UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q


ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended May 1, 2010
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from to .

COMMISSION FILE NUMBER: 1-32315

NEW YORK & COMPANY, INC.
(Exact name of registrant as specified in its charter)


DELAWARE (State of incorporation)		33-1031445 (I.R.S. Employer Identification No.)
450 West 33 ^rd Street 5 ^th Floor New York, New York 10001 (Address of Principal Executive Offices, including Zip Code)		(212) 884-2000 (Registrant's Telephone Number, Including Area Code)

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 ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o		Accelerated filer ý		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

As of May 28, 2010, the registrant had 60,006,075 shares of common stock outstanding.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements	1
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
	Item 4.	Controls and Procedures	21
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings	22
	Item 1A.	Risk Factors	22
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
	Item 3.	Defaults Upon Senior Securities	22
	Item 4.	Removed and Reserved	22
	Item 5.	Other Information	22
	Item 6.	Exhibits	23

Table of Contents

PART I.

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

New York & Company, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

(Amounts in thousands, except per share amounts)		Three months ended May 1, 2010			Three months ended May 2, 2009

Net sales		$	236,982		$	232,860
Cost of goods sold, buying and occupancy costs			178,437			174,008

	Gross profit		58,545			58,852
Selling, general and administrative expenses			67,248			67,368

	Operating loss		(8,703	)		(8,516	)
Interest expense, net of interest income of $12 and $18, respectively			186			220

	Loss from continuing operations before income taxes		(8,889	)		(8,736	)
Benefit for income taxes			(4,030	)		(3,848	)

	Loss from continuing operations		(4,859	)		(4,888	)
	Income from discontinued operations, net of taxes		—			3

Net loss		$	(4,859	)	$	(4,885	)

Basic loss per share:
	Basic loss per share from continuing operations	$	(0.08	)	$	(0.08	)
	Basic earnings per share from discontinued operations		—			—

	Basic loss per share	$	(0.08	)	$	(0.08	)

Diluted loss per share:
	Diluted loss per share from continuing operations	$	(0.08	)	$	(0.08	)
	Diluted earnings per share from discontinued operations		—			—

	Diluted loss per share	$	(0.08	)	$	(0.08	)

Weighted average shares outstanding:
	Basic shares of common stock		59,337			60,043

	Diluted shares of common stock		59,337			60,043

See accompanying notes.

Table of Contents

New York & Company, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Amounts in thousands, except per share amounts)		May 1, 2010			January 30, 2010			May 2, 2009

		(Unaudited)			(Audited)			(Unaudited)
Assets
Current assets:
	Cash and cash equivalents	$	23,176		$	87,296		$	31,080
	Accounts receivable		24,184			9,447			18,593
	Income taxes receivable		3,000			3,000			6,446
	Inventories, net		133,172			87,059			122,935
	Prepaid expenses		21,592			22,608			27,650
	Other current assets		1,219			1,417			2,677
	Current assets of discontinued operations		108			108			109

Total current assets			206,451			210,935			209,490
Property and equipment, net			180,834			187,079			209,556
Intangible assets			14,879			14,879			14,879
Deferred income taxes			22,632			22,637			15,025
Other assets			923			997			1,257

Total assets		$	425,719		$	436,527		$	450,207

Liabilities and stockholders' equity
Current liabilities:
	Current portion—long-term debt	$	6,000		$	6,000		$	6,000
	Accounts payable		77,108			72,019			74,877
	Accrued expenses		52,545			58,932			55,112
	Income taxes payable		—			991			—
	Deferred income taxes		3,361			4,774			1,925
	Current liabilities of discontinued operations		265			265			268

Total current liabilities			139,279			142,981			138,182
Long-term debt, net of current portion			6,000			7,500			12,000
Deferred rent			71,455			72,020			75,543
Other liabilities			5,041			5,862			6,858

Total liabilities			221,775			228,363			232,583
Stockholders' equity:
	Common stock, voting, par value $0.001; 300,000 shares authorized; 60,005, 59,396 and 60,526 shares issued and outstanding at May 1, 2010, January 30, 2010, and May 2, 2009, respectively		60			60			60
	Additional paid-in capital		155,134			154,495			152,816
	Retained earnings		53,818			58,677			67,273
	Accumulated other comprehensive loss		(1,671	)		(1,671	)		(2,052	)
	Treasury stock at cost of 1,000, 1,000, and 142 shares at May 1, 2010, January 30, 2010, and May 2, 2009, respectively		(3,397	)		(3,397	)		(473	)

Total stockholders' equity			203,944			208,164			217,624

Total liabilities and stockholders' equity		$	425,719		$	436,527		$	450,207

See accompanying notes.

Table of Contents

New York & Company, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Amounts in thousands)			Three months ended May 1, 2010			Three months ended May 2, 2009

Operating activities
Net loss			$	(4,859	)	$	(4,885	)
Less: Income from discontinued operations, net of taxes				—			3

Loss from continuing operations				(4,859	)		(4,888	)
Adjustments to reconcile net loss to net cash used in operating activities of continuing operations:
	Depreciation and amortization			10,184			10,466
	Amortization of deferred financing costs			54			54
	Share-based compensation expense			485			464
	Deferred income taxes			(1,408	)		(223	)
	Changes in operating assets and liabilities:
		Accounts receivable		(14,737	)		(6,600	)
		Income taxes receivable		—			3,756
		Inventories, net		(46,113	)		(18,074	)
		Prepaid expenses		1,016			(3,040	)
		Accounts payable		5,089			6,446
		Accrued expenses		(6,387	)		(6,009	)
		Income taxes payable		(991	)		—
		Deferred rent		(565	)		(305	)
		Other assets and liabilities		(626	)		(552	)

Net cash used in operating activities of continuing operations				(58,858	)		(18,505	)
Investing activities
Capital expenditures				(3,916	)		(2,741	)

Net cash used in investing activities of continuing operations				(3,916	)		(2,741	)
Financing activities
Repayment of debt				(1,500	)		(1,500	)
Proceeds from exercise of stock options				8			2
Excess tax benefit from exercise of stock options				146			23
Purchase of treasury stock				—			(476	)

Net cash used in financing activities of continuing operations				(1,346	)		(1,951	)
Cash flows from discontinued operations
	Operating cash flows			—			(4	)
	Investing cash flows			—			—
	Financing cash flows			—			—

Net cash used in discontinued operations				—			(4	)

Net decrease in cash and cash equivalents				(64,120	)		(23,201	)
Cash and cash equivalents at beginning of period (including cash at discontinued operations of $0 and $1, respectively)				87,296			54,281

Cash and cash equivalents at end of period (continuing operations only)			$	23,176		$	31,080

See accompanying notes.

Table of Contents

New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements

May 1, 2010

(Unaudited)

1. Organization and Basis of Presentation

New York & Company, Inc. (together with its subsidiaries, collectively the "Company") is a leading specialty retailer of fashion-oriented, moderately-priced women's apparel. The Company designs and sources its proprietary branded New York & Company® merchandise sold exclusively through its national network of retail stores and E-commerce store at www.nyandcompany.com . The target customers for the Company's merchandise are fashion-conscious, value-sensitive women between the ages of 25 and 45. As of May 1, 2010, the Company operated 579 stores in 43 states.

The accompanying condensed consolidated financial statements include the accounts for New York & Company, Inc. and Lerner New York Holding, Inc. ("Lerner Holding") and its wholly owned subsidiaries, which include Lerner New York, Inc. (and its wholly owned subsidiaries, which includes Lerner New York Outlet, Inc.), Lernco, Inc. and Nevada Receivable Factoring, Inc. On a stand alone basis, without the consolidation of Lerner Holding and its subsidiaries, New York & Company, Inc. has no significant independent assets or operations. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to present fairly the financial condition, results of operations and cash flows for the interim periods.

The condensed consolidated financial statements as of May 1, 2010 and May 2, 2009 and for the thirteen weeks ("three months") ended May 1, 2010 and May 2, 2009 are unaudited and are presented pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). Accordingly, these unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the 52-week fiscal year ended January 30, 2010 ("fiscal year 2009"), which were filed with the Company's Annual Report on Form 10-K with the SEC on April 6, 2010. The 52-week fiscal year ending January 29, 2011 is referred to herein as "fiscal year 2010." The Company's fiscal year is a 52- or 53-week year that ends on the Saturday closest to January 31.

Due to seasonal variations in the retail industry, the results of operations for any interim period are not necessarily indicative of the results expected for the full fiscal year.

2. Restructuring

On January 8, 2009, the Company announced the launch of a multi-year restructuring and cost reduction program that is expected to generate approximately $175 million in pre-tax savings over a five-year period, of which more than $30 million was realized during fiscal year 2009. This program is designed to streamline the Company's organization by reducing costs and eliminating underperforming assets while enhancing efficiency and profitability.

