New York & Company, Inc. (Form: 10-Q, Received: 06/02/2017 16:37:44)

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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 April 29, 2017
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.)
330 West 34 ^th Street
9 ^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 ý 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, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.


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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 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 24, 2017, the registrant had 64,214,035 shares of common stock outstanding.

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TABLE OF CONTENTS

		Page

Special Note Regarding Forward-Looking Statements and Risk Factors		1
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	2
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3.	Defaults Upon Senior Securities	21
Item 4.	Mine Safety Disclosures	21
Item 5.	Other Information	21
Item 6.	Exhibits	22

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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. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These include, but are not limited to: (i) the Company's dependence on mall traffic for its sales and the continued reduction in the volume of mall traffic; (ii) the Company's ability to anticipate and respond to fashion trends; (iii) the impact of general economic conditions and their effect on consumer confidence and spending patterns; (iv) changes in the cost of raw materials, distribution services or labor; (v) the potential for economic conditions to negatively impact the Company's merchandise vendors and their ability to deliver products; (vi) the Company's ability to open and operate stores successfully; (vii) seasonal fluctuations in the Company's business; (viii) competition in the Company's market, including promotional and pricing competition; (ix) the Company's ability to retain, recruit and train key personnel; (x) the Company's reliance on third parties to manage some aspects of its business; (xi) the Company's reliance on foreign sources of production; (xii) the Company's ability to protect its trademarks and other intellectual property rights; (xiii) the Company's ability to maintain, and its reliance on, its information technology infrastructure; (xiv) the effects of government regulation; (xv) the control of the Company by its sponsors and any potential change of ownership of those sponsors; and (xvi) other risks and uncertainties as described in the Company's documents filed with the SEC, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. The Company undertakes no obligation to revise the forward-looking statements included in this press release to reflect any future events or circumstances.

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.

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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 April 29, 2017			Three months ended April 30, 2016

Net sales	$	209,857		$	216,038
Cost of goods sold, buying and occupancy costs		145,435			156,151

Gross profit		64,422			59,887
Selling, general and administrative expenses		68,274			65,285

Operating loss		(3,852	)		(5,398	)
Interest expense, net of interest income of $48 and $1, respectively		279			297

Loss before income taxes		(4,131	)		(5,695	)
Provision for income taxes		116			21

Net loss	$	(4,247	)	$	(5,716	)



Basic loss per share	$	(0.07	)	$	(0.09	)



Diluted loss per share	$	(0.07	)	$	(0.09	)



Weighted average shares outstanding:
Basic shares of common stock		63,181			63,277



Diluted shares of common stock		63,181			63,277

See accompanying notes.

New York & Company, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

(Amounts in thousands)	Three months ended April 29, 2017			Three months ended April 30, 2016

Comprehensive loss	$	(4,155	)	$	(5,608	)

See accompanying notes.

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New York & Company, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Amounts in thousands, except per share amounts)	April 29, 2017			January 28, 2017*			April 30, 2016

	(Unaudited)						(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	75,292		$	88,369		$	47,628
Accounts receivable		16,873			11,837			17,011
Income taxes receivable		115			144			47
Inventories, net		96,194			78,044			102,764
Prepaid expenses		17,777			18,746			18,998
Other current assets		1,516			824			831

Total current assets		207,767			197,964			187,279
Property and equipment, net		83,146			87,070			86,136
Intangible assets		14,879			14,879			14,879
Other assets		1,563			1,675			1,966

Total assets	$	307,355		$	301,588		$	290,260



Liabilities and stockholders' equity
Current liabilities:
Current portion-long-term debt	$	841		$	841		$	841
Accounts payable		83,496			68,068			91,158
Accrued expenses		66,070			69,294			55,388
Income taxes payable		66			174			63

Total current liabilities		150,473			138,377			147,450
Long-term debt, net of current portion		11,275			11,485			12,115
Deferred rent		29,554			30,039			33,131
Other liabilities		40,977			42,518			8,246

Total liabilities		232,279			222,419			200,942
Stockholders' equity:
Common stock, voting, par value $0.001; 300,000 shares authorized; 65,905, 65,844 and 65,632 shares issued and 64,210, 64,367 and 64,632 shares outstanding at April 29, 2017, January 28, 2017 and April 30, 2016, respectively		66			66			66
Additional paid-in capital		181,873			181,399			179,349
Retained deficit		(100,719	)		(96,472	)		(84,897	)
Accumulated other comprehensive loss		(1,264	)		(1,356	)		(1,803	)
Treasury stock at cost; 1,695, 1,477 and 1,000 shares at April 29, 2017, January 28, 2017 and April 30, 2016, respectively		(4,880	)		(4,468	)		(3,397	)

Total stockholders' equity		75,076			79,169			89,318

Total liabilities and stockholders' equity	$	307,355		$	301,588		$	290,260

*: Derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended January 28, 2017.

See accompanying notes.

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New York & Company, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Amounts in thousands)	Three months ended April 29, 2017			Three months ended April 30, 2016

Operating activities
Net loss	$	(4,247	)	$	(5,716	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		5,732			5,863
Loss from impairment charges		288			—
Amortization of deferred financing costs		48			47
Share-based compensation expense		501			1,107
Changes in operating assets and liabilities:
Accounts receivable		(5,036	)		(8,803	)
Income taxes receivable		29			—
Inventories, net		(18,150	)		(14,987	)
Prepaid expenses		969			444
Accounts payable		15,428			8,933
Accrued expenses		(3,239	)		2,664
Income taxes payable		(108	)		(176	)
Deferred rent		(485	)		(1,220	)
Other assets and liabilities		(1,613	)		270

Net cash used in operating activities		(9,883	)		(11,574	)
Investing activities
Capital expenditures		(2,096	)		(1,869	)

Net cash used in investing activities		(2,096	)		(1,869	)
Financing activities
Repayment of long-term debt		(250	)		(250	)
Purchase of treasury stock		(416	)		—
Proceeds from exercise of stock options		—			120
Shares withheld for payment of employee payroll taxes		(23	)		(73	)
Principal payment on capital lease obligations		(409	)		(158	)

Net cash used in financing activities		(1,098	)		(361	)
Net decrease in cash and cash equivalents		(13,077	)		(13,804	)
Cash and cash equivalents at beginning of period		88,369			61,432

Cash and cash equivalents at end of period	$	75,292		$	47,628



Supplementary non-cash investing activities
Non-cash capital lease transactions	$	—		$	1,299

See accompanying notes.

