EXHIBIT 10.yy


         THIS  LEASE,  dated as of this 30th day of August,  1986 by and between
Meyers-Thornton Investment Co.("Landlord") and Heilig-Meyers Company ("Tenant").

                              W I T N E S S E T H:

1. Landlord hereby leases to Tenant, subject to the terms and conditions hereof,
the following  described  property  together with all  improvements  thereon and
appurtenances thereunto belonging (the "Premises"):

         TRACT #1: BEGINNING at an iron pipe in the south  right-of-way  line of
         Hwy. #17, said beginning corner being located north 54-1/2 degrees east
         303 feet as measured along the south right-of-way line of Hwy. #17 from
         a highway  right-of-way  stone located at the intersection of the south
         right-of-way of Hwy. #17 and the north  right-of-way line of Hwy. #130;
         thence from said beginning point along the south  right-of-way  line of
         Hwy.  #17 north 54-1/2  degrees  east 125 feet to an iron pipe;  thence
         south 35-1/2 degrees east 200 feet to an iron pipe; thence south 54-1/2
         degrees west 125 feet to an iron pipe; thence north 35-1/2 degrees west
         200 feet to the point of BEGINNING,  and containing 25,000 square feet,
         more or less,  and being that tract of land described in a deed from A.
         Earl  Milliken and wife,  Clara R.  Milliken,  to Eli Kravitz and wife,
         Jeanne C. Kravitz,  dated April 14, 1964, and duly recorded in Book 178
         at Page 387 of the Brunswick County Registry.

         TRACT #2: BEGINNING at Eli Kravitz's  northeast corner which is located
         north  54-1/2  degrees east 428 feet from a  right-of-way  stone at the
         intersection  Hwy.  #130 and U. S. Hwy.  #17 known as the Holden  Beach
         Road;  thence from the beginning  corner runs north 54-1/2 degrees east
         25 feet to an iron pipe;  thence south 35-1/2  degrees east 200 feet to
         an iron pipe;  thence south 54-1/2 degrees west 25 feet to an iron pipe
         and being Eli Kravitz's  southeast corner;  thence north 35-1/2 degrees
         west 200  feet  with  Eli  Kravitz's  line to the  place  and  point of
         BEGINNING,  and being  that tract of land  described  in a deed from A.
         Earl  Milliken and wife,  Clara R.  Milliken,  to Eli Kravitz and wife,
         Jeanne C. Kravitz, dated May 17, 1965, and duly recorded in Book 172 at
         Page 483 of the Brunswick County Registry.

         TRACT #3:  BEGINNING at an iron pipe, the northeast corner of a 25-foot
         parcel of land  previously  conveyed  to Eli  Kravitz  et ux,  the said
         beginning  point also being north 54-1/2 degrees east 453 feet from the
         right-of-way  stone on the north side of the Holden Beach Road;  thence
         north  54-1/2  degrees  east 25 feet to an iron rod,  Eudores  Edwards'
         corner;  thence  south 35-1/2  degrees  east 200 feet to said  Edwards'
         corner;  thence  south  54-1/2  degrees  west 25 feet to Eli  Kravitz's
         corner iron pipe;  thence with Eli Kravitz's  line north 35-1/2 degrees
         west 200 feet to the BEGINNING,  containing  11/100 of an acre, more or
         less,  as surveyed by H. R. Hewett,  Surveyor;  and being that tract of
         land  described  in a deed from A.  Earl  Milliken  and wife,  Clara R.
         Milliken,  to Eli Kravitz and wife,  Jeanne C. Kravitz,  dated June 17,
         1965, and duly recorded in Book 172 at Page 532 of the Brunswick County
         Registry.

         TRACT #4: BEGINNING at an iron stake on the southside of U. S. Hwy. #17
         being 60 feet from  center,  said  beginning  point also being north 54
         degrees 30 minutes east 478 feet from highway right-of-way (marketer or
         stone) in the northern right-of way line of U. S. Hwy. #17; runs thence
         north 54 degrees 30 minutes east 50 feet to an iron stake; thence south
         24 degrees  40 minutes  east 200 feet to an iron  stake;  thence  south
         12.35 feet to an iron stake;  thence  north 35 degrees 30 minutes  west
         197.17 feet to the point of  BEGINNING,  containing  14/100 of an acre,
         and being a part of the  property  described  in a Deed  from  Brightie
         Holden to A. Earl  Milliken  dated March 8, 1962,  and recorded in Book
         162, at Page 158, in the Office of the Register of Deeds for  Brunswick
         County, North Carolina.

