UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-K/A
                                (AMENDMENT NO. 2)

(Mark One)
  X  Annual report pursuant to Section 13 or 15 (d) of the Securities Exchange
     Act of 1934 [Fee Required]

For the fiscal year ended February 28, 1998 or

     Transition  report  pursuant  to  Section  13 or 15 (d)  of the  Securities
     Exchange Act of 1934 [No Fee Required]

For the transition period from               to

Commission file number 1-8484
                              HEILIG-MEYERS COMPANY
             (Exact name of registrant as specified in its charter)

                  Virginia                          54-0558861
         (State or other jurisdiction of        (I.R.S. Employer
         incorporation or organization)          Identification No.)

12560 West Creek Parkway, Richmond, Virginia           23238
(Address of principal executive offices)          (Zip Code)

Registrant's telephone number, including area code:  (804) 784-7300
Securities registered pursuant to Section 12(b) of the Act:

         Title of each Class           Name of each exchange on which registered
         Common Stock, $2.00                             New York Stock Exchange
         Par Value                                       Pacific Exchange

         Rights to purchase Preferred                    New York Stock Exchange
         Stock, Series A, $10.00                         Pacific Exchange
         Par Value

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

                                      None
                                (Title of Class)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 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 the
filing requirements for at least the past 90 days. Yes X No .
                                                      ---
         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of  Regulation  S-K (Sec.  229.405 of this  chapter)  is not  contained
herein,  and will not be contained,  to the best of registrant's  knowledge,  in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [ ]

         The aggregate  market value of the voting stock held by  non-affiliates
of the registrant as of May 1, 1998 was approximately $748,798,640.

<PAGE>

         This figure was calculated by  multiplying  (i) the closing sales price
of the  registrant's  common stock on the New York Stock Exchange on May 1, 1998
by (ii) the number of shares of the  registrant's  common  stock not held by the
officers or directors of the  registrant or any persons known to the  registrant
to own more than five percent of the outstanding common stock of the registrant.
Such calculation does not constitute an admission or determination that any such
officer,  director or holder of more than five percent of the outstanding common
stock of the registrant is in fact an affiliate of the registrant.

         As of May 1, 1998,  there  were  outstanding  58,812,313  shares of the
registrant's common stock, $2.00 par value.

DOCUMENTS INCORPORATED BY REFERENCE

Portions  of  the  registrant's  Proxy  Statement  for  its  Annual  Meeting  of
Shareholders  scheduled for June 17, 1998,  are  incorporated  by reference into
Part III.


This  Amendment No. 2 on Form 10-K/A (the  "Amendment")  amends and restates the
disclosure  made by the  registrant  in its  Annual  Report on Form 10-K for the
fiscal  year  ended  February  28,  1998 in  response  to "Item 7.  Management's
Discussion and Analysis of Financial Condition and Results of Operations"
                                       2
<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION
and RESULTS of OPERATIONS

RESULTS OF OPERATIONS

         Results  of  operations  expressed  as a  percentage  of  sales  are as
follows:

                                                        Fiscal Year
                                    1998              1997              1996
                                    ----------------------------------------

Other income                        14.3%            18.7%             19.4%
Costs of sales                      67.2             65.3              66.1
Selling, general and
         administrative expense     38.3             39.2              38.3
Interest expense                     3.1              3.6               3.6
Provision for doubtful
         accounts                    8.4              6.0               5.7
Store closing and other
         charges                     1.2                -                 -
Earnings (loss) before
         provision (benefit)
         for income taxes           (3.9)             4.6               5.7
Provision (benefit) for
         income taxes               (1.4)             1.6               2.0
Net earnings (loss)                 (2.6)             3.0               3.7


Profit Improvement Plan
         Home  furnishings   purchases  are  generally  considered   "big-ticket
purchases",  and consumers  typically  utilize  consumer credit to finance these
purchases.  Impacted by an increase in consumer  credit  problems  and  personal
bankruptcies,  the demand for home furnishings in the niche in which the Company
serves  has  been  low over the past  two  fiscal  years.  In  response  to this
difficult  environment,   Heilig-Meyers  Company  (the  "Company")  conducted  a
comprehensive review of its operations,  and developed a Profit Improvement Plan
(the "Plan"),  which was announced on December 17, 1997. The Plan has three main
components:  (1) expense reductions; (2) restructuring of certain aspects of the
business; and (3) Heilig-Meyers store operating initiatives.  The Plan calls for
the closing of certain  Heilig-Meyers  stores,  the downsizing of administrative
and support  facilities,  a reorganization  of the  Heilig-Meyers  private label
credit card program, and the development of operating initiatives to improve the
performance of the  Heilig-Meyers  stores.  Once  completed,  the  store-closing
component  of the Plan will  eliminate  stores that  incurred  pretax  operating
losses before corporate  overhead  allocation of  approximately  $6.5 million in
fiscal 1998.  Management  expects to incur total pretax  operating losses before
corporate overhead allocation of approximately $5.5 million during the first and
second quarters of fiscal 1999 as these stores are closed in an orderly fashion.
The  downsizing  initiatives  completed in the fourth quarter of fiscal 1998 are
expected to reduce general overhead expenses by approximately $8.0 million on an
annual  basis,   starting  in  March  1998.  Management  does  not  believe  the
reorganization  of the private  label  credit card  program will have a material
impact on the Company's financial statements. The Company expects to continue to
offer its customers a private label credit card as a financing option.  However,
as a result of the reorganization of the program, the Company is not expected to
be responsible for servicing these accounts or any related credit losses.
         In the fourth  quarter of fiscal 1998,  the Company  recorded a pre-tax
charge  of  approximately  $25.5  million  related  to  specific  plans to close
approximately 40 Heilig-Meyers  stores,  downsize office and support facilities,
and reorganize the Heilig-Meyers  private label credit card program.  The charge
reduced 1998 net earnings  $16.7 million or $.30 per share.  The pre-tax  charge
includes the following components:  $8.1 million for severance, $7.6 million for
lease and facility exit costs, $7.3 million for fixed asset impairment, and $2.5
million for goodwill impairment.  The Company expects to substantially  complete
the store  closings  and office  downsizing  during the first  quarter of fiscal
1999, and private label credit card program  reorganization  during fiscal 1999.
Accordingly,  the majority of the  reserves  are expected to be utilized  during
fiscal 1999.  The final plan calls for closing  approximately  40 stores  rather
than the  approximately  60 stores  initially  contemplated,  as a result of the
completion of store operations and asset disposition analyses.

