SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K

(Mark One)

[X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934

For the fiscal year ended:  November 2, 2002

                                       OR

[ ]    TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
       EXCHANGE ACT OF 1934

For the transition period from              to
                               ------------    ------------
--------------------------------------------------------------------------------
Commission file number              0-14900
                       ---------------------------

                                    PSS, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                       91-1335798
-------------------------------                 -------------------------------
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                        Identification No.)

     P.O. Box 21093, Seattle, WA                          98111-3093
----------------------------------------        -------------------------------
(Address of principal executive offices)                  (Zip Code)

(Registrant's telephone number, including area code) (206) 901-3790
                                                     --------------

--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report

Securities registered pursuant to Section 12(b) of the Act:  None.

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

                         Common stock - $1.00 par value

                 7-1/8% Convertible Debentures due July 15, 2006

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                 Yes X                  No ___


Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K 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. [ X ]

Aggregate market value of the registrant's voting stock held by nonaffiliates of
the registrant as of January 27, 2003: $90,000.

The  number of shares  of common  stock  outstanding  as of  January  27,  2003:
19,473,728.

Documents incorporated by reference:  None

                                  Page 1 of 29
<PAGE>

                                     PART I

ITEM 1 -    BUSINESS
            --------

PSS, Inc. ("PSS"),  through its wholly owned subsidiary,  PNS Inc. ("PNS"), owns
PSSC Inc. ("PSSC");  together, PSS, PNS and PSSC are referred to collectively as
the  "Company".  At  November  2,  2002,  the  Company,  through  PSSC,  owned a
pass-through  and  participation  certificate  issued by the  Federal  Home Loan
Mortgage  Corporation  backed by whole  pool real  estate  mortgages  ("Mortgage
Certificates"), and as a result, was primarily engaged in the business of owning
mortgages and other liens on and interests in real estate.  At November 2, 2002,
the  Company's  principal  assets  consisted  of  approximately  $1.6 million of
Mortgage Certificates and $414,000 of cash and short-term investments from which
interest  income  is  earned.  The  Mortgage  Certificates  were  financed  with
borrowings,  payable  on  demand,  secured  by the  Mortgage  Certificates  (the
"Mortgage Financing"). The principal obligations of the Company are the Mortgage
Financing  borrowings,  the PNS 12-1/8% Senior  Subordinated  Notes due July 15,
1996 (the "Senior Notes") and the PSS 7-1/8% Convertible Debentures due July 15,
2006 (the "Debentures"), upon which interest expense is incurred.

In June 1988 the Company sold  substantially  all of its assets  comprising  its
entire retail  operations and received in partial payment of the purchase price,
shares of common stock of the purchaser's parent  corporation.  Since 1993, when
the Company sold the balance of the securities  received by it in the 1988 sale,
it has not engaged in any business other than holding  mortgages and other liens
on and interests in real estate,  which have  constituted  its only assets.  For
these  past ten  years  the  Company  has  relied  exclusively  on the  Mortgage
Certificates  it owned as its  source for funds.  Due to the  limited  available
cash,  since  1995  the  Company  has  failed  to pay  the  interest  due on its
Debentures and its Senior Notes, and it failed to pay the outstanding  principal
on its Senior Notes when it became due in July 1996.  With no prospects  for any
change  in the  Company's  business  or in its  ability  to  generate  a greater
ultimate  recovery  for the  holders  of the  Senior  Notes  (the only  class of
creditors who stand to receive any recovery due to their senior position and the
Company's very limited resources),  on January 27, 2003, the Company consummated
the sale of the Mortgage Certificates.  After repaying the Company's margin debt
associated  with the  Mortgage  Certificates  and  setting  aside a  reserve  of
approximately $25,000 (for the purposes of an orderly discharge of miscellaneous
obligations and expenses incurred during the distribution  period),  the Company
will distribute to the holders of its Senior Notes the remaining cash balance of
approximately $569,000.  Following the distribution,  the Company will no longer
have any cash or other  assets  (except for the  limited  expense  reserve)  and
expects to terminate all operations on or prior to February 28, 2003.

The  anticipated  distribution of the net proceeds from the sale of the Mortgage
Certificates  to the  holders  of the  Senior  Notes  will cause them to receive
approximately  11% of the past due principal (with no recovery on account of the
defaulted  interest).  The issuer of the  Debentures  (PSS,  Inc.) has no assets
other than the stock of PNS, Inc. and, accordingly,  stands behind the issuer of
the Senior Notes with respect to its rights to the net proceeds from the sale of
the Mortgage Certificates. Upon completion of the distribution to the holders of
the  Senior  Notes,  no assets  will  remain to allow for any  recovery  for the
holders of the Debentures or the Company's stockholders.

Affiliates of the Company's principal stockholders,  Seacorp, Inc. and Zimmerman
Retailing Group Limited, which own an aggregate of 52% of the outstanding shares
of PSS  Common  Stock,  also hold  $159,000  and  $352,000  principal  amount of
Debentures,  respectively.  Neither Seacorp,  Inc. nor Zimmerman Retailing Group
(nor any of their  respective  affiliates)  will  receive any  distributions  on
account of their holdings.


                                       2
<PAGE>

ITEM 2 -    PROPERTIES
            ----------

None

ITEM 3 -    LEGAL PROCEEDINGS
            -----------------

None.

ITEM 4 -    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
            ---------------------------------------------------

Not applicable.














                                       3
<PAGE>

                                    PART II


ITEM 5 -    MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
            MATTERS
            --------------------------------------------------------------------

MARKET INFORMATION

The Company's common stock is traded  over-the-counter.  High and low prices are
the high and low bids as reported by National Quotation Bureau,  Inc., which are
those  quoted by dealers to each  other,  exclusive  of  markups,  markdowns  or
commissions,  and do not represent actual transactions.  The high and low prices
for the stock during the two years ended November 2, 2002 were reported as being
less than $0.01 per share.

HOLDERS

As of January 1, 2003,  there were 969 holders of record of the Company's common
stock.

DIVIDENDS ON COMMON STOCK

The Company has never paid a dividend and does not anticipate  paying  dividends
for the foreseeable future. The indentures  governing the Company's Senior Notes
and Debentures  contain  covenants  which restrict the ability of the Company to
pay dividends (see Note 5 to the financial statements).















                                       4
<PAGE>

ITEM 6 -    SELECTED FINANCIAL DATA
            -----------------------

The following  selected  financial data should be read in  conjunction  with the
financial statements and related notes and "Management's Discussion and Analysis
of Financial Condition and Results of Operations"  included elsewhere herein. As
explained in Note 2 to the financial  statements,  information is presented on a
liquidation basis.  Presentation of per share information on a liquidation basis
is not considered meaningful and has been omitted.

