training and periodic, in-district meetings conducted by district and market managers, the Sr. Vice President - Training & Associate Development, Vice President - Training or one of the two Vice Presidents - Operations. Annually, all general managers are brought to Richmond to participate in a 3-day corporate training and team building session.

The Company stresses promotion from within, and most of the Company’s general managers and district managers have been promoted in this manner. S&K has cash bonuses and other incentive plans in effect for its store and district managers which are based upon individual and store performance.

5

Each store employs an average of six sales associates, some on a part-time basis. A weekly sales goal is established for each sales associate. The Company evaluates weekly productivity reports and conducts semi-annual “Good to Great” Development reviews to assess each associate’s performance.

All sales are accepted with cash, personal checks, debit cards or independent credit cards (Visa/Master Card/Discover/American Express/S&K Premier Charge Card). The Company assumes no credit risk on debit or credit card purchases but pays a customary percentage of those sales to a debit or credit card processor as a service charge. The Company has a liberal refund policy on returned merchandise.

Information Management and Point-of-Sale System

Inventory records are controlled centrally and updated daily utilizing an automated point-of-sale (POS) system. Each store’s POS system is polled nightly by the Company’s computerized information system. This system assimilates all data and interfaces with the Company’s automated merchandise control, ordering, replenishment, EDI and open-to-buy systems. Physical inventories are generally conducted in the stores twice a year to verify and enhance the accuracy of the merchandise information system. Additionally, the store general managers provide daily information to the central office where it is subjected to various sales, cash and inventory procedures.

All stores have a customized POS system which includes the following features: automatic price lookup including promotional pricing on markdown items, the ability to scan barcode merchandise price tickets, the ability to capture and track Premier Club purchase activity, store and employee productivity reporting capabilities including manpower scheduling, recording hours worked for all store employees, a merchandise locator service, alterations tracking and the ability to send and receive electronic mail. The Company monitors the performance of its POS systems and works closely with the vendor to develop enhancements to this software.

Store Expansion

The Company plans to continue its policy of pursuing suitable locations and opening new stores when attractive opportunities are presented. The strategy for expansion is to increase sales and market share through the development of additional store locations in both existing and new markets, subject to favorable economic conditions.

The Company is currently seeking new S&K store locations in the eastern half of the United States. The criteria used in selecting sites for new stores include the geographic locations and the demographics and psychographics of the surrounding area. Based on S&K’s research, the Company locates its stores in areas that appear most likely to be receptive to the Company’s retailing strategy. These store sites could be in regional shopping malls or strip shopping centers generally located near a regional mall, or in outlet centers. With respect to store sites in these centers, the Company considers the principal anchor stores located in the center, tenant mix and the positioning of the Company’s site within that center.

The S&K stores are designed to provide what the Company believes is required by the modern-day value-conscious consumers of menswear. The Company’s store formats are designed to attract a broad mix of customers by providing the customer with the opportunity to make purchases quickly during leisure time as well as having quality merchandise displayed in attractive store settings using a wide variety of merchandising techniques.

The Company currently has two formats: approximately 78% of the stores are considered to be traditional stores while 22% are outlets. The 4,300 square foot traditional S&K store provides a specialty store setting and is generally located in or near regional malls in mid-size markets. The 3,500 square foot outlet store is located within outlet centers and is designed to attract the value shopper.

6

Additionally, the Company continues to offer merchandise on line through its web-store at www.skmenswear.com and through an alliance formed in late fiscal 2003 with Amazon.com which offers merchandise through Amazon’s on-line specialty store. The Company believes that the structure of its relationship with Amazon can be recreated, with minimal costs, into future alliances with other on-line vendors.

Seasonality

The Company’s business is highly seasonal, with peak sales periods occurring during the fourth fiscal quarter, which includes the Christmas season. The fourth fiscal quarter generally accounts for approximately 30% of the Company’s net sales and 35-55% of its net earnings for a fiscal year.

Working Capital

The Company has historically funded its working capital from internally generated funds and from bank borrowings and expects these sources to continue to be adequate for the foreseeable future.

Competition

The retail men’s apparel business is highly competitive. The Company’s stores compete with department stores, other men’s specialty stores and discount clothing stores. The Company competes on the basis of price, quality and selection of merchandise, as well as customer service and store location. Many of its competitors are considerably larger than the Company and have substantially greater financial and other resources. At various times throughout the year, department store chains and full-priced specialty shops offer brand name merchandise at substantial markdowns, which may result in prices matching or less than those regularly offered by the Company.

Employees

As of January 31, 2004, the Company had approximately 2,100 employees, more than half of whom worked part-time. A number of part-time employees are usually added during the Christmas holiday season. None of the Company’s employees are covered by collective bargaining agreements. The Company considers its employee relations to be good.

New Accounting Pronouncements

In early 2003, the Financial Accounting Standards Board (FASB) issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” SFAS No. 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”.

In December 2003, the FASB issued SFAS No. 132 (Revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits - an amendment of FASB Statements No. 87, 88, and 106.” SFAS No. 132 revises employers’ disclosures about pension plans and other postretirement benefit plans. Additionally, SFAS No. 143, “Accounting for Asset Retirement Obligations,” which provides the accounting requirements for retirement obligations associated with tangible long-lived assets, was effective for the Company’s 2004 fiscal year.

In December 2003, the FASB issued a revision to its previously issued FIN No. 46 “Consolidation of Variable Interest Entities.” FIN No. 46-R, requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns, or both.

The adoption of SFAS No. 149, SFAS No. 132, SFAS No. 143 and FIN No. 46-R did not have a material impact on the Company’s financial statements.

In February 2003, the Emerging Issues Task Force (“EITF”) addressed EITF Statement No. 02-16 (“EITF 02-16”), “Accounting by a Reseller for Cash Consideration Received From a Vendor.” EITF

7

02-16 provides accounting guidance on how a reseller should characterize consideration given by a vendor and when to recognize and how to measure that consideration in its income statement. Adoption of EITF 02-16 did not have a material impact on the Company’s financial statements.

Information Regarding Forward-Looking Statements

The provisions of the Private Securities Litigation Reform Act of 1995 (the “Act”) provide companies with a “safe harbor” when making forward-looking statements. This “safe harbor” encourages companies to provide prospective information about their companies without fear of litigation. The Company wishes to take advantage of the “safe harbor” provisions of the Act and is including this section in its Annual Report on Form 10-K in order to do so. Company statements that are not historical facts, including statements about management’s expectations for fiscal year 2005 and beyond, are forward-looking statements and involve various risks and uncertainties. Factors that could cause the Company’s actual results to differ materially from management’s projections, forecasts, estimates and expectations include, but are not limited to, the following:

(a) changes in the amount and degree of promotional intensity exerted by current competitors and potential new competitors many of whom are, or may be, larger and have greater financial and marketing resources;

(b) changes in general U.S. economic conditions including, but not limited to, consumer credit availability, interest rates, inflation, and consumer sentiment about the economy in general;

(c) changes in availability of working capital and capital expenditure financing, including the availability of the Company’s credit facilities to support seasonal borrowing needs and the development of retail stores;

(d) changes in the availability on acceptable terms of appropriate real estate locations for expansion;

(e) the presence or absence of new products or product features in the merchandise categories the Company sells and changes in the Company’s actual merchandise sales mix;

(f) changes in availability of or access to both domestic and foreign sources of merchandise inventory;

(g) the ability to maintain an effective leadership team in a dynamic environment of changes in the cost and availability of a suitable work force to manage and support the Company’s service-driven operating strategy;

(h) changes in production or distribution costs of the Company’s advertising; and

(i) unusual weather patterns.

The Company assumes no obligation to update publicly or release revisions to any forward-looking statements, whether as a result of new information, future events or otherwise.

The United States retail industry and the specialty apparel retail industry in particular, are dynamic by nature. The Company’s ability to anticipate and successfully respond to continuing challenges is key to achieving its expectations.

Trademarks and Service Marks

The Company believes it has the right to use all trademarks and service marks necessary to conduct its business as currently operated. The Company considers these marks and the accompanying customer recognition and goodwill to be valuable to its business, particularly in the case of its “S&K”-related service marks and logos. The Company believes its existing rights to use such marks can be preserved through continued use of the marks and, where applicable, renewal of registrations.