The key components of the restructuring and cost reduction program include:

•: Strategic staff downsizing resulting in a permanent reduction of approximately 12% of the Company's field management in its existing stores and an approximate 10% reduction of corporate office professionals;
•: The optimization of the Company's store portfolio, including the closure of 40 to 50 underperforming stores over a five-year period;

Table of Contents

New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

May 1, 2010

(Unaudited)

2. Restructuring (Continued)

•: A broad based cost reduction effort across all aspects of the Company's business; and
•: A significant reduction in capital expenditures in fiscal year 2009 as compared to prior years.

In total, the Company recorded pre-tax restructuring charges of $24.5 million during the fourth quarter of fiscal year 2008, which includes a non-cash charge of $22.9 million related to the impairment of store assets and a $1.7 million cash charge related primarily to severance and other costs necessary to implement the restructuring and cost reduction program. In addition, during the third and fourth quarters of fiscal year 2009, the Company recorded additional pre-tax restructuring charges totaling $2.4 million, which includes a non-cash charge of $1.2 million related to the impairment of store assets and $1.2 million of cash charges related to severance. As of May 1, 2010, January 30, 2010 and May 2, 2009, severance related accruals of approximately $0.9 million, $1.0 million and $0.2 million, respectively, are included in accrued expenses on the condensed consolidated balance sheets. As of May 1, 2010, the Company had paid $2.0 million in total for severance liabilities related to the restructuring and cost reduction program. The Company does not currently expect to record any material restructuring charges for these matters during the remainder of fiscal year 2010. Refer to Note 11, "Subsequent Events" for a description of the Company's plan to exit an underperforming test accessories concept during the second quarter of fiscal year 2010 and the related restructuring charges the Company expects to incur.

3. Earnings Per Share

Basic (loss) earnings per share are computed by dividing net (loss) income by the weighted average number of shares of common stock outstanding for the period. Except when the effect would be anti-dilutive at the continuing operations level, diluted (loss) earnings per share are calculated based on the weighted average number of outstanding shares of common stock plus the dilutive effect of share-based awards (stock options, unvested restricted stock, stock appreciation rights and performance

Table of Contents

New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

May 1, 2010

(Unaudited)

3. Earnings Per Share (Continued)

awards) calculated under the treasury stock method. A reconciliation between basic and diluted (loss) earnings per share is as follows:

		Three months ended May 1, 2010			Three months ended May 2, 2009

		(Amounts in thousands, except per share amounts)
Loss from continuing operations		$	(4,859	)	$	(4,888	)
Income from discontinued operations, net of taxes			—			3

Net loss		$	(4,859	)	$	(4,885	)

Basic loss per share
Weighted average shares outstanding:
	Basic shares of common stock		59,337			60,043

	Basic loss per share from continuing operations	$	(0.08	)	$	(0.08	)
	Basic earnings per share from discontinued operations		—			—

	Basic loss per share	$	(0.08	)	$	(0.08	)

Diluted loss per share
Weighted average shares outstanding:
	Basic shares of common stock		59,337			60,043
	Plus impact of share-based awards		—			—

	Diluted shares of common stock		59,337			60,043

	Diluted loss per share from continuing operations	$	(0.08	)	$	(0.08	)
	Diluted earnings per share from discontinued operations		—			—

	Diluted loss per share	$	(0.08	)	$	(0.08	)

The calculation of diluted loss per share for the three months ended May 1, 2010 and May 2, 2009 excludes 3,687,365 and 3,731,704 potential shares, respectively, due to their anti-dilutive effect.

4. Share-Based Compensation

The Company accounts for all share-based payments in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ^TM ("ASC") Topic 718, "Compensation—Stock Compensation" ("ASC 718"). ASC 718 requires that the cost resulting from all share-based payment transactions be treated as compensation and recognized in the consolidated financial statements.

The Company recorded share-based compensation expense in the amount of $0.5 million in both the three months ended May 1, 2010 and May 2, 2009.

Table of Contents

New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

May 1, 2010

(Unaudited)

4. Share-Based Compensation (Continued)

During the three months ended May 1, 2010, 68,648 shares of common stock were issued upon exercise of stock options.

On April 1, 2010, in connection with the Company's annual performance review process for all associates, the Company issued 540,000 shares of restricted stock and 770,000 stock appreciation rights ("SAR"), all of which are scheduled to cliff vest on April 1, 2013 subject to continued employment with the Company through such date. Each SAR represents the right to receive a payment measured by the increase in the fair market value of one share of common stock from the date of grant of the SAR to the date of exercise of the SAR. Upon exercise, the SARs will be settled in stock.

The fair value of restricted stock is based on the closing stock price of an unrestricted share of the Company's common stock on the grant date, which on April 1, 2010 was $4.79. The fair value of a SAR is calculated using the Black-Scholes option-pricing model, which for the April 1, 2010 SARs resulted in a fair value of $2.90 per SAR. Total compensation expense related to the restricted stock and SARs granted on April 1, 2010 will be recognized in the consolidated financial statements on a straight-line basis over the requisite service period of the awards.

5. Pension Plan

The Company sponsors a single employer defined benefit pension plan (the "plan") covering substantially all union employees. Employees covered by collective bargaining agreements are primarily non-management store associates, representing approximately 9% of the Company's total employees. The collective bargaining agreement with the Local 1102 unit of the Retail, Wholesale and Department Store Union ("RWDSU") AFL-CIO has been extended indefinitely, subject to 30 days advance notice by either party to negotiate a modification to the agreement or to terminate the agreement.

The plan provides retirement benefits for union employees who have attained the age of 21 and complete 1,000 or more hours of service in any calendar year following the date of employment. The plan provides benefits based on length of service. The Company's funding policy for the pension plan is to contribute annually the amount necessary to provide for benefits based on accrued service. The Company anticipates contributing approximately $0.8 million to the plan during fiscal year 2010. Net periodic benefit cost includes the following components:

	Three months ended May 1, 2010			Three months ended May 2, 2009

	(Amounts in thousands)
Service cost	$	83		$	67
Interest cost		126			139
Expected return on plan assets		(120	)		(103	)
Amortization of unrecognized losses		32			36

Net periodic benefit cost	$	121		$	139

Table of Contents

New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

May 1, 2010

(Unaudited)

6. Income Taxes

The Company files U.S. federal income tax returns and income tax returns in various state and local jurisdictions. In November 2008, the Internal Revenue Service ("IRS") began its examination of the Company's U.S. federal income tax return for the 2006 tax year. During the third and fourth quarters of fiscal year 2009, the IRS communicated its intention to audit the Company's 2007 and 2008 federal income tax returns, as well as the Company's previously settled 2005 federal income tax return as a result of the Company's refund claims carrying back the Company's net operating losses. In addition, the Company is subject to U.S. federal income tax examinations for the Company's 2009 tax year and each year thereafter and state and local income tax examinations for the 2006 tax year and each year thereafter.

At January 30, 2010, the Company reported a total liability of $2.5 million for unrecognized tax benefits, including interest and penalties, all of which would impact the Company's effective tax rate if reversed. There were no material changes to the liability for unrecognized tax benefits during the three months ended May 1, 2010. The Company does not anticipate any significant increases or decreases to the balance of unrecognized tax benefits during the next 12 months.

The Company accrues interest and penalties related to unrecognized tax benefits in income tax expense.

The effective tax rate for the three months ended May 1, 2010 reflects a benefit of 45.3%, as compared to a benefit of 44.0% for the three months ended May 2, 2009. The change in the effective tax rate is primarily due to a tax benefit resulting from the reduction of reserves for uncertain tax positions for prior years.

7. Long-Term Debt and Credit Facilities

The Company's credit facilities currently consist of a term loan, of which $12.0 million was outstanding at May 1, 2010, and a $90.0 million revolving credit facility (which includes a sub-facility available for issuance of letters of credit of up to $75.0 million), both having a maturity date of March 17, 2012.

As of May 1, 2010, the Company had availability under its revolving credit facility of $72.9 million, net of letters of credit outstanding of $6.7 million, as compared to availability of $73.2 million, net of letters of credit outstanding of $6.9 million, as of May 2, 2009.

The revolving loans under the credit facilities bear interest, at the Company's option, either at a floating rate equal to the Eurodollar rate plus a margin of between 1.00% and 1.25% per year, depending upon the Company's financial performance, or the Prime rate. The Company pays the lenders under the revolving credit facility a monthly fee on outstanding commercial letters of credit at a rate of 0.625% per year and on standby letters of credit at a rate of between 1.00% and 1.25% per year, depending upon the Company's financial performance, plus a monthly fee on a proportion of the unused commitments under that facility at a rate of 0.20% per year. The term loan bears interest at a floating rate equal to the Eurodollar rate plus 2.50% per year. If any default were to exist under the revolving credit facility and for so long as such default were to continue, at the option of the agent or lenders, the monthly fee on outstanding standby letters of credit may increase to 3.25% per year,

Table of Contents

New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

May 1, 2010

(Unaudited)

7. Long-Term Debt and Credit Facilities (Continued)

interest on the revolving loans may increase to 3.25% per year above the Eurodollar rate for Eurodollar rate loans and 2.00% per year above the Prime rate for all Prime rate loans, and interest on the term loan may increase to the Eurodollar rate plus 4.50% per year.