<TABLE>
<CAPTION>

                                                                                             YEAR ENDED
                                                           NOVEMBER 2,    NOVEMBER 3,     OCTOBER 28,      OCTOBER 30,   OCTOBER 31,
                                                              2002           2001           2000             1999           1998
                                                           -------------------------------------------------------------------------
                                                                                  (thousands of dollars)

STATEMENT OF CHANGES IN NET LIABILITIES DATA:

<S>                                                         <C>            <C>             <C>             <C>             <C>
Decrease (Increase) in Net Liabilities                      $ 48,326       $ (2,290)       $ (2,290)       $ (2,290)       $ (2,265)


                                                           NOVEMBER 2,    NOVEMBER 3,     OCTOBER 28,      OCTOBER 30,   OCTOBER 31,
                                                              2002           2001           2000             1999           1998
                                                           -------------------------------------------------------------------------

STATEMENTS OF NET LIABILITIES DATA:


Total Assets                                                $  2,034       $  2,236        $  2,863        $  3,268        $  3,984

Short-term borrowings                                          1,394          1,615           2,255           2,641           3,270

Long-term debt                                                   569         28,178          28,178          28,178          28,178

Total Liabilities                                              2,034         48,625          46,899          45,014          43,440

Net Liabilities                                             $     --       $(46,326)       $(44,036)       $(41,746)       $(39,456)

</TABLE>



                                       5
<PAGE>

ITEM 7 -    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS
            --------------------------------------------------------------------

Liquidity and Capital Resources
-------------------------------

At November 2, 2002, the Company's  principal  assets consisted of approximately
$1.6  million of  Mortgage  Certificates  and  $414,000  of cash and  short-term
investments  from which interest income is earned and its principal  obligations
consisted of Mortgage  Financing  borrowings,  Senior Notes and Debentures  upon
which interest expense is incurred.

PNS is restricted by terms of its Senior Notes  Indenture from paying  dividends
or making  other  payments to PSS,  except that PNS may pay  dividends to PSS in
amounts  sufficient to enable PSS to meet its obligation on its Debentures  when
due. PNS, like its parent company, has a stockholder's deficit.

At November 2, 2002, the Company had total assets of approximately $2.03 million
and liabilities,  other than the Senior Notes and Debentures  including  accrued
interest and liquidation  costs, of $1.46 million,  thus having a net difference
of  approximately   $569,000  available  for  holders  of  Senior  Notes.  After
distribution  of such proceeds  (subject to a small reserve for  expenses),  all
holders  of the  remaining  obligations  associated  with the  Senior  Notes and
Debentures  in the amounts of $4.69  million and $22.92  million,  respectively,
plus the accured interest thereon will not receive any future proceeds.

In June 1988 the Company sold  substantially  all of its assets  comprising  its
entire retail  operations and received in partial payment of the purchase price,
shares of common stock of the purchaser's parent  corporation.  Since 1993, when
the Company sold the balance of the securities  received by it in the 1988 sale,
it has not engaged in any business other than holding  mortgages and other liens
on and interests in real estate,  which have  constituted  its only assets.  For
these  past ten  years  the  Company  has  relied  exclusively  on the  Mortgage
Certificates  it owned as its  source for funds.  Due to the  limited  available
cash,  since  1995  the  Company  has  failed  to pay  the  interest  due on its
Debentures and its Senior Notes, and it failed to pay the outstanding  principal
on its Senior Notes when it became due in July 1996.  With no prospects  for any
change  in the  Company's  business  or in its  ability  to  generate  a greater
ultimate  recovery  for the  holders  of the  Senior  Notes  (the only  class of
creditors who stand to receive any recovery due to their senior position and the
Company's very limited resources),  on January 27, 2003, the Company consummated
the sale of the Mortgage Certificates.  After repaying the Company's margin debt
associated  with the  Mortgage  Certificates  and  setting  aside a  reserve  of
approximately $25,000 (for the purposes of an orderly discharge of miscellaneous
obligations and expenses incurred during the distribution  period),  the Company
will distribute to the holders of its Senior Notes the remaining cash balance of
approximately $569,000.  Following the distribution,  the Company will no longer
have any cash or other  assets  (except for the  limited  expense  reserve)  and
expects to terminate all operations on or prior to February 28, 2003.

The  anticipated  distribution of the net proceeds from the sale of the Mortgage
Certificates  to the  holders  of the  Senior  Notes  will cause them to receive
approximately  11% of the past due principal (with no recovery on account of the
defaulted  interest).  The issuer of the  Debentures  (PSS,  Inc.) has no assets
other than the stock of PNS, Inc. and, accordingly,  stands behind the issuer of
the Senior Notes with respect to its rights to the net proceeds from the sale of
the Mortgage Certificates. Upon completion of the distribution to the holders of
the  Senior  Notes,  no assets  will  remain to allow for any  recovery  for the
holders of the Debentures or the Company's stockholders.

Affiliates of the Company's principal stockholders,  Seacorp, Inc. and Zimmerman
Retailing Group Limited, which own an aggregate of 52% of the outstanding shares
of PSS  Common  Stock,  also hold  $159,000  and  $352,000  principal  amount of
Debentures,  respectively.  Neither Seacorp,  Inc. nor


                                       6
<PAGE>

Zimmerman Retailing Group (nor any of their respective  affiliates) will receive
any distributions on account of their holdings.

In  anticipation  of the  intended  distribution  to holders of Senior  Notes in
February 2003, the Company revised  estimates  utilized in the liquidation basis
of accounting  such that at November 2, 2002,  Senior Notes and  Debentures  and
related accrued and reserved  interest,  and all other liabilities are stated at
fair value,  which are  determined  as amounts to be  received in  distribution.
Accordingly,  as holders of  Debentures  will not  receive  any  proceeds of the
distribution,  the  Debentures  and  related  interest  are stated at zero.  The
holders  of Senior  Notes will  receive  the  remaining  cash,  which  amount is
considered  the fair value of the Senior  Notes at November  2, 2002.  The $48.6
million  decrease in the previous  carrying value of  liabilities  and resultant
value at November 2, 2002 is included in decrease in reserve for estimated costs
and  interest  during  period  of  liquidation  and  adjustment  to  fair  value
liabilities in the accompanying statement of changes in net liabilities.

Results of Operations
---------------------

      Investment income
      -----------------

Investment  income for each of the years ended  November 2, 2002 and November 3,
2001  decreased  as  compared to the prior year  primarily  as a result of lower
balances of investments in Mortgage Certificates. Investment income for the year
ended  October 28, 2000  increased  as compared to the prior year as a result of
the change in Mortgage Certificates unrealized appreciation offset by a decrease
in  interest   income  due  to  lower   balances  of   investments  in  Mortgage
Certificates.  The weighted  average interest income rate earned on the Mortgage
Certificates  approximated  5.6 %, 7.5% and 7.5% during the years ended November
2, 2002, November 3, 2001, and October 28, 2000, respectively.