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          TRACT #5:  BEGINNING  at an iron  pipe,  said iron  pipe  being  Jerry
          Moore's southeast  corner,  said iron pipe also being located south 35
          degrees 30 minutes east 200 feet from a railroad spike in the southern
          right-of-way  of U. S. Hwy.  #17,  said spike being  located  north 54
          degrees  30  mints  east  303  feet as  measured  along  the  southern
          right-of-way line of U. S. Hwy. #17 from a right-of-way  stone located
          at the  intersection  of the southern  right-of-way  of U. S. Hwy. #17
          with the northern right-of-way of N. C. Hwy. #130; thence running from
          the beginning iron pipe south 35 degrees 30 minutes east 25 feet to an
          iron pipe; thence running north 53 degrees 40 minutes east 187.35 feet
          to an iron pipe;  thence  running  north 35 degrees 30 minutes west 25
          feet to an iron pipe,  this  being  Heilig-Meyers  existing  southeast
          corner; thence running with Heilig-Meyers southern property line south
          53 degrees 40 minutes  west 187.35 feet to the  beginning  iron.  This
          being a portion of the lands  deeded by  William  E.  Benton and wife,
          Gwynella M. Benton,  to Alvin E.  Milliken,  Jr. and being recorded in
          Book 314 at Page 913 of the Brunswick Registry, Southport, N.C.

for a term of fifteen  (15)  years,  commencing  on April 15, 1986 and ending on
April 14, 2001 at 12:00 Midnight.

2. (a) Beginning with the commence date,  Tenant shall pay to Landlord a monthly
rental of Two thousand seven hundred forty eight and 86/100 Dollars  ($2,748.86)
payable in advance on the first day of every month.

(b) The annual  rental shall be changed every three (3) years to an amount equal
to four (4) per cent of  Tenant's  net sales at the  Premises  for the  previous
year.  Previous  year is  defined  as the last  full  fiscal  year  prior to the
anniversary  date of this  Lease.  Net  sales is  defined  as gross  sales  less
returned sales and sales taxes.  Credit service  charges,  insurance and service
sales are not included in "Net Sales".

3.       Tenant agrees that it shall:

(a)      Pay all charges for water, electricity, gas an other utilities;

(b) Keep the interior and exterior of the Premises,  together with all plumbing,
heating, air conditioning,  ventilating,  electrical and mechanical equipment in
good order and repair (including  termite control) at its own expense;  and upon
termination  of this  Lease  surrender  the  same in as good  condition  as when
received,  excepting  depreciation  caused by ordinary  wear and tear and damage
caused by fire, accident, casualty or act of God;

(c) Cause the Premises to be insured against loss by fire with extended coverage
in an amount  sufficient  for  replacement of the Premises in the event of total
loss by facilities of the same size and quality as existed prior to such loss;

(d) Pay when due all ad valorem  real estate taxes and  assessments  against the
Premises.  (All real estate taxes  payable by Tenant shall be prorated as of the
commencement  date and to the  termination  date of this Lease.  Landlord  shall
promptly forward to Tenant all bills received by Landlord for taxes which are to
be paid by Tenant,  and Tenant shall  deliver  promptly  thereafter  to Landlord
receipts  evidencing  payment of all such taxes.  Tenant may file in the name of
the Landlord all such protests or other  instruments and institute and prosecute
proceedings  for the purpose of contesting any of such taxes,  but shall, at the
request of Landlord,  furnish reasonable  assurance to Landlord  indemnifying it
against any loss or  liability  by reason of such  contest.  Landlord  agrees to
cooperate in every  respect in  prosecuting  such  contest.  Tenant shall not be
deemed to be in default  hereunder so long as Tenant shall in good faith contest
such tax.  Nothing herein contained shall be construed to obligate Tenant to pay
any part of any income, estate or inheritance taxes assessed by any governmental
authority against the Landlord, its successor or assigns.);

(e) Tenant agrees, at its own expense,  to promptly comply with all requirements
of any legally constituted public authority,

(f) Not use or permit the Premises to be used  for  any  unlawful  or disorderly
purpose; and

(g) Permit  Landlord to post one "For Rent" sign to and to exhibit the  Premises
to prospective  tenants  during the last six (6) months of the Lease's  duration
provided that  Landlord  shall cause the least  possible  disruption of Tenant's
business.