8

(d) Financial Information about Foreign and Domestic Operations and Export Sales

The Company has no foreign operations or export sales.

Available Information

The Company’s website address is www.skmenswear.com. The Company makes available free of charge through its website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports as soon as reasonably practicable after filing or furnishing the material to the SEC.

Item 2. Properties

As of April 2, 2004, all but one of the Company’s 240 stores are leased. The Company owns a “flagship” traditional store in Richmond, Virginia, which it built and opened in March 1998. With the exception of three freestanding locations, all the stores are located in strip shopping centers, enclosed malls, or outlet centers. The square footage of the stores varies with store format. The traditional S&K stores generally range in size from approximately 3,500 to 5,000 square feet and the outlet stores from 3,000 to 4,000 square feet. All stores are located in close proximity to population centers, department stores and other retail operations and are often situated near a major highway or thoroughfare.

As leases expire, the Company generally exercises a renewal option when desirable. It is S&K’s strategy to negotiate its leases to include termination clauses exercisable within two years of initial occupancy. By exercising this termination clause when appropriate, S&K is able to minimize any long-term effect of opening an undesirable location, which would be unable to meet volume and profitability expectations. Additionally, these termination clauses give the Company flexibility to relocate a store should a more attractive site become available in that market. In most cases, the Company’s new stores have been profitable, on an operating basis, in the first full fiscal quarter of their operation.

The company closed nine stores in fiscal 2004 (four of which were relocations): Commerce, Georgia; Buffalo, Rochester (2 stores) and Victor, New York; Knoxville, Tennessee, Austin (2 stores), Texas; and Fredericksburg, Virginia.

9

As of April 2, 2004, the Company operated 240 stores in 27 states. The following summary recaps the number of current locations by state.

	Number of stores
Alabama	12
Arkansas	5
Florida	18
Georgia	10
Illinois	9
Indiana	10
Iowa	3
Kansas	3
Kentucky	5
Louisiana	4
Maine	2
Maryland	2
Michigan	13
Mississippi	2
Missouri	3
New Jersey	1
New York	16
North Carolina	27
Ohio	13
Oklahoma	2
Pennsylvania	8
South Carolina	17
Tennessee	16
Texas	6
Virginia	26
West Virginia	2
Wisconsin	5
Total	240

Store leases generally provide for an annual base rent of between $4.50 and $27.00 per square foot. Most leases contain provisions which require the payment of a percentage of sales as additional rent, generally when sales reach specified levels.

The Company’s executive offices are located at its Corporate Headquarters and Central Distribution Center in Richmond, Virginia, and are owned by the Company. The total facility contains approximately 130,000 square feet, with the distribution center occupying approximately 110,000 of that square footage.

Item 3. Legal Proceedings

There are no legal proceedings pending against the Company which are expected to have a material effect upon the Company or its financial condition.

Item 4. Submission of Matters to a Vote of Security Holders

None.

10

Executive Officers of the Registrant

The executive officers of the Company who serve at the discretion of the Board of Directors are as follows:

Stuart C. Siegel, 61, is Chairman of the Board of Directors of the Company. Prior to April 2002, Mr. Siegel was also Chief Executive Officer.

Donald W. Colbert, 54, is Vice Chairman and Chief Operating Officer and a director of the Company since April 2002. Prior to April 2002, Mr. Colbert was President and Chief Operating Officer and a director.

Stewart M. Kasen, 64, is President and Chief Executive Officer and a director of the Company since April 2002. Prior to joining the Company, Mr. Kasen was President of Schwarzschild Jewelers between September 2001 and April 2002; a private investor between November 1999 and August 2001; Chairman, President and Chief Executive Officer of Factory Card Outlet Corp. between May 1998 and October 1999.

Robert E. Knowles, 54, is Executive Vice President, Chief Financial Officer, Secretary and Treasurer. Mr. Knowles is a Certified Public Accountant.

Robert F. Videtic, 56, is Senior Vice President, Divisional Merchandise Manager. Prior to January 2001, Mr. Videtic was Vice President, Divisional Merchandise Manager

Jon R. Vinegar, 47, is Vice President, Divisional Merchandise Manager since February 2000. Between November 1999 and February 2000, Mr. Vinegar was a Divisional Merchandise Manager – Men’s Clothing & Furnishings with Belk Department Stores; previously he was Vice President, Divisional Merchandise Manager with S&K Famous Brands, Inc.

Weldon J. Wirick, III, 53, is Senior Vice President—Training and Associate Development. Prior to January 2002, Mr. Wirick was Senior Vice President — Operations.

11

PART II

Item 5. Market for the Registrant’s Common Equity and Related Stockholder Matters

Please see page 13 of the 2003 Annual Report under the caption “Selected Quarterly Data,” which is incorporated herein by reference.

During the fiscal year ended January 31, 2004, the Company contributed 17,196 shares of its common stock to the S&K Famous Brands Employees’ Savings/Profit Sharing Plan (the “Plan”) for the year ended December 31, 2002. The contribution was exempt from registration pursuant to section 3(a) 2 of the Securities Act of 1933, as amended, because the Plan does not permit employee contributions to be invested in the Company’s securities.

Item 6. Selected Financial Data

Please see page 3 of the 2003 Annual Report under the caption “Five-Year Summary of Selected Financial Data,” which is incorporated herein by reference.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Please see pages 3-5 of the 2003 Annual Report under the caption “Management’s Discussion and Financial Review,” which is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Please see page 5 of the 2003 Annual Report under the caption “Interest Rate Risk,” which is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data

Please see Part IV, Item 14 (a) 1, captioned “Financial Statements,” for a list of financial statements which are incorporated herein by reference from the 2003 Annual Report.

Please see page 13 of the 2003 Annual Report under the caption “Selected Quarterly Data,” which is incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of the Company’s Disclosure Controls. As of the end of the period covered by this Annual Report on Form 10-K, the Company evaluated the effectiveness of the design and operation of its “disclosure controls and procedures” (“Disclosure Controls”). This evaluation (the “Controls Evaluation”) was done under the supervision and with the participation of management, including our chief executive officer (CEO) and chief financial officer (CFO). Disclosure Controls are procedures that are designed with the objective of providing reasonable assurance that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 (the “Exchange Act”), such as this Annual Report, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s (SEC) rules and forms. Disclosure Controls are also designed with the objective of providing reasonable assurance that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

12

Limitations on the Effectiveness of Controls. The Company’s management, including the CEO and CFO, does not expect that our Disclosure Controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual act of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Conclusions. Based upon the Controls Evaluation, our CEO and CFO have concluded that our Disclosure Controls are effective at a reasonable assurance level.

13

PART III

Item 10. Directors and Executive Officers of the Registrant

Please see pages 3-4 of the registrant’s definitive Proxy Statement under the caption “Information Regarding Nominees” for information concerning directors, which is incorporated herein by reference.

Please see section entitled “Executive Officers of the Registrant” in Part I of this report for information concerning executive officers.

Item 11. Executive Compensation

Please see page 6 and page 12 of the registrant’s definitive Proxy Statement under the captions “Executive Compensation” and “Compensation Committee Interlocks and Insider Participation” and page 5 of the registrant’s definitive Proxy Statement under the caption “Directors’ Compensation,” which are incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Please see pages 1-2 of the registrant’s definitive Proxy Statement under the captions “Security Ownership of Certain Beneficial Owners,” and “Security Ownership of Management” and page 8 of the registrant’s definitive Proxy Statement under the caption “Equity Compensation Plan Information” which are incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions

Please see page 4 and pages 8-9 of the registrant’s definitive Proxy Statement under the captions “Certain Relationships and Related Transactions” and “1995 and 2000 Stock Purchase Loan Plans,” which are incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

Please see page 16 of the registrant’s definitive Proxy Statement under the caption “Proposal No. 3 Ratification of Selection of Accountants” which is incorporated herein by reference.