Included in investment  income are unrealized  gains (or losses)  resulting from
increases   (or   decreases)   in   unrealized   appreciation   resulting   from
mark-to-market adjustments on Mortgage Certificates.  Increases in market values
offset  decreases  in  unrealized  appreciation  due  to  principal  repayments,
resulting in a net decrease in  unrealized  appreciation  during the years ended
November 2, 2002 and November 3, 2001 of $7,000, and $3,000, respectively, and a
net increase in unrealized  appreciation  during the year ended October 28, 2000
of $1,000.

      Interest expense
      ----------------

Interest  expense for each of the years ended  November 2, 2002 and  November 3,
2001  decreased as compared to the  immediate  preceding  year  primarily due to
lower average balances of Mortgage Financing  borrowings  outstanding during the
periods, as well as lower interest rates.  Interest expense increased during the
year ended October 28, 2000 as compared to the prior year due to higher interest
rates offset by lower average balances of Mortgage Certificate  borrowings.  The
weighted  average  interest  expense  rate  on  Mortgage   Certificate   related
borrowings  approximated 3.0%, 5.8%, and 6.9% during the years ended November 2,
2002, November 3, 2001, and October 28, 2000, respectively.

      Critical Accounting Policies
      ----------------------------

Certain   accounting   policies   related  to   presentation  of  the  Company's
consolidated  financial  statements  on the  liquidation  basis and valuation of
deferred tax assets are considered to be critical accounting policies due to the
estimation processes involved.

As described in Note 2 to the consolidated  financial statements,  the Company's
consolidated  financial  statements  are  presented  on  the  liquidation  basis
utilizing a  liquidation  date of February 28,  2003.  A


                                       7
<PAGE>

summary of  significant  estimates and  judgments are also  described in Note 2.
Estimates  and  judgments  may be subject  to change as facts and  circumstances
change,  and actual costs and expenses may differ  significantly  depending on a
number of factors, particularly the length of the liquidation period.

The Company has provided a full valuation  allowance  related to its substantial
deferred assets.

ITEM 7A. -  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
            ----------------------------------------------------------

The Company's  investment in mortgage  certificates  is a market risk  sensitive
instrument relative primarily to interest rate risk. The investment represents a
pass-through  and  participation  certificate  issued by the  Federal  Home Loan
Mortgage  Corporation in 1990 with an original  principal of  approximately  $11
million and a 2020 maturity date.  This investment was sold in January 2003. The
Company's average investment  approximated $1.8 million,  $2.5 million, and $3.0
million,  during the fiscal years ended November 2, 2002,  November 3, 2001, and
October 28, 2000,  respectively.  The  investment in mortgage  certificates  has
declined  over the past three years due primarily to principal  repayments  from
the  underlying  mortgages  within  the  mortgage  certificate  pool.  Principal
repayments were 19%, 25%, and 11% of the mortgage  investment  during the fiscal
years  ended  November  2,  2002,  November  3,  2001,  and  October  28,  2000,
respectively.  The rate of interest to be earned on the mortgage certificates is
adjustable  based on  general  interest  rate  trends,  with  certain  maximums,
including  limits of 2% for annual rate  changes and interest  rate  maximums of
approximately 13%. Interest rates on the underlying  mortgages are adjusted,  as
applicable,  throughout the year.  The weighted  average  interest  income rates
earned on the mortgage  certificates  approximated  5.6% and 7.5% during  fiscal
2002  and  2001,  respectively,  and the  interest  rate  at  November  2,  2002
approximated 5.0%.

Mortgage certificates are financed with borrowings from an investment bank, such
borrowings  being  secured by the mortgage  certificates  and payable on demand.
Borrowings  bear  interest  at rates  generally  approximating  the three  month
Federal Funds rate plus 25 to 75 basis points.  The Company's average borrowings
approximated  $1.3 million,  $2.0 million,  and $2.5 million,  during the fiscal
years  ended  November  2,  2002,  November  3,  2001,  and  October  28,  2000,
respectively.  The  borrowings  have  declined  over the past  three  years  due
primarily to applying  principal  repayments  from the mortgage  certificates to
repay  borrowings.  The weighted  average interest expense rates incurred on the
borrowings  approximated  3.0%, 5.8% and 6.9% during the years ended November 2,
2002,  November 3, 2001,  and October 28, 2000,  respectively,  and the interest
rate at  November  2, 2002  approximated  3.0%.  Borrowings  at November 2, 2002
approximated $1.4 million.

Generally,  a decline in interest  rates would  result in a decrease in interest
rates  earned on mortgage  certificates  as  underlying  mortgages  would likely
adjust interest rates down,  however such adjustment  would occur throughout the
year. Interest rates paid on borrowings would likely decline on a more immediate
basis.  The  timing of when  interest  income  and  expense  rates are  effected
historically has resulted in a short-term margin  improvement  during periods of
interest  rate  declines.   The  market  price  of  mortgage   certificates  has
historically  increased as interest  rates  decline.  During periods of interest
rate increases, the opposite is the case.

In the  Company's  circumstances,  whereby  its  future  operating  results  and
financial  condition  are  primarily  dependent  upon  actions  to be taken with
respect to the $5.26  million of 12 1/8%  Senior  Notes and $22.92  million of 7
1/8% Debentures,  both of which are in default, and its financial statements are
presented on a liquidation  basis  utilizing a liquidation  date of February 28,
2003,  additional  quantitative and qualitative  disclosures  about market risk,
including  projections of future cash flows,  are not considered  meaningful and
have not been presented.



                                       8
<PAGE>

ITEM 8 -    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
            -------------------------------------------

INDEX TO FINANCIAL STATEMENTS
-----------------------------

         Financial statements                                               Page
         --------------------                                               ----


         Report of Independent Accountants                                    10
         Consolidated Statements of Net Liabilities                           11
         Consolidated Statements in Changes in Net Liabilities                12
         Notes to Financial Statements                                        13

SUPPLEMENTARY FINANCIAL INFORMATION
-----------------------------------

         Selected quarterly financial data (unaudited)                        18
         ---------------------------------------------




                                       9
<PAGE>


                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of PSS, Inc.

We have audited the accompanying  consolidated  statements of net liabilities of
PSS, Inc and its subsidiaries in liquidation as of November 2, 2002 and November
3, 2001, and related  consolidated  statements of changes in net  liabilities in
liquidation  for the years ended November 2, 2002,  November 3, 2001 and October
28, 2000. These financial  statements are the  responsibilities of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free from material misstatement. An audit also includes examining
on a  test  basis,  evidence  supporting  the  amounts  and  disclosures  in the
financial statements. An audit also includes assessing the accounting principles
used and  significant  estimated made by  management,  as well as evaluating the
overall  financial  statement  presentation.  We believe  our  audits  provide a
reasonable basis for our opinion.