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New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements

April 29, 2017

(Unaudited)

1. Organization and Basis of Presentation

New York & Company, Inc. (together with its subsidiaries, the "Company") is a specialty retailer of women's fashion apparel and accessories, and the modern wear-to-work destination for women, providing fashion that is feminine, polished, on-trend and versatile. New York & Company, Inc. helps its customers feel confident, put-together, attractive and stylish by providing affordable fashion. The Company's proprietary branded New York & Company® merchandise is sold through its national network of retail stores and online 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 April 29, 2017, the Company operated 463 stores in 39 states.

The condensed consolidated financial statements as of April 29, 2017 and April 30, 2016 and for the 13 weeks ("three months") ended April 29, 2017 and April 30, 2016 are unaudited and are presented pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). Accordingly, these unaudited condensed 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 28, 2017 ("fiscal year 2016"), which were filed with the Company's Annual Report on Form 10-K with the SEC on April 12, 2017. The 53-week fiscal year ending February 3, 2018 is referred to herein as "fiscal year 2017." The Company's fiscal year is a 52- or 53-week year that ends on the Saturday closest to January 31.

The Company identifies its operating segments according to how its business activities are managed and evaluated. Its operating segments have been aggregated and are reported as one reportable segment based on the similar nature of products sold, production process, distribution process, target customers and economic characteristics. All of the Company's revenues are generated in the United States. In the opinion of management, the accompanying condensed 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. All significant intercompany balances and transactions have been eliminated in consolidation.

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.

Certain totals that appear in this Quarterly Report on Form 10-Q may not equal the sum of the components due to rounding.

2. New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"), which supersedes the revenue recognition requirements in FASB Accounting Standards Codification™ ("ASC") Topic 605, "Revenue Recognition" and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled to in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers: Deferral of the Effective Date," which defers the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within those reporting periods. As

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New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

April 29, 2017

(Unaudited)

2. New Accounting Pronouncements (Continued)

amended, early adoption is permitted for annual reporting periods beginning after December 15, 2016, including interim reporting periods within those reporting periods. The standard may be applied retrospectively to each prior period presented or on a modified retrospective basis with the cumulative effect recognized as of the date of adoption. The Company is continuing to evaluate the impact of the adoption of this standard on its consolidated financial statements and related disclosures, but based on its current review, the Company plans to adopt ASU 2014-09 using the modified retrospective method, and the more significant change that the Company has identified relates to the timing of when revenue is recognized from its loyalty programs.

In February 2016, the FASB issued ASU 2016-02, "Leases" ("ASU 2016-02"), which is a comprehensive new lease standard that amends various aspects of existing accounting guidance for leases. The core principle of ASU 2016-02 will require lessees to present the assets and liabilities that arise from leases on their balance sheets. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years and requires modified retrospective adoption. Early adoption is permitted. The Company is currently evaluating the new standard and its impact on the Company's financial position and results of operations. The Company expects that the adoption of ASU 2016-02 will result in a significant increase to its long-term assets and liabilities on the consolidated balance sheet. The Company is continuing to evaluate the impact of the adoption of this standard on its results of operations.

In March 2016, the FASB issued ASU 2016-09, "Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"), which simplifies several aspects of accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification within the statement of cash flows for certain components of share-based awards. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those fiscal years. The adoption of ASU 2016-09 on January 29, 2017 did not have a material impact on the Company's financial position or results of operations.

In August 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which addresses how certain cash receipts and cash payments are classified in the statement of cash flows with the objective of reducing the existing diversity in practice related to eight specific cash flow issues. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and requires retrospective adoption. Early adoption is permitted. The Company does not expect the adoption of ASU 2016-15 to have a material impact on the Company's financial position or results of operations.

In March 2017, the FASB issued ASU 2017-07, "Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ("ASU 2017-07"), which requires: the disaggregation of the service cost component from the other components of net benefit costs in the income statement; provides explicit guidance on the presentation of the service cost component and the other components of net benefit cost in the income statement; and allows only the service cost component of net benefit cost to be eligible for capitalization. ASU 2017-07 is effective for annual reporting periods beginning after December 15, 2017, and interim

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New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

April 29, 2017

(Unaudited)

2. New Accounting Pronouncements (Continued)

periods within those fiscal years, and requires retrospective adoption. Early adoption is permitted. The Company does not expect the adoption of ASU 2017-07 to have a material impact on the Company's financial position or results of operations.

3. Proprietary Credit Card

On July 14, 2016, the Company entered into a Second Amended and Restated Private Label Credit Card Program Agreement, effectively dated May 1, 2016, with Alliance Data Systems Corporation (the "ADS Agreement"), which replaced the existing agreement with Alliance Data Systems Corporation ("ADS") and has a term through April 30, 2026.

Pursuant to the terms of the ADS Agreement, ADS has the exclusive right to provide private label credit cards to customers of the Company. In connection with the execution of the ADS Agreement, the Company received $40.0 million in signing bonuses. The signing bonuses were payable in two installments, of which $17.5 million was received on July 28, 2016 and $22.5 million was received on January 10, 2017. Upon execution of the ADS Agreement, the Company recorded $40.0 million of deferred revenue, which will be amortized on a straight-line basis over the 10-year term of the ADS Agreement. As of April 29, 2017, $32.0 million of deferred revenue is included in "Other liabilities" and $4.0 million of deferred revenue is included in "Accrued expenses" on the consolidated balance sheet. In addition, over the term of the ADS Agreement, the Company will receive an increased level of royalty payments based on a percentage of private label credit card sales. During the three months ended April 29, 2017, the Company recognized $5.7 million of revenue from royalties and the amortization of signing bonuses in connection with the ADS Agreement, as compared to recognizing $1.0 million of marketing credits during the three months ended April 30, 2016 under the previous agreement with ADS, which were recorded as a reduction to marketing expense within "Selling, general and administrative expenses" on the consolidated statement of operations, in accordance with generally accepted accounting principles. Under the previous agreement with ADS, marketing credits received by the Company were to be used for marketing of the Company's proprietary credit card program and other marketing-related activities, and as such the Company recorded these marketing credits as a reduction to marketing expense.