14

PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)	Documents filed as part of this report:
			Page in Annual Report
	1.	Financial Statements:
		The following financial statements of S&K Famous Brands, Inc. and report of independent accountants, included in the registrant's 2003 Annual Report are incorporated by reference in Item 8:
		Statements of Income for the fiscal years ended January 31, 2004, February 1, 2003 and February 2, 2002	6
		Statements of Changes in Shareholders' Equity for the fiscal years ended January 31, 2004, February 1, 2003 and February 2, 2002	6
		Balance Sheets at January 31, 2004 and February 1, 2003	7
		Statements of Cash Flows for the fiscal years ended January 31, 2004, February 1, 2003 and February 2, 2002	8
		Notes to Financial Statements	9-12
		Report of Independent Accountants	12
	2.	Financial Statement Schedules:
		None.
	3.	Exhibits required to be filed by Item 601 of Regulation S-K:
		See INDEX TO EXHIBITS
(b)	Reports on Form 8-K filed during the last quarter of the year ended January 31, 2004. The Forms 8-K listed below that were furnished to the SEC shall not be deemed filed for any purpose.
	A current report on Form 8-K, dated November 25, 2003 was filed with the SEC to report under Item 12, the Company’s issuance of a press release on the Company’s financial results for the third quarter and nine months ended November 1, 2003

Except for the information referred to in Items 5, 6, 7, 7A, 8 and 14(a) 1. hereof, the 2003 Annual Report to Shareholders for the fiscal year ended January 31, 2004 shall not be deemed to be filed pursuant to the Securities Exchange Act of 1934.

15

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	S&K FAMOUS BRANDS, INC.
Date: April 12, 2004	/s/ Stewart M. Kasen
	STEWART M. KASEN
	President and Chief Executive Officer
	(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: April 12, 2004	/s/ Stuart C. Siegel
	STUART C. SIEGEL, Chairman of the Board of Directors
Date: April 12, 2004	/s/ Robert L. Burrus, Jr.
	ROBERT L. BURRUS, JR., Director
Date: April 12, 2004	/s/ Donald W. Colbert
	DONALD W. COLBERT, Vice Chairman and Chief Operating Officer, Director
Date: April 12, 2004	/s/ Janet L. Jorgensen
	JANET L. JORGENSEN
	Senior Vice President & Controller, Chief Accounting Officer (Principal Accounting Officer)
Date: April 12, 2004	/s/ Stewart M. Kasen
	STEWART M. KASEN, President and Chief Executive Officer, Director
Date: April 12, 2004	/s/ Robert E. Knowles
	ROBERT E. KNOWLES
	Executive Vice President, Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer)
Date: April 12, 2004	/s/ Andrew M. Lewis
	ANDREW M. LEWIS, Director
Date: April 12, 2004	/s/ Steven A. Markel
	STEVEN A. MARKEL, Director
Date: April 12, 2004	/s/ Karen L. Newman
	KAREN L. NEWMAN, Director
Date: April 12, 2004	/s/ Troy A. Peery, Jr.
	TROY A. PEERY, JR., Director
Date: April 12, 2004	/s/ Marshall B. Wishnack
	MARSHALL B. WISHNACK, Director

INDEX TO EXHIBITS

Exhibit No.

(3)	Articles of incorporation and bylaws
	a.	Registrant’s Amended and Restated Articles of Incorporation (conformed to include amendments to date), filed as Exhibit 3(a) to registrant’s Quarterly Report on Form 10-Q for the quarter ended July 31, 1999, are expressly incorporated herein by this reference.
	b.	Amendment to registrant’s Bylaws dated March 26, 2002 and registrant’s amended and restated Bylaws (conformed to include amendments to date).
(4)	Instruments defining the rights of security holders, including indentures.
	a.	Loan and Security Agreement, dated March 27, 2002, among the registrant, Branch Banking and Trust Company of Virginia and SunTrust Bank, filed as Exhibit (b) to the registrant’s Schedule TO filed March 28, 2002, is expressly incorporated herein by this reference.
	b.	First Amendment to Loan and Security Agreement dated May 15, 2002 filed as Exhibit (a) 1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended May 4, 2002, is expressly incorporate herein by this reference.
(10)	Material Contracts
*	a.	Deferred compensation agreements dated February 1, 1988, between registrant and the following officers of the registrant: Stuart C. Siegel, Donald W. Colbert, Robert E. Knowles and Weldon J. Wirick, III, filed as Exhibit 19(a) to registrant’s Quarterly Report on Form 10-Q for the quarter ended April 30, 1988 (File #0-11682), are expressly incorporated herein by this reference.
*	b.	1991 Stock Option Plan, filed as Exhibit 19 to registrant’s Quarterly Report on Form 10-Q for the quarter ended July 27, 1991 (File #0-11682), is expressly incorporated herein by this reference.
*	c.	Amendment to 1991 Stock Option Plan, filed as Exhibit 19 to registrant’s Quarterly Report on Form 10-Q for the quarter ended May 1, 1993 (File #0-11682), is expressly incorporated herein by this reference.
*	d.	Amendment to 1991 Stock Option Plan, filed as Exhibit 10(g) to registrant’s Annual Report on Form 10-K for the year ended January 31, 1998 (file #0-11682), is expressly incorporated herein by this reference.
*	e.	1999 Stock Incentive Plan filed as Exhibit A to the registrant’s definitive proxy statement for the Annual Meeting of Shareholders held on May 19, 1999 (file #0-11682) is expressly incorporated herein by this reference.
*	f.	2000 Stock Purchase Loan Plan filed as Exhibit A to the registrant’s definitive proxy statement for the Annual Meeting of Shareholders held on May 18, 2000 (file #0-11682) is expressly incorporated herein by this reference.

* Management contract or compensatory plan or arrangement of the Company required to be filed as an exhibit.

(13)	Annual report to security holders, Form 10-Q or quarterly report to security holders
	a.	Registrant’s 2003 Annual Report to Shareholders (“2003 Annual Report”) for the fiscal year ended January 31, 2004.
(23)	Consents of Experts and Counsel
	a.	Consent of Independent Accountants
(31.1)	Certification by President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(31.2)	Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32.1)	Certification by President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(32.2)	Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, pursuant to Section 906 of the Sarbanes-Osley Act of 2002.

EX-13

S&K FAMOUS BRANDS, INC.

Exhibit 13

FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA

(Dollar and share amounts in thousands, except per share data)

	Fiscal Year Ended
	January 31, 2004²		February 1, 2003		February 2, 2002		February 3, 2001		January 29, 2000
Income Statement Data:
Net sales¹	$	176,189	$	168,617	$	166,915	$	174,249	$	168,399
Gross profit¹		80,703		78,133		77,853		83,324		78,578
Selling, general and administrative expenses¹		72,704		70,532		69,498		72,110		67,241
Interest		458		439		375		869		1,068
Depreciation and amortization		3,033		3,063		3,068		3,123		2,954
Net income		2,800		2,721		3,386		4,531		4,899
Earnings Per Share Data:
Basic earnings per share	$	1.13	$	0.95	$	0.84	$	1.04	$	1.04
Diluted earnings per share		1.08		0.94		0.83		1.04		1.04
Weighted average shares outstanding – basic		2,472		2,866		4,054		4,373		4,719
Weighted average shares outstanding – including dilutive potential common shares		2,589		2,891		4,072		4,375		4,729
Balance Sheet Data:
Working capital	$	35,940	$	34,510	$	39,317	$	43,769	$	43,670
Inventories		48,477		46,073		44,869		52,031		51,538
Property and equipment, net		15,597		16,121		17,571		18,522		19,607
Total assets		74,840		78,321		76,731		81,881		81,450
Long-term debt (including current maturities)		4,564		11,279		1,440		9,230		10,019
Shareholders’ equity		47,828		45,184		59,158		55,866		55,303
Book value per share		19.21		18.05		14.63		13.60		11.88
Current ratio		2.8:1		2.7:1		4.0:1		4.2:1		4.3:1
Number of stores at year-end		238		236		237		238		240

¹ Amounts reflect the reclassification of alteration revenues and related expenses to net sales and cost of sales which had previously been netted against selling, general and administrative expenses. Alteration revenues reclassified to net sales for the last five fiscal years were $7,477, $6,433, $6,057, $6,336 and $5,607, respectively. The net effect from this reclassification was an increase to gross profit of $795, $331, $75, $241 and $147, respectively, for the last five fiscal years.