As described in Note 2 of the consolidated  financial statements,  as of October
28, 1995, the Company adopted the liquidation basis of accounting.  As described
in Note 1 to the  consolidated  financial  statements,  on January  27, 2003 the
Company consummated the sale of its Mortgage  Certificate and after repaying the
Company's  margin debt  associated  with the  Mortgage  Certificate,  intends to
distribute  the  remaining  cash,  less an estimated  reserves of  approximately
$25,000, to the holders of the Senior Notes and cease all operations on or prior
to February 28, 2003.

In our  opinion,  the  consolidated  financial  statements  referred to in first
paragraph  present  fairly,  in all material  respects,  the net  liabilities in
liquidation of PSS, Inc. and its  subsidiaries  at November 2, 2002 and November
3, 2001, and the changes in their net  liabilities in liquidation  for the years
ended  November 2, 2002,  November 3, 2001 and October 28, 2000,  in  conformity
with accounting  principles  generally  accepted in the United States of America
applied on the basis described in the preceding paragraph.

PricewaterhouseCoopers LLP
Seattle, Washington
January 31, 2003


                                       10
<PAGE>

<TABLE>
<CAPTION>


                                    PSS, INC.
                   CONSOLIDATED STATEMENTS OF NET LIABILITIES
                        (LIQUIDATION BASIS - SEE NOTE 2)
                             (THOUSANDS OF DOLLARS)


                                                                          November 2,      November 3,
                                                                             2002             2001
                                                                         ---------------------------------
<S>                                                                       <C>              <C>
Cash and short-term investments                                           $      414       $      --

Related party receivable                                                          --              56

Investment in mortgage certificates                                            1,606           2,155

Accrued interest receivable                                                       14              25
                                                                         -----------       ----------
             Total Assets                                                      2,034           2,236
                                                                         -----------       ----------

Borrowings under mortgage certificate financing agreement                      1,394           1,615
Accounts payable and accrued liabilities                                          46             160
Reserve for estimated costs during period of liquidation                          25              59
PNS 12 1/8% senior notes                                                         569           5,258
Accrued interest payable on PNS notes                                             --           4,344
Reserve for interest on PNS notes during period of liquidation                    --             636
PSS 7 1/8% debentures                                                             --          22,920
Accrued interest payable on PSS debentures                                        --          11,941
Reserve for interest on PSS debentures during period of liquidation               --           1,629
                                                                         -----------       ----------

        Total Liabilities                                                      2,034          48,562
                                                                         -----------       ----------

        Net Liabilities                                                      $    --        ($46,326)
                                                                         ===========       ==========

</TABLE>

   The accompanying notes are an integral part of these financial statements.



                                       11
<PAGE>

                                    PSS, INC.
              CONSOLIDATED STATEMENTS OF CHANGES IN NET LIABILITIES
                        (LIQUIDATION BASIS - SEE NOTE 2)
                             (THOUSANDS OF DOLLARS)


<TABLE>
<CAPTION>

                                                                                 Year Ended
                                                                                 ----------

                                                                  November      November      October 28,
                                                                  2, 2002       3, 2001           2000
                                                                  ----------------------------------------
<S>                                                              <C>              <C>           <C>
Investment income                                                 $    102             $270     $      217

Interest expense                                                    (2,304)          (2,490)        (2,436)

General and administrative expense                                     (58)             (94)           (70)

Decrease in reserve for estimated costs
  and interest during period of liquidation                          2,256            2,314          2,289

Adjustment to fair value liability (Note 2)                         46,355               --             --

Provision for estimated costs and interest
  during period of liquidation                                        (25)           (2,290)        (2,290)
                                                                 ---------        ---------     ----------
Decrease (Increase) in Net Liabilities                           $ 46,326         $  (2,290)    $   (2,290)
                                                                 =========        =========     ===========

</TABLE>



   The accompanying notes are an integral part of these financial statements.


                                       12
<PAGE>


                                    PSS, INC.

                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - THE COMPANY
--------------------

The consolidated  financial statements of PSS, Inc. ("PSS"),  include its direct
subsidiary  PNS  Inc.   ("PNS")  and  its  subsidiary   PSSC,   Inc.   ("PSSC"),
collectively,  the "Company".  The Company is principally owned by Seacorp, Inc.
("Seacorp") and Zimmerman  Retailing Group Limited ("Zimco").  Seacorp and Zimco
own approximately 41% and 12%, respectively, of the Company's outstanding common
stock, with the remainder publicly owned.

The Company,  through PSSC, owned a pass-through and  participation  certificate
issued by the Federal Home Loan Mortgage  Corporation  backed by whole pool real
estate  mortgages  ("Mortgage  Certificates"),  and as a result,  was  primarily
engaged in the business of owning  mortgages and other liens on and interests in
real  estate.  The  principal  obligations  of the Company  are PSSC  borrowings
secured by Mortgage Certificates, PNS 12-1/8% Senior Subordinated Notes due July
15, 1996 (the "Senior Notes") and PSS 7-1/8% Convertible Debentures due July 15,
2006 (the "Debentures").

In June 1988 the Company sold  substantially  all of its assets  comprising  its
entire retail  operations and received in partial payment of the purchase price,
shares of common stock of the purchaser's parent  corporation.  Since 1993, when
the Company sold the balance of the securities  received by it in the 1988 sale,
it has not engaged in any business other than holding  mortgages and other liens
on and interests in real estate,  which have  constituted  its only assets.  For
these  past ten  years  the  Company  has  relied  exclusively  on the  Mortgage
Certificates  it owned as its  source for funds.  Due to the  limited  available
cash,  since  1995  the  Company  has  failed  to pay  the  interest  due on its
Debentures and its Senior Notes, and it failed to pay the outstanding  principal
on its Senior Notes when it became due in July 1996.  With no prospects  for any
change  in the  Company's  business  or in its  ability  to  generate  a greater
ultimate  recovery  for the  holders  of the  Senior  Notes  (the only  class of
creditors who stand to receive any recovery due to their senior position and the
Company's very limited resources),  on January 27, 2003, the Company consummated
the sale of the Mortgage Certificates.  After repaying the Company's margin debt
associated  with the  Mortgage  Certificates  and  setting  aside a  reserve  of
approximately $25,000 (for the purposes of an orderly discharge of miscellaneous
obligations and expenses incurred during the distribution  period),  the Company
will distribute to the holders of its Senior Notes the remaining cash balance of
approximately $569,000.  Following the distribution,  the Company will no longer
have any cash or other  assets  (except for the  limited  expense  reserve)  and
expects to terminate all operations on or prior to February 28, 2003.

The  anticipated  distribution of the net proceeds from the sale of the Mortgage
Certificates  to the  holders  of the  Senior  Notes  will cause them to receive
approximately  11% of the past due principal (with no recovery on account of the
defaulted  interest).  The issuer of the  Debentures  (PSS,  Inc.) has no assets
other than the stock of PNS, Inc. and, accordingly,  stands behind the issuer of
the Senior Notes with respect to its rights to the net proceeds from the sale of
the Mortgage Certificates. Upon completion of the distribution to the holders of
the  Senior  Notes,  no assets  will  remain to allow for any  recovery  for the
holders of the Debentures or the Company's stockholders.