                                       3
<PAGE>

         The core-store  operating  initiatives  include a plan to significantly
slow the growth of the Heilig-Meyers  stores over the next year to allow for the
maturation of the recent store additions.  Approximately 20 to 30 stores will be
relocated to higher-traffic  areas. The initiatives also call for adjustments to
merchandising and advertising  strategies based on the remaining markets and the
strengthening of the inventory  management  programs.  While management plans to
slow  the  growth  in  the   Heilig-Meyers   division,   it  expects  to  pursue
opportunities in the Company's other formats. These opportunities will be in the
formats that are less capital  intensive and are  currently  operating at higher
levels of return  than the  Heilig-Meyers  division.  The  Company has adopted a
capital  allocation  process under which all expansion and capital projects will
be subjected to return on investment criteria.
         Pursuant  to these  initiatives,  raw  selling  margins  in the  fourth
quarter of fiscal 1998 were negatively  impacted by approximately  $5.1 million,
or .2% of sales, due to inventory liquidations. Approximately $14.8 million (.7%
of sales) in selling,  general and administrative expenses were incurred related
to asset  write-downs  and other  reserves  in the third and fourth  quarters of
fiscal 1998 (see "Costs and Expenses").
         While the Company anticipates that the majority of the reserves related
to this  Plan will be  utilized  over the first  two  quarters  of fiscal  1999,
amounts related to property and long-term lease  commitments will continue to be
utilized  subsequent to this time period. The overall cash impact of the Plan is
expected  to be positive as cash  received  from the sale of certain  assets and
from income tax benefits is expected to significantly  exceed cash expenditures,
which will consist  primarily  of employee  severance  and payments  under lease
obligations.

Revenues
         Sales for fiscal 1998  compared to the two  previous  periods are shown
below:

                                                          Fiscal Year
                                           1998              1997          1996
                                       ----------------------------------------

Sales (in thousands)                 $2,160,223       $1,342,208     $1,138,506
Percentage increase over
         prior period                      60.9%            17.9%          19.1%
Portion of increase from
         existing (comparable)
         stores                             2.8             (0.6)           0.3
Portion of increase from
         new stores                        58.1             18.5           18.8



         The growth in total sales of the Company  for fiscal  years 1998,  1997
and 1996 is  primarily  attributed  to the  growth in  operating  units  through
acquisitions.  The impact of price  changes on sales  growth over the last three
fiscal years has been insignificant. Expansion of the Heilig-Meyers retail units
during fiscal 1998 and 1997 was primarily in the south central, southwestern and
northwestern United States.
         The Company has four primary retail  formats  targeting a wide range of
consumers.  The  increase  in these  formats  over the past two  years  has been
achieved through  acquisitions.  Sales for the last three fiscal years and store
counts as of February 28, (29), were as follows:


                                            Fiscal Year
                         1998                  1997                 1996
               -----------------------------------------------------------------
                                   (Sales amounts in millions)

                # of           % of   # of           % of    # of          % of
              Stores   Sales  Total  Stores   Sales  Total  Stores  Sales  Total
              ------------------------------------------------------------------
Heilig-Meyers    865  $1,436   66.5    829   $1,262   94.1   716   $1,139  100.0
Rhodes           102     480   22.2    105       78    5.8     -        -      -
The RoomStore     61     112    5.2     10        2    0.1     -        -      -
Mattress
   Discounters   225     132    6.1      -        -      -     -        -      -
               -----------------------------------------------------------------
Total          1,253  $2,160  100.0    944   $1,342  100.0   716   $1,139  100.0
               =================================================================

                                       4
<PAGE>

         On December 31, 1996,  Rhodes,  Inc., a Georgia  Corporation,  became a
wholly-owned  subsidiary of the Company in a transaction accounted for under the
purchase  method.  The Company  operates  these stores under the Rhodes name and
format. These stores are primarily located in metropolitan areas of 15 southern,
midwestern and western states.
         In late February 1997, the Company  acquired certain assets relating to
10 stores  operating  in  central  Texas  under the name  "The  RoomStore"  in a
transaction  accounted for under the purchase  method.  The  RoomStore  operates
under a "rooms  concept,"  displaying  and selling  furniture  in complete  room
packages.  At the end of fiscal 1998,  The RoomStore  operated 61 stores,  18 of
which were acquired from Reliable Inc. in Columbia,  Maryland,  in February 1998
and 3 of which were acquired in January 1998 from John M. Smyth's  Homemakers in
Chicago,  Illinois. The remaining additions to The RoomStore format were through
the ongoing conversion of pre-existing Heilig-Meyers and Rhodes stores.
         In July 1997, the Company acquired all of the outstanding capital stock
of  Mattress  Discounters  Corporation  and  a  related  corporation  ("Mattress
Discounters") with 169 stores in 10 states and Washington,  D.C. The transaction
was  accounted  for under the  purchase  method.  In January  1998,  the Company
acquired all of the outstanding capital stock of Bedding Experts,  Inc., with 54
stores in Chicago,  Illinois,  and the  surrounding  area. The  transaction  was
recorded  as a  pooling-of-interests,  however,  prior  periods  have  not  been
restated as the effect is not considered material to the consolidated  financial
statements.  These stores are included in the Mattress Discounters format in the
table above.
         Other income  decreased to 14.3% of sales for fiscal 1998 from 18.7% of
sales for fiscal 1997.  Other income decreased to 18.7% of sales for fiscal 1997
from 19.4% of sales for fiscal 1996. These decreases are primarily the result of
the effect of Rhodes,  The RoomStore  and Mattress  Discounters  operations,  as
these stores' credit  programs are  maintained by third parties and,  unlike the
Heilig-Meyers  in-house program,  do not produce finance income for the Company.
Excluding the results of Rhodes, The RoomStore and Mattress  Discounters,  other
income decreased .1% of sales for the year ended February 28, 1998,  compared to
the prior fiscal year.
         The Company plans to continue its program of periodically  securitizing
a portion of the installment  accounts receivable portfolio of its Heilig-Meyers
stores.  Proceeds from securitized accounts receivable are generally used by the
Company  to lower debt  levels.  Net  servicing  income  related to  securitized
receivables  that have been sold to third  parties is included in other  income.
The Company offers  third-party  private label credit card programs to customers
of the Rhodes and The RoomStore formats.