² In fiscal 2004, the Company adopted the fair value method provisions of SFAS No. 123, “Accounting for Stock-Based Compensation” on a prospective basis for all awards granted after February 2, 2003.

S&K FAMOUS BRANDS, INC.

MANAGEMENT’S DISCUSSION AND FINANCIAL REVIEW

RESULTS OF OPERATIONS

The following table sets forth certain items in the Statements of Income as a percentage of net sales for fiscal years 2004, 2003 and 2002.

	Percentage of Net Sales
	Fiscal Year Ended
	1/31/04		2/1/03		2/2/02
Net sales	100.0	%	100.0	%	100.0	%
Cost of sales	54.2		53.7		53.4
Gross profit	45.8		46.3		46.6
Other costs and expenses:
Selling, general and administrative	41.3		41.8		41.6
Interest	0.2		0.3		0.2
Depreciation and amortization	1.7		1.8		1.8
Other income, net	—		(0.2	)	(0.3	)
Income before income taxes	2.6		2.6		3.3
Provision for income taxes	1.0		1.0		1.3
Net income	1.6	%	1.6	%	2.0	%

Year Ended January 31, 2004 Compared to Year Ended February 1, 2003

Net sales increased by 4.5%, or $7.6 million, from fiscal 2003 to fiscal 2004 with comparable store sales up 3.7%. This increase was due to growth in average sale and in higher sales of suits, furnishings and shoes. Alteration revenues, included in net sales, were $7.5 million and $6.4 million in fiscal 2004 and 2003, respectively. During fiscal 2004 the Company opened eleven new stores, and closed nine under-performing stores (four of which were relocations). There were 238 stores in operation as of January 31, 2004 versus 236 at the end of the prior year.

Cost of sales in fiscal 2004 was 54.2% of net sales compared to 53.7% of net sales in fiscal 2003. The 0.5% of net sales increase was primarily due to higher levels of promotional and seasonal markdowns in fiscal 2004 designed to increase store traffic.

Selling, general and administrative expenses in fiscal 2004 were 41.3% of net sales compared to 41.8% of net sales in fiscal 2003. This 0.5% of net sales decrease was due primarily to lower advertising costs and better leveraging of fixed occupancy costs on higher sales compared to last year which more than offset increases in store payrolls, group health claims and a $507,000 non-cash accrual for performance awards.

Interest expense in fiscal 2004 was $458,000 or 0.2% of net sales compared to $439,000 or 0.3% of net sales in fiscal 2003. Fiscal 2004 included a full year of interest expense related to the new Credit Facility while fiscal 2003 expense originated after the April 26, 2002 tender offer.

Other income, net in fiscal 2003 included income from an insurance claim of approximately $132,000, or $82,000 after tax.

Year Ended February 1, 2003 Compared to Year Ended February 2, 2002

Net sales increased by 1%, or $1.7 million, from fiscal 2002 to fiscal 2003 with comparable store sales up 1%. Alteration revenues, included in net sales, were $6.4 million and $6.1 million in fiscal 2003 and 2002, respectively. During fiscal 2003 the Company opened nine new stores and closed ten under-performing stores (four of which were relocations).

Cost of sales in fiscal 2003 was 53.7% of net sales compared to 53.4% of net sales in fiscal 2002. The 0.3% of net sales increase was primarily due to taking a higher level of promotional markdowns to increase store traffic and, to a lesser degree, higher freight and buying and occupancy costs as a component of cost of sales compared to the prior year.

Selling, general and administrative expenses in fiscal 2003 were 41.8% of net sales compared to 41.6% of net sales in fiscal 2002. This 0.2% of net sales increase was due primarily to a combination of higher incentive bonus payments and significantly higher rates for casualty insurance, offset in part by lower advertising expense.

Interest expense in fiscal 2003 was 0.3% of net sales compared to 0.2% of net sales in fiscal 2002. Fiscal 2003 includes incremental interest expense of approximately $253,000 related to the new Credit Facility (see Note 4 to the Financial Statements) and was partially offset primarily by lower interest rates compared to the prior year.

Other income, net included income from unrelated insurance claims of $132,000, or $82,000 after tax, in fiscal 2003 and $525,000, or $325,000 after tax, in fiscal 2002.

Performance Awards

Under the provisions of the 1999 Stock Incentive Plan, which was approved by the Company’s shareholders, the Compensation Committee of the Board of Directors approved a grant of approximately 324,000 Performance Awards to twenty officers of the Company in March 2003. The Company believes that the long-term incentive provided by Performance Awards will help continue to retain key employees and better align shareholder and employee interests than the previous practice of granting stock options. The Performance Awards will be earned dependent on the level of earnings growth for the four-year period beginning February 2, 2003 and ending February 3, 2007. Each Performance Award, if earned, will entitle the recipient to receive a share of the Company’s common stock.

None of the Performance Awards will be earned if the officer is no longer employed on February 3, 2007, or if the four-year compound annual pre-tax earnings growth (“CAGR”) is below 10%. Half of the Performance Awards will be earned if the Company achieves four-year CAGR of 10% and all will be earned at 20% or higher CAGR. Should the four-year compound annual pre-tax earnings growth be between 10% and 20%, the Performance Awards will be earned on a pro rata basis. Achievement of CAGR goals is determined on a pre-tax basis prior to any expenses related to the Performance Awards. See table below.

During the four-year period, the Company will determine the degree to which the Performance Awards should be accrued and record the appropriate stock-based compensation expense under SFAS No. 123. The Company’s current assessment of the achievement of CAGR goals is 16% and accordingly a related expense of $507,000 was accrued for fiscal 2004.

Pre-Tax Earnings for Years Ending January Before Expensing Performance Awards

	Base Year 2003		2004		2005		2006		2007		Four-Year Total
CAGR Assumption
10%
Pre-tax Earnings	$	4,390,000	$	4,829,000	$	5,311,900	$	5,843,100	$	6,427,400	$	22,411,400
# Awards Accrued				40,500		40,500		40,500		40,500		162,000
20%
Pre-tax Earnings	$	4,390,000	$	5,268,000	$	6,321,600	$	7,585,900	$	9,103,100	$	28,278,600
# Awards Accrued				81,000		81,000		81,000		81,000		324,000

LIQUIDITY AND CAPITAL RESOURCES

In fiscal 2004, the Company funded its operating activities, including capital expenditures for the opening of new stores, from internally generated funds and from bank borrowings. During fiscal 2004, the Company opened eleven new stores and closed nine under-performing stores (four of which were relocations). The closed locations had not met the Company’s sales and profitability expectations. During fiscal 2005 the Company believes it will open approximately 10-15 new stores and close or relocate approximately five other locations. The Company does not expect this activity to significantly impact liquidity or capital resources, including its debt covenants, during fiscal 2005.

Operating activities provided net cash of $4.4 million, $10.8 million and $13.4 million in fiscal 2004, 2003 and 2002, respectively. The change between fiscal 2004 and 2003 related primarily to the year over year fluctuation in the levels of accounts payable which increased by $0.4 million in fiscal 2004 versus $5.7 million in fiscal 2003. The change between fiscal 2003 and 2002 was primarily related to the year over year fluctuations in the levels of inventory and accounts payable. Merchandise inventories increased by $1.5 million during fiscal 2003 while they had decreased by $6.8 million during fiscal 2002. The changes in the levels of payables resulted from the timing of merchandise receipts and cash payments.

Investing activities provided net cash of $0.1 million in fiscal 2004 while it used net cash of $2.6 million and $3.4 million in fiscal 2003 and 2002, respectively. Capital expenditures of $3.2 million, $2.2 million and $2.9 million in fiscal 2004, 2003 and 2002, respectively, were primarily for the purpose of store expansion, including relocations and remodelings, and technology related purchases. In fiscal 2004 the Company received $3.5 million upon the repayment of accumulated premiums under the split dollar life insurance policies as discussed in footnote 5.

