Mail Stop 3561
November 10, 2005
Robert E. Bernard, Chief Executive Officer
dELiA*s, Inc.
435 Hudson Street
New York, New York 10014
Re: dELiA*s, Inc.
Amendment No. 1 to Registration Statement on Form S-1
Filed October 27, 2005
File No. 333-128153
Dear Mr. Bernard:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
General
1. We note your response to comment 1 in our letter dated October
7,
2005. On page 97, you have revised your disclosure to state that
"you believe" that your three brands are "well-established."
Please
tell us why you believe that your brands are "well-established."
Also, on page 99, you state that you are "a leading direct
marketing
company." Please tell us why you believe you are a "leading"
direct
marketing company. We note in your supplemental information that
Alloy, Inc. is ranked 98 in the Multichannel Merchant 100
companies.
However, since you are being spun off from Alloy, Inc., please
provide us with a source specifically referencing why you should
be
regarded as a leading direct market company.
Questions and Answers about the Spinoff and Rights Offering, page
1
Will I have to pay U.S. federal income taxes on my receipt...,
page 5
2. We note your response to comment 6 in our letter dated October
7,
2005. Since counsel is unable to provide you with an unqualified
opinion as to the tax-free nature of the spin-off, please include
a
cross reference to the risk factor indicating that the transaction
may be taxable.
Prospectus Summary, page 11
3. We note that you included a third paragraph to this section in
which you state that your prospectus summarizes various agreements
that are "subject to, and qualified in their entirety by, the
provisions of the summarized agreements, copies of which are filed
as
exhibits to, or incorporated as exhibits by reference to, the
registration statement of which this prospectus forms a part."
Please remove this paragraph. Any discussion in your document
that
summarizes an agreement should be materially complete. Please
revise
any disclosure in your document discussing an agreement that is
materially inaccurate or incomplete.
Our Company, page 11
4. We note your response to comment 10 in our letter dated October
7,
2005. It appears that you removed the disclosure regarding
duplicative names in your databases. Please tell us whether there
are any duplicative names in the 15.1 million persons who
purchased
merchandise or requested catalogs from you, including the 4.8
million
persons who purchased merchandise or requested a catalog within
that
last two years. If so, please discuss how this duplication
affects
the value of your databases.
Risk Factors That May Affect Future Results, page 21
5. We note your response to comment 11 in our letter dated October
7,
2005. However, some of your risk factors still do not clearly and
concisely convey the actual risk to you or your business
operations.
Please revise or advise us on the following risk factors:
* In the last risk factor on page 21, please disclose the risk you
face having no recent operating history as an independent company.
* In the last risk factor on page 25, please disclose the risk
that
competition with other retailers for sales and location in your
retail store operations has on you. Also, please consider whether
it
is necessary to include the portion of this risk factor that
states
you are no longer able to rely on Alloy, Inc. to guaranty your
leases, or whether it would be more appropriate to include this
portion of the risk factor in your last risk factor on page 21.
* In the third risk factor on page 40, please discuss how your
intention not to pay dividends on your common stock is a risk to
shareholders.
Use of Proceeds, page 67
6. We note your response to comment 16 in our letter dated October
7,
2005. Please reference the retail store expansion plan that you
discuss in greater detail in your Management`s Discussion and
Analysis section and your Our Business section.
Our Business, page 97
dELiA*s, page 98
7. We note your response to comment 27 in our letter dated October
7,
2005. Please discuss what you believe to be the "profile" and
"interests" of juniors in high school.
Revenue Segments, page 91
8. We note your response to comment 31 in our letter dated October
7,
2005. Currently, you leave blank the percentage of the products
you
sell for which any one vendor accounts. If this number is greater
than 10% for any one vendor, please discuss why the loss of this
vendor or vendors would not have a material impact on your
operations, and discuss why you believe there are sufficient
alternative sources should you choose to, or be forced to, change
the
vendor or vendors.
Direct Marketing Strategy, page 101
9. We note your response to comment 32 in our letter dated October
7,
2005. Please discuss the material impact of your "restrictive"
return policy, if any.
Certain United States Federal Income Tax Considerations, page 126
10. We note your response to comment 42 in our letter dated
October
7, 2005. In the last paragraph on page 136, you state that the
"Spinoff is conditioned upon receipt by Alloy, Inc. of an opinion
from Weil, Gotshal & Manges LLP, special tax counsel to Alloy,
Inc.,
substantially to the effect that the Spinoff should qualify as a
tax-
free spin-off to Alloy, Inc. and to Alloy, Inc.`s common
stockholders." In the last paragraph on page 137, you state that
Weil, Gotshal & Manges LLP is unable to render an unqualified
opinion
as to the tax-free nature of the Spinoff. In your second full
risk
factor on page 35, please state that Weil, Gotshal & Manges LLP
issued a qualified tax opinion, the reasons for issuing that
qualified opinion, and indicate that there is a risk that the
spin-
off transaction will be taxable to your stockholders.
* * * * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
You may contact Yong Kim, Staff Accountant, at (202) 551-
3323
or William Choi, Accounting Branch Chief, at (202) 551-3716, if
you
have questions regarding comments on the financial statements and
related matters. Please contact John Fieldsend, Staff Attorney,
at
(202) 551-3343, Ellie Quarles, Special Counsel, at (202) 551-3238,
or
me at (202) 551-3720 with any other questions.
Sincerely,
H. Christopher Owings
Assistant Director
cc: Richard M. Graf, Esq.
Katten Muchin Rosenman LLP
Via Fax: (202) 339-6058
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Robert E. Bernard, Chief Executive Officer
dELiA*s, Inc.
November 10, 2005
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