4.       Tenant shall have the right to:

(a) At its own expense make such  alternations,  changes and improvements to the
Premises  (including  installation  of  signs)  as  Tenant  may deem  necessary;
provided,  however, that no structural alterations to the Premises shall be made
without Landlord's consent;

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(b)  Assign or sublet the  Premises  or any  portion  thereof  without  consent;
provided, however, that no such assignment or subletting shall relieve Tenant of
liability for the performance of the terms and conditions of this Lease; and

(c) Remove any equipment,  improvements or fixtures installed by it, except that
Tenant  may  elect to leave the same,  in which  event  they  shall  become  the
property of Landlord upon termination of this Lease.

5.       Landlord agrees that it shall:

(a) Take no action (except at Tenant's request) which would cause an increase in
the taxes or insurance premiums assessable with respect to the Premises;

(b) Reimburse Tenant for one half of the taxes and insurance  premiums paid with
respect to the Premises; and

(c) Hold  Tenant and its  agents  harmless  from any and all claims and  demands
resulting from acts or omissions of Landlord or its agents.

6.       Landlord covenants, warrants and agrees:

(a) That Landlord has full and complete authority to make this Lease and that so
long as Tenant is not in default  hereunder,  Tenant shall have quiet  peaceable
possession  and enjoyment of the Premises for the duration of this Lease without
hindrance on the part of Landlord or any other parties and that  Landlord  shall
warrant and defend Tenant in such possession against the claim of all parties.

(b) That Landlord  shall deliver to Tenant  physical  possession of the Premises
upon the  commencement  of the term, free and clear of all tenants and occupants
and the  rights  of  either,  and of all  encumbrances  and  violations  of laws
relating to the use and occupancy of the Premises; and

(c) That the Premises and all plumbing, heating, air conditioning,  ventilating,
electrical and mechanical equipment are in good condition and operating order.

7.  Landlord and Tenant  hereby waive all claims  against each other for loss or
damage  caused  by fire or perils  capable  of  coverage  by  standard  fire and
extended coverage  insurance,  regardless of the cause of such damage.  Landlord
and Tenant will cause an  appropriate  waiver of  subrogation  provisions  to be
inserted in their policies of insurance on the Premises.

8. (a) Tenant shall  maintain at its  expense,  throughout  the term,  insurance
covering the building and other  improvements now or hereafter existing upon the
property  against  loss or damage by fire or such  other  risk now or  hereafter
embraced  by the  term  "extended  coverage"  and  by  vandalism  and  malicious
mischief,  in an amount not less than the full insurable  value as determined by
Tenant's  insurer.  As used in this subsection,  the term "full insurable value"
shall mean the actual  replacement  cost,  excluding  foundation  and excavation
costs,  without  deduction for physical  depreciation as such  replacement  cost
shall be adjusted by Tenant's  insurer  every year due to changes in the cost of
construction and other relevant factors.

(b) Tenant shall maintain at its expense, throughout the term, insurance against
loss or liability in connection  with bodily injury,  death,  property damage or
destruction,  occurring  on or about  the  property  or  arising  out of the use
thereof by Tenant or its agents, employees,  officers or invitees,  visitors and
guests, under one ore more policies of comprehensive public liability insurance,
including  insurance against assumed or contractual  liability under this Lease,
having such limits as to each as are  reasonably  required by Landlord from time
to time,  but in any event of not less than Two Million  Five  Hundred  Thousand
Dollars  ($2,500,000.00)  for bodily  injury to or death of all  persons and for
property damage or destruction in anyone occurrence.

(c) Each  policy  referenced  above  shall (a) name as the  insureds  thereunder
Landlord and Tenant  (and,  at  Landlord's  request,  any  mortgagee of Landlord
holding  a  note  secured  by a deed  of  trust  or  other  security  instrument
encumbering the Property);  except that for the policies described in subsection
8(b) Landlord shall be named as an additional  insured (b) by its terms,  not be
cancellable  without at least thirty (30) days prior written  notice to Landlord
(and, at Landlord's request, any mortgagee),  and (c) be issued by an insurer of
recognized  responsibility  licensed to issue such policy in the state where the
Property is located. At least five (5) days before the commencement date, Tenant
shall  deliver to Landlord  each such policy or a  certificate  of insurance for
each such policy,  and at least thirty (30) days before any such policy expires,
Tenant shall deliver to Landlord a replacement policy or certificate therefor.