Financing activities used net cash of $7.3 million, $7.3 million and $8.1 million in fiscal 2004, 2003 and 2002, respectively. During fiscal 2003, the Company completed a tender offer under which it purchased approximately 1.6 million shares at $11.00 per share for approximately $17.1 million. The tender offer and the payoff of a previously outstanding Industrial Development Bond was financed under a new $46.0 million Credit Facility with two banks (see Note 4 to the Financial Statements). During fiscal 2004 and 2003, the Company re-paid approximately $6.7 million and $9.2 million, respectively, under this Credit Facility. Financing activities in fiscal 2002 primarily related to fluctuations in the borrowing levels under the Company’s previous revolving credit agreements, (which had an aggregate borrowing capacity of $40.0 million) and included the repurchase of the Company’s common stock of $0.3 million. At the end of fiscal 2004, the Company had the entire $26.0 million available for use under the revolving loan portion of the Credit Facility and was in compliance with all covenants.

Contractual Obligations

The Company’s contractual obligations to make future payments under its existing Credit Facility and lease obligations are summarized below:

Payments Due by Period ($ millions)

Contractual obligations	Total		Less than 1 Year		1-3 Years		4-5 Years		After 5 Years
Long-term debt	$	4.6	$	.4	$	.8	$	3.4	$	—
Operating leases		40.0		13.5		15.6		7.7		3.2
Total contractual obligations	$	44.6	$	13.9	$	16.4	$	11.1	$	3.2

OTHER MATTERS

Critical Accounting Policies

In conformity with accounting principles generally accepted in the United States of America, the preparation of our financial statements requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Although the estimates are based on our knowledge of current events and actions we may under take in the future, actual results could differ from those estimates. Significant accounting policies used in the preparation of the Company’s financial statements, including the use of estimates, are summarized in Note 1 of the Company’s Financial Statements.

Critical accounting policies are those that are most important to the presentation of the Company’s financial condition and the results of operations; require management’s most difficult, subjective and complex judgements; and involve uncertainties. The Company’s most critical accounting policies pertain to revenue recognition, inventories and stock-based compensation. Management must use informed judgements and best estimates to properly apply these critical accounting policies. Because of the uncertainty of these estimates, actual results could differ from estimates used in applying the critical accounting policies. The Company is not aware of any reasonably likely events or circumstances which would result in different amounts being reported that would materially affect its financial condition or results of operations.

The Company has reclassified alteration revenues and related expenses to net sales and cost of sales, respectively. Alteration revenues and related costs had historically been netted against selling, general and administrative expenses. Alteration revenues reclassified to net sales for the last three fiscal years were approximately $7.5 million, $6.4 million and $6.1 million, respectively. Alteration related expenses reclassified to cost of sales were approximately $6.7 million, $6.1 million and $6.0 million, respectively.

In early 2003, the Financial Accounting Standards Board (FASB) issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” SFAS No. 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” In December 2003, the FASB issued SFAS No. 132 (Revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits - an amendment of FASB Statements No. 87, 88, and 106.” SFAS No. 132 revises employers’ disclosures about pension plans and other postretirement benefit plans. Additionally SFAS No. 143, “Accounting for Asset Retirement Obligations,” which provides the accounting requirements for retirement obligations associated with tangible long-lived assets was effective for the Company’s 2004 fiscal year. Also in December 2003 the FASB issued a revision to its previously issued FIN No. 46 “Consolidation of Variable Interest Entities,” FIN No. 46-R requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns, or both. The adoption of SFAS No. 149, SFAS No. 132, SFAS No. 143 and FIN No. 46-R did not have a material impact on the Company’s financial statements.

In February 2003, the Emerging Issues Task Force (“EITF”) addressed EITF Statement No. 02-16 (“EITF 02-16”), “Accounting by a Reseller for Cash Consideration Received from a Vendor.” EITF 02-16 provides accounting guidance on how a reseller should characterize consideration given by a vendor and when to recognize and how to measure that consideration in its income statement. Adoption of EITF 02-16 did not have a material impact on the Company’s financial statements.

Off Balance Sheet Arrangements

The Company does not have transactions, arrangements or relationships with “special purpose” entities. Except for Letters of Credit approximating $1.7 million, which expire July 2004, the Company does not have any off balance sheet arrangements.

Interest Rate Risk

The Company’s bank credit facilities bear interest at variable rates, which expose the Company to risk from interest rate fluctuations. If interest rates were to increase or decrease by 10%, the effect on net income and cash flows would not be material.

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company’s actual results in future periods to differ materially from forecasted or expected results. Those risks include, among other things, the competitive environment in the value-priced men’s apparel industry in general and in the Company’s specific market area, inflation, changes in costs of goods and services, economic conditions in general and in the Company’s specific market area. Those and other risks are more fully described in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2004.

STATEMENTS OF INCOME (in thousands, except per share data)

	Fiscal Year Ended
	January 31, 2004			February 1, 2003			February 2, 2002
Net sales	$	176,189		$	168,617		$	166,915
Cost of sales		95,486			90,484			89,062
Gross profit		80,703			78,133			77,853
Other costs and expenses:
Selling, general and administrative		72,704			70,532			69,498
Interest		458			439			375
Depreciation and amortization		3,033			3,063			3,068
Other income, net		(8	)		(291	)		(549	)
Income before income taxes		4,516			4,390			5,461
Provision for income taxes		1,716			1,669			2,075
Net income	$	2,800		$	2,721		$	3,386
Earnings per common share:
Basic	$	1.13		$	0.95		$	0.84
Diluted	$	1.08		$	0.94		$	0.83
Weighted average common shares outstanding - basic		2,472			2,866			4,054
Dilutive effect of stock options and performance awards		117			25			18
Weighted average common shares outstanding - including dilutive potential common shares		2,589			2,891			4,072

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (in thousands)

	Common Stock
	Shares		Amount			Capital in Excess of Par Value			Notes Receivable Stock Purchase Loan Plan			Retained Earnings			Total
Balance – February 3, 2001	4,109		$	2,054		$	266		$	(2,467	)	$	56,013		$	55,866
Net income													3,386			3,386
Repurchase of common stock	(84	)		(42	)		(357	)					(262	)		(661	)
Issuances of common stock	19			10			103									113
Reduction of notes receivable										454						454
Balance – February 2, 2002	4,044			2,022			12			(2,013	)		59,137			59,158
Net income													2,721			2,721
Repurchase of common stock	(1,564	)		(782	)		(154	)					(16,274	)		(17,210	)
Tender offer costs													(375	)		(375	)
Surrender of shares under Stock Purchase Loan Plan	(44	)		(22	)		(182	)					(285	)		(489	)
Issuances of common stock, including tax benefits	68			34			324						4			362
Reduction of notes receivable										1,017						1,017
Balance – February 1, 2003	2,504			1,252			0			(996	)		44,928			45,184
Net income													2,800			2,800
Repurchase of common stock	(70	)		(35	)		(141	)					(502	)		(678	)
Issuances of common stock, including tax benefits	56			28			418						(16	)		430
Reduction of notes receivable										92						92
Balance – January 31, 2004	2,490		$	1,245		$	277		$	(904	)	$	47,210		$	47,828

See Notes to Financial Statements.

S&K FAMOUS BRANDS, INC.

BALANCE SHEETS (in thousands, except per share data)

	January 31, 2004			February 1, 2003
Assets
Current assets:
Cash and cash equivalents	$	2,384		$	5,114
Accounts receivable		407			314
Merchandise inventories		48,477			46,073
Prepaid income taxes		—			242
Other current assets		3,981			3,283
Total current assets		55,249			55,026
Property and equipment, net		15,597			16,121
Other assets		3,994			7,174
	$	74,840		$	78,321
Liabilities and Shareholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	403		$	1,860
Book overdrafts		1,977			2,112
Accounts payable		11,686			12,037
Accrued compensation and related items		2,887			2,379
Current and deferred income taxes		92			94
Other current liabilities		2,264			2,034
Total current liabilities		19,309			20,516
Long-term debt		4,161			9,419
Other long-term liabilities		2,250			1,690
Deferred income taxes		1,292			1,512
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $1 par value; authorized shares, 500; issued and outstanding shares, none
Common stock, $.50 par value; authorized shares, 10,000; issued and outstanding shares, 2,490 (2004)and 2,504 (2003)		1,245			1,252
Capital in excess of par value		277			—
Notes receivable—Stock Purchase Loan Plan		(904	)		(996	)
Retained earnings		47,210			44,928
		47,828			45,184
	$	74,840		$	78,321

See Notes to Financial Statements.