Affiliates of the Company's principal stockholders,  Seacorp, Inc. and Zimmerman
Retailing Group Limited, which own an aggregate of 52% of the outstanding shares
of PSS  Common  Stock,  also hold  $159,000  and  $352,000  principal  amount of
Debentures,  respectively.  Neither Seacorp,  Inc. nor Zimmerman Retailing Group
(nor any of their  respective  affiliates)  will  receive any  distributions  on
account of their holdings.



                                       13
<PAGE>

NOTE 2 - LIQUIDATION BASIS OF ACCOUNTING
----------------------------------------

Effective  October 28,  1995,  the  Company  adopted  the  liquidation  basis of
accounting for presenting its consolidated  financial statements.  This basis of
accounting is considered appropriate when, among other things,  liquidation of a
company  appears  imminent  and the  net  realizable  value  of its  assets  are
reasonably  determinable.  Under this basis of  accounting,  cash and short term
investments,   investments  in  mortgage   certificates   and  accrued  interest
receivable are stated at their net realizable value, net deferred tax assets are
stated at zero,  liabilities  are stated at contractual  face value with accrued
interest  through  the  liquidation   date,  and  estimated  costs  through  the
liquidation date are provided to the extent reasonably determinable.

The net effect of converting  from the going  concern  basis to the  liquidation
basis of accounting as of October 28, 1995 was an increase in net liabilities of
approximately  $1.7  million,  as a result  of  recording  estimated  costs  and
interest expense to the liquidation date. No adjustment to the reported value of
assets was required.  Under the  liquidation  basis,  the Company accrued future
liabilities  and  estimated  future net revenues  from interest and other income
associated with mortgage certificates to the liquidation date.

A summary of significant  estimates and judgments utilized in preparation of the
consolidated financial statements on a liquidation basis follows:

      o  February  28, 2003 has been  utilized as the  liquidation  date for the
         November 2, 2002 financial  statements.  The Company's then next fiscal
         year end, the Saturday closest to the end of October,  November 2, 2002
         was utilized as the liquidation date for the November 3, 2001 financial
         statements and the November 3, 2001 fiscal year end was utilized as the
         liquidation date for the October 28, 2000 financial statements.

      o  Mortgage  Certificates are stated at estimated market value and related
         interest receivable at face value.

      o  Deferred tax assets relating to net operating loss carry forwards,  net
         of valuation allowance, are stated at zero.

      o  Borrowings  secured by Mortgage  Certificates are stated at face value,
         which approximates market value.

      o  The  reserve  for  estimated  costs  during the  period of  liquidation
         represents  estimates  of  future  costs  to be  incurred  through  the
         liquidation date.

      o  Net estimated interest income to be earned on Mortgage  Certificates in
         excess of interest expense on related borrowings has been considered in
         determining  the  reserve  for  estimated  costs  during  the period of
         liquidation.

      o  Prior to  November 2, 2002,  Senior  Notes and  Debentures  and related
         interest accrued were stated at contractual face value.

      o  Prior to November 2, 2002,  the reserve for interest  during the period
         of liquidation  represents  interest on Senior Notes and Debentures for
         the  period  from  the  date  of  the  Consolidated  Statements  of Net
         Liabilities to the estimated liquidation date, as applicable.

In  anticipation  of the  intended  distribution  to holders of Senior  Notes in
February 2003,  the Company  revised its estimates  utilized in the  liquidation
basis of accounting such that at November 2, 2002, Senior


                                       14
<PAGE>

Notes and Debentures and related  accrued and reserved  interest,  and all other
liabilities  are stated at fair  value,  which are  determined  as amounts to be
received in distribution. Accordingly, as holders of Debentures will not receive
any proceeds of the distribution, the Debentures and related interest are stated
at zero.  The  holders of Senior  Notes will  receive the  remaining  cash after
payment of the borrowings under the mortgage  certificate  financing  agreement,
accounts payable and accrued  liabilities and reserve for estimated costs during
the  period of  liquidation,  such  amount is  considered  the fair value of the
Senior  Notes at November 2, 2002.  The $48.6  million  decrease in the previous
carrying  value of  liabilities  and  resultant  value at  November  2,  2002 is
included in decrease in reserve for estimated  costs and interest  during period
of  liquidation  and adjustment to fair value  liabilities  in the  accompanying
statement of changes in net liabilities.

All of the above  estimates  and judgments may be subject to change as facts and
circumstances   change.   Similarly,   actual  costs  and  expenses  may  differ
significantly  depending on a number of factors,  particularly the length of the
liquidation period.

During the fiscal years ended  November 2, 2002,  November 3, 2001,  and October
28, 2000 the Company's  actual net excess of costs  incurred over net investment
income reasonably approximated the recorded reserve for such years.

Presentation  of per common  share  information  on a  liquidation  basis is not
considered meaningful and has been omitted.

NOTE 3 - SUMMARY OF ACCOUNTING PRINCIPLES
-----------------------------------------

Cash and Short-Term Investments and Related Party Receivables
-------------------------------------------------------------

Cash and short-term investments,  having maturities of three months or less when
purchased,   are  primarily  comprised  of  interest-bearing,   short-term  bank
certificates  of deposits.  During the years ended November 2, 2002 and November
3, 2001,  the  Company,  along with other  companies  affiliated  with  Seacorp,
invested  cash  with  an  affiliate  of  Seacorp,  a  related  party,  in 7  day
certificates of deposit and has received,  together with the other parties whose
funds have been  invested,  its pro rata portion of the interest  earned and has
reported  this amount as a related  party  receivable  in the  Statement  of Net
Liabilities.  At November 2, 2002, the Company had no such investment and future
investments are not anticipated.

Investment in Mortgage Certificates
-----------------------------------

The  investment in Mortgage  Certificates  is recorded at estimated  fair value,
based upon market  prices  obtained from an  investment  bank.  Gains and losses
realized  upon sale of Mortgage  Certificates  and  unrealized  gains and losses
resulting from mark-to-market adjustments are included in investment income.

Accounting Estimates
--------------------

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those amounts.

NOTE 4 - INVESTMENT IN MORTGAGE CERTIFICATES
--------------------------------------------

Mortgage  Certificates  are financed with  borrowings  provided by an investment
bank pursuant to a letter  agreement  (the  "Financing  Agreement").  Borrowings
pursuant to the Financing  Agreement (the


                                       15
<PAGE>

"Mortgage Financing") are secured by the Mortgage Certificates.  In the event of
a decrease in the aggregate market value of the Mortgage  Certificates below the
requirements  of the  Financing  Agreement,  additional  collateral is required.
Principal and interest payments received on Mortgage Certificates are maintained
in an interest earning account and amounts in excess of required  collateral are
released to the Company at its  request.  The  Mortgage  Financing is payable on
demand and  generally  bears  interest  at rates  approximating  the three month
Federal Funds Rate plus 25 to 75 basis points. Mortgage Financing borrowings and
related  interest rates  approximated  $1.4 million and 3.0% at November 2, 2002
and $1.6  million and 3.8% at November 3, 2001,  respectively.  During the years
ended  November 2, 2002 and November 3, 2001,  and October 28, 2000, the average
balance of mortgage related  borrowings  outstanding  approximated $1.3 million,
$2.0 million, and $2.5 million, and the weighted annual average interest expense
rates approximated 3.0%, 5.8%, and 6.9%, respectively.