The Company's credit facilities contain certain covenants, including restrictions on the Company's ability to pay dividends on its common stock, incur additional indebtedness and to prepay, redeem, defease or purchase other debt. Subject to such restrictions, the Company may incur more debt for working capital, capital expenditures, stock repurchases, acquisitions and for other purposes. The terms of the Company's credit facilities also subject it to a minimum fixed charge coverage ratio of 1.00 to 1.00, if the Company's borrowing availability under its revolving credit facility plus qualified cash falls below $30.0 million ($20.0 million during March and November). Should the Company fully repay its existing term loan, the Company will only be subject to the minimum fixed charge coverage ratio in the event that borrowing availability under its revolving credit facility falls below $12.5 million. In addition, the Company is required at all times to maintain minimum borrowing availability under its credit facility of $10.0 million. The Company is currently in compliance with the financial covenants referred to above.

The lenders have been granted a pledge of the common stock of Lerner Holding and certain of its subsidiaries, and a first priority security interest in substantially all other tangible and intangible assets of New York & Company, Inc. and its subsidiaries, as collateral for the Company's obligations under the credit facilities. In addition, New York & Company, Inc. and certain of its subsidiaries have fully and unconditionally guaranteed the credit facilities, and such guarantees are joint and several.

8. Fair Value Measurements

FASB ASC Topic 820, "Fair Value Measurements and Disclosures" ("ASC 820") establishes a common definition for fair value to be applied to US GAAP guidance requiring the use of fair value, establishes a framework for measuring fair value, and expands the disclosure about such fair value measurements. ASC 820 establishes a three level fair value hierarchy that requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs used to measure fair value are as follows:


	Level 1:		Observable inputs such as quoted prices in active markets;
	Level 2:		Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
	Level 3:		Unobservable inputs in which there is little or no market data and require the reporting entity to develop its own assumptions.

The Company's financial instruments consist of cash and cash equivalents, short-term trade receivables, accounts payable and long-term debt. The carrying values on the balance sheet for cash and cash equivalents, short-term trade receivables, and accounts payable approximate their fair values due to the short-term maturities of such items. The carrying value on the balance sheet for the

Table of Contents

New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

May 1, 2010

(Unaudited)

8. Fair Value Measurements (Continued)

Company's long-term debt approximates its fair value due to the variable interest rate it carries, and as such it is classified within level 2 of the fair value hierarchy.

9. Share Repurchases

On November 26, 2008, the Company announced that its board of directors had authorized the repurchase of up to 3,750,000 shares over a 12 month period. During fiscal year 2009, the Company repurchased 1,000,000 shares of its common stock at a cost of approximately $3.4 million.

On November 18, 2009, the Company's board of directors authorized the extension of the share repurchase program for an additional 12 month period ending on November 23, 2010. Repurchases, if any, will be made from time to time in the manner the Company believes appropriate, through open market or private transactions, including through pre-established trading plans. During the three months ended May 1, 2010, the Company did not repurchase any shares of the Company's common stock under the Company's authorized share repurchase program.

10. New Accounting Pronouncements

In May 2009, the FASB issued ASC Topic 855, "Subsequent Events" ("ASC 855"), which establishes general standards of accounting for the disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued. ASC 855 is effective for interim or annual financial periods ending after June 15, 2009 and is applied prospectively. The Company adopted the provisions of ASC 855 effective August 1, 2009, with no material impact on its financial position or results of operations. In February 2010, the FASB issued Accounting Standards Update ("ASU") No. 2010-09, "Subsequent Events" ("ASU 2010-09"), which amends certain provisions of ASC 855 by removing the requirement for SEC filers to disclose the date through which subsequent events have been evaluated. ASU 2010-09 is effective upon its issuance in February 2010, and its provisions have been adopted by the Company by the removal of the date subsequent events were evaluated in the footnotes to the Company's consolidated financial statements. The adoption of ASU 2010-09 did not have any impact on the Company's financial position and results of operations.

In January 2010, the FASB issued ASU No. 2010-06, "Improving Disclosures about Fair Value Measurements" ("ASU 2010-06"), which amends ASC 820 by providing new disclosures and clarifying existing disclosures. ASU 2010-06 requires reporting entities to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. In addition, ASU 2010-06 requires the presentation of separate information regarding purchases, sales, issuances, and settlements for Level 3 fair value measurements. ASU 2010-06 also clarifies the existing disclosures about the level of disaggregation to require fair value measurement disclosures for each class of assets and liabilities and clarifies that a description of inputs and valuation techniques used to measure fair value is required for both recurring and nonrecurring fair value measurements classified as Level 2 or Level 3. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements, which are effective for fiscal years beginning after

Table of Contents

New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

May 1, 2010

(Unaudited)

10. New Accounting Pronouncements (Continued)

December 15, 2010, and for interim periods within those fiscal years. Except for the detailed Level 3 roll forward disclosures, the guidance in ASU 2010-06 was adopted by the Company on January 31, 2010 with no material impact on its financial position and results of operations. The Company does not anticipate that the adoption of the remaining provisions of ASU 2010-06 regarding detailed Level 3 roll forward disclosures will have a material impact on its financial position or results of operations.

11. Subsequent Events

On May 20, 2010, the Company announced that during the second quarter of fiscal year 2010, it plans to exit an underperforming test accessories concept consisting of five stores. The Company believes exiting this concept will allow it to focus its resources on the growth opportunities in its E-commerce business and the newly launched New York & Company Outlet stores, as well as the core New York & Company stores. In connection with exiting the test accessories concept, the Company expects to record restructuring charges of approximately $2.0 million to $2.5 million during the second quarter of fiscal year 2010.

Table of Contents

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTORS

(Cautionary Statements Under the Private Securities Litigation Reform Act of 1995)

This Quarterly Report on Form 10-Q includes forward looking statements. Certain matters discussed in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" and other sections of this Quarterly Report on Form 10-Q are forward looking statements intended to qualify for safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. Some of these statements can be identified by terms and phrases such as "anticipate," "believe," "intend," "estimate," "expect," "continue," "could," "may," "plan," "project," "predict" and similar expressions and include references to assumptions that the Company believes are reasonable and relate to its future prospects, developments and business strategies. Factors that could cause the Company's actual results to differ materially from those expressed or implied in such forward looking statements, include, but are not limited to those discussed under the heading "Item 3. Quantitative and Qualitative Disclosures About Market Risk" in this Quarterly Report on Form 10-Q and:

•: the Company's business is impacted by general economic conditions and their effect on consumer confidence and spending patterns, which have deteriorated significantly and may continue to do so for the foreseeable future;
•: the current economic conditions could negatively impact the Company's merchandise vendors and their ability to deliver products, as well as the Company's retail landlords and their ability to maintain their shopping centers in a first-class condition and otherwise perform their obligations as a landlord;
•: the Company's ability to open and operate stores successfully, including its new New York & Company Outlet stores, and the potential lack of availability of suitable store locations on acceptable terms;
•: seasonal fluctuations in the Company's business;
•: fluctuations in comparable store sales and results of operations;
•: the Company's ability to anticipate and respond to fashion trends, develop new merchandise and launch new product lines successfully;
•: the Company's dependence on mall traffic for its sales;
•: the Company's dependence on the success of its brand;
•: competition in the Company's market, including promotional and pricing competition;
•: the Company's reliance on the effective use of customer information;
•: the Company's ability to service any debt it incurs from time to time as well as its ability to maintain the requirements that the agreements related to such debt impose upon the Company;
•: the susceptibility of the Company's business to extreme and/or unseasonable weather conditions;
•: the Company's ability to retain, recruit and train key personnel;
•: the Company's reliance on third parties to manage some aspects of its business;
•: changes in the cost of raw materials, distribution services or labor, including federal and state minimum wage rates;

Table of Contents

•: the potential impact of national and international security concerns on the retail environment, including any possible military action, terrorist attacks or other hostilities;
•: the Company's reliance on foreign sources of production, including the disruption of imports by labor disputes, political instability, legal and regulatory matters, duties, taxes, other charges, local business practices, potential delays in shipping and related pricing impacts and political issues and fluctuation in currency and exchange rates;
•: the potential impact of natural disasters and health concerns relating to outbreaks of widespread diseases, particularly on manufacturing operations of the Company's vendors;
•: the ability of the Company's manufacturers to manufacture and deliver products in a timely manner while meeting its quality standards;
•: the Company's ability to successfully maintain its restructuring and cost reduction program;
•: the Company's ability to successfully integrate new or acquired businesses, including the Company's planned outlet expansion, into its existing business;
•: the Company's reliance on manufacturers to maintain ethical business practices;
•: the Company's ability to protect its trademarks and other intellectual property rights;
•: the Company's ability to maintain, and its reliance on, its information technology infrastructure;
•: the effects of government regulation;
•: the control of the Company by its sponsors and any potential change of ownership of those sponsors; and
•: risks and uncertainties as described in the Company's documents filed with the SEC, including its Annual Report on Form 10-K, as filed on April 6, 2010.