4. Earnings (Loss) Per Share

Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. Except when the effect would be anti-dilutive, diluted earnings (loss) per share are calculated based on the weighted average number of outstanding shares of common stock plus the dilutive effect of share-based awards calculated under the

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New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

April 29, 2017

(Unaudited)

4. Earnings (Loss) Per Share (Continued)

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

	Three months ended April 29, 2017			Three months ended April 30, 2016

	(Amounts in thousands, except per share amounts)
Net loss	$	(4,247	)	$	(5,716	)



Basic loss per share
Weighted average shares outstanding:
Basic shares of common stock		63,181			63,277



Basic loss per share	$	(0.07	)	$	(0.09	)



Diluted loss per share
Weighted average shares outstanding:
Basic shares of common stock		63,181			63,277
Plus impact of share-based awards		—			—

Diluted shares of common stock		63,181			63,277



Diluted loss per share	$	(0.07	)	$	(0.09	)

The calculation of diluted loss per share for the three months ended April 29, 2017 and April 30, 2016 excludes the share-based awards listed in the following table due to their anti-dilutive effect as determined under the treasury stock method:

	Three months ended April 29, 2017

	(Amounts in thousands)
Stock options		289	405
Stock appreciation rights(1)		7,282	6,487
Restricted stock and units		687	771

Total anti-dilutive shares		8,258	7,663

(1): Each stock appreciation right ("SAR") referred to above 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.

5. Pension Plan

The Company sponsors a single employer defined benefit pension plan ("plan") covering substantially all union employees. Employees covered by collective bargaining agreements are primarily

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New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

April 29, 2017

(Unaudited)

5. Pension Plan (Continued)

non-management store associates, representing approximately 8% of the Company's workforce at April 29, 2017. The collective bargaining agreement with the Local 1102 unit of the Retail, Wholesale and Department Store Union AFL-CIO is in effect through August 31, 2018. The Company believes its relationship with its employees is good.

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 and to contribute at least the minimum required by ERISA rules. Net periodic benefit cost includes the following components:

	Three months ended April 29, 2017			Three months ended April 30, 2016

	(Amounts in thousands)
Service cost	$	84		$	86
Interest cost		86			80
Expected return on plan assets		(122	)		(146	)
Amortization of unrecognized losses		96			112
Amortization of prior service credit		(4	)		(4	)

Net periodic benefit cost	$	140		$	128

In accordance with FASB ASC Topic 220, "Comprehensive Income," comprehensive income (loss) reported on the Company's condensed consolidated statements of comprehensive income (loss) includes net income (loss) and other comprehensive income (loss). For the Company, other comprehensive income (loss) consists of the reclassification of unrecognized losses and prior service credits related to the Company's minimum pension liability. The total amount of unrecognized losses and prior service credits reclassified out of "Accumulated other comprehensive loss" on the condensed consolidated balance sheets and into "Selling, general, and administrative expenses" on the Company's condensed consolidated statements of operations for the three months ended April 29, 2017 and April 30, 2016 was approximately $92,000 and $108,000, respectively. As of January 28, 2017, the Company reported a minimum pension liability of $1.9 million due to the underfunded status of the plan. The minimum pension liability is reported in "Other liabilities" on the condensed consolidated balance sheets.

6. Income Taxes

The Company files U.S. federal income tax returns and income tax returns in various state and local jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for tax years through 2012. With limited exception, the Company is no longer subject to state and local income tax examinations for tax years through 2012.

At January 28, 2017, the Company reported a total liability for unrecognized tax benefits of $1.8 million, including interest and penalties. There have been no material changes during the three

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New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

April 29, 2017

(Unaudited)

6. Income Taxes (Continued)

months ended April 29, 2017. Of the total $1.8 million of unrecognized tax benefits at January 28, 2017, approximately $1.4 million, if recognized, would impact the Company's effective tax rate. The Company does not anticipate any significant increases or decreases to the balance of unrecognized tax benefits during the next 12 months.

The Company continues to maintain a valuation allowance against its deferred tax assets until the Company believes it is more likely than not that these assets will be realized in the future. If sufficient positive evidence arises in the future indicating that all or a portion of the deferred tax assets meet the more likely than not standard under ASC Topic 740, "Income Taxes," the valuation allowance would be reversed accordingly in the period that such determination is made. As of April 29, 2017, the Company's valuation allowance against its deferred tax assets was $77.0 million.

7. Long-Term Debt and Credit Facilities

On October 24, 2014, Lerner New York, Inc., Lernco, Inc. and Lerner New York Outlet, LLC (f.k.a. Lerner New York Outlet, Inc.), wholly-owned indirect subsidiaries of New York & Company, Inc., entered into a Fourth Amended and Restated Loan and Security Agreement (the "Loan Agreement") with Wells Fargo Bank, National Association, as Agent and Term Loan Agent and the lender party thereto. The obligations under the Loan Agreement are guaranteed by New York & Company, Inc. and its other subsidiaries.