Costs and Expenses
         In fiscal 1998, costs of sales increased,  as a percentage of sales, to
67.2%  from  65.3% in fiscal  year  1997.  This  increase  is the  result of the
liquidation of merchandise  associated with  acquisitions,  reduced  leverage on
distribution  and  occupancy  costs,  and higher  occupancy  costs in the larger
markets served by the Rhodes and The RoomStore formats. Raw selling margins were
reduced  by  approximately  $5.1  million,  or .2% of  sales,  due to  inventory
liquidation sales in the Rhodes stores and  Heilig-Meyers  stores in Puerto Rico
(see "Profit Improvement  Plan").  Costs of sales decreased to 65.3% of sales in
fiscal  1997 from  66.1% in fiscal  1996.  The  reduction  in costs of sales was
primarily related to improved raw selling margins in the Heilig-Meyers stores. A
reduction in the use of aggressive,  price-cutting promotions and improvement in
day-to-day  pricing  policies were the primary  contributors  to the raw selling
margin results.  Additionally, as compared to fiscal 1996, the merchandise sales
mix for fiscal 1997 included a higher percentage of furniture and bedding, which
carry higher raw selling margins.
         Selling,  general and  administrative  expenses  decreased  to 38.3% of
sales in fiscal 1998 from 39.2% in fiscal 1997.  The decrease  between years was
the result of leverage gained on sales at the Rhodes, The RoomStore and Mattress
Discounters  formats.  Compared to the prior year period,  the addition of these
formats has resulted in a lower  administrative  cost structure generally due to
the  use  of  third-party  credit  providers.   However,  selling,  general  and
administrative  expenses for fiscal 1998 include charges of approximately  $14.8
million,  or .7% of sales,  related to asset write-downs and other reserves (see
"Profit Improvement Plan").  These charges arise primarily from asset impairment
caused  by  the  conversion  of  existing  stores  to  new  operating   formats,
relocations of  administrative  and support  facilities,  and a more  aggressive
strategy to exit excess real estate.  Also included in this amount are legal and
other transaction costs associated with the Bedding Experts  acquisition,  which
was accounted for as a pooling of interests. Selling, general and administrative
expenses  increased  to 39.2% of sales in fiscal 1997 from 38.3% in fiscal 1996.
The increase in fiscal 1997 was primarily  the result of loss of sales  leverage
on fixed type expenses such as base salaries, data processing,  and depreciation
and amortization,  given the modest decline in comparable store sales during the
fiscal year. Advertising costs in fiscal 1997 were slightly down as a percentage
of sales compared to fiscal 1996.



                                       5
<PAGE>


         Interest  expense  was 3.1% and 3.6% of sales in fiscal  years 1998 and
1997,  respectively.  The  decrease  is mainly due to  leverage  on the sales by
Rhodes, The RoomStore and Mattress Discounters, which were purchased with common
stock.  The Company issued $175 million in public debt during the second quarter
of fiscal  1998.  The Company also issued  approximately  $300 million in public
debt in the last half of fiscal 1997 as part of the financing strategy discussed
below.  Weighted  average  long-term  interest  rates for fiscal  1998  remained
relatively  consistent at 7.8%, compared to 7.7% during the prior year. Weighted
average  short-term  debt increased to $229.2 million in fiscal 1998 from $186.3
million in fiscal 1997.  Weighted average short-term interest rates increased to
6.1% from 5.8% in the prior year.  Interest  expense was 3.6% of sales in fiscal
years 1997 and 1996.  The impact of an increase in  weighted  average  long-term
debt of $93.5 million was offset by lower weighted average interest rates, which
decreased  to 7.7%  from  7.9%  on  long-term  debt  and to  5.8%  from  6.3% on
short-term  debt in fiscal  years 1997 and 1996,  respectively.  The increase in
long-term  debt  levels in both  fiscal  1998 and 1997 was  consistent  with the
Company's plan to structure its debt portfolio to contain a higher percentage of
long-term fixed rate debt in order to minimize the exposure to future short-term
interest rate fluctuations.
         The  provision  for doubtful  accounts was 8.4% of sales in fiscal 1998
compared to 6.0% and 5.7% in fiscal 1997 and 1996, respectively. The increase in
the  provision for doubtful  accounts as a percentage of sales  resulted from an
increase in the installment  portfolio's loss rate and related  write-offs,  the
impact of management's plan to close  approximately 40 stores,  and management's
plan to reorganize  the  Heilig-Meyers  private  label credit card program.  The
overall rise in the portfolio's loss rate is primarily attributed to an increase
in  bankruptcies.  The Company provided an additional $38.0 million for doubtful
bankrupt accounts based on the increase in the total bankrupt account portfolio,
the  mix of  accounts  by  type  of  bankruptcy  filed,  and  recent  collection
experience.  The Company also provided for increased write-offs of approximately
$36.3 million  related to a more  critical  evaluation of accounts for write-off
for  fiscal  1998 and to cover  the  impact of  transferring  the  servicing  of
accounts  from  stores  that are  planned  for  closing in fiscal  1999 to other
Heilig-Meyers  store  locations.  Additionally,  management  has  committed to a
reorganization of the Heilig-Meyers private label credit card program,  which is
offered to certain  customers  under an agreement with a financial  institution.
The Company  provided $15.0 million to cover estimated losses under the recourse
provisions  of  the  agreement  that  will  be  incurred  as  a  result  of  the
reorganization  plan. The items noted above, which total 4.1% of sales in fiscal
1998 were  slightly  offset by the  operations  of Rhodes,  The  RoomStore,  and
Mattress Discounters as these formats primarily use third-party credit providers
and, accordingly, do not record significant provisions for doubtful accounts.
         Total  portfolio  write-offs for fiscal 1998, 1997 and 1996 were $167.5
million, $77.4 million and $66.1 million,  respectively. Of these amounts, $21.2
million,  $6.9  million  and  $8.9  million  were  for  purchased   receivables,
respectively.  Management  believes that the allowance for doubtful  accounts at
February 28, 1998, is adequate.
         Components of the Profit  Improvement  Plan address the increase in the
portfolio loss rate.  Stores that have been targeted for closing have been among
the  poorest  performers  related  to credit  losses.  Management  believes  the
elimination of these stores will positively  impact the Company's  credit losses
going  forward.  The Company plans to more fully  implement  risk-based  scoring
models to provide local  management with better tools in making credit extension
decisions.   These  models  will  also  enable  corporate   management  to  more
efficiently monitor the portfolio. Management believes implementing this plan at
the local and  corporate  levels  will also  positively  impact the  portfolio's
credit losses.

Provision for Income Taxes and Net Earnings
         The income tax  benefit for fiscal  1998 was  calculated  by applying a
percentage of 34.7% compared to fiscal 1997's tax rate of 35.1%. The decrease in
the rate from 1997 is due to the impact of the loss incurred during 1998, offset
by  the  higher  effective  tax  rates  of  the  recently   acquired   operating
subsidiaries.  The higher  rates result from the  carryover  tax  attributes  of
acquired  assets and  liabilities.  The  effective  tax rate for fiscal 1997 was
35.1%  compared to 35.7% for fiscal 1996.  The decrease  between the fiscal 1997
and 1996  effective  tax rate was  primarily  the result of higher  fixed dollar
income tax credits in fiscal 1997 and lower levels of pretax earnings.