The Company undertakes no obligation to revise the forward looking statements included in this Quarterly Report on Form 10-Q to reflect any future events or circumstances. The Company's actual results, performance or achievements could differ materially from the results expressed or implied by these forward looking statements.

Overview

The Company is a leading specialty retailer of fashion-oriented, moderately-priced women's apparel. The Company designs and sources its proprietary branded New York & Company merchandise sold exclusively through its national network of retail stores and E-commerce store at www.nyandcompany.com . The target customers for the Company's merchandise are fashion-conscious, value-sensitive women between the ages of 25 and 45. As of May 1, 2010, the Company operated 579 stores in 43 states.

During fiscal year 2010, the Company is focusing on increasing sales and properly positioning itself to generate future profits. During the three months ended May 1, 2010, the Company opened six new stores, including five New York & Company Outlet stores, and completed the remodeling of one existing store. The Company remains on track to open 20 to 25 New York & Company Outlet stores during fiscal year 2010, and believes the long-term growth potential could be between 75 and 90 outlet stores. On May 20, 2010, the Company announced that during the second quarter of fiscal year 2010, it plans to exit an underperforming test accessories concept consisting of five stores. The Company believes exiting this concept will allow it to focus its resources on the growth opportunities in its E-commerce business and the newly launched New York & Company Outlet stores, as well as the core New York & Company stores. In connection with exiting the test accessories concept, the Company

Table of Contents

expects to record restructuring charges of approximately $2.0 million to $2.5 million during the second quarter of fiscal year 2010.

Net sales for the three months ended May 1, 2010 increased by 1.8% to $237.0 million, as compared to $232.9 million for the three months ended May 2, 2009. Comparable store sales increased 2.9% for the three months ended May 1, 2010, as compared to a comparable store sales decrease of 15.0% for the three months ended May 2, 2009. While the Company experienced an improvement in sales trends across key apparel and accessories categories and an increase in E-commerce sales during the three months ended May 1, 2010, promotional activity during the quarter led to a decrease in merchandise margins as compared to first quarter last year. Loss from continuing operations for the three months ended May 1, 2010 was flat compared to the three months ended May 2, 2009 at $4.9 million, or $0.08 per diluted share. Included in the loss from continuing operations for the three months ended May 1, 2010 is a $0.01 per diluted share loss related to the test accessories concept, which the Company plans to exit during the second quarter of fiscal year 2010.

Capital spending for the three months ended May 1, 2010 was $3.9 million, as compared to $2.7 million for the three months ended May 2, 2009. The $3.9 million of capital spending represents $3.2 million related to the construction of six new stores, including five New York & Company Outlet stores, and the remodeling of one existing store and $0.7 million related to non-store capital projects. Capital spending during the three months ended May 2, 2009 primarily represents non-store capital projects.

The Company views the retail apparel market as having two principal selling seasons: spring (first and second quarter) and fall (third and fourth quarter). The Company's business experiences seasonal fluctuations in net sales and operating income, with a significant portion of its operating income typically realized during the fourth quarter. Seasonal fluctuations also affect inventory levels. The Company must carry a significant amount of inventory, especially before the holiday season selling period in the fourth quarter.

General

Net Sales. Net sales consist of sales from comparable and non-comparable stores and the Company's E-commerce store. A store is included in the comparable store sales calculation after it has completed 13 full fiscal months of operation from the store's original opening date or once it has been reopened after remodeling. Beginning in February 2008, sales from the Company's E-commerce store are included in comparable store sales. Non-comparable store sales include stores which have not completed 13 full fiscal months of operations, sales from closed stores, and sales from stores closed or in temporary locations during periods of remodeling. In addition, in a year with 53 weeks, sales in the last week of the year are not included in determining comparable store sales. Net sales from the sale of merchandise at the Company's stores are recognized when the customer takes possession of the merchandise and the purchases are paid for, primarily with either cash or credit card. Net sales from the sale of merchandise at the Company's E-commerce store are recognized when the merchandise is shipped to the customer. A reserve is provided for projected merchandise returns based on prior experience.

The Company issues gift cards which do not contain provisions for expiration or inactivity fees. The portion of the dollar value of gift cards that ultimately is not used by customers to make purchases is known as breakage. The Company estimates gift card breakage and records such amount as revenue as gift cards are redeemed. The Company's estimate of gift card breakage is based on analysis of historical redemption patterns, as well as the remaining balance of gift cards for which the Company believes the likelihood of redemption to be remote.

Cost of Goods Sold, Buying and Occupancy Costs. Cost of goods sold, buying and occupancy costs is comprised of direct inventory costs for merchandise sold, distribution, payroll and related costs for

Table of Contents

design, sourcing, production, merchandising, planning and allocation personnel, and store occupancy and related costs.

Gross Profit. Gross profit represents net sales less cost of goods sold, buying and occupancy costs.

Selling, General and Administrative Expenses. Selling, general and administrative expenses include selling, store management and corporate expenses, including payroll and employee benefits, employment taxes, management information systems, marketing, insurance, legal, store pre-opening and other corporate level expenses. Store pre-opening expenses include store level payroll, grand opening event marketing, travel, supplies and other store opening expenses.

Results of Operations

The following tables summarize the Company's results of operations as a percentage of net sales and selected store operating data for the three months ended May 1, 2010 and May 2, 2009:



Net sales	100.0	%	100.0	%
Cost of goods sold, buying and occupancy costs	75.3	%	74.7	%

Gross profit	24.7	%	25.3	%
Selling, general and administrative expenses	28.4	%	29.0	%

Operating loss	(3.7	)%	(3.7	)%
Interest expense, net	0.1	%	0.1	%

Loss from continuing operations before income taxes	(3.8	)%	(3.8	)%
Benefit for income taxes	(1.7	)%	(1.7	)%

Loss from continuing operations	(2.1	)%	(2.1	)%
Income from discontinued operations, net of taxes	—	%	—	%

Net loss	(2.1	)%	(2.1	)%

	Three months ended May 1, 2010			Three months ended May 2, 2009

	(Dollars in thousands, except square foot data)
Selected operating data:
Comparable store sales increase (decrease)		2.9	%		(15.0	)%
Net sales per average selling square foot(1)	$	74		$	71
Net sales per average store(2)	$	410		$	395
Average selling square footage per store(3)		5,523			5,595

(1): Net sales per average selling square foot is defined as net sales divided by the average of beginning and end of period selling square feet.
(2): Net sales per average store is defined as net sales divided by the average of beginning and end of period number of stores.
(3): Average selling square footage per store is defined as end of period selling square feet divided by end of period number of stores.

Table of Contents

	Three months ended May 1, 2010						Three months ended May 2, 2009

	Store Count			Selling Square Feet			Store Count			Selling Square Feet
Store count and selling square feet:
Stores open, beginning of period		576			3,193,602			589			3,294,779
New stores		6			20,561			—			—
Closed stores		(3	)		(13,411	)		(1	)		(4,830	)
Net impact of remodeled stores on selling square feet		—			(3,115	)		—			—

Stores open, end of period		579			3,197,637			588			3,289,949

Three Months Ended May 1, 2010 Compared to Three Months Ended May 2, 2009

Net Sales. Net sales for the three months ended May 1, 2010 increased 1.8% to $237.0 million, as compared to $232.9 million for the three months ended May 2, 2009. The increase in net sales is primarily driven by a 2.9% increase in comparable store sales for the three months ended May 1, 2010, as compared to a decrease of 15.0% for the three months ended May 2, 2009. The increase in comparable store sales was partially offset by the impact of stores closed during fiscal year 2009 in connection with the Company's restructuring and cost reduction program. In the comparable store base, average dollar sales per transaction decreased by 4.3%, while the number of transactions per average store increased by 7.6%, as compared to the same period last year.