The Loan Agreement consists of: (i) a revolving credit facility that provides the Company with up to $100 million of credit, consisting of a $75 million revolving credit facility (which includes a sub-facility for issuance of letters of credit up to $45 million) with a fully committed accordion option that allows the Company to increase the revolving credit facility up to $100 million or decrease it to a minimum of $60 million, subject to certain restrictions, and (ii) a $15 million, 5-year term loan, bearing interest at the Adjusted Eurodollar Rate plus 4.50% (the "Term Loan"). The Company used a portion of the proceeds from the Term Loan to pay for costs associated with the relocation and build-out of its new corporate headquarters at 330 West 34 ^th Street, New York, New York and for general corporate purposes.

Under the terms of the Loan Agreement, the interest rates applicable to Revolving Loans are, at the Company's option, either at a floating rate equal to the Adjusted Eurodollar Rate plus a margin of between 1.50% and 1.75% per year for Eurodollar Rate Loans or a floating rate equal to the Prime Rate plus a margin of between 0.50% and 0.75% per year for Prime Rate Loans, depending upon the Company's Average Compliance Excess Availability. The Company pays to the lender under the revolving credit facility a monthly fee on outstanding commercial letters of credit at a rate of between 0.75% and 0.875% per year and on standby letters of credit at a rate of between 1.50% and 1.75% per year, depending upon the Company's Average Compliance Excess Availability, plus a monthly fee on a proportion of the unused commitments under the revolving credit facility at a rate of 0.25% per year.

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New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

April 29, 2017

(Unaudited)

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

compared to availability of $36.7 million, net of letters of credit outstanding of $14.5 million, as of January 28, 2017, and availability of $59.3 million, net of letters of credit outstanding of $14.2 million, as of April 30, 2016. The $14.2 million in letters of credit outstanding at April 29, 2017 represents standby letters of credit primarily related to the Company's new corporate headquarters and certain insurance contracts. Standby letters of credit related to the Company's corporate headquarters are scheduled to be reduced by $2.0 million annually beginning in October 2017, for a total reduction of $6.0 million by October 2019.

Under the terms of the Loan Agreement, the Company is subject to a Minimum Excess Availability covenant of $7.5 million. The Loan Agreement contains other covenants and conditions, including restrictions on the Company's ability to pay dividends on its common stock, prepay the Term Loan, incur additional indebtedness and to prepay, redeem, defease or purchase other indebtedness. Subject to such restrictions, the Company may incur more indebtedness for working capital, capital expenditures, stock repurchases, acquisitions and for other purposes.

The lender has been granted a pledge of the common stock of Lerner New York Holding, Inc. 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 Loan Agreement. In addition, New York & Company, Inc. and certain of its subsidiaries have fully and unconditionally guaranteed the obligations under the Loan Agreement, and such guarantees are joint and several.

As of April 29, 2017, January 28, 2017, and April 30, 2016, the Company had $6.2 million, $6.6 million, and $5.1 million of capital lease obligations outstanding, respectively. The Company's capital lease obligations are generally required to be repaid ratably over a five-year term beginning on the respective lease commencement date.

8. Fair Value Measurements

The Company measures fair value in accordance with FASB ASC Topic 820, "Fair Value Measurements" ("ASC 820"). 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 sheets for cash and cash equivalents, short-term trade receivables and accounts payable approximate their fair values

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New York & Company, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

April 29, 2017

(Unaudited)

8. Fair Value Measurements (Continued)

due to the short-term maturities of such items. The carrying amount of long-term debt on the balance sheets approximates its fair value due to the variable interest rate it carries.

The Company classifies long-lived store assets within Level 3 of the fair value hierarchy. The Company evaluates the impairment of long-lived assets in accordance with ASC Topic 360, "Property, Plant and Equipment." Long-lived assets are evaluated for recoverability whenever events or changes in circumstances indicate that an asset may have been impaired. The evaluation is performed at the individual store level, which is the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. In evaluating long-lived assets for recoverability, the Company estimates the future cash flows at the individual store level that are expected to result from the use of each store's assets based on historical experience, omni-channel strategy, knowledge and market data assumptions. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the long-lived assets, an impairment loss, equal to the excess of the carrying amount over the fair value of the assets, is recognized. During the three months ended April 29, 2017, the Company recorded $0.3 million of non-cash impairment charges related to underperforming store assets in "Selling, general and administrative expenses" on the Company's condensed consolidated statement of operations. There were no impairment charges recorded during the three months ended April 30, 2016.

9. Share Repurchases

Effective July 14, 2016, the Company's board of directors authorized the repurchase of up to $5 million of the Company's common stock over the subsequent 12 months, as described in the Company's press release issued on July 14, 2016.

Purchases will be made in compliance with SEC rules and regulations, subject to market conditions, applicable legal requirements, and other relevant factors. The Company is not obligated to acquire any particular amount of common stock.

During the three months ended April 29, 2017, the Company repurchased 218,524 shares of its common stock for a total cost of approximately $0.4 million, including commission.

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

Overview

During fiscal year 2017, the Company's key strategic initiatives are as follows: (i) evolve as a broader lifestyle brand through the growth of the Company's sub-brand strategy, including 7th Avenue Design Studio featuring Gabrielle Union, Soho Jeans and Soho Street, Eva Mendes Collection, and Gabrielle Union's upcoming namesake collection; (ii) enhance brand image and increase customer loyalty, including growth in both new private label credit card holders and the Company's existing customer database, to drive traffic online and into stores; (iii) drive growth in eCommerce sales and continue to evolve as an omni-channel retailer; (iv) optimize the Company's existing store base; and (v) continue ongoing Project Excellence initiatives, including leveraging the Company's Go-To-Market process improvements to provide more rapid delivery of product from concept to in-store, and remaining focused on cost savings opportunities and increasing operating efficiencies across the organization.

Net sales for the three months ended April 29, 2017 were $209.9 million, as compared to $216.0 million for the three months ended April 30, 2016. Comparable store sales decreased 0.7% for the three months ended April 29, 2017, as compared to a decrease of 2.3% for the three months ended April 30, 2016. A store is included in the comparable store sales calculation after it has completed 13 full fiscal months of operations from the store's opening date or once it has been reopened after remodeling if the gross square footage did not change by more than 20%. Sales from the Company's eCommerce store and private label credit card royalties and related revenue are included in comparable store sales.