At November 2, 2002, the interest rate to be earned on the Mortgage Certificates
approximated  5.0%.  The  rate  of  interest  on the  Mortgage  Certificates  is
adjustable  based  on  general  interest  rate  trends  with  certain  maximums,
including  limits of 2% for annual  interest  rate  changes  and  interest  rate
maximums of approximately 13%. The weighted average interest income rates earned
on the Mortgage Certificates approximated 5.6%, 7.5%, and 7.5%, during the years
ended November 2, 2002, November 3, 2001, and October 28, 2000, respectively.

As further described in Note 1, in January 2003, the Company sold its investment
in Mortgage Certificates and repaid related Mortgage Financing borrowings.

NOTE 5 - SUBORDINATED DEBT
--------------------------

Subordinated  debt and related  interest payable through the balance sheet dates
are summarized as follows (thousands of dollars):

                                         November 2,               November 3,
                                            2002                       2001
                                         -----------               -----------

PNS 12-1/8% Senior Notes                   $    569                   $  5,258
Interest payable on Senior Notes                 --                      4,344
                                         -----------               -----------
                                           $    569                   $  9,602
                                         ===========               ===========

PSS 7-1/8% Debentures                      $      0                   $ 22,920
Interest payable on Debentures                    0                     11,941
                                         -----------               -----------
                                           $      0                   $ 34,861
                                         ===========               ===========

In July 1986,  the Company  completed  three public  securities  offerings  (the
"Public  Offerings").  PNS issued $150 million of Senior Notes and PSS sold 3.25
million  shares of its  common  stock and  issued  $150  million  of  Debentures
convertible  to PSS common  stock at $19.68 per share (the  conversion  price is
subject to adjustment  in the case of  dilution).  PSS invested the net proceeds
from its two offerings in PNS, in the form of a  contribution  to capital and an
intercompany  debenture  between PNS and PSS in the amount of $150  million with
substantially   the  same  interest  rate  and  redemption   provisions  as  the
Debentures.  The indenture  governing the Senior Notes  restricts the ability of
PNS and its  subsidiaries  to pay  dividends or make other  payments to PSS. The
Senior Notes indenture permits PNS to pay dividends to PSS in amounts sufficient
to enable PSS to meet its obligations on the Debentures when due,  provided that
no event of default (as defined in the Senior Notes  indenture) has occurred and
is continuing.  PNS, like its parent company,  has a stockholder's  deficit. The
Senior Notes and  Debentures  provide for semiannual  interest  payments and are
unsecured.



                                       16
<PAGE>

The indentures for the Senior Notes and Debentures  contain certain  restrictive
covenants which, among other things,  limit dividends and similar  distributions
to  stockholders,  essentially  prohibit  redemptions  and  retirements  of  the
Company's equity, limit the Company's ability to incur debt, and restrict action
and  agreements  by the  Company  that  would  prohibit  dividends  and  similar
distributions to the Company from its subsidiaries.

NOTE 6 - INCOME TAXES
---------------------

Due to losses for each of the years ended November 2,2002, November 3, 2001, and
October 28, 2000, there was no provision for income taxes recorded.

As of November 2, 2002,  for income tax purposes,  the Company has net operating
loss  carry-forwards  available to offset future taxable income and a portion of
such  carry-forwards  expires at the end of fiscal 2003.  As Company  management
cannot  determine  that it is more likely than not that the Company will receive
the benefit of deferred  tax assets  relating  to these loss  carry-forwards,  a
valuation  allowance  equal to the deferred tax asset has been  established.  If
certain substantial changes in the Company's ownership should occur, there would
be an annual  limitation  on the  amount of the  carry-forwards  which  could be
utilized.

NOTE 7 - STOCKHOLDERS' DEFICIT
------------------------------

The Company's  common stock  consists of 60 million  authorized  shares,  $1 par
value,  19,473,728 shares of which are issued and outstanding.  The Company also
has 10 million authorized shares of preferred stock, $1 par value, none of which
have been issued.  There have been no changes in common stock or additional paid
in capital  since  October 29, 1994.  Effective  October 28, 1995 as a result of
presenting  financial statements on the liquidation basis, changes in components
of stockholders' deficit are not presented.








                                       17
<PAGE>

NOTE 8 - SELECTED FINANCIAL DATA (UNAUDITED)
--------------------------------------------

Selected quarterly financial data are as follows (thousands of dollars):

<TABLE>
<CAPTION>

                                                                Fiscal Quarters Ended
                                                                ---------------------
                                                   November     August 3     May 4,    February 2,
                                                   2, 2002        2002        2002        2002
                                                   ------------------------------------------------
<S>                                                <C>          <C>         <C>         <C>
Decrease in reserve for estimated costs and
interest during period of liquidation              $   581     $  551     $   568      $   556

Adjustment to fair value liability
(Note 2)                                            46,355         --

Provision for estimated costs and interest
during period of liquidation                           (25)        --          --           --

Decrease in Net Liabilities                         46,326         --          --           --

<CAPTION>

                                                                Fiscal Quarters Ended
                                                                ---------------------
                                                   November     July 28,    April 28,  January 27,
                                                   3, 2001        2001        2001        2001
                                                   ------------------------------------------------
<S>                                                <C>          <C>         <C>         <C>
Decrease in reserve for estimated costs and
interest during period of liquidation              $     618    $  556     $   556      $   565

Provision for estimated costs and interest
during period of liquidation                          (2,290)       --          --           --

Increase in Net Liabilities                           (2,290)       --          --           --

</TABLE>

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE
         ---------------------------------------------------------------

None.



                                       18
<PAGE>

                                    PART III


ITEM 10 -         DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
                  --------------------------------------------------

The  following  table  sets forth  certain  information  concerning  each of the
directors and executive officers of the Company.  All directors will serve until
the next Annual Meeting of  Shareholders  and until his respective  successor is
elected or appointed. Each director of the Company is also a director of PNS.

                                       Present Principal
Name and Position                      Occupation or Employment
With the Company              Age      and Five Year Employment History

Mark Todes                    47        President  and  Director  of the Company
President and Director                  for more than 5 years. President of City
                                        Realty,  Inc.  (a  real  estate  holding
                                        company)  and   President  of  200  West
                                        Holdings,  Ltd.  (a  subsidiary  of City
                                        Realty)  for  more  than 5  years.  Vice
                                        President  of  Seacorp  for more  than 5
                                        years.