Gross Profit. Gross profit decreased $0.3 million to $58.5 million, or 24.7% of net sales, for the three months ended May 1, 2010, as compared to $58.9 million, or 25.3% of net sales, for the three months ended May 2, 2009. The decrease in gross profit as a percentage of net sales during the three months ended May 1, 2010 is due to a 250 basis point decrease in merchandise margins resulting from increased levels of promotional activity, partially offset by a 190 basis point decrease in buying and occupancy costs, primarily attributable to the increase in comparable store sales combined with savings recognized from the Company's restructuring and cost reduction program.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $67.2 million, or 28.4% of net sales, for the three months ended May 1, 2010, as compared to $67.4 million, or 29.0% of net sales, for the three months ended May 2, 2009. The decrease in selling, general and administrative expenses as a percentage of net sales is primarily a result of the increase in comparable store sales.

Operating Loss. For the reasons discussed above, operating loss for the three months ended May 1, 2010 was $8.7 million, or 3.7% of net sales, as compared to an operating loss of $8.5 million, or 3.7% of net sales, for the three months ended May 2, 2009.

Interest Expense, Net. Net interest expense was flat for the three months ended May 1, 2010 as compared to the three months ended May 2, 2009 at $0.2 million.

Benefit for Income Taxes. The effective tax rate for the three months ended May 1, 2010 reflects a benefit of 45.3%, as compared to a benefit of 44.0% for the three months ended May 2, 2009. The change in the effective tax rate is primarily due to a tax benefit resulting from the reduction of reserves for uncertain tax positions for prior years.

Loss from Continuing Operations. For the reasons discussed above, loss from continuing operations for the three months ended May 1, 2010 was flat as compared to the three months ended May 2, 2009 at $4.9 million, or 2.1% of net sales.

Income from Discontinued Operations, Net of Taxes. Income from discontinued operations, net of taxes, represents the Company's discontinued JasmineSola business.

Table of Contents

Non-GAAP Financial Measure

The Company has provided a non-GAAP financial measure to adjust loss from continuing operations for the three months ended May 1, 2010 and May 2, 2009. This information reflects, on a non-GAAP adjusted basis, the Company's loss from continuing operations before interest expense, net; benefit for income taxes; and depreciation and amortization ("EBITDA"). The calculation for EBITDA is provided to enhance the user's understanding of the Company's operating results. EBITDA is provided because management believes it is an important measure of financial performance commonly used to determine the value of companies and to define standards for borrowing from institutional lenders. The non-GAAP financial information should be considered in addition to, not as an alternative to, loss from continuing operations, as an indicator of the Company's operating performance, and cash flows from operating activities of continuing operations, as a measure of the Company's liquidity, as determined in accordance with accounting principles generally accepted in the United States. The Company may calculate EBITDA differently than other companies.

Reconciliation of Loss from Continuing Operations to EBITDA

		Three months ended May 1, 2010						Three months ended May 2, 2009

		Amounts in thousands			As a % of net sales			Amounts in thousands			As a % of net sales
Loss from continuing operations		$	(4,859	)		(2.1	)%	$	(4,888	)		(2.1	)%
Add back:
	Interest expense, net		186			0.1	%		220			0.1	%
	Benefit for income taxes		(4,030	)		(1.7	)%		(3,848	)		(1.7	)%
	Depreciation and amortization		10,184			4.3	%		10,466			4.5	%

EBITDA		$	1,481			0.6	%	$	1,950			0.8	%

Liquidity and Capital Resources

The Company's primary uses of cash are to fund working capital, operating expenses, debt service and capital expenditures related primarily to the construction of new stores, remodeling of existing stores and development of the Company's information technology infrastructure. Historically, the Company has financed these requirements from internally generated cash flow. The Company intends to fund its ongoing capital and working capital requirements, as well as debt service obligations, primarily through cash flows from operations, supplemented by borrowings under its credit facilities, if needed. The Company is in compliance with all debt covenants as of May 1, 2010.

The following tables contain information regarding the Company's liquidity and capital resources:

	May 1, 2010		January 30, 2010		May 2, 2009

	(Amounts in thousands)
Cash and cash equivalents	$	23,176	$	87,296	$	31,080
Working capital	$	67,172	$	67,954	$	71,308

Table of Contents

	Three months ended May 1, 2010			Three months ended May 2, 2009

	(Amounts in thousands)
Net cash used in operating activities of continuing operations	$	(58,858	)	$	(18,505	)
Net cash used in investing activities of continuing operations	$	(3,916	)	$	(2,741	)
Net cash used in financing activities of continuing operations	$	(1,346	)	$	(1,951	)
Net cash used in discontinued operations	$	—		$	(4	)

Net decrease in cash and cash equivalents	$	(64,120	)	$	(23,201	)

Operating Activities of Continuing Operations

Net cash used in operating activities of continuing operations was $58.9 million for the three months ended May 1, 2010, as compared to net cash used in operating activities of continuing operations of $18.5 million for the three months ended May 2, 2009. The increase in net cash used in operating activities for the three months ended May 1, 2010, as compared to the three months ended May 2, 2009, is primarily related to changes in accounts receivable, income taxes receivable, inventory, accounts payable and income taxes payable, partially offset by a change in prepaid expenses.

Investing Activities of Continuing Operations

Net cash used in investing activities of continuing operations was $3.9 million for the three months ended May 1, 2010, as compared to $2.7 million of net cash used in investing activities of continuing operations for the three months ended May 2, 2009. Net cash used in investing activities during the three months ended May 1, 2010 reflects capital expenditures of $3.2 million related to the construction of six new stores, including five New York & Company Outlet stores, and the remodeling of one existing store and $0.7 million related to non-store capital projects. Net cash used in investing activities during the three months ended May 2, 2009 primarily represents capital expenditures for non-store capital projects.

As previously announced, the Company plans to open approximately 20 to 25 New York & Company Outlet stores during fiscal year 2010. The Company's future capital requirements will depend primarily on the number of new stores it opens, the number of existing stores it remodels and the timing of these expenditures.

Financing Activities of Continuing Operations

Net cash used in financing activities of continuing operations was $1.3 million for the three months ended May 1, 2010, as compared to $2.0 million of net cash used in financing activities of continuing operations for the three months ended May 2, 2009. Net cash used in financing activities for the three months ended May 1, 2010 consists of a $1.5 million quarterly payment against the Company's outstanding term loan and $0.2 million of proceeds from the exercise of stock options and the related tax benefit to the Company. Net cash used in financing activities for the three months ended May 2, 2009 primarily consists of a $1.5 million quarterly payment against the Company's outstanding term loan and $0.5 million used for the repurchase of 142,400 shares of the Company's common stock under its authorized share repurchase program.

Table of Contents

Discontinued Operations Cash Flows

There were no material payments or receipts during the three months ended May 1, 2010 and May 2, 2009 that related to the discontinued operations of JasmineSola.

Long-Term Debt and Credit Facilities

Critical Accounting Policies

Management has determined that our most critical accounting policies are those related to inventory valuation, impairment of long-lived assets, goodwill and other intangible assets, and income taxes. We continue to monitor our accounting policies to ensure proper application of current rules and

Table of Contents

regulations. There have been no significant changes to these policies as discussed in our Annual Report on Form 10-K for the fiscal year ended January 30, 2010.

Adoption of New Accounting Standards

In May 2009, the FASB issued ASC Topic 855, "Subsequent Events" ("ASC 855"), which establishes general standards of accounting for the disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued. ASC 855 is effective for interim or annual financial periods ending after June 15, 2009 and is applied prospectively. The Company adopted the provisions of ASC 855 effective August 1, 2009, with no material impact on its financial position or results of operations. In February 2010, the FASB issued ASU No. 2010-09, "Subsequent Events" ("ASU 2010-09"), which amends certain provisions of ASC 855 by removing the requirement for SEC filers to disclose the date through which subsequent events have been evaluated. ASU 2010-09 is effective upon its issuance in February 2010, and its provisions have been adopted by the Company by the removal of the date subsequent events were evaluated in the footnotes to the Company's consolidated financial statements. The adoption of ASU 2010-09 did not have any impact on the Company's financial position and results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rates. The Company's market risks relate primarily to changes in interest rates. The Company's credit facilities carry floating interest rates that are tied to the Eurodollar rate and the Prime rate and therefore, the consolidated statements of operations and the consolidated statements of cash flows will be exposed to changes in interest rates. A 1.0% interest rate increase would increase interest expenses by approximately $0.1 million annually. The Company historically has not engaged in interest rate hedging activities.

Currency Exchange Rates. The Company historically has not been exposed to currency exchange rate risks with respect to inventory purchases as such expenditures have been, and continue to be, denominated in U.S. Dollars. The Company purchases some of its inventory from suppliers in China, for which the Company pays U.S. Dollars. Since July 2005, China has been slowly increasing the value of the Chinese Yuan, which is now linked to a basket of world currencies. If the exchange rate of the Chinese Yuan to the U.S. Dollar continues to increase, the Company may experience fluctuations in the cost of inventory purchased from China and the Company would adjust its supply chain accordingly.