                                       6
<PAGE>


     The net loss for fiscal  1998 was $55.1  million  compared  to  earnings of
$40.2 million for fiscal 1997. The decrease  between years was caused  primarily
by the $25.5 million pretax store closing charge and the $89.3 million  increase
in the  provision for doubtful  accounts.  Selling,  general and  administrative
expenses  included $14.8 million related to asset write-downs and other reserves
(see "Profit  Improvement Plan"). The Company's raw selling margins were reduced
by approximately  $5.1 million due to inventory  liquidation sales in the Rhodes
stores and the Heilig-Meyers  stores located in Puerto Rico. The remaining $11.6
million decrease between years is the result of the additional  factors noted in
the  discussion  above.  The net  earnings  for fiscal 1997  decreased  to $40.2
million from $41.5  million for fiscal 1996.  As a percentage  of sales,  profit
margin decreased to 3.0% for fiscal 1997 from 3.7% for fiscal 1996. The decrease
was mostly  attributable  to an  increase as a  percentage  of sales in selling,
general and administrative expenses due to the decline in comparable store sales
and an increase in the provision for doubtful accounts.

LIQUIDITY AND CAPITAL RESOURCES
         The Company  increased its cash position $33.8 million to $48.8 million
at February 28, 1998, from $15.0 million at February 28, 1997, and $16.0 million
at February 29, 1996. As the Company  continued to expand its store base through
acquisitions, cash flows used for investing activities exceeded cash provided by
operating  activities  for  fiscal  years  1998,  1997 and 1996.  The  Company's
operating  activities  typically  use cash  primarily  because  the  significant
majority of customer  sales in the  Heilig-Meyers  format have been  through the
Company's in-house credit program. These uses of cash have been partially offset
by proceeds from the sale of accounts receivable and financing activities.
         Operating  activities  used  cash of  $22.8  million  for  fiscal  1998
compared to cash used of $3.0 million in fiscal 1997 and cash  provided of $92.5
million in fiscal 1996. The Company  traditionally  produces minimal or negative
cash flow from operating  activities  because it extends  in-house credit in its
Heilig-Meyers  stores. The Company's change in accounts receivable and provision
for doubtful  accounts  netted to a $13.5 million  increase in fiscal 1998.  The
Company's  retained interest in securitized  receivables at cost decreased $50.5
million  during  fiscal  1998 as the  result  of the  sale of  certain  of these
investments.  The Company's retained interest in securitized receivables at cost
grew by $198.8  million in fiscal 1997 with  accounts  receivable  decreasing by
$56.2 million.  These changes relate to the sale of $60.5 million of receivables
and the change in classification of certain receivables  transferred to a master
trust during fiscal 1997. The higher level of receivables  transferred relate to
the continued  extension of credit to customers and a reduced amount of accounts
sold  during the year as compared to the  amounts  sold in fiscal  1996.  During
fiscal  1998,  inventory  levels  increased  at a higher  rate than  fiscal 1997
primarily  due to the stocking of line-up  inventory  in the  recently  acquired
stores in order to  support  the  merchandising  plan.  The prior  increases  in
inventory  levels  have  primarily  been the  result of the  opening  of 113 new
Heilig-Meyers  stores in fiscal 1997 and 69 in fiscal 1996.  Continued extension
of credit and related  increases  in customer  accounts  receivable,  as well as
increases in inventory  related to new stores,  are expected to be negative cash
flow  activities  in  future  periods.  However,  as noted  above,  the  Company
periodically  sells  accounts  receivable  to provide a source of positive  cash
flows from operating activities.
         Investing  activities produced negative cash flows of $106.5 million in
fiscal 1998,  $146.5  million in fiscal 1997,  and $95.6 million in fiscal 1996.
Cash used for acquisitions  decreased in 1998 to $40.2 million compared to $58.8
million in fiscal 1997 as a result of a lower level of  acquisition  activity in
fiscal 1998. Cash used for acquisitions was relatively consistent in fiscal 1997
compared to fiscal 1996, at $58.8 million and $51.7 million, respectively.  Cash
used for  additions to property and  equipment  resulted from the opening of new
store  locations and related  support  facilities as well as the  remodeling and
improvement  of  existing  and  acquired  locations.  The  increase  in the cash
required  for  capital  expenditures  in fiscal  1997 was the result of a larger
number  of  prototype   stores  and  support   facilities   completed  or  under
construction  as of  February  28,  1997,  compared to February  29,  1996.  The
increase in the disposals of property and equipment between fiscal 1998 and 1997
is the  result of the  beginning  phases of the  Company's  "Profit  Improvement
Plan."  See  the  discussion  concerning  the  Company's  future  expansion  and
disposition plans under "Profit Improvement Plan" above.

                                       7
<PAGE>

         Financing  activities  provided  a  positive  net cash  flow of  $163.1
million in fiscal  1998 as  compared  to $148.4  million in fiscal 1997 and $8.8
million in fiscal 1996. In June 1997, the Company and a wholly-owned  subsidiary
filed a joint  Registration  Statement  on Form  S-3  with  the  Securities  and
Exchange  Commission relating to up to $400.0 million aggregate principal amount
of  securities.  As of  February  28,  1998,  long-term  notes  payable  with an
aggregate  principal  amount of $175.0  million  have been  issued to the public
under this  registration  statement.  Long-term  notes payable with an aggregate
principal amount of $300.0 million were issued to the public during fiscal 1997.
Proceeds  from the  issues  were  used to retire  long-term  debt  maturing  and
short-term  notes  payable.  All  previously  issued  debt had  been in  private
placements rather than public markets.  As of February 28, 1998, the Company had
a $400.0 million  revolving credit facility in place which expires in July 2000.
This facility  includes  thirteen banks and had $260.0 million  outstanding  and
$140.0  million  unused as of February 28, 1998. The Company also had additional
lines of credit with banks totaling $60.0 million, all of which was unused as of
February 28, 1998.
         As a result of  charges  recorded  in  fiscal  1998  under  the  Profit
Improvement Plan, the Company obtained amendments to its bank debt agreements in
order to maintain covenant  compliance.  In addition,  certain provisions of the
Company's bond indenture  restrict the Company's ability to incur long-term debt
until certain covenant  restrictions are met.  Management  expects to meet these
covenants in the fourth  quarter of fiscal 1999.  However,  management  believes
that the Company has adequate access to capital to finance accounts  receivable,
inventories and other capital needs during these next twelve months.
         Total debt as a percentage of debt and equity was 62.1% at February 28,
1998,  compared  to 56.0%  and  51.9%  at  February  28,  (29),  1997 and  1996,
respectively. The increase in total debt as a percentage of debt and equity from
February 28, 1997 to February 28, 1998 is primarily  attributed  to the issuance
of $175 million of long-term  debt as well as the increase in  short-term  notes
payable during fiscal 1998. The issuance was partially  offset by the payment on
the maturity of long-term  notes.  The fiscal 1998 loss,  which reduced retained
earnings,  also  resulted in the increase of total debt as a percentage  of debt
and equity.  The current  ratio was 1.8X at February 28, 1998,  compared to 1.9X
and 2.4X for February 28, (29), 1997 and 1996, respectively. The decrease in the
current  ratios  from  February  29, 1996 to  February  28,  1997 was  primarily
attributed to an $82.6 million increase in long-term debt due within one year.