Gerald P.  Nathanson          67        Director  of the Company  since  October
Director                                1986  and a  private  investor  for more
                                        than 5 years.

Carite L. Torpey              54        Vice President,  Secretary and Treasurer
Vice President, Secretary               of the  Company  for more  than 5 years.
and Treasurer                           Vice  President of TG Services,  Inc. (a
                                        private  investment  company)  for  more
                                        than 5 years.

ITEM 11 - EXECUTIVE COMPENSATION
          ----------------------

Compensation of Directors and Executive Officers
------------------------------------------------

The Company has no employees.  There are currently no  arrangements  under which
any officer or director of the Company will receive  compensation for serving as
such; however, other arrangements may be made in the future.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
          --------------------------------------------------------------

The following  table sets forth, as of January 1, 2003,  information  concerning
the beneficial ownership of the common stock of the Company by (i) persons known
by the Company to own beneficially more than 5% of its outstanding common stock,
(ii) each of the  directors of the Company and (iii) all directors and executive
officers of the Company as a group.  Except as set forth in the footnotes to the
table, the stockholders  have sole voting and investment power over such shares.
Unless otherwise specified,  the address for all directors is the address of the
Company's executive offices.  The address for Messrs.  Julius and Eddie Trump is
the address set forth below for Seacorp.  The address for Mr. Christopher Podoll
is the address set forth below for Zimmerman Retailing Group Limited.



                                       19
<PAGE>

                                          Amount and Nature
                                            of Beneficial
Name                                        Ownership           Percent of Class
----                                      ------------------    ----------------
Christopher Podoll (a)                       2,391,079               12.3%

Zimmerman Retailing Group Limited (a)        2,391,079               12.3%
P.O. Box 948
Route 2, Pleasant Plain Road
Fairfield, IA 52556

Seacorp, Inc. (b)                            8,014,705               41.1%
P.O. Box 2573
Seattle, WA 98111

Eddie Trump (b)                              8,014,705               41.1%

Julius Trump (b)                             8,014,705               41.1%

All Directors and Executive Officers                 0                   0%
as a Group (3 persons)


(a)      According to the Schedule  13D, as amended (the "Zimco  Amended  13D"),
         filed with the Securities and Exchange  Commission (the  "Commission"),
         Zimco is an Iowa limited partnership, the sole general partner of which
         is Soma 2 L.P., a Delaware limited  partnership  ("Soma 2"). Soma 2 has
         as its general partner ZRG Co., Inc., a Delaware  corporation  ("ZRG"),
         for which Mr. Podoll serves as the sole executive officer and director.
         Mr. Podoll is a manager of investments of the William Zimmerman family.
         Amounts  include 8,079 shares  issuable  upon  conversion of Debentures
         beneficially  owned by Zimco.  Amounts do not include the  ownership of
         6,000 shares and 3,810 shares  issuable  upon  conversion of Debentures
         owned by the Surya  Financial Inc.  Retirement  Plan, a retirement plan
         for the  benefit of  various  employees  of Surya  Financial  Inc.,  an
         affiliate of Zimco.

(b)      According to the Schedule 13D, as amended, filed with the Commission by
         Julius Trump, Eddie Trump and Seacorp,  Seacorp is, and Messrs.  Julius
         and  Eddie  Trump  may be  deemed to be,  the  beneficial  owner(s)  of
         8,014,705  shares of common stock.  Such amount  includes  8,079 shares
         issuable  upon  conversion  of  Debentures  beneficially  owned  by  an
         affiliate of Seacorp.  As set forth in the Schedule  13D,  Seacorp is a
         Delaware  corporation  and does not presently  have any business  other
         than the ownership of shares of common stock of the Company. Seacorp is
         indirectly controlled by Messrs. Julius and Eddie Trump.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
          ----------------------------------------------

During the years ended November 2, 2002 and November 3, 2001, the Company, along
with other companies affiliated with Seacorp, invested cash with an affiliate of
Seacorp,  a related party,  in 7 day  certificates  of deposit and has received,
together  with the other parties  whose funds have been  invested,  its pro rata
portion of the interest  earned and has reported  this amount as a related party
receivable in the Statement of Net Liabilities.



                                       20
<PAGE>

ITEM 14 - CONTROLS AND PROCEDURES
          -----------------------

(a)      The Company's Chief Executive  Officer and Chief Financial Officer have
         evaluated  the  Company's  disclosure  controls  and  procedures  as of
         January 31, 2003, and they concluded that these controls and procedures
         are effective.

(b)      There are no  significant  changes  in  internal  controls  or in other
         factors that could  significantly  affect these controls  subsequent to
         January 31, 2003.



                                       21
<PAGE>

                                    PART IV

                                OTHER INFORMATION

ITEM 15 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
          ------------------------------------------------------

FORM 8-K

(a)     See the section entitled "Index to Financial Statements" appearing under
        Item 8 of this Annual Report on Form 10-K.

(b)     Not applicable

(c)     Exhibits:

<TABLE>
<CAPTION>

<S>     <C>          <C>                                           <C>
        3.1          Restated Certificate of Incorporation of      Incorporated by referenced from Exhibit 3.1 to the
                     the Registrant                                Registration Statement on Form S-1 (File No. 33-5560)
                                                                   of the Company (the  "Registration Statement").

        3.2          Certificate of Amendment of Certificate       Incorporated by reference from Exhibit 3.2 to the
                     of Incorporation of the Registrant            Registration Statement.

        3.3          Certificate of Amendment of Certificate       Incorporated by reference from Exhibit 3.1 to
                     of Incorporation of the Registrant            Quarterly Report on Form 10-Q for the quarter ended
                                                                   July 30, 1988.

        3.4          Certificate of Amendment of Certificate       Incorporated by reference from Exhibit 3.4 to the
                     of Incorporation of the Registrant            Annual Report on Form 10-K for the  year ended
                                                                   October 31, 1992.

        3.5          By-Laws of the Registrant                     Incorporated by reference from Exhibit 3.3  to the
                                                                   Registration Statement.

        4.1          Indenture between the Registrant Inc.         Incorporated by reference from Exhibit 4.1 to the
                     and United States Trust Company of New        Registration Statement.
                     York, as Trustee, relating to the 7-1/8%
                     Convertible Debentures due July 15, 2006
                     (including the form of Convertible
                     Debenture).

        4.2          First Supplemental Indenture between the      Incorporated by reference from Exhibit 4.1 to the
                     Registrant and United States Trust            Quarterly Report on Form 10-Q for quarter ended April
                     Company of New York as Trustee, relating      30, 1988.
                     to the 7-1/8% Convertible Debentures due
                     July 15, 2006.