Net loss for the three months ended April 29, 2017 was $4.2 million, or a loss of $0.07 per diluted share, as compared to a net loss of $5.7 million, or a loss of $0.09 per diluted share, for the three months ended April 30, 2016. On a non-GAAP basis, adjusted net loss for the three months ended April 29, 2017 was $2.7 million, or a loss of $0.04 per diluted share, which excludes $1.6 million of non-operating charges. There were no non-operating charges recorded during the three months ended April 30, 2016. Please refer to the "Results of Operations" and "Reconciliation of GAAP to non-GAAP Financial Measures" sections below for a further discussion of the Company's operating results.

Capital spending for the three months ended April 29, 2017 was $2.1 million, as compared to $1.9 million for the three months ended April 30, 2016, primarily reflecting the remodeling/refreshing of three existing locations, the opening of five New York & Company stores and one Outlet store, and continued investment in the Company's information technology infrastructure. The five New York & Company stores opened during the quarter are in highly desirable locations, with short-term leases and competitively priced rents. These locations were previously occupied by a competitor and therefore required relatively low capital investment to open. During the three months ended April 29, 2017, the Company closed 8 New York & Company stores and 1 Outlet store, ending the quarter with 463 stores, including 123 Outlet stores, and 2.3 million selling square feet in operation. Included in the New

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York & Company store count at April 29, 2017 are 18 Eva Mendes side-by-side stores, 51 Eva Mendes shop-in-shop stores, and 1 free-standing Eva Mendes boutique.

As previously disclosed, during the third quarter of fiscal year 2014, the Company engaged a leading global business advisory firm to assist the Company in analyzing its business processes and organizational structure in an effort to improve sales productivity and operating efficiencies, as well as to reduce the Company's overall cost structure. The Company refers to this ongoing business re-engineering program as "Project Excellence." Remaining focused on Project Excellence in fiscal year 2016, the Company negotiated a new private label credit card agreement with Alliance Data Systems Corporation (the "ADS Agreement"), the third-party administrator of its proprietary credit card. In connection with the execution of the ADS Agreement, the Company received $40.0 million in signing bonuses. The signing bonuses were payable in two installments, of which $17.5 million was received on July 28, 2016 and $22.5 million was received on January 10, 2017. In addition, over the 10-year term of the ADS Agreement, the Company will receive an increased level of royalty payments based on a percentage of private label credit card sales. For a further description of Project Excellence, please refer to the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 12, 2017.

The Company views the retail apparel market as having two principal selling seasons: spring (first and second fiscal quarters) and fall (third and fourth fiscal quarters). The Company's business experiences seasonal fluctuations in net sales and operating income, with a significant portion of its operating income typically realized during its fourth quarter. Any decrease in sales or margins during either of the principal selling seasons in any given year could have a disproportionate effect on the Company's financial condition and results of operations. 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 fiscal quarter and prior to the Easter and Mother's Day holidays toward the latter part of the first fiscal quarter and beginning of the second fiscal quarter.

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 April 29, 2017 and April 30, 2016:

(As a % of net sales)

Net sales	100.0	%	100.0	%
Cost of goods sold, buying and occupancy costs	69.3	%	72.3	%

Gross profit	30.7	%	27.7	%
Selling, general and administrative expenses	32.5	%	30.2	%

Operating loss	(1.8	)%	(2.5	)%
Interest expense, net	0.1	%	0.1	%

Loss before income taxes	(1.9	)%	(2.6	)%
Provision for income taxes	0.1	%	—	%

Net loss	(2.0	)%	(2.6	)%

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Selected operating data:	Three months ended April 29, 2017			Three months ended April 30, 2016

	(Dollars in thousands, except square foot data)
Comparable store sales decrease		(0.7	)%		(2.3	)%
Net sales per average selling square foot(1)	$	89		$	86
Net sales per average store(2)	$	452		$	442
Average selling square footage per store(3)		5,033			5,112

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

	Three months ended April 29, 2017						Three months ended April 30, 2016

Store count and selling square feet:	Store Count			Selling Square Feet			Store Count			Selling Square Feet
Stores open, beginning of period		466			2,367,194			490			2,511,429
New stores		6			26,603			—			—
Closed stores		(9	)		(57,511	)		(2	)		(16,432	)
Net impact of remodeled stores on selling square feet		—			(5,997	)		—			(210	)

Stores open, end of period		463			2,330,289			488			2,494,787

Three Months Ended April 29, 2017 Compared to Three Months Ended April 30, 2016

Net Sales. Net sales for the three months ended April 29, 2017 were $209.9 million, as compared to $216.0 million for the three months ended April 30, 2016. Comparable store sales decreased 0.7% for the three months ended April 29, 2017, as compared to a decrease of 2.3% for the three months ended April 30, 2016. Included in comparable store sales for the three months ended April 29, 2017 are royalty fees and the amortization of signing bonuses totaling $5.7 million recognized as a result of the ADS Agreement. In the comparable store base, average dollar sales per transaction increased by 2.6%, while the number of transactions per average store decreased 3.0%, as compared to the same period last year. For further information related to the ADS Agreement, please refer to Note 3, "Proprietary Credit Card" in the Notes to Condensed Consolidated Financial Statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Gross Profit. Gross profit for the three months ended April 29, 2017 was $64.4 million, or 30.7% of net sales, as compared to $59.9 million, or 27.7% of net sales, for the three months ended April 30, 2016. The increase in gross profit as a percentage of net sales for the three months ended April 29, 2017, as compared to the three months ended April 30, 2016, reflects a 170 basis point increase in merchandise margin and a 130 basis point improvement in the leverage of buying and occupancy costs. The increase in merchandise margin during the three months ended April 29, 2017, as compared to the three months ended April 30, 2016, is primarily due to a $5.7 million benefit from the revenue recognized as a result of the ADS Agreement, as well as reduced product costs, partially offset by a $1.2 million increase in shipping costs associated with the growth in the Company's eCommerce business.