OTHER INFORMATION

Year 2000 Issue
         The Year 2000 issue  arises  because  many  computer  programs  use two
digits rather than four to define the  applicable  year.  Using two digits could
result  in  system  failure  or   miscalculations   that  cause  disruptions  of
operations.  In  addition to  computer  systems,  any  equipment  with  embedded
technology that involves date sensitive  functions is at risk if two digits have
been used rather than four.
         During fiscal year 1997,  management  established a team to oversee the
Company's  Year 2000 date  conversion  project.  The  project is composed of the
following stages: 1) assessment of the problem, 2) prioritization of systems, 3)
remediation  activities and 4) compliance  testing.  A plan of corrective action
using both internal and external resources to enhance or replace the systems for
Year  2000  compliance  has been  implemented.  Internal  resources  consist  of
permanent employees of the Company's  Information  Systems  department,  whereas
external  resources  are  composed of contract  programming  personnel  that are
directed  by the  Company's  management.  The team has  continued  to assess the
systems of  subsidiaries  as the Company  has  expanded.  Management  expects to
complete the  remediation  stage for the critical  systems of the  Heilig-Meyers

                                       8
<PAGE>

operations  during  fiscal year 1999.  Completion of  remediation  for all other
subsidiaries'  critical  systems is expected in the first quarter of fiscal year
2000.  The testing stage for the entire Company is planned for the first quarter
of fiscal year 2000.  The Company is in the early stages of making an assessment
of its non-information technology systems (such as telephone and alarm systems).
Managers of such systems have been instructed to contact the  appropriate  third
party vendors to determine their Year 2000 compliance.
         Since the project's  beginning in fiscal 1997, the Company has incurred
approximately  $.6 million in expenses in updating  its  management  information
system to alleviate potential year 2000 problems.  These expenditures  represent
personnel  costs related to software  remediation of major impact  systems.  The
Company had previously  initiated a hardware upgrade plan for desktop  computers
that was  independent  of the Year 2000 issue,  and,  therefore,  most  hardware
upgrades were completed under this plan.
         The  remaining  expenditures  are  expected  to be  approximately  $1.8
million, which will be expensed as incurred. Expected future expenditures can be
broken down as follows:

                                                  Dollars
      Task:                                   (in thousands)        %
      -----                                   --------------      ----
      Auditing Remediation Efforts                      126         7%
      Hardware Remediation                            1,098        61%
      Internal and External Personnel Resources         378        21%
      Software Upgrades/Remediation/Testing             198        11%
                                              --------------      ----
                                      Total           1,800       100%
                                              --------------      ----

         The remaining  cost of the Company's Year 2000 Project and the dates on
which the Company plans to complete the Year 2000  compliance  program are based
on  management's  current  estimates,   which  are  derived  utilizing  numerous
assumptions.  Such  assumptions  include,  but are not limited to, the continued
availability of certain resources,  the readiness of third-parties through their
own remediation  plans, the absence of costs associated with  implementation  of
any  contingency  plan, and the lack of  acquisitions  by the Company  requiring
additional  remediation efforts.  These assumptions are inherently uncertain and
actual events could differ significantly from those anticipated.
         The team is communicating with other companies,  on which the Company's
systems rely and is planning to obtain  compliance  letters from these entities.
There can be no assurance,  however,  that the systems of these other  companies
will be  converted  in a timely  manner,  or that any such failure to convert by
another company would not have an adverse effect on the Company's systems.
         Management  believes the Year 2000 compliance  issue is being addressed
properly by the Company to prevent any material adverse operational or financial
impacts. However, if such enhancements are not completed in a timely manner, the
Year 2000  issue may have a material  adverse  impact on the  operations  of the
Company.  The Company is currently  assessing the  consequences of its Year 2000
project not being  completed  on schedule or its  remediation  efforts not being
successful.  Management is developing  contingency plans to mitigate the effects
of problems experienced by the Company, key vendors or service providers related
to the Year 2000.  Management  is ranking  suppliers  based on how critical each
supplier  is  believed  to  be to  the  Company's  operations.  The  Company  is
requesting a copy of the Year 2000 project plan under which these  suppliers are
operating.  The Company's  Year 2000 project team will review these plans.  If a
supplier is deemed to be critical  and has a project plan that does not meet our
expectations for completion,  the Company will examine all of the  circumstances
and develop a contingency plan. Contingency plans may include the identification
and use of an  alternate  supplier of the  product or service  that is Year 2000
compliant  or the  purchase of  additional  levels of  inventory as a precaution
based on the Company's  expected needs.  Management expects to complete its Year
2000 contingency planning during the first quarter of fiscal 2000.

FORWARD-LOOKING STATEMENTS

     Certain  statements  included  in  this  Annual  Report  are not  based  on
historical facts, but are  forward-looking  statements.  These statements can be
identified  by the  use  of  forward-looking  terminology  such  as  "believes,"

                                       9
<PAGE>

"expects,"  "may," "will," "should," or "anticipates" or the negative thereof or
other  variations  thereon  or  comparable  terminology,  or by  discussions  of
strategy.  See,  e.g.,   "Management's  Discussion  and  Analysis  of  Financial
Condition  and  Results  of  Operations"  and  "Leading  Our  Industry   Through
Innovation,"  "Strengthening Our Core Business,"  "Expanding Via New Formats and
Markets," and "Leveraging Our Strengths." These statements reflect the Company's
reasonable  judgments with respect to future events and are subject to risks and
uncertainties that could cause actual results to differ materially from those in
the forward-looking  statements.  Such risks and uncertainties  include, but are
not  limited  to, the  customer's  willingness,  need and  financial  ability to
purchase home  furnishings  and related items,  the Company's  ability to extend
credit to its customers,  the costs and effectiveness of promotional activities,
the Company's  ability to realize cost savings and other  synergies  from recent
acquisitions,  as well as the Company's  access to, and cost of, capital.  Other
factors  such as changes  in  consumer  debt and  bankruptcy  trends,  tax laws,
recessionary or expansive  trends in the Company's  markets,  the ability of the
Company  to  effectively  correct  the Year  2000  issue,  inflation  rates  and
regulations  and laws which affect the  Company's  ability to do business in its
markets may also impact the outcome of forward-looking statements.


