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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   For the quarterly period ended June 30, 2002

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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   For the transition period from                      to

Delaware		04-3416255
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

PART I—FINANCIAL INFORMATION
Item 1.		Financial Statements		3
		Condensed Consolidated Balance Sheets as of June 30, 2002 and December 30, 2001		3
		Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2002 and July 1, 2001		4
		Condensed Consolidated Statement of Stockholders’ Equity for the Six Months Ended June 30, 2002		5
		Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2002 and July 1, 2001		6
		Notes To Condensed Consolidated Financial Statements		7
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		20
PART II—OTHER INFORMATION
Item 4.		Submission of Matters to a Vote of Security Holders		20
Item 5.		Other Information		20
Item 6.		Exhibits and Reports on Form 8-K		20
SIGNATURES				21

Item 1.

Financial Statements

		June 30, 2002				December 30, 2001
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	35,855			$	39,518
Marketable securities			30,077				39,238
Accounts receivable, net			13,429				10,171
Inventories			6,796				6,659
Prepaid marketing expenses			2,374				12,539
Other current assets			2,361				1,500
Total current assets			90,892				109,625
Fixed assets, net of accumulated depreciation of $26,957 and $23,492, respectively			19,228				23,948
Intangible assets, net			6,458				7,888
Goodwill, net			5,694				14,599
Prepaid marketing expenses			13,740				14,884
Deposits and other assets			378				354
Total assets		$	136,390			$	171,298
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	23,039			$	20,309
Accrued compensation			2,526				2,608
Accrued marketing expenses			1,770				2,249
Other current liabilities			1,858				2,031
Current portion of capital lease obligations			1,027				1,612
Total current liabilities			30,220				28,809
Capital lease obligations, less current portion			294				638
Stockholders’ equity:
Preferred stock, $.0001 par value:
Authorized shares—10,000,000
Issued and outstanding shares—None			—				—
Common stock, $.0001 par value, stated at amounts paid in:
Authorized shares—250,000,000
Issued and outstanding shares—68,014,301 and 66,731,818 as of June 30, 2002 and December 30, 2001, respectively			744,237				742,949
Deferred stock-based compensation			(1,197	)			(1,400	)
Accumulated deficit			(637,164	)			(599,698	)
Total stockholders’ equity			105,876				141,851
Total liabilities and stockholders’ equity		$	136,390			$	171,298

		Three Months Ended								Six Months Ended
		June 30, 2002				July 1, 2001				June 30, 2002				July 1, 2001
Net sales		$	47,615			$	34,035			$	91,551			$	66,804
Costs and expenses:
Cost of sales			38,350				28,494				73,782				56,260
Fulfillment and order processing(1)			6,497				6,915				13,167				14,683
Marketing and sales(2)			7,589				8,263				16,305				19,205
Technology and content(3)			3,280				4,845				6,810				10,560
General and administrative(4)			2,766				3,481				5,801				7,567
Impairment and restructuring charges			2,450				—				2,450				7,294
Amortization of intangible assets			716				9,681				1,430				19,392
Amortization of stock-based compensation			340				1,572				1,107				4,449
Total costs and expenses			61,988				63,251				120,852				139,410
Operating loss			(14,373	)			(29,216	)			(29,301	)			(72,606	)
Interest income, net			389				1,199				740				2,933
Loss before cumulative effect of change in accounting principle			(13,984	)			(28,017	)			(28,561	)			(69,673	)
Cumulative effect of change in accounting principle			—				(4,121	)			(8,905	)			(4,121	)
Net loss		$	(13,984	)		$	(32,138	)		$	(37,466	)		$	(73,794	)
Basic and diluted loss per share:
Loss before cumulative effect of change in accounting principle		$	(0.21	)		$	(0.43	)		$	(0.43	)		$	(1.06	)
Cumulative effect of change in accounting principle			—				(0.06	)			(0.13	)			(0.06	)
		$	(0.21	)		$	(0.49	)		$	(0.56	)		$	(1.12	)
Weighted average shares outstanding used to compute basic and diluted loss per share			67,590,381				65,940,203				67,318,948				65,705,611

		Common Stock					Deferred Stock-Based Compensation				Accumulated Deficit				Total
		Shares		Amount
Balance at December 30, 2001		66,731,818		$	742,949		$	(1,400	)		$	(599,698	)		$	141,851
Exercise of stock options		995,464			349			—				—				349
Employee stock purchase plan		34,613			35			—				—				35
Issuance of common stock to settle fair market value guarantee		252,406			—			—				—				—
Deferred stock-based compensation, net of cancellations of $237		—			904			(904	)			—				—
Amortization of stock-based compensation		—			—			1,107				—				1,107
Net loss		—			—			—				(37,466	)			(37,466	)