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Selling, General and Administrative Expenses. Selling, general and administrative expenses were $68.3 million, or 32.5% of net sales, for the three months ended April 29, 2017, as compared to $65.3 million, or 30.2% of net sales, for the three months ended April 30, 2016. Included in selling, general and administrative expenses for the three months ended April 29, 2017 is $1.0 million of non-operating charges, comprised of consulting expenses related to new initiatives under Project Excellence and legal expenses related to an ongoing trademark infringement case. Also contributing to the increase in selling, general, and administrative expenses during the three months ended April 29, 2017, as compared to the three months ended April 30, 2016, is an increase in marketing expense due to the elimination of $1.0 million of marketing credits earned under the old ADS private label credit card agreement, which have been replaced by royalty fees under the new ADS Agreement and classified by the Company as revenue in accordance with generally accepted accounting principles; a $1.2 million increase in marketing expense to drive growth in eCommerce, celebrity collaborations, and the private label credit card program; and a $0.5 million increase in eCommerce expenses largely due to variable expenses associated with the growth in eCommerce sales. These increases were partially offset by a $1.3 million reduction in compensation expense resulting from a reduction in store payroll and share-based compensation.

Operating Loss. For the reasons discussed above, operating loss for the three months ended April 29, 2017 was $3.9 million, as compared to an operating loss of $5.4 million for the three months ended April 30, 2016.

Interest Expense, Net. Net interest expense was $0.3 million for both the three months ended April 29, 2017 and April 30, 2016, primarily related to interest on a $15.0 million, 5-year term loan (the "Term Loan"), described further in the "Long-Term Debt and Credit Facilities" section below.

Provision for Income Taxes. As previously disclosed, the Company continues to provide for adjustments to the deferred tax valuation allowance initially recorded during the three months ended July 31, 2010.

Net Loss. For the reasons discussed above, net loss for the three months ended April 29, 2017 was $4.2 million, or a loss of $0.07 per diluted share, as compared to a net loss of $5.7 million, or a loss of $0.09 per diluted share, for the three months ended April 30, 2016.

Reconciliation of GAAP to Non-GAAP Financial Measures

A reconciliation of the Company's GAAP to non-GAAP financial statement information for the three months ended April 29, 2017 is indicated below. This information reflects, on a non-GAAP basis, the Company's adjusted operating results after excluding certain non-operating charges, as described below. This non-GAAP financial information is provided to enhance the user's overall understanding of the Company's current financial performance. Specifically, the Company believes the non-GAAP adjusted results provide useful information to both management and investors by excluding expenses that the Company believes are not indicative of the Company's continuing operating results. The non-GAAP financial information should be considered in addition to, not as a substitute for or as being

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superior to, measures of financial performance prepared in accordance with GAAP. There were no non-operating charges for the three months ended April 30, 2016.

	Three months ended April 29, 2017

(Amounts in thousands, except per share amounts)	Cost of goods sold, buying and occupancy costs		Gross profit		Selling, general and administrative expenses		Operating loss			Net loss			Loss per diluted share
GAAP as reported	$	145,435	$	64,422	$	68,274	$	(3,852	)	$	(4,247	)	$	(0.07	)
Adjustments affecting comparability
Certain severance expenses		548		548		—		548			548
Consulting expense		—		—		562		562			562
Legal settlement fees (trademark infringement case)		—		—		470		470			470

Total adjustments(1)		548		548		1,032		1,580			1,580			0.03

Non-GAAP as adjusted	$	144,887	$	64,970	$	67,242	$	(2,272	)	$	(2,667	)	$	(0.04	)

(1): The tax effect of the $1.6 million expense reduction during the three months ended April 29, 2017 is offset by a full valuation allowance against deferred tax assets.

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/refreshing of existing stores and the development of the Company's information technology infrastructure and omni-channel strategy. 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 facility, if needed. As of the date of this Quarterly Report on Form 10-Q, the Company is in compliance with all debt covenants.

The Company may also use cash to repurchase shares of its common stock. On July 14, 2016, the Company announced that its board of directors had authorized the use of up to $5 million to repurchase the Company's common stock over a 12-month period. Purchases will be made in compliance with SEC rules and regulations, subject to market conditions, applicable legal requirements, and other relevant factors. The Company is not obligated to acquire any particular amount of common stock.

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

	April 29, 2017		January 28, 2017		April 30, 2016

	(Amounts in thousands)
Cash and cash equivalents	$	75,292	$	88,369	$	47,628
Working capital	$	57,294	$	59,587	$	39,829

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	Three months ended April 29, 2017			Three months ended April 30, 2016

	(Amounts in thousands)
Net cash used in operating activities	$	(9,883	)	$	(11,574	)
Net cash used in investing activities	$	(2,096	)	$	(1,869	)
Net cash used in financing activities	$	(1,098	)	$	(361	)

Net decrease in cash and cash equivalents	$	(13,077	)	$	(13,804	)

Operating Activities

Net cash used in operating activities was $9.9 million for the three months ended April 29, 2017, as compared to $11.6 million for the three months ended April 30, 2016. The decrease in net cash used in operating activities during the three months ended April 29, 2017, as compared to the three months ended April 30, 2016, is primarily the result of a decrease in net loss combined with fluctuations in operating assets and liabilities.

Investing Activities

Net cash used in investing activities was $2.1 million for the three months ended April 29, 2017, as compared to $1.9 million for the three months ended April 30, 2016. Net cash used in investing activities during the three months ended April 29, 2017 represents capital expenditures of $1.2 million for store-related projects and $0.8 million related to the Company's information technology infrastructure. During the three months ended April 29, 2017, the Company opened 5 New York & Company stores and 1 new Outlet store, remodeled/refreshed 3 existing stores, and closed 8 New York & Company stores and 1 Outlet store, ending the first quarter with 463 stores, including 123 Outlet stores, and 2.3 million selling square feet in operation. Included in the New York & Company store count at April 29, 2017 are 18 Eva Mendes side-by-side stores, 51 Eva Mendes shop-in-shop stores, and 1 free-standing Eva Mendes boutique. The five New York & Company stores opened during the quarter are in highly desirable locations, with short-term leases and competitively priced rents. These locations were previously occupied by a competitor and therefore required relatively low capital investment to open.