S&K FAMOUS BRANDS, INC.

STATEMENTS OF CASH FLOWS Increase (decrease) in cash (in thousands)

	Fiscal Year Ended
	January 31, 2004			February 1, 2003			February 2, 2002
Cash flows from operating activities:
Net income	$	2,800		$	2,721		$	3,386
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization		3,646			3,685			3,658
Gain on insurance claim		(11	)		(132	)		(525	)
Loss on property dispositions, net		147			85			177
Proceeds received on insurance claim		240			415			868
Changes in assets and liabilities:
Accounts receivable		(93	)		(44	)		(16	)
Merchandise inventories		(2,633	)		(1,519	)		6,819
Other current and non-current assets		(936	)		(208	)		(498	)
Accounts payable and accrued expenses		434			5,706			181
Current and deferred income taxes		285			(33	)		(731	)
Other long-term liabilities		561			106			98
Net cash provided by operating activities		4,440			10,782			13,417
Cash flows from investing activities:
Capital expenditures		(3,243	)		(2,216	)		(2,915	)
Payoff of split dollar policy loans		3,499			—			—
Premium payments under life insurance policies		(123	)		(383	)		(564	)
Proceeds from property dispositions		15			14			31
Net cash provided by (used for) investing activities		148			(2,585	)		(3,448	)
Cash flows from financing activities:
Net paydowns under revolving bank loans		—			—			(7,610	)
Borrowings under line of credit debt		—			18,997			—
Repayment under line of credit and real estate debt		(6,715	)		(9,158	)		(180	)
Repurchase of common stock		(678	)		(17,210	)		(294	)
Payment of tender offer cost		—			(375	)		—
Payment of debt issuance cost		—			(212	)		—
Principal paid on notes receivable-Stock Purchase Loan Plan		75			618			—
Net cash used for financing activities		(7,318	)		(7,340	)		(8,084	)
Net (decrease) increase in cash and cash equivalents		(2,730	)		857			1,885
Cash and cash equivalents at beginning of year		5,114			4,257			2,372
Cash and cash equivalents at end of year	$	2,384		$	5,114		$	4,257
Supplemental disclosure of cash flow information:
Cash paid during the year for interest	$	404		$	414		$	404
Cash paid during the year for income taxes, net		1,431			1,701			2,838
Non-cash financing activity-
Reduction of notes receivable – Stock Purchase Loan Plan		—			379			367
Principal forgiveness on Stock Purchase Loan Plan		31			41			92
Issuances of common stock		150			132			113
Reduction of common stock due to surrender of shares		—			(489	)		—
Reduction in income taxes payable from benefit of stock options		265			230			—

See Notes to Financial Statements.

S&K FAMOUS BRANDS, INC.

NOTES TO FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies:

Principal Business

S&K Famous Brands, Inc. (the Company) operates in one segment, the retail sale of menswear, including tailored clothing, furnishings, sportswear, shoes and accessories. The Company’s fiscal year is the 52- or 53-week period, which ends on the Saturday closest to January 31. Fiscal years ended January 31, 2004 (fiscal 2004), February 1, 2003 (fiscal 2003), and February 2, 2002 (fiscal 2002) were 52-week periods.

Reclassifications

Certain prior year balances have been reclassified to conform to the current year’s presentation. The reclassification of alteration revenues and related expenses to net sales and cost of sales had the effect of increasing net sales by $7.5 million, $6.4 million and $6.1 million in fiscal 2004, 2003 and 2002, respectively, and increasing cost of sales by $6.7 million, $6.1 million and $6.0 million, respectively.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and that affect the reported amounts of revenues and expenses during the reporting period. While actual results could differ from those estimates, management does not expect the differences, if any, to have a material effect on the financial statements.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and marketable securities with original maturities of 90 days or less.

Merchandise Inventories

Inventories are valued at the lower of average cost or market.

Property and Equipment

Property and equipment are stated at cost. Depreciation for financial reporting purposes is computed using both straight- line and accelerated methods over the estimated service lives which are between 25 and 40 years for buildings and between three and seven years for fixtures and equipment. Leasehold improvements are generally amortized over an eight-year period.

The Company annually evaluates long-lived assets for any impairment through the evaluation of the recoverability of its property and equipment based on the utilization of assets and expected cash flows. This evaluation has not resulted in adjustments to the Company’s results of operations or financial position. Repair and maintenance expenditures are charged to expense as incurred. Upon retirement or sale of an asset, its cost and related accumulated depreciation are written off and any gain or loss is recognized in other income, net.

Other Assets

In fiscal 2004 other assets consist primarily of cash surrender value related to various life insurance policies. In fiscal 2003, in addition to the cash surrender value, it also included receivables from certain officers under split dollar life insurance policies, in total aggregating $6.7 million.

Revenue Recognition

The Company recognizes sales, net of returns and exclusive of sales taxes related to merchandise sold at the point of sale when title passes to the customer. Additionally, alteration revenues and revenues related to tuxedo rentals are included in sales. Merchandise vendor allowances are recognized in the period in which the related merchandise is sold and are taken as a reduction of cost of sales.

Advertising Costs

Advertising costs are expensed in the period in which the advertisement initially runs. Advertising expense of $11.9 million, $12.4 million and $12.9 million, respectively, was included in selling, general and administrative expenses in each of the last three fiscal years. Deferred advertising costs related to future programs included in the balance sheets approximated $100,000 in each year.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Earnings Per Share

The computation of basic earnings per share is based on the weighted average number of common shares outstanding during each period. Diluted earnings per share include the dilutive effect of stock options, and beginning in fiscal 2004, the dilutive effect of performance awards. There were no anti-dilutive options outstanding during fiscal 2004. Anti-dilutive stock options representing common stock which were excluded in the computation of diluted earnings per share in fiscal 2003 and 2002 were 51,700 and 118,000, respectively.

Stock-Based Compensation

In the fourth quarter of fiscal 2004, the Company adopted the fair value provisions of Statement of Financial Accounting Standards (SFAS) No. 123, “Accounting for Stock-Based Compensation,” on a prospective basis for all new grants of equity instruments (which would include performance awards and stock options) effective February 2, 2003. Prior to fiscal 2004, the Company accounted for those plans under the recognition and measurement provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (APB No. 25) and related interpretations. Accordingly, no stock-based compensation expense was included in the fiscal 2003 or 2002 Statements of Income. See Note 6 for disclosures related to the Company’s Stock Incentive and Stock Purchase Loan Plans. The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all outstanding and unvested awards in each period.

(in thousands, except per share amounts)	2004			2003			2002
Net income, as reported	$	2,800		$	2,721		$	3,386
Add: Stock-based compensation expense included in reported net income, net of taxes		314			—			—
Deduct: Total stock-based compensation expense determined under the fair value based method for all awards, net of taxes		(414	)		(121	)		(121	)
Pro forma net income	$	2,700		$	2,600		$	3,265
Earnings per share:
Basic – as reported	$	1.13		$	.95		$	.84
Basic – pro forma		1.09			.91			.81
Diluted earnings per share:
Diluted – as reported	$	1.08		$	.94		$	.83
Diluted – pro forma		1.04			.90			.80

Accounting Pronouncements

In early 2003, the Financial Accounting Standards Board (FASB) issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” SFAS No. 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” In December 2003, the FASB issued SFAS No. 132 (Revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits - an amendment of FASB Statements No. 87, 88, and 106.” SFAS No. 132 revises employers’ disclosures about pension plans and other postretirement benefit plans. Additionally SFAS No. 143, “Accounting for Asset Retirement Obligations”, which provides the accounting requirements for retirement obligations associated with tangible long-lived assets was effective for the Company’s 2004 fiscal year. Also in December 2003 the FASB issued a revision to its previously issued FIN No. 46 “Consolidation of Variable Interest Entities.” FIN No. 46-R requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns, or both. The adoption of SFAS No. 149, SFAS No. 132, SFAS No. 143 and FIN No. 46-R did not have a material impact on the Company’s financial statements.