                                       10
<PAGE>

                                     PART IV



                                   SIGNATURES

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

                                             HEILIG-MEYERS COMPANY


       Date:  January 6, 1999             by /s/William C. DeRusha
                                          -------------------------
                                          William C. DeRusha
                                          Chairman of the Board
                                          and Chief Executive Officer




                                       11
<PAGE>

Index to Exhibits


3.       Articles of Incorporation and Bylaws.

         a.       Registrant's Restated Articles of Incorporation, as amended.

         b.       Registrant's  Amended and Restated Bylaws, filed as Exhibit 3a
                  to Registrant's  Quarterly Report on Form 10-Q for the quarter
                  ended  November  30,  1997,  are  incorporated  herein by this
                  reference.

4.       Instruments defining the rights of security holders, including
         indentures.


         a.       The long-term debt as shown on the consolidated  balance sheet
                  of the  Registrant  at  February  28,  1995  includes  various
                  obligations  each  of  which  is  evidenced  by an  instrument
                  authorizing  an  amount  that is less  than  10% of the  total
                  assets  of  the   Registrant   and  its   subsidiaries   on  a
                  consolidated basis. The documents evidencing these obligations
                  are  accordingly  omitted  pursuant to  Regulation  S-K,  Item
                  601(b)(4)(iii)  and will be furnished to the  Commission  upon
                  request.

10.      Contracts

         a.       Three  leases  dated as of  December  27, 1976  between  Hyman
                  Meyers,  Agent, and the Registrant,  filed as Exhibit 10(a)(2)
                  and Exhibit 10(a)(4) - Exhibit 10(a)(5) to Registrant's Annual
                  Report on Form 10-K for the  fiscal  year ended  February  28,
                  1989 (No. 1-8484), are incorporated herein by this reference.

         b.       The following Agreements filed as Exhibits 10(b) through 10(f)
                  to Registrant's Annual Report on Form 10-K for the fiscal year
                  ended February 28, 1991 (No. 1-8484) are  incorporated  herein
                  by this reference:

                  (1)      Lease dated as of January 1, 1980 between Hyman Myers
                           , Agent, and the Registrant.

                  (2)      Lease dated  November 1, 1970 between  Hyman  Meyers,
                           Agent, and the Registrant as successor in interest to
                           Heilig-Meyers Company of Greenville, Inc.

                  (3)      Lease dated April 15,  1971  between  Meyers-Thornton
                           Investment  Co. and the  Registrant  as  successor in
                           interest to Meyers-Thornton Corporation.

                  (4)      Lease  dated June 28,  1971  between  Meyers-Thornton
                           Investment Company and the Registrant as successor in
                           interest to Meyers-Thornton Corporation.

                  (5)      Lease dated December 1, 1972 between  Meyers-Thornton
                           Investment Company and the Registrant.

         c.       The  following  Agreements  (originally  filed as  exhibits to
                  Registrant's  Annual  Report on Form 10-K for the fiscal  year
                  ended March 31, 1982) were refiled as Exhibits 10(c)(1)-(3) to
                  Registrant's  Annual  Report on Form 10-K for the fiscal  year
                  ended  February  28, 1993 (No.  1-8484)  and are  incorporated
                  herein by reference:

                  (1)      Executive Employment and Deferred Compensation
                           Agreement made January 12, 1982 between Hyman
                           Meyers and the Registrant. *

                  (2)      Executive   Employment   and  Deferred   Compensation
                           Agreement made January 12, 1982 between S.
                           Sidney Meyers and the Registrant. *


                                       12
<PAGE>

                  (3)      Executive Employment and Deferred Compensation
                           Agreement made January 12, 1982 between
                           Nathaniel Krumbein and the Registrant. *

         d.       Addendum  to  Lease  and  Contract  dated  February  26,  1973
                  amending   Lease   Contract   dated  April  15,  1971  between
                  Meyers-Thornton Investment Co. and the Company as successor in
                  interest   to   Meyers-Thornton   Corporation   (see   Exhibit
                  10(c)(2)), filed as Exhibit 10(k) to Registrant's Registration
                  Statement on Form S-2 (No. 2-81775) is incorporated  herein by
                  this reference.

         e.       The following Agreements filed as Exhibits 19(a) through 19(c)
                  to Registrant's  Quarterly Report on Form 10-Q for the quarter
                  ended June 30, 1984 (No.  1-8484) are  incorporated  herein by
                  this reference:

                  (1)      Agreement  made as of May 4, 1984 to amend  Executive
                           Employment   and  Deferred   Compensation   Agreement
                           between Hyman Meyers and Registrant.*

                  (2)      Agreement  made as of May 4, 1984 to amend  Executive
                           Employment   and  Deferred   Compensation   Agreement
                           between S. Sidney Meyers and Registrant.*


                  (3)      Agreement  made as of May 4, 1984 to amend  Executive
                           Employment   and  Deferred   Compensation   Agreement
                           between Nathaniel Krumbein and Registrant.*

         f.       Agreement  made as of  September  15, 1989 to amend  Executive
                  Employment and Deferred  Compensation  Agreement between Hyman
                  Meyers  and   Registrant   filed  as  Exhibit   10(i)  to  the
                  Registrant's  Annual  Report on Form 10-K for the fiscal  year
                  ended February 28, 1990 (No. 1-8484) is incorporated herein by
                  this reference.*

         g.       Agreement  made as of  September  15, 1989 to amend  Executive
                  Employment  and  Deferred  Compensation  Agreement  between S.
                  Sidney  Meyers and  Registrant  filed as Exhibit  10(j) to the
                  Registrant's  Annual  Report on Form 10-K for the fiscal  year
                  ended February 28, 1990 (No. 1-8484) is incorporated herein by
                  this reference.*

         h.       Agreement  made as of  September  15, 1989 to amend  Executive
                  Employment  and  Deferred   Compensation   Agreement   between
                  Nathaniel  Krumbein and  Registrant  filed as Exhibit 10(k) to
                  the  Registrant's  Annual  Report on Form 10-K for the  fiscal
                  year  ended  February  28,  1990 (No.  1-8484)is  incorporated
                  herein by this reference.*