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(d) General. In the event that, at any time during the term of this Agreement of
Lease, the buildings and improvements  portion of the property (i) are destroyed
or (ii) are damaged to the extent of fifty  percent (50%) or more of their Gross
Leaseable  Area,  then within sixty (60) days after such damage or  destruction,
Tenant shall notify  Landlord of its  excercise of or its desire not to exercise
the hereby  granted  option to terminate  this Agreement of Lease not later than
and  effective on the end of such sixty (60) day period.  Failure to so exercise
such  option  will  obligate  Tenant to  repair  and  restore  the  property  as
hereinafter  provided.  In all other events, Tenant shall repair and restore the
property as hereinafter provided.

(e) Repair and  Rebuilding.  In the event that  Tenant does not  terminate  this
Agreement of Lease as provided  for in Section 8 above and in all other  events,
the Tenant, at its own cost and expense,  shall, subject to the other provisions
of this Section 8, cause the same to be repaired,  replaced or rebuilt as nearly
as  possible to its  condition  immediately  prior to the damage or  destruction
subject to such alterations or changes as Tenant may elect to make in conformity
with  Section 8 hereof  within a period  of time  which,  under  all  prevailing
circumstances,  shall be  reasonable.  If Tenant  shall  exercise  its option to
terminate  this Lease,  this Lease  shall  expire  automatically  as provided in
subsection  8(d) in which event Tenant shall be under no  obligation  to repair,
replace or rebuild the building and improvements on the property but shall clear
away the ruins and leave the Demised  Premises  in a clean,  orderly and sightly
condition.  In the  event  that (i)  Tenant  shall  fail to give  notice  of its
exercise of its option to terminate  within such period or (ii) if the buildings
and  improvements on the Demised  Premises shall not be damaged to the extent of
more than fifty percent (50%) of this Gross  Leaseable  Area, the, Tenant shall,
subject  to the  other  provisions  of this  Section  8,  cause  the  same to be
repaired, replaced or rebuilt at its own cost and expense as herein provided. If
Tenant does not repair, replace or rebuild any damaged or destroyed buildings or
improvements,  all  insurance  proceeds  that are  payable  as a  result  of the
destruction or damage to such buildings or improvements plus the deductible,  if
any,  shall be paid to Landlord and this  Agreement of Lease shall  terminate on
the date of such payment.

9.  (a) If all or  substantially  all of the  Property  or such  portion  of the
improvements  located  on  the  property  as  to  render  the  balance  of  such
improvements  unsuitable in Landlord's and Tenant's reasonable judgement for the
purposes of Tenant is taken by the exercise of any power of eminent domain or is
conveyed to or at the direction of any governmental entity under a threat of any
such  taking,  Landlord  shall be  entitled  to  collect  from  such  condemning
authority  the  entire  amount of any award  made in any such  proceeding  or as
consideration for such conveyance, without deduction therefrom for any leasehold
or other estate held by Tenant under this Lease, except as specifically provided
for  herein  this  Lease  shall  terminate  on the date that  possession  of the
property is taken by such  condemning  authority  and all Rent,  Taxes and other
charges payale hereunder will be apportioned and paid to such date.

(b) Tenant  hereby (a) assigns to  Landlord  all of  Tenant's  right,  title and
interest,  if any,  in any to any such  award (b)  waives  any right that it may
otherwise have in connection with such  condemnation,  against  Landlord or such
condemning  authority,  to any payment  for (i) the value of the  then-unexpired
potrion  of the  Term,  (ii)  leasehold  damages,  and  (iii)  any  damage to or
diminution of the value of Tenant's  leasehold interest hereunder or any portion
of the Property not covered by such Condemnation,  and (c) agrees to execute any
and all  further  documents  which  may be  required  to  facilitate  Landlord's
collection of any and all such awards;  provided,  however, that if Tenant shall
have made  improvements or alterations to the property after the date hereof and
shall have not yet fully  amortized its  expenditures  for such  improvements or
alterations under generally accepted accounting procedures, then Landlord shall,
and hereby does,  assign to Tenant out of any award paid to Landlord a sum equal
to the unamortized portion of any such expenditures  subject, in all events, (i)
to all  mortgagees  of Landlord  having been paid  amounts due to them from such
award  according to their loan documents and also (ii) to their being  available
excess  funds from the award to pay such amounts to Tenant after all amounts due
and owing to Landlord hereunder and its mortgagees are paid from such award.