In February 2003, the Emerging Issues Task Force (“EITF”) addressed EITF Statement No. 02-16 (“EITF 02-16”), “Accounting by a Reseller for Cash Consideration Received from a Vendor.” EITF 02-16 provides accounting guidance on how a reseller should characterize consideration given by a vendor and when to recognize and how to measure that consideration in its income statement. Adoption of EITF 02-16 did not have a material impact on the Company’s financial statements.

Note 2 - Merchandise Inventories:

Inventories are costed using an average cost method, under which the Company tracks inventory costs for approximately 100 inventory categories, which are used to classify its inventory. The Company’s slow moving inventory allowance and shrinkage reserve approximated $245,000 and $281,000, respectively, at January 31, 2004 and $235,000 and $275,000, respectively, at February 1, 2003.

The Company capitalizes certain buying, holding and distribution costs to inventory, which at the end of the last two fiscal years were approximately $2.8 million and $2.7 million, respectively. Buying, holding and distribution costs charged to cost of sales in fiscal years 2004, 2003 and 2002 were approximately $4.7 million, $4.4 million and $4.2 million, respectively.

Note 3 - Property and Equipment:

Property and equipment consists of the following (in thousands):

	January 31, 2004		February 1, 2003
Land	$	1,232	$	1,232
Buildings		5,375		5,375
Furniture, fixtures and equipment		18,227		17,327
Leasehold improvements		18,038		17,220
		42,872		41,154
Less - accumulated depreciation and amortization		27,275		25,033
	$	15,597	$	16,121

Depreciation and amortization expense of approximately $613,000, $622,000 and $590,000 was included in cost of sales for each of the last three fiscal years, respectively.

Note 4 - Long-Term Debt:

Long-term debt consists of (in thousands):

	January 31, 2004		February 1, 2003
Credit Facility:
Line of Credit; $486 of principal due quarterly beginning May 1, 2003 plus interest based on LIBOR due monthly	$	—	$	5,507
Term Loan; $34 of principal plus interest based on LIBOR due monthly collateralized by land and corporate headquarters		4,564		5,772
		4,564		11,279
Less - current maturities		403		1,860
	$	4,161	$	9,419

On April 26, 2002, the Company purchased approximately 1.6 million shares of its common stock at $11.00 per share under a tender offer and financed it through available cash and a new credit facility (the “Credit Facility”) from two banks including a line of credit and term loan. The Credit Facility also provided for an operating revolving loan for working capital needs in the principal amount of $26.0 million; at January 31, 2004, no amounts were outstanding on this revolving loan.

The Credit Facility, which matures in 2007, is collateralized by liens on the Company’s inventory and the Company’s headquarters property and adjacent store. Monthly principal payments on the term loan began in July 2002 and quarterly principal reductions on the line of credit loan began in May 2003. In addition, on January 29, 2004 the balance of approximately $4.0 million on the line of credit was paid off and $.8 million was paid on the term loan. Amounts outstanding under the Credit Facility bear interest at a variable rate based on LIBOR (1.07% at January 31, 2004), payable monthly. The Credit Facility contains customary financial covenants, including restrictions on the Company’s ability to pay dividends and to repurchase its capital stock. The Company is presently in compliance with all covenants in the Credit Facility.

As of January 31, 2004, the Company had $4.6 million outstanding under the term loan with maturities for the next four years estimated at $.4 million, $.4 million, $.4 million and $3.4 million, respectively.

Note 5 - Profit Sharing and Other Benefit Programs:

The Company maintains a noncontributory profit sharing plan for all employees who meet age and service requirements. Contributions to the plan are determined annually by the Board of Directors and were $50,000, in each of the last three fiscal years.

Additionally, the profit sharing plan includes a qualified salary reduction plan under Section 401(k) of the Internal Revenue Code. Eligible participants in the Company’s 401(k) Plan can elect to invest 1% to 100% of their pre-tax earnings. The Company’s contribution to the 401(k) Plan is at the discretion of the Board of Directors, who authorized contributions of the Company’s common stock in the amount of $150,000 in each of the last three fiscal years. These contributions are paid into the plan within 60 days of fiscal year end.

Included in other assets at the end of fiscal 2003 was receivables from certain officers (aggregating $3,499,000) which represented accumulated premiums paid on split dollar life insurance policies through July 2002, when the Company ceased premium payments. Cash surrender values of the related policies (aggregating $3,872,000) were pledged as collateral for these receivables. On December 10, 2003, the officers repaid to the Company all of the accumulated premiums and the collateral assignments thereunder were released.

Other long-term liabilities consist of unfunded deferred compensation agreements with certain officers which provide a fixed level of retirement benefits to be paid based on age and years of service. Deferred compensation expense is being accrued over the vesting period using a discount rate of 8% and approximated $81,000, $134,000 and $127,000, respectively, in each of the last three fiscal years.

Note 6 - Stock Incentive and Stock Purchase Loan Plans:

Prior to fiscal 2004, the Company accounted for its stock-based compensation plans, which consisted of stock option grants under the provisions of APB No. 25 and related interpretations. Effective February 2, 2003, the Company adopted the fair value recognition provisions of SFAS No. 123. SFAS No. 123 was adopted on a prospective basis for all awards granted after February 2, 2003. No stock-based compensation expense was reflected in the fiscal 2003 or 2002 Statements of Income.

Under the provisions of the 1999 Stock Incentive Plan the Compensation Committee of the Board of Directors approved a grant of approximately 324,000 Performance Awards to twenty officers of the Company in March 2003. The Performance Awards are earned dependent on the Company achieving a four-year annual compound pre-tax earnings growth of 10% or higher beginning February 2, 2003 and ending February 3, 2007. Each Performance Award, if earned, will entitle the recipient to receive a share of the Company’s common stock. None of the Performance Awards will be earned if the officer is no longer employed or if the earnings growth is not achieved. Under the provisions of SFAS No. 123, the Company accrued related compensation expense of $507,000 in fiscal 2004.

The Company’s stock incentive plan also provides for the granting of up to 400,000 common shares to key management employees. Options to purchase the Company’s stock are granted with an exercise price not less than the market value at the date of grant, are exercisable after one to five years and expire after eight years. There were no options granted in fiscal 2004 or 2003. Prior to fiscal 2004, the Company had applied the intrinsic value based method of accounting prescribed by ABP No. 25, in accounting for its stock options. Accordingly, the Company has not recognized any related compensation expense in its Statements of Income for those grants.

Changes in options under the plan for the three years ended January 31, 2004 were as follows:

	Options		Weighted Average Exercise Price		Exercisable	Weighted Average Exercise Price
Outstanding - February 3, 2001	617,436		$	9.79	421,496	$	10.28
Exercised	(30,000	)		6.28
Surrendered	(73,100	)		9.08
Expired	(50,000	)		21.75
Outstanding - February 2, 2002	464,336			8.84	336,976		8.93
Exercised**	(212,432	)		8.45
Surrendered	(14,264	)		8.98
Outstanding - February 1, 2003	237,640			9.17	165,036		9.51
Exercised***	(82,160	)		9.36
Surrendered	(1,300	)		7.77
Outstanding - January 31, 2004	154,180		$	9.08	121,896	$	9.44

** Shareholders surrendered 157,490 shares in the exercise of 212,432 stock options which resulted in the net issuance of 54,942 shares of common stock by the Company.

*** Shareholders surrendered 43,771 shares in the exercise of 82,160 stock options which resulted in the net issuance of 38,389 shares of common stock by the Company.