Table of Contents

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. The Company carried out an evaluation, as of May 1, 2010, under the supervision and with the participation of the Company's management, including the Company's Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Company's disclosure controls and procedures are effective in ensuring that all information required to be filed in this Quarterly Report on Form 10-Q was (i) recorded, processed, summarized and reported within the time period specified in the Securities and Exchange Commission's rules and forms (ii) and that the disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its Principal Executive and Principal Financial Officers, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting. There has been no change in the Company's internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13a-15 or 15d-15 that occurred during the Company's last fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Table of Contents

PART II.
OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There have been no material changes in the Company's legal proceedings from what was reported in its Annual Report on Form 10-K filed with the SEC on April 6, 2010.

ITEM 1A. RISK FACTORS

There have been no material changes in the Company's risk factors from what was reported in its Annual Report on Form 10-K filed with the SEC on April 6, 2010.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

As indicated in the table below, the Company did not make any purchases of the Company's common stock during the three months ended May 1, 2010.

Period

January 31, 2010 to February 27, 2010	—	—	—	2,750,000
February 28, 2010 to April 3, 2010	—	—	—	2,750,000
April 4, 2010 to May 1, 2010	—	—	—	2,750,000

Total	—	—	—	2,750,000

(1): On November 26, 2008, the Company announced that its board of directors had authorized the repurchase of up to 3,750,000 shares over a 12 month period. Subsequently, on November 18, 2009, the Company's board of directors authorized the extension of the share repurchase program for an additional 12 month period ending on November 23, 2010. During fiscal year 2009, the Company repurchased 1,000,000 shares of its common stock at a cost of approximately $3.4 million. Repurchases, if any, will be made from time to time in the manner the Company believes appropriate, through open market or private transactions including through pre-established trading plans.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. REMOVED AND RESERVED

ITEM 5. OTHER INFORMATION

None.

Table of Contents

ITEM 6. EXHIBITS

The following exhibits are filed with this report and made a part hereof.


	10.1		Employment Letter, dated April 28, 2010, between New York & Company, Inc. and Gregory Scott.
	31.1		Certification by the Chairman and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated June 10, 2010.
	31.2		Certification by the Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated June 10, 2010.
	32.1		Written Statement of the Chief Executive Officer and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated June 10, 2010.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		NEW YORK & COMPANY, INC.
		/s/ SHEAMUS TOAL
		By:		Sheamus Toal
		Its:		Executive Vice President and Chief Financial Officer (Principal Financial Officer)
		Date:		June 10, 2010

Exhibit 10.1

Re: Letter Agreement of Employment

Dear Greg:

This letter agreement (this “ Agreement ”) sets forth the terms and conditions of your employment, and your employment relationship, with New York & Company, Inc. (the “ Company ”). Your execution of this Agreement will represent your acceptance of all of the terms set forth below.

1. Nature of Agreement and Relationship . This Agreement does not represent an employment contract for any specified term. Your employment relationship thus will remain “at will,” meaning that, subject to the terms hereof, either party to this Agreement may terminate the employment relationship at any time for any lawful reason.

2. Job Title and Duties . Your job title will be President. We understand that prior to accepting the position of President, you have a limited commitment to complete a project for HSN (as defined in your letter to Richard P. Crystal dated April 27, 2010 (copy attached). After completion of this project, you will be expected to devote all of your full time efforts to the performance of the duties and responsibilities normally associated with this position, including those from time to time that may be assigned to you by the Chief Executive Officer or the Board of Directors of the Company (or the designee of any of the foregoing). In addition, you will become a member of the Board of Directors. For so long as you hold the position of President, you shall be a Director on the Board. Your start date will be June 1, 2010.

3. Salary . For the 12 month period ending on the last Saturday of each January (the last day of the fiscal year), you will receive a base salary at the rate of $750,000 per annum (“ Base Salary ”), subject to the remaining provisions of this Section. For the remainder of the current fiscal year starting on the date of this Agreement, your Base Salary will be pro rated based on the number of days remaining in such fiscal year divided by 365. At the Company’s sole discretion, your Base Salary may be increased or decreased based on your performance and the performance of the business. You will be paid in accordance with the Company’s normal payroll policies and practices, with all applicable deductions being withheld from your paychecks.

4. Bonus . You will be eligible to participate in the Company’s then current bonus plan, in accordance with its terms and conditions, and to receive performance based bonuses pursuant to any formula that may be established. For the Company’s current fiscal year, your bonus target for the spring bonus (relating to the Company’s results for the first and second fiscal quarters of each fiscal year) will be 28% of your Base Salary; for the fall bonus (relating to the Company’s results for the third and fourth fiscal quarters of each fiscal year) will be 36% of your

Base Salary; and for the annual bonus (relating to the Company’s results for the fiscal year) will be 16% of your Base Salary. Any amount payable in respect of the spring bonus will be paid in the calendar month immediately following the end of the applicable performance period to which that bonus relates. Any amount payable in respect of the fall or the annual bonus will be paid within two and one half months following the end of the applicable performance period to which that bonus relates. All bonuses are determined at the Company’s sole discretion, and the Company has the sole discretion to modify or terminate any bonus plan and that plan will govern your right, if any, to a bonus payment upon termination of your employment.

5. SARs and Other Long Term Incentives . You will be eligible to receive awards under SARs, restricted stock or other equity based long term incentive plans established by the Company (or an Affiliate) that cover executive officers of the Company. The term “ Affiliate ” means any corporation, partnership, limited liability company or other entity (other than the Company) that controls or is controlled by the Company, whether directly or indirectly, such as a parent company or subsidiary. All equity awards described in this paragraph are determined at the Company’s sole discretion, and the Company has the sole discretion to modify or terminate any SARs, restricted stock or other equity based long term incentive plan and that plan will govern your rights, if any, relating to any equity award(s) you have received, or may be entitled to receive, upon termination of your employment.

6. Employee Benefits . You will be entitled to participate in all employee benefits plans, practices and programs maintained by the Company and made available to senior executives generally and as may be in effect from time to time (the “ Benefits Plans ”). Your participation in the Benefits Plans will be on the same basis and terms as are applicable to senior executives of the Company generally. Benefits Plans include, but are not limited to, savings and retirement plans, deferred compensation, health and prescription drug benefits, disability benefits, other insurance programs, vacation and other leave, merchandise discounts and business expense procedures. Plan documents setting forth terms of certain of the Benefits Plans are available upon request, which plan documents control all questions of interpretation concerning applicable Benefits Plans, including your rights, if any, upon termination of your employment. The Benefits Plans are subject to modification or termination by the Company at any time, at its sole discretion, in accordance with their terms.

7. Severance Pay . Upon either your voluntary resignation or termination of employment by the Company and all Affiliates without Cause (as defined below), but subject to your performance of all post employment obligations set forth in this Agreement, you will be entitled to receive severance pay for twelve (12) months (“Severance Period”) at your final Base Salary (“Severance Pay”), beginning the first pay period following your separation date and ending upon the earlier of: (i) your receipt of fifty two (52) such payments (such number of payments to be adjusted if any change is made to the frequency of regularly scheduled payroll dates) or (ii) your first day of employment with another employer, whichever is earlier. The Severance Pay for voluntary resignation and termination without Cause shall be conditioned upon the requirements set forth in Section 11 (Non-Compete) of this Agreement. In addition, the Severance Pay for termination without Cause shall also be conditioned upon your execution and delivery to the Company of a general release of claims in favor of the Company in a form reasonably satisfactory to the Company. Such release shall be executed and delivered (and no longer subject to revocation, if applicable) within sixty (60) days following your termination of employment. If you fail to execute such release as provided above, you shall forfeit all of your rights to receive the Severance Pay. In the event of either voluntary resignation or termination without Cause, if you obtain employment at an annual salary that is lower than your final Base Salary, you will continue to receive the differential between the two rates of pay for the balance of the fifty two (52) weeks. This Severance Pay, which will be subject to applicable deductions required by law, will be paid on the Company’s regular payroll dates as in effect on the date of each such payment for the balance of the “Severance Period” following your separation date, as outlined above. For purposes of this Agreement, “ Cause ” means the occurrence of any of the following: (i) your willful failure to perform your duties to the Company (other than as a result of

death or a physical or mental incapacity); (ii) your commission of, indictment for, conviction of, or plea of guilty or nolo contendere to, a felony (regardless of the nature of the felony) or any other crime involving dishonesty, fraud or moral turpitude; (iii) your gross negligence or willful misconduct (including, but not limited to, acts of fraud, criminal activity, professional misconduct, dishonesty, or breach of trust or other fiduciary duty) in connection with the performance of your duties and responsibilities to the Company or with regard to the Company or its assets; (iv) your failure to comply with the rules and policies of the Company governing employee conduct or with the lawful directives of the Board of Directors of the Company or Chief Executive Officer of the Company; or (v) your breach of this Agreement or any obligation under any non disclosure, non solicitation, non competition or other restrictive covenant, employment or any other agreement with the Company (such as your letter to Richard P. Crystal dated April 27, 2010). Any determination of Cause will be made in the good faith discretion of the Company.