Net cash used in investing activities during the three months ended April 30, 2016 represents capital expenditures of $1.2 million for store-related projects and $0.6 million related to the Company's information technology infrastructure, including its eCommerce store. During the three months ended April 30, 2016, the Company converted 50 New York & Company stores to Outlet stores and closed two existing stores, ending the first quarter with 488 stores, including 132 Outlet stores and 2.5 million selling square feet in operation. Included in the New York & Company store count at April 30, 2016 are 16 Eva Mendes side-by-side stores, 25 Eva Mendes shop-in-shop stores, and 2 free-standing Eva Mendes boutiques.

For fiscal year 2017, capital expenditures are expected to be between $18 million and $20 million. In total, fiscal year 2017 capital expenditures reflect continued investments in the Company's information technology, including its omni-channel infrastructure, eCommerce store and mobile applications, and real estate spending to support opening a select number of new stores and remodeling/refreshing existing locations. In fiscal year 2017, the Company expects to open 2 new Outlet stores, remodel/refresh 8 existing stores, open 6 to 10 New York & Company stores with short-term leases, and close between 34 and 38 stores ending the fiscal year with between 436 and 444 stores, including 122 Outlet stores, and approximately 2.2 million selling square feet.

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As of April 29, 2017, approximately 50% of the Company's store leases could be terminated by the Company within one year or less, and approximately 60% of its store leases could be terminated by the Company within two years or less.

Financing Activities

Net cash used in financing activities for the three months ended April 29, 2017 was $1.1 million, which consists primarily of $0.4 million for the purchase of treasury stock, $0.4 million of principal payments on capital lease obligations, and a $0.3 million quarterly amortization payment of the Term Loan. Net cash used in financing activities for the three months ended April 30, 2016 was $0.4 million, which consists primarily of a $0.3 million quarterly amortization payment of the Term Loan, $0.2 million of principal payments on capital lease obligations, and $0.1 million of employee payroll taxes for which shares were withheld, partially offset by proceeds from the exercise of stock options.

Long-Term Debt and Credit Facilities

The Loan Agreement consists of: (i) a revolving credit facility that provides the Company with up to $100 million of credit, consisting of a $75 million revolving credit facility (which includes a sub-facility for issuance of letters of credit up to $45 million) with a fully committed accordion option that allows the Company to increase the revolving credit facility up to $100 million or decrease it to a minimum of $60 million, subject to certain restrictions, and (ii) a $15 million, 5-year term loan, bearing interest at the Adjusted Eurodollar Rate plus 4.50%. The Company used a portion of the proceeds from the Term Loan to pay for costs associated with the relocation and build-out of its new corporate headquarters at 330 West 34 ^th Street, New York, New York and for general corporate purposes.

The maximum borrowing availability under the Company's revolving credit facility is determined by a monthly borrowing base calculation based on applying specified advance rates against eligible inventory and certain other eligible assets. As of April 29, 2017, the Company had availability under its revolving credit facility of $59.6 million, net of letters of credit outstanding of $14.2 million, as compared to availability of $36.7 million, net of letters of credit outstanding of $14.5 million, as of January 28, 2017, and availability of $59.3 million, net of letters of credit outstanding of $14.2 million, as of April 30, 2016. The $14.2 million in letters of credit outstanding at April 29, 2017 represents standby letters of credit primarily related to the Company's new corporate headquarters and certain insurance contracts. Standby letters of credit related to the Company's corporate headquarters are scheduled to be reduced by $2.0 million annually beginning in October 2017, for a total reduction of $6.0 million by October 2019.

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Critical Accounting Policies

Management has determined the Company's most critical accounting policies are those related to inventories, long-lived assets, intangible assets and income taxes. Management continues to monitor these accounting policies to ensure proper application of current rules and regulations. There have been no significant changes to these policies as discussed in the Company's Annual Report on Form 10-K filed with the SEC on April 12, 2017.

Adoption of New Accounting Standards

Please refer to Note 2, "New Accounting Pronouncements" in the Notes to Condensed Consolidated Financial Statements appearing elsewhere in this Quarterly Report on Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Company's quantitative and qualitative disclosures about market risk from what was reported in its Annual Report on Form 10-K filed with the SEC on April 12, 2017.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. The Company carried out an evaluation, as of April 29, 2017, 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.

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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 12, 2017.

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 12, 2017.

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

The following table sets forth information concerning purchases made by the Company of its common stock for the periods indicated, pursuant to the Company's authorized share repurchase program:

Period		Average Price Paid Per Share			Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program(1)

January 29, 2017 to February 25, 2017	—	$	—	—	$	—
February 26, 2017 to April 1, 2017	132,524	$	1.95	132,524	$	3,670,606
April 2, 2017 to April 29, 2017	86,000	$	1.79	86,000	$	3,516,957

Total	218,524	$	1.89	218,524	$	3,516,957

(1): On July 14, 2016, the Company announced that its board of directors had authorized the repurchase of up to $5.0 million of the Company's common stock over the subsequent 12 months. Purchases will be made in compliance with SEC rules and regulations, subject to market conditions, applicable legal requirements, and other relevant factors. The Company is not obligated to acquire any particular amount of common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

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


	10.1		Offer Letter and Employment Letter, effective as of November 7, 2016, between New York & Company, Inc. and Michelle Pearlman.
	31.1		Certification by the Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated June 2, 2017.
	31.2		Certification by the Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated June 2, 2017.
	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 2, 2017.
	101.INS		XBRL Instance Document.
	101.SCH		XBRL Taxonomy Extension Schema Document.
	101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.
	101.DEF		XBRL Taxonomy Definition Linkbase Document.
	101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
	101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

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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 2, 2017

Exhibit 10.1

October 27, 2016

(revised)

Ms. Michelle Pearlman

Dear Michelle:

It is with a great deal of pleasure that we write this letter to formalize our invitation for you to join us as at New York & Company as our EVP, Chief Marketing and Digital Officer and Corporate Strategy as a member of our Executive Committee. We are pleased and excited at the prospect of having you as our partner.