(c)  Subject  in all  events  to  the  operation  and  effect  of the  foregoing
provisions of this Section,  Tenant may seek a separate  award on account of any
damages or costs incurred by Tenant as a result of such condemnation, so long as
such separate  award in no way  diminishes  any award or payment which  Landlord
would otherwise receive as a result of such Condemnation.

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(d) Partial Condemnation.  If a (i) portion of the Property that is not improved
by buildings or structures as of the date of this Lease or (ii) a portion of the
improvements  portion of the property is so taken so that no termination of this
lease occurs  according to subsection 9(a), then Landlord is entitled to collect
from  such  condemning  authority  the  entire  amount  of any award in any such
proceeding or as  consideration  for any such  conveyance,  this lease shall not
terminate and Landlord  shall,  upon its receipt of such award in  condemnation,
restore said  building  improvements  to as complete a building as is reasonably
and practically  possible in design,  character and quality of the conditions of
the building  immediately  prior to the condemnation;  provided however,  in any
event, Landlord shall not be required to spend for any such repair,  restoration
or  alteration  work an amount in excess of the amounts  received by Landlord as
damage for the taking of such  building  improvements  part of the  property and
Tenant,  at its own cost  and  expense  shall  make all  necessary  repairs  and
alterations to its trade fixtures,  decoration,  signs,  machinery and contents.
Base rent payable  after any such taking will  thereafter be reduced in the same
proportion as the gross  leaseable area of the improvement is reduced by or as a
consequence  of such  condemnation.  There will be no  reduction or abatement of
base rent or any other charges payable by Tenant hereunder in the even Tenant is
only  temporarily  deprived in whole or in part of the use of any portion of the
property, for a period not in excess of ninety (90) days.

(e) Liability Upon Condemnation. If there is a condemnation, Landlord shall have
no liability to Tenant on account of any (a)  interruption of Tenant's  business
upon the property,  (b) diminution in Tenant's  ability to use the property,  or
(c) other injury or damage sustained by Tenant as a result of such condemnation.

(f) Condemnation Proceedings.  Except for any proceeding brought by Tenant under
the  provisions of subsection  9(c),  Landlord  shall be entitled to conduct any
such  condemnation  proceeding and any settlement  thereof free of  interference
from  Tenant,  and Tenant  hereby  waives any right  which it  otherwise  has to
participate therein.

10. In the event Tenant  shall  default in the  performance  of any of the terms
herein  contained  and shall not remedy the same  within  thirty (3o) days after
written  notice  thereof by Landlord (or in the event Tenant  cannot  reasonably
remedy said  default  within  thirty (30) days,  if Tenant shall not commence to
cure  within  said  thirty  (30) day  period and  diligently  pursue the same to
completion) or if Tenant shall be adjudicated a bankrupt or shall make a general
assignment for the benefit of creditors, or if a receiver shall be appointed for
Tenant and not removed within sixty (60) days,  Landlord shall have the right to
re-enter and take possession of the Premises and to remove any property  therein
and to  terminate  this Lease.  In the event of such  termination,  Landlord may
relet the Premises or any part thereof on such terms as it may determine.

11. (a) All notices called for hereunder shall be in writing and shall be deemed
to have been given when sent postage  prepaid by registered  of certified  mail,
return receipt  requested,  to the address stated beside  signature,  or to such
other  address  as the party to receive  such  notice  may  hereafter  direct by
written notice.

(b) This Lease sets forth the entire  agreement  of the  parties  regarding  the
Premises, and there are no promises,  agreements,  conditions or understandings,
either oral or implied,  other than as set forth herein. No subsequent amendment
or  modification  of this Lease shall be binding unless in writing and signed by
both parties.

(c) This Lease  shall be binding  upon and enure to the  benefit of the  parties
hereto, their heirs, successors, assigns, and legal representatives.

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         WITNESS the following signatures and seals:

                                       TENANT:

                                       HELIG-MEYERS COMPANY

                                       By:        /s/Troy A. Peery, Jr.
                                                  ---------------------------
                                                  President

                                       Address:   3228 West Cary Street
                               Richmond, VA 23221

(Corporate Seal)

ATTEST:

[signature illegible]
----------------------------
Secretary


                                       LANDLORD:

                                       MEYERS-THORNTON INVESTMENT CO.

                                       By:          /s/H. Meyers
                                                    --------------------------
                                                    Partner

                                       Address:






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