8. Code Section 409A Compliance .

8.1. It is the Company’s intent that compensation and benefits to which you are entitled under this Agreement not be treated as “nonqualified deferred compensation” under Section 409A of the Internal Revenue Code of 1986, as amended, and the treasury regulations and other official guidance promulgated thereunder (“ Code Section 409A ”), and that any ambiguities in the construction of this Agreement be interpreted in order to effectuate such intent. In the event that the Company determines, in its sole discretion, that any compensation or benefits to which you are entitled under this Agreement could be treated as “nonqualified deferred compensation” under Code Section 409A unless this Agreement is amended or modified, the Company may, in its sole discretion, amend or modify this Agreement without obtaining any additional consent from you, so long as such amendment or modification does not materially affect the net present value of the compensation or benefits to which you otherwise would be entitled under this Agreement.

8.2. A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” If you are deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered “nonqualified deferred compensation” under Code Section 409A payable on account of a “separation from service,” such payment or benefit shall be made or provided at the date which is the earlier of (a) the expiration of the six (6) month period measured from the date of your “separation from service,” and (b) the date of your death (the “ Delay Period ”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to you in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

8.3. If a general release of claims, as contemplated under Section 7 hereof, is executed and delivered (and no longer subject to revocation) in the manner provided in said Section 7, then the following shall apply:

(a) To the extent that the Severance Pay is not “nonqualified deferred compensation” for purposes of Code Section 409A, then the Severance Pay shall commence upon the first scheduled payment date immediately following the date that the release is executed, delivered and no longer subject to revocation (the “ Release Effective Date ”). The first such cash payment shall include payment of all amounts that otherwise would have been due prior to the Release Effective Date under the terms of this Agreement applied as though such payments commenced immediately upon your termination of employment, and any payments made thereafter shall continue as provided herein.

(b) To the extent that the Severance Pay is “nonqualified deferred compensation” for purposes of Code Section 409A, then such payments or benefits shall be made or commence upon the sixtieth (60th) day following your termination of employment. The first such cash payment shall include payment of all amounts that otherwise would have been due prior thereto under the terms of this Agreement had such payments commenced immediately upon your termination of employment, and any payments made thereafter shall continue as provided herein.

8.4. For purposes of compliance with Code Section 409A, (a) all expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by you, (b) any right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit, and (c) no such reimbursement, expenses eligible for reimbursement, or in kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other taxable year.

8.5. For purposes of Code Section 409A, your right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.

8.6. In no event shall any payment under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.

8.7. In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on you by Code Section 409A or damages for failing to comply with Code Section 409A.

9. Confidential Information, Intellectual Property .

9.1. Confidentiality . You agree not to disclose, distribute, publish, communicate or in any way cause to be disclosed, distributed, published, or communicated in any way or at any time, Confidential Information (as defined herein), or any part of Confidential Information, to any person, firm, corporation, association, or any other operation or entity except on behalf of the Company in performance of your duties and responsibilities for the Company, and then only in a fashion consistent with protecting the Confidential Information from unauthorized use or disclosure, except as otherwise approved by the Company. You further agree not to use or permit the reproduction of any Confidential Information except on behalf of the Company in your capacity as an employee of the Company. You agree to take all reasonable care to avoid the unauthorized disclosure or use of any Confidential Information. You assume responsibility for and agree to indemnify and hold harmless the Company from and against

any disclosure or use of the Confidential Information in violation of this Agreement.

9.2. Confidential Information . For the purpose of this Agreement, “Confidential Information” shall mean any written or unwritten information which relates to or is used in the Company’s business (including, without limitation, information related to the names, addresses, buying habits and other special information regarding past, present and potential customers, employees and suppliers of the Company; customer and supplier contracts and transactions or price lists of the Company and suppliers; all agreements, files, books, logs, charts, records, studies, reports, processes, schedules and statistical information relating to the Company; all products, services, programs and processes sold, and all computer software licensed or developed by the Company; data, plans and specifications related to present or future development projects of the Company; financial or marketing data respecting the conduct of the present or future phases of business of the Company; computer programs, computer or web based training programs, systems or software; ideas, inventions, trademarks, business information, know how, processes, techniques, improvements, designs, redesigns, creations, discoveries and developments of the Company; and finances and financial information of the Company) which the Company deems confidential and proprietary, which is generally not known to others outside the Company, or which gives or tends to give the Company a competitive advantage over persons who do not possess such information or the secrecy of which is otherwise of value to the Company in the conduct of its business regardless of when and by whom such information was developed or acquired, and regardless of whether any of these are described in writing, copyrightable or considered copyrightable, patentable or considered patentable. “Confidential Information” shall not include general industry information or information which is publicly available or otherwise known to those persons outside the Company working in the area of the business of the Company or is otherwise in the public domain without breach of this Agreement or information which you have lawfully acquired without an obligation to maintain the information in confidence from a source other than the Company. “Confidential Information” specifically includes information received by the Company from others, including the Company’s clients, that the Company has an obligation to treat as confidential and also includes any confidential information acquired or obtained by you while in the employment of any Affiliate.

9.3. Invention Ownership . With respect to information, inventions and discoveries developed, made or conceived by you, either alone or with others, at any time during your employment by the Company and whether or not within normal working hours, arising out of such employment or pertinent to any field of business or research in which, during such employment, the Company is engaged or (if such is known to or ascertainable by you) is considering engaging, you agree:

(a) that all such information, inventions and discoveries, whether or not patented or patentable, shall be and remain the sole property of the Company;

(b) to disclose promptly to an authorized representative of the Company all such information, inventions and discoveries and all information in your possession as to possible applications and uses thereof;

(c) not to file any patent applications relating to any such invention or discovery except with the prior consent of an authorized representative of the Company; and

(d) at the request of the Company, and without expense or additional compensation to you, to execute such documents and perform such other acts as the Company deems necessary, to obtain patents on such inventions in a jurisdiction or jurisdictions designated by the Company, and to assign to the Company or its designee such inventions and all patent applications and patents relating thereto.

Both the Company and you intend that all original works of authorship within the purview of the copyright laws of the United States authored or created by you in the course of your employment with the Company will be works for hire within the meaning of such copyright laws.

9.4. Confidentiality of Inventions; Return of Materials and Confidential Information . With respect to the information, inventions and discoveries referred to in Section 9.3, and also with respect to all other information, whatever its nature and form and whether obtained orally, by observation, from graphic materials, or otherwise (except such as is generally available through publication) obtained by you during or as a result of your employment by the Company and relating to any product, service, process, or apparatus or to any use of any of them, or to materials, tolerances, specifications, costs (including manufacturing costs), prices, or to any plans of the Company, you agree:

(a) to hold all such information, inventions and discoveries in strict confidence and not to publish or otherwise disclose any portion thereof except with the prior consent of an authorized representative of the Company;

(b) to take all reasonable precautions to ensure that all such information, inventions, and discoveries are properly protected from access by unauthorized persons;

(c) to make no use of any such information, invention, or discovery except as required or permitted in the performance of your duties and responsibilities for the Company; and

(d) upon termination of your employment by the Company, or at any time upon request of the Company, to deliver to the Company all graphic materials and all substances, models, prototypes and the like containing or relating to Confidential Information or any such information, invention, or discovery, all of which graphic materials and other things shall be and remain the sole property of the Company. The term “graphic materials” includes letters, memoranda, reports, notes, notebooks, books of account, drawings, prints, specifications, formulae, data printouts, microfilms, magnetic tapes and disks and other documents and recordings, together with all copies thereof.

10. Non Solicitation . Regardless of whether you are eligible to receive Severance Pay, you agree that, if your employment with the Company ends for any reason, you will not, for a period of twelve (12) months following such termination of employment, (i) directly or indirectly, either for yourself or for any other person, business, company or entity, hire from the Company or any Affiliate, or attempt to hire, divert or take away from the Company or any Affiliate, any of the then current officers or employees of the Company or any Affiliate, (ii) interfere with or harm, or attempt to interfere with or harm, the relationship of the Company or any Affiliate with any person who at any time was an employee, customer or supplier of the Company or any Affiliate or

otherwise had a business relationship with the Company or any Affiliate, or (iii) unless compelled by law to do so, directly or indirectly, knowingly make any statement or other communication that impugns or attacks the reputation or character of the Company or any Affiliate, or damages the goodwill of the Company or any Affiliate, or knowingly take any action, directly or indirectly, that would interfere with any contractual or customer or supplier relationships of the Company or any Affiliate.