                                       22
<PAGE>

        4.3          Indenture between PNS Inc. and Norwest        Incorporated by reference from Exhibit 4.1 to the
                     Bank Minneapolis, National Association        Registration Statement on Form S-1 (File No. 33-5591)
                     as Trustee, relating to the 12-1/8%           of PNS Inc.
                     Senior   Subordinated   Notes  due
                     July  15,   1996 (including the form of
                     Senior Subordinated Note.

        4.4          First Supplemental Indenture between PNS      Incorporated by reference from Exhibit 4.2 to the
                     Inc., and Norwest Bank Minnesota,             Quarterly Report on Form 10-Q for the quarter ended
                     National Association as Trustee,              April 30, 1988.
                     relating to the 12-1/8% Senior
                     Subordinated Notes due July 15, 1996.

        10.5         Letter Agreement dated February 9, 1990       Incorporated by reference from Exhibit (i) to
                     by and among PSSC Inc. and Bear Stearns       Quarterly Report on form 10-Q for the quarter ended
                     & Co., Inc. for the purchase and the          February 3, 1990.
                     financing of adjustable-rate mortgages.

        22.1         Subsidiaries of the Registrant.               Incorporated by reference from Exhibit 22 to the
                                                                   Annual Report on Form 10-K for the year ended October
                                                                   31, 1992.
<CAPTION>


        <S>          <C>
        99.1         Certification pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the
                     Sabanes-Oxley Act of 2002.

        99.2         Certification pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the
                     Sabanes-Oxley Act of 2002.
</TABLE>



                                       23
<PAGE>


                                   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.

                                                 PSS, INC.
                                                 (Registrant)

Date:  January 31, 2003                          By: /s/ MARK TODES
                                                     ---------------------------
                                                     Mark Todes, President and
                                                     Director





                                       24
<PAGE>


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.

Date                           Title                       Signature
----                           -----                       ---------

January 31, 2003               Director                    /s/ GERALD NATHANSON
                                                           --------------------
                                                           Gerald Nathanson


January 31, 2003               Director                    /s/ MARK TODES
                                                           --------------
                                                           Mark Todes












                                       25
<PAGE>



                                 CERTIFICATIONS

I, Mark Todes,  President and Chief  Executive  Officer of the Company,  certify
that:

1)     I have  reviewed  this  Annual  Report  on Form  10-K of PSS,  Inc.  (the
       "Report");

2)     Based on my knowledge,  this Report does not contain any untrue statement
       of a material fact or omit to state a material fact necessary to make the
       statements  made,  in  light  of  the  circumstances   under  which  such
       statements  were made, not misleading  with respect to the period covered
       by this Report;

3)     Based on my knowledge,  the  financial  statements,  and other  financial
       information  included  in this  Report,  fairly  present in all  material
       respects  the  financial  condition  and  results  of  operations  of the
       registrant as of, and for, the periods presented in this Report;

4)     The  registrant's  other  certifying  officers and I are  responsible for
       establishing  and  maintaining  disclosure  controls and  procedures  (as
       defined in Exchange Act Rules 13a-14 and 15d-14) for the  registrant  and
       have:

       a)   designed  such  disclosure  controls and  procedures  to ensure that
            material  information  relating  to the  registrant,  including  its
            consolidated  subsidiaries,  is made  known to us by  others  within
            those entities,  particularly during the period in which this Report
            is being prepared;

       b)   evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures as of a date within 90 days prior to the filing date
            of this Report (the "Evaluation Date"); and

       c)   presented in this Report our conclusions  about the effectiveness of
            the disclosure controls and procedures based on our evaluation as of
            the Evaluation Date;

5)     The registrant's other certifying officers and I have disclosed, based on
       our most recent  evaluation,  to the registrant's  auditors and the audit
       committee of registrant's  board of directors (or persons  performing the
       equivalent functions):

       a)   all significant  deficiencies in the design or operation of internal
            controls which could adversely  affect the  registrant's  ability to
            record,  process,  summarize  and  report  financial  data  and have
            identified for the registrant's  auditors any material weaknesses in
            internal controls; and

       b)   any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal controls; and

6)     The registrant's  other certifying  officers and I have indicated in this
       Report whether or not there were significant changes in internal controls
       or in other factors that could  significantly  affect  internal  controls
       subsequent  to the  date of our most  recent  evaluation,  including  any
       corrective  actions with regard to significant  deficiencies and material
       weaknesses.

                                                  By: /s/ MARK TODES
                                                      --------------------------
                                                      Mark Todes
                                                      President and Chief
                                                      Executive Officer

January 31, 2003


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<PAGE>


                                 CERTIFICATIONS

I, Carite  Torpey,  Vice President and Chief  Financial  Officer of the Company,
certify that:

1)     I have  reviewed  this  Annual  Report  on Form  10-K of PSS,  Inc.  (the
       "Report");

2)     Based on my knowledge,  this Report does not contain any untrue statement
       of a material fact or omit to state a material fact necessary to make the
       statements  made,  in  light  of  the  circumstances   under  which  such
       statements  were made, not misleading  with respect to the period covered
       by this Report;

3)     Based on my knowledge,  the  financial  statements,  and other  financial
       information  included  in this  Report,  fairly  present in all  material
       respects  the  financial  condition  and  results  of  operations  of the
       registrant as of, and for, the periods presented in this Report;

4)     The  registrant's  other  certifying  officers and I are  responsible for
       establishing  and  maintaining  disclosure  controls and  procedures  (as
       defined in Exchange Act Rules 13a-14 and 15d-14) for the  registrant  and
       have:

       a)   designed  such  disclosure  controls and  procedures  to ensure that
            material  information  relating  to the  registrant,  including  its
            consolidated  subsidiaries,  is made  known to us by  others  within
            those entities,  particularly during the period in which this Report
            is being prepared;

       b)   evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures as of a date within 90 days prior to the filing date
            of this Report (the "Evaluation Date"); and

       c)   presented in this Report our conclusions  about the effectiveness of
            the disclosure controls and procedures based on our evaluation as of
            the Evaluation Date;

5)     The registrant's other certifying officers and I have disclosed, based on
       our most recent  evaluation,  to the registrant's  auditors and the audit
       committee of registrant's  board of directors (or persons  performing the
       equivalent functions):

       a)   all significant  deficiencies in the design or operation of internal
            controls which could adversely  affect the  registrant's  ability to
            record,  process,  summarize  and  report  financial  data  and have
            identified for the registrant's  auditors any material weaknesses in
            internal controls; and

       b)   any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal controls; and

6)     The registrant's  other certifying  officers and I have indicated in this
       Report whether or not there were significant changes in internal controls
       or in other factors that could  significantly  affect  internal  controls
       subsequent  to the  date of our most  recent  evaluation,  including  any
       corrective  actions with regard to significant  deficiencies and material
       weaknesses.

                                                 By: /s/ CARITE TORPEY
                                                     ---------------------------
                                                     Carite Torpey
                                                     Vice President and Chief
                                                     Financial Officer

January 31, 2003



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