         i.       Deferred Compensation Agreement between Robert L. Burrus, Jr.
                  and the Registrant filed as Exhibit 10(o) to the Registrant's
                  Annual Report on Form 10-K for the fiscal year ended February
                  28, 1987(No.1-8484) is incorporated herein by this reference.*

         j.       Amendment   dated   September   15,   1989  to  the   Deferred
                  Compensation  Agreement between Robert L. Burrus,  Jr. and the
                  Registrant  filed  as  Exhibit  10(m) to  Registrant's  Annual
                  Report on Form 10-K for the  fiscal  year ended  February  28,
                  1990(No.1-8484) is incorporated herein by this reference.*

         k.       Deferred Compensation  Agreement between Lawrence N. Smith and
                  the  Registrant  filed as  Exhibit  10(p) to the  Registrant's
                  Annual Report on Form 10-K for the fiscal year ended  February
                  28,  1987  (No.   1-8484)  is  incorporated   herein  by  this
                  reference.*

         l.       Amendment  dated  September 15, 1989 to Deferred  Compensation
                  Agreement  between  Lawrence N. Smith and the Registrant filed
                  as Exhibit  10(o) to  Registrant's  Annual Report on Form 10-K
                  for the fiscal year ended  February  28, 1990 (No.  1-8484) is
                  incorporated herein by this reference.*

                                       13
<PAGE>

         m.       Deferred  Compensation  Agreement  between George A. Thornton,
                  III  and  the  Registrant   filed  as  Exhibit  10(q)  to  the
                  Registrant's  Annual  Report on Form 10-K for the fiscal  year
                  ended February 28, 1987 (No. 1-8484) is incorporated herein by
                  this reference.*

         n.       Amendment  dated  September 15, 1989 to Deferred  Compensation
                  Agreement  between George A. Thornton,  III and the Registrant
                  filed as Exhibit 10(q) to  Registrant's  Annual Report on Form
                  10-K for the fiscal year ended February 28, 1990 (No.  1-8484)
                  is incorporated herein by this reference.*

         o.       Employees  Supplemental  Profit-Sharing and Retirement Savings
                  Plan,  adopted  effective  as of March 1,  1991,  amended  and
                  restated  effective as of March 1, 1994 filed as Exhibit 10(s)
                  to Registrant's Annual Report on Form 10-K for the fiscal year
                  ended February 28, 1997 (No. 1-8484) is incorporated herein by
                  this reference. *

         p.       Registrant's  1983 Stock  Option  Plan,  as amended,  filed as
                  Exhibit C to  Registrant's  Proxy  Statement dated May 9, 1988
                  (No.  1-8484) for its Annual Meeting of  Stockholders  held on
                  June 22, 1988 is incorporated herein by this reference.*

         q.       Amendments to registrant's 1983 Stock Option Plan, as amended,
                  filed as Exhibit 10(t) to  Registrant's  Annual Report on Form
                  10-K for the fiscal year ended February 28, 1990 (No.  1-8484)
                  is incorporated herein by this reference.*

         r.       Registrant's  1990 Stock  Option  Plan,  as amended,  filed as
                  Exhibit 10(t) to  Registrant's  Annual Report on Form 10-K for
                  the  fiscal  year  ended  February  28,  1993 (No.  1-8484) is
                  incorporated herein by this reference.*

         s.       Registrant's  1994 Stock  Option  Plan,  as amended,  filed as
                  Exhibit A to  Registrant's  Proxy  Statement dated May 3, 1994
                  (No.  1-8484) for its Annual Meeting of  Stockholders  held on
                  June 15, 1994 is incorporated herein by this reference.*

         t.       Registrant's   Executive   Severance   Plan  effective  as  of
                  September  15,  1989  filed as Exhibit  10(v) to  Registrant's
                  Annual Report on Form 10-K for the fiscal year ended  February
                  28,  1990  (No.   1-8484)  is  incorporated   herein  by  this
                  reference.*

         u.       Form of Executive Supplemental Retirement Agreement between
                  the Registrant and each of William C. DeRusha and Troy A.
                  Peery, Jr. dated January 1, 1996 filed as Exhibit 10(y) to
                  Registrant's Annual Report on Form 10-K for the fiscal year
                  ended February 28, 1997 (No. 1-8484) is incorporated herein by
                  this reference. *

         v.       Form of Executive  Supplemental  Retirement  Agreement between
                  the  Registrant  and each of James F.  Cerza,  Jr.,  Joseph R.
                  Jenkins  and James R.  Riddle  dated  January 1, 1996 filed as
                  Exhibit 10(z) to  Registrant's  Annual Report on Form 10-K for
                  the  fiscal  year  ended  February  28,  1997 (No.  1-8484) is
                  incorporated herein by this reference. *

         w.       Form of Executive  Supplemental  Retirement  Agreement between
                  the  Registrant  and William J. Dieter  dated  January 1, 1996
                  filed as Exhibit 10(aa) to Registrant's  Annual Report on Form
                  10-K for the fiscal year ended February 28, 1997 (No.  1-8484)
                  is incorporated herein by this reference. *

         x.       Employment  Agreement  made as of  November  1,  1996  between
                  William C. DeRusha and the Registrant  filed as Exhibit 10(bb)
                  to Registrant's Annual Report on Form 10-K for the fiscal year
                  ended February 28, 1997 (No. 1-8484) is incorporated herein by
                  this reference. *

                                       14
<PAGE>

         y.       Employment Agreement made as of November 1, 1996 between Troy
                  A. Peery, Jr. and the Registrant filed as Exhibit 10(cc) to
                  Registrant's Annual Report on Form 10-K for the fiscal year
                  ended February 28, 1997 (No. 1-8484) is incorporated herein by
                  this reference. *

         z.       The following  Agreements filed as Exhibits 10 (ii) through 10
                  (kk) to the Registrant's Annual Report on Form 10-K for fiscal
                  year ended  February  28, 1991 (No.  1-8484) are  incorporated
                  herein by this reference:

                  (1)      Employment Agreement dated April 10, 1991 between
                           Joseph R. Jenkins and the Registrant.*

                  (2)      Employment Agreement dated April 10, 1991 between
                           James C. Cerza, Jr. and the Registrant.*