11. Non Competition . During the Non-Competition Period described below you may not and will not, within the United States of America, directly or indirectly, without the prior written consent of the Company’s Chief Executive Officer or its Board of Directors (which may be given or withheld in its sole discretion), own, manage, operate, join, control, be employed by, consult with or participate in the ownership, management, operation or control of, or be connected with (as a stockholder, partner or otherwise) any business, partnership, firm, company, corporation or other entity engaged in the retail business of women’s fashion apparel, accessories and related products or any other product sold or intended to be sold by the Company or an Affiliate during your employment with the Company. Notwithstanding the foregoing, your beneficial ownership after your termination of employment with the Company, either individually or as a member of a group, of not more than two percent (2%) of the voting stock of any publicly held corporation shall not be a violation of this provision.

The “Non-Competition Period” means the period you are employed by the Company, plus the longer of (a) one (1) year from your Separation Date or (b) the period during which you receive Severance Pay as described in Section 7 above. If however, at the Company’s discretion, you are released from the one (1) year “Non-Competition Period”, you will no longer be eligible for Severance Pay.

12. Remedies . You acknowledge that money will not adequately compensate the Company for the substantial damages that will arise upon the breach of any provision of Sections 9, 10 and 11 of this Agreement and that the Company would have no adequate remedy at law. For this reason, any claim the Company may make that you have breached or are threatening to breach Sections 9, 10 or 11 is not subject to mandatory arbitration under Section 05. Instead, if you breach or threaten to breach any provision of Sections 9, 10 or 11, the Company will be entitled, in addition to other rights and remedies, to specific performance, injunctive relief and other equitable relief to prevent or restrain any breach or threatened breach of Sections 9, 10 or 11. The Company may obtain such relief from (i) any court of competent jurisdiction, (ii) an arbitrator acting pursuant to Section 0 hereof, or (iii) a combination of the two (e.g., by simultaneously seeking arbitration under Section 05 and a temporary injunction from a court pending the outcome of the arbitration). It shall be the Company’s sole and exclusive right to elect which approach to use to vindicate its rights. You also agree that in the event of a breach (or any threat of breach) the Company shall be entitled to obtain an immediate injunction and restraining order to prevent such breach or threatened breach or continued breach, without having to prove damages, and to obtain all costs and expenses, including reasonable attorneys’ fees and costs. In addition, the existence of any claim or cause of action by you against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the restrictive covenants of this Agreement.

13. Acknowledgment of Reasonableness . You and the Company specifically agree that the provisions of the restrictive covenants contained in this Agreement, including the post employment covenants regarding non solicitation and non competition, are reasonable and that the Company would not have entered into this Agreement but for the inclusion of such covenants. You understand that the Company’s business is nationwide, and, therefore, a nationwide restrictive covenant is reasonable. If a court or arbitrator determines that any provision of any such restrictive covenant is unreasonable, whether in period of time, geographical area, or otherwise, you and the Company agree that the covenant shall be interpreted and enforced to the maximum extent which a court or arbitrator deems reasonable. In

addition, you and the Company authorize any such court or arbitrator to reform these restrictions to the minimum extent necessary.

14. Company Property . Upon your termination of employment for any reason, you will promptly return to the Company all Company related documents and Company property within your possession or control.

15. Arbitration of Disputes. Except as set forth in Section 02, any dispute, claim or difference arising out of or in relation to your employment will be settled exclusively by binding arbitration administered by the American Arbitration Association under its National Rules for the Resolution of Employment Disputes before a single arbitrator. You expressly understand and agree that claims subject to arbitration under this section include asserted violations of the Employee Retirement and Income Security Act of 1974; the Age Discrimination in Employment Act; the Older Worker’s Benefit Protection Act; the Americans with Disabilities Act; Title VII of the Civil Rights Act of 1964 (as amended); the Family and Medical Leave Act; and any law prohibiting discrimination, harassment or retaliation in employment, whether based on federal, state or local law; any claim of breach of contract, tort, promissory estoppel or detrimental reliance, defamation, intentional infliction of emotional distress; or the public policy of any state, or any other federal, state or local law. The arbitration will be held in New York, New York unless you and the Company (each a “ Party ,” and jointly, the “ Parties ”) mutually agree otherwise. To the extent permitted by law, each Party will bear its own costs and fees of the arbitration, and other fees and expenses of the arbitrator will be borne equally by the Parties; provided , however , that the arbitrator will be empowered to require any one or more of the Parties to bear all or any portion of fees and expenses of the Parties or the fees and expenses of the arbitrator in the event that the arbitrator determines such Party has acted in bad faith. The arbitrator will have the authority to award any remedy or relief that a court of the State of New York could order or grant. The decision and award of the arbitrator will be binding on all Parties. Either Party to the arbitration may seek to have the ruling of the arbitrator entered in any court having jurisdiction thereof. Each Party agrees that it will not file suit, motion, petition or otherwise commence any legal action or proceeding for any matter which is required to be submitted to arbitration as contemplated herein, except in connection with the enforcement of an award rendered by an arbitrator and except to seek the issuance of an injunction or temporary restraining order pending a final determination by the arbitrator.

16. Post Termination Cooperation . As is required of you during employment, you agree that during and after employment with the Company you will, without expense or additional compensation to you, cooperate with the Company or any Affiliate in the following areas:

16.1 Cooperation With the Company . You agree [a] to be reasonably available to answer questions for the Company’s (or any Affiliate’s) officers regarding any matter, project, initiative or effort for which you were responsible while employed by the Company and [b] to cooperate with the Company (and with any Affiliate) during the course of all third party proceedings arising out of the Company’s (or any Affiliate’s) business about which you have knowledge or information. For purposes of this Agreement, [c] “proceedings” includes internal investigations, administrative investigations or proceedings and lawsuits (including pre trial discovery and trial testimony) and [d] “cooperation” includes [i] your being reasonably available for interviews, meetings, depositions, hearings or trials without the need for subpoena or assurances by the Company (or any Affiliate), [ii] providing any and all documents in your possession that relate to the proceeding, and [iii] providing assistance in locating any and all relevant notes and documents.

16.2 Cooperation With Media . You agree not to communicate with, or give statements to, any member of the media (including print, television or radio media) relating to any matter (including pending or threatened lawsuits or administrative

investigations) about which you have knowledge or information (other than knowledge or information that is not Confidential Information as defined in Section 9.3) as a result of employment with the Company. You also agree to notify the Chief Executive Officer or his designee immediately after being contacted by any member of the media with respect to any matter affected by this section.

17. Post Termination Board of Directors Participation . Upon termination of your employment, you shall resign your position as Director on the Board.

18. Entire Agreement . This Agreement constitutes your entire agreement with the Company relating to the subject mater hereof, and supersedes in its entirety any and all prior agreements, understandings or arrangements with the Company.

19. Governing Law . All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the choice of law principles thereof.

20. Survival of Provisions . Sections 8 through 19 will survive the termination of your employment for any reason and shall not be affected by any transfer(s) between the Company and its Affiliate(s).

21. Understandings and Representations . You should not sign this Agreement until you understand its terms and conditions. Your execution of this Agreement represents your acknowledgement that you have take all steps you believe necessary, including consultation with financial and legal advisors of your choice, to understand this Agreement.

Sincerely,

By:	/s/ Richard P. Crystal	Dated:	April 27, 2010
	Richard P. Crystal
	Chairman & Chief Executive Officer


By:	/s/ Gregory Scott	Dated:	April 28, 2010
	Gregory Scott
	President

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.1

CERTIFICATION

I, Richard P. Crystal, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of New York & Company, 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(s) 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) 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

(d) 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(s) 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 the registrant's board of directors (or persons performing the equivalent functions):

(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.


Date: June 10, 2010		/s/ RICHARD P. CRYSTAL Richard P. Crystal Chairman and Chief Executive Officer

QuickLinks

Exhibit 31.1

CERTIFICATION

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.2

CERTIFICATION

I, Sheamus Toal, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of New York & Company, Inc.;

(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.


Date: June 10, 2010		/s/ SHEAMUS TOAL Sheamus Toal Executive Vice President and Chief Financial Officer

QuickLinks

Exhibit 31.2

QuickLinks -- Click here to rapidly navigate through this document

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

Solely for the purposes of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned Chairman and Chief Executive Officer, and Executive Vice President and Chief Financial Officer of New York & Company, Inc. (the "Company"), hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended May 1, 2010 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 10, 2010


		/s/ RICHARD P. CRYSTAL Richard P. Crystal Chairman and Chief Executive Officer
		/s/ SHEAMUS TOAL Sheamus Toal Executive Vice President and Chief Financial Officer

QuickLinks

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