Additional information regarding stock options outstanding at January 31, 2004 follows:

Range of Exercise Prices	Outstanding Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Exercisable Options	Weighted Average Exercise Price
$7.38	52,040	$	7.38	4.6 years	31,224	$	7.38
$8.41	57,340		8.41	3.7 years	45,872		8.41
$11.94	44,800		11.94	2.6 years	44,800		11.94
$7.38 - $11.94	154,180				121,896

Under the Company’s Stock Purchase Loan Plan, the Company has full recourse loans with twelve officers approximating $1.1 million, gross of amounts accrued for principal forgiveness. The Plan annually provides for reduction of a portion of interest payable on the loans based on meeting certain operating targets, as well as the opportunity for the officer to receive a reduction of a portion of the principal balance of the loan if the officer remains an employee of the Company for seven years and maintains ownership of the stock. Compensation expense related to this program was $31,000, $41,000 and $92,000 for the last three fiscal years, respectively. At the end of fiscal 2004 and 2003, the Company has accrued interest receivable from these officers in the amount of $178,400 and $214,900, respectively.

Note 7 - Provision for Income Taxes:

Significant components of the Company’s deferred income tax liabilities (assets) are as follows (in thousands):

	January 1, 2004			February 2, 2003
Deferred tax liabilities:
Depreciation	$	2,268		$	2,267
Other items		219			218
Total deferred tax liabilities		2,487			2,485
Deferred tax assets, primarily compensation related		(1,108	)		(879	)
Net deferred tax liabilities	$	1,379		$	1,606

The provision for income taxes consists of (in thousands):

	Fiscal Year Ended
	2004			2003		2002
Current:
Federal	$	1,511		$	1,231	$	1,945
State		432			368		416
		1,943			1,599		2,361
Deferred		(227	)		70		(286	)
	$	1,716		$	1,669	$	2,075

The effective income tax rates consist of (in thousands):

	Fiscal Year Ended
	2004			2003			2002
Income taxes at federal statutory rate (34%)	$	1,535		$	1,493		$	1,857
State income taxes, net of federal benefit		285			243			275
Other - net		(104	)		(67	)		(57	)
	$	1,716		$	1,669		$	2,075
Effective income tax rate		38.0	%		38.0	%		38.0	%

Note 8 – Commitments and Contingencies:

The Company leases all but one of its stores under varying terms and arrangements, which generally provide renewal options and contingent rentals based on a percentage of gross sales. Total rent expense under the leases approximated $13.7 million, $13.4 million and $13.0 million in each of the last three fiscal years, respectively.

The future minimum payments under operating leases as of the end of fiscal 2004 aggregate $40.0 million and are payable as follows: fiscal 2005 - $13.5 million, fiscal 2006 - $9.4 million, fiscal 2007 - $6.2 million, fiscal 2008 - $4.6 million, fiscal 2009 - $3.1 million and $3.2 million, thereafter.

The Company leases a property from an immediate family member of an officer of the Company, who is also a shareholder. Rent expense included approximately $153,000, $150,000 and $147,000 in fiscal 2004, 2003 and 2002, respectively, paid to this party. The Company is also obligated under the current lease agreement to pay minimum rentals approximating $69,000 in fiscal 2005 and 2006, and $52,000 in fiscal 2007.

At the end of fiscal 2004, the Company had outstanding Letters of Credit approximating $1.7 million.

Note 9 – Insurance Claim:

During fiscal 2003, other income, net, included $132,000, or $82,000 after tax related to income from an insurance claim. Gross proceeds from this insurance claim were approximately $511,000 and covered the $379,000 loss of inventory and other related costs.

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of S&K Famous Brands, Inc.

In our opinion, the accompanying balance sheets and related statements of income, of changes in shareholders’ equity and of cash flows present fairly, in all material respects, the financial position of S&K Famous Brands, Inc. (the “Company”) at January 31, 2004, and February 1, 2003, and the results of its operations and its cash flows for each of the three fiscal years in the period ended January 31, 2004 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Notes 1 and 6, the Company changed the manner in which it accounts for stock-based compensation as of February 2, 2003.

/s/ PricewaterhouseCoopers, LLP

March 5, 2004

Richmond, Virginia

S&K FAMOUS BRANDS, INC.

SELECTED QUARTERLY DATA (unaudited)

Summarized quarterly data for fiscal 2004 and 2003 are as follows (in thousands, except per share data):

Fiscal 2004	May 3		August 2		November 1			January 31
Net sales ¹	$	44,019	$	41,128	$	40,313		$	50,729
Gross profit ¹		21,036		18,530		18,534			22,603
Net income ²		1,529		207		92			972
Earnings per share—basic / diluted ²		.62 / .61		.08 / .08		.04 / .04			.39 / .37
Common share prices: High / Low		10.71 / 8.36		16.90 / 10.41		20.62 / 16.10			18.75 / 16.16
Fiscal 2003	May 4		August 3		November 2			February 1
Net sales ¹	$	43,481	$	37,585	$	37,616		$	49,935
Gross profit ¹		20,693		16,943		17,535			22,962
Net income		1,474		55		(202	)		1,394
Earnings per share—basic and diluted		.38		.02		(.08	)		.55
Common share prices: High / Low		13.10 / 7.95		14.85 / 9.50		12.00 / 7.75			13.76 / 9.82

¹ Previously netted against selling, general and administrative expenses, amounts reflect the reclassification of alteration revenues and related expenses to net sales and cost of sales. Alteration revenues reclassified to net sales for fiscal 2004 quarters were $1,836, $1,696, $1,868 and $2,077, respectively, and $1,690, $1,491, $1,508 and $1,744, respectively, in fiscal 2003 quarters. The net effect from this reclassification was an increase in gross profit of $194, $105, $223 and $273, respectively, for the four quarters in fiscal 2004 and $106, $45, $48 and $132, respectively, in fiscal 2003 quarters.

² In the fourth quarter of fiscal 2004, the Company adopted SFAS No. 123 “Accounting for Stock-Based Compensation”, effective as of February 2, 2003. As a result, selling, general and administrative expenses and net income has been restated for the first three quarters of the year ended January 31, 2004. This restatement had the effect of increasing selling, general and administrative expenses by $51, $152 and $152 in the first three quarters of fiscal 2004, respectively, and decreasing net income by $32, $94 and $94, respectively.

S&K Famous Brands, Inc. common shares are traded on The Nasdaq Stock Market under the symbol SKFB.

As of January 31, 2004, there were more than 1,000 holders of S&K common stock, including approximately 200 holders of record. The number of record holders does not reflect the number of beneficial owners of the Company’s common stock for whom shares are held by Cede & Co., certain brokerage firms and others. The Credit Facility prohibits the Company from paying dividends on its common stock without the consent of the banks. The Company has not declared cash dividends and anticipates that for the foreseeable future it will continue to follow its present policy of retaining earnings in order to finance the expansion and development of its business.

EX-23

Exhibit 23

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 33-23918, 33-72270, 33-58703 and 333-37324) of S&K Famous Brands, Inc. of our report dated March 5, 2004 relating to the financial statements, which appears in the 2003 Annual Report, which is incorporated in this Annual Report on Form 10-K.

PricewaterhouseCoopers LLP

Richmond, VA

April 12, 2004

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Stewart M. Kasen, certify that:

1. I have reviewed this annual report on Form 10-K of S&K Famous Brands, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: April 12, 2004	/s/ Stewart M. Kasen
	Stewart M. Kasen
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Robert E. Knowles, certify that:

1. I have reviewed this annual report on Form 10-K of S&K Famous Brands, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: April 12, 2004	/s/ Robert E. Knowles
	Robert E. Knowles
	Executive Vice President,
	Chief Financial Officer,
	Secretary and Treasurer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the S&K Famous Brands, Inc. (the “Company”) Annual Report on Form 10-K for the period ending January 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stewart M. Kasen, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 12, 2004	By:	/s/ Stewart M. Kasen
		Stewart M. Kasen
		President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to S&K Famous Brands, Inc. and will be retained by S&K Famous Brands, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the S&K Famous Brands, Inc. (the “Company”) Annual Report on Form 10-K for the period ending January 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert E. Knowles, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 12, 2004	By:	/s/ Robert E. Knowles
		Robert E. Knowles
		Executive Vice President and
		Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to S&K Famous Brands, Inc. and will be retained by S&K Famous Brands, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.