The following points will outline the terms of our offer:

Position:		EVP, E-Commerce and Chief Marketing Officer

Base Salary:		$650,000

Incentive Compensation :		You will be eligible to participate in our Incentive Compensation (cash bonus program) at a target level of 65% of your annual base salary.

		All Incentive Compensation (IC) payouts are based on New York & Company profit results and can vary from zero (0) to a maximum of double your target level.

		IC is paid three times a year at the end of each bonus period (August for the Spring season and March for both the Fall season and the fiscal year). The payouts are weighted 25%/Spring, 25%/Fall and 50%/ Fiscal Year of target earned each bonus period.

		Your participation in the IC program will begin with the Fall 2016 season. Your bonus eligibility for 2016 will be prorated based upon your date of hire and the

		season in which you begin IC participation. For example, if your start date is in November 2016, you will be eligible for a ½ bonus for Fall 2016 and a ¼ bonus for Fiscal 2016. Of course, all IC payouts are predicated on the Company achieving its profit targets.

		In addition, you will be entitled to a full bonus for Spring 2017, Fall 2017 and Fiscal 2017, of which Spring and Fall 2017 will be guaranteed at $105,625 for each season.

Stock Grants:		You will receive 200,000 SARs in New York & Company common stock, with a grant price equal to the closing price on your start date. This grant will vest over a period of four years at 25%, 25%, 25%, and 25% respectively.

		You will also receive 150,000 shares of Restricted Stock in New York & Company common stock to be granted on your start date. This grant will vest on the third anniversary of the grant.

Paid Time Off:		You will be eligible for 22 PTO days beginning in 2017.

Benefits:		The full extent of coverage is explained in the enclosed Benefit Summary. Some additional highlights as an Executive Committee member are also enclosed.

This offer is based on your representation that you are under no legal impediment to accepting our offer and performing the anticipated services.

As a member of the Executive Committee, upon acceptance of our offer, you are requested to sign the enclosed Employment Agreement, which includes, but is not limited to, the following:

· Six months of severance pay if terminated without cause by the Company prior to the two year anniversary of your start date or twelve months of severance pay if terminated without cause by the Company thereafter, subject to performance of all post employment obligations set forth in the agreement.

· A standard non-solicitation agreement to cover a period of 12 months following separation from the Company.

· A non-compete agreement to cover a period of six months it terminated without cause by the Company prior to the two year anniversary of your start date or twelve months if terminated without cause by the Company thereafter.

Michelle, we are excited at the prospect of your joining us at New York & Company to work with us to build a great future.

Please call me at 212-884-2000 with any questions you may have. We ask that you sign and return one of the attached copies of this letter and one of the attached copies of the Employment Agreement.

Sincerely,		I accept the foregoing offer as of the date above.


/s/ Faeth Bradley
Faeth Bradley		/s/ Michelle Pearlman
Executive Vice President, Human Resources		Michelle Pearlman

Michelle Pearlman

Re: Letter Agreement of Employment

Dear Michelle:

This letter agreement (this “ Agreement ”) sets forth the terms and conditions of your employment, and your employment relationship, with Lerner New York, 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 EVP, E-Commerce and Chief Marketing Officer. 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 your Supervisor, the President, the Chief Executive Officer or the Board of Directors of the Company (or the designee of any of the foregoing).

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 Six Hundred Fifty Thousand and 00/100 Dollars ($650,000) 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 16.25% 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 16.25% of your Base Salary; and for the annual bonus (relating to the Company’s results for the fiscal year) will be 32.5% 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 your 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 six (6) months if employment is terminated prior to the two year anniversary of the start date of employment under this letter and twelve (12) months if terminated thereafter, (“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 the number of weekly payments coinciding with the length of the Severance Period (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 shall 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. 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 Severance Period. If you obtain employment at an annual salary that is the same or higher than your final Base Salary, no further payments will be owed. 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 termination date, as outlined above. For purposes of this Agreement, “ Cause ” means the occurrence of any of the following: (i) your 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 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 a more senior executive 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. 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 . For a period of six (6) months if you resign or your employment is terminated by the Company with Cause prior to the two (2) year anniversary of your start date of employment under this letter and twelve (12) months if you resign or your employment is terminated by the Company with Cause thereafter, 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 moderate 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.

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 15. 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 15 hereof, or (iii) a combination of the two (e.g., by simultaneously seeking arbitration under Section 15 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 12, 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. 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.

18. 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 Delaware, without regard to the choice of law principles thereof that would result in the application of the laws of any other jurisdiction.

19. Survival of Provisions . Sections 8 through 18 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).

20. 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/ Faeth Bradley	Dated:	November 11, 2016
	Faeth Bradley
	Executive Vice President,
	Human Resources


By:	/s/ Michelle Pearlman	Dated:	November 4, 2016
	Michelle Pearlman
	Executive Vice President, E-Commerce and
	Chief Marketing Officer

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Exhibit 31.1

CERTIFICATION

I, Gregory J. Scott, 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 officers 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 2, 2017		/s/ GREGORY J. SCOTT Gregory J. Scott Chief Executive Officer

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Exhibit 31.1

CERTIFICATION

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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 2, 2017		/s/ SHEAMUS TOAL Sheamus Toal Executive Vice President and Chief Financial Officer

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Exhibit 31.2

CERTIFICATION

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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 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 April 29, 2017 (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 2, 2017


		/s/ GREGORY J. SCOTT Gregory J. Scott Chief Executive Officer
		/s/ SHEAMUS TOAL Sheamus Toal Executive Vice President and Chief Financial Officer

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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