                  (3)      Employment Agreement dated April 10, 1991 between
                           James R. Riddle and the Registrant.*

         aa.      Carve Out Life Insurance Plan filed as Exhibit 10(ff) to the
                  Registrant's Annual Report on Form 10-K for the fiscal year
                  ended February 28, 1993 (No. 1-8484) is incorporated herein
                  by this reference.*

         bb.      Amendment, dated as of August 18, 1993, to the Heilig-
                  Meyers Company Severance Plan filed as exhibit 10(hh)
                  to the Registrant's  Annual Report on Form 10-K for the fiscal
                  year ended  February  28,  1994 (No.  1-8484) is  incorporated
                  herein by this reference.*

         cc.      1988 Deferred Compensation Agreement for Outside Directors
                  between George A. Thornton, III and the Registrant filed as
                  exhibit 10(ii) to the Registrant's Annual Report on Form
                  10-K for the fiscal year ended February 28, 1994 (No. 1-8484)
                  is incorporated herein by this reference.*

         dd.      Amendment,   dated  as  of  April  18,   1994,   to  the  1986
                  Heilig-Meyers  Company  Deferred  Compensation  Agreement  for
                  Outside  Director  between  George  A.  Thornton,  III and the
                  Registrant filed as exhibit 10(jj) to the Registrant's  Annual
                  Report on Form 10-K for the  fiscal  year ended  February  28,
                  1994 (No. 1-8484) is incorporated herein by this reference.*

         ee.      Amendment,  dated as of April  18,  1994,  to the 1990  Heilig
                  Meyers  Company  Deferred  Compensation  Agreement for Outside
                  Director  between George A.  Thornton,  III and the Registrant
                  filed as exhibit 10(kk) to the  Registrant's  Annual Report on
                  Form 10-K for the fiscal  year ended  February  28,  1994 (No.
                  1-8484) is incorporated herein by this reference.*

         ff.      Letter Agreement, dated August 26, 1993, amending employment
                  agreement between Joseph R. Jenkins and the Registrant filed
                  as exhibit 10(ll) to the Registrant's Annual Report on Form
                  10-K for the fiscal year ended February 28, 1994 (No. 1-8484)
                  is incorporated herein by this reference.*

         gg.      Letter Agreement, dated August 26, 1993, amending employment
                  agreement between James R. Riddle and the Registrant filed as
                  exhibit 10(mm) to the Registrant's Annual Report on Form 10-K
                  for the fiscal year ended February 28, 1994 (No. 1-8484) is
                  incorporated herein by this reference.*

         hh.      Letter Agreement, dated August 26, 1993, amending employment
                  agreement between James F. Cerza and the Registrant filed as
                  exhibit 10(nn) to the Registrant's Annual Report on Form 10-K
                  for the fiscal year ended February 28, 1994 (No. 1-8484) is
                  incorporated herein by this reference.*

                                       15
<PAGE>

         ii.      $400,000,000  Credit  Agreement  dated July 18, 1995 (the
                  "Credit Facility") among MacSaver Financial Services, Inc., as
                  Borrower; the Registrant,  as Guarantor;  and Wachovia Bank of
                  Georgia,  N.A.,  as  Administrative  Agent,  as amended by the
                  First Amendment and Restatement of Credit  Agreement dated May
                  14, 1996 filed as exhibit 10 (pp) to the  Registrant's  Annual
                  Report on Form 10-K for the  fiscal  year ended  February  29,
                  1996 (No. 1-8484) is incorporated herein by this reference.

         jj.      Policy issued by Life Insurance Company of North America,
                  dated March 1, 1989 covering the Rhodes, Inc. Employee
                  Disability Plan, filed with the Commission as Exhibit 10.38
                  to Rhodes, Inc.'s Annual Report on Form 10-K for the year
                  ended February 28, 1991 (No. 0-08966) is incorporated herein
                  by this reference.*

         kk.      Form of Compensation (change in control) Agreement between
                  Irwin L. Lowenstein and Rhodes, Inc., filed with the
                  Commission as Exhibit 10.7 to Rhodes, Inc.'s Annual Report on
                  Form 10-K for the year ended February 28, 1995 (No. 1-09308)
                  is incorporated herein by this reference.*

         ll.      Amended and Restated Merchant Agreement by and between
                  Beneficial National Bank USA, HMY RoomStore, Inc. and Rhodes,
                  Inc., dated as of May 9, 1997 filed as Exhibit 10(qq) to
                  Registrant's Annual Report on Form 10-K for the fiscal year
                  ended February 28, 1997 (No. 1-8484) is incorporated herein by
                  this reference.

         mm.      Compensation Agreement entered into between Rhodes, Inc. and
                  Joel T. Lanham, filed with the Commission as Exhibit 10.10 to
                  Rhodes, Inc.'s. Annual Report on Form 10-K for the year ended
                  February 29, 1996 (No. 1-09308) is incorporated herein by this
                  reference.*

         nn.      Compensation Agreement entered into between Rhodes, Inc. and
                  Joel H. Dugan, filed with the Commission as Exhibit 10.11 to
                  Rhodes, Inc.'s Annual Report on Form 10-K for the year ended
                  February 29, 1996 (No. 1-09308) is incorporated herein by this
                  reference.*

         oo.      First Amendment and Restatement of Credit Agreement dated as
                  of May 14, 1996.

         pp.      Second Amendment and Restatement of Credit Agreement dated as
                  of January 8, 1997.

         qq.      Third Amendment and Restatement of Credit Agreement dated as
                  of May 23, 1997.

         rr.      Amendment No. 4 to the Credit Agreement, dated as of November
                  30, 1997 filed as Exhibit 10a to Registrant's Quarterly Report
                  on Form 10-Q for the quarter ended November 30, 1997, is
                  incorporated herein by this reference.

         ss.      Amendment No. 5 to the Credit Agreement dated as of April 22,
                  1998.

         tt.      Amended and Restated  Guaranty by the Registrant,  dated as of
                  May 9, 1997,  of certain  obligations  under the  Amended  and
                  Restated Merchant  Agreement by and among Beneficial  National
                  Bank USA, HMY RoomStore,  Inc. and Rhodes,  Inc.,  dated as of
                  May 9, 1997,  filed as Exhibit 10a to  Registrant's  Quarterly
                  Report on Form 10-Q for the  quarter  ended May 31,  1997,  is
                  incorporated herein by this reference.

         uu.      Rhodes Inc. Supplemental Employees Pension Plan, effective as
                  of March 1, 1995.


                                       16
<PAGE>

21.               Subsidiaries of Registrant.


23.               Consents of experts and counsel.

                  a.       Consent of Deloitte & Touche LLP to  incorporation by
                           reference of Accountants'  Reports into  Registrant's
                           Registration Statements on Form S-8.

27.               Financial Data Schedule


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



                                       17
<PAGE>