UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 1O-Q

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

                  For the quarterly period ended November 1,
1997

                                       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: 1-10089

                           FAMILY BARGAIN CORPORATION
             (Exact name of registrant as specified in its charter)

         Delaware                                               51-0299573
         (State or other jurisdiction of                     (I.R.S. Employer
         incorporation or organization)                     Identification No.)


         4000 Ruffin Road, San Diego, CA                           92123
         (Address of principal executive office)                (Zip Code)

                                 (619) 627-1800
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. [X] YES [ ] NO

The number of shares  outstanding  of the  registrant's  of common stock,  as of
December 8, 1997, was 4,929,822 shares.

<PAGE> 2
<TABLE>
                           FAMILY BARGAIN CORPORATION

            FORM 10-Q FOR THE QUARTERLY PERIOD ENDED NOVEMBER 1, 1997

                                      INDEX
<CAPTION>
<S>      <C>

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

         Family Bargain Corporation and Subsidiaries Consolidated Balance
         Sheets as of November 1, 1997 (Unaudited) and February 1, 19........F-1

         Family  Bargain  Corporation  and  Subsidiaries   Consolidated
         Statements  of Operations  (Unaudited)  for the 13 weeks ended
         November 1, 1997 and October 26, 1996...............................F-3

         Family  Bargain  Corporation  and  Subsidiaries   Consolidated
         Statements  of Operations  (Unaudited)  for the 39 weeks ended
         November 1, 1997 and October 26, 1996...............................F-4

         Family  Bargain  Corporation  and  Subsidiaries   Consolidated
         Statements  of Cash Flows  (Unaudited)  for the 39 weeks ended
         November 1, 1997 and October 26, 1996...............................F-5

         Family Bargain Corporation and Subsidiaries Notes to Consolidated
         Financial Statements (Unaudited) ...................................F-7

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations ................................................3

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.....................................................8
Item 2.  Changes in Securities.................................................8
Item 3.  Defaults Upon Senior Securities.......................................8
Item 4.  Submission of Matters to a Vote of Security Holders...................8
Item 5.  Other Information.....................................................8
Item 6.  Exhibits and Reports on Form 8-K .....................................8
         Signatures        ....................................................9
         Exhibit Index     ...................................................10
</TABLE>
                                       2
<PAGE> F-1

                                     PART I

Item 1. Financial Statements
<TABLE>

                   FAMILY BARGAIN CORPORATION AND SUBSIDIARIES
                           Consolidated Balance Sheets
                        (in thousands, except share data)

<CAPTION>
                                               November 1,           February 1,
                                                  1997                  1997
                                                  ----                  ----
                                               (Unaudited)
          Assets
<S>                                            <C>                     <C>

Current assets:
  Cash                                         $   3,319              $   3,261
  Merchandise inventories                         43,413                 29,118
  Prepaid expenses                                 1,174                    505
                                               ---------              ---------

    Total current assets                          47,906                 32,884

Leasehold improvements and equipment, net         14,229                 10,714
Other assets, net                                  3,440                  2,757

Excess of cost over net assets  acquired,
less  accumulated  amortization  of
$6,533 and $5,332 at November 1, 1997 and
February 1, 1997, respectively                    33,111                 34,314
                                                --------               --------

          Total assets                          $ 98,686               $ 80,669
                                                ========               ========
</TABLE>
                                   (continued)
                                      F-1
<PAGE> F-2
<TABLE>
                   FAMILY BARGAIN CORPORATION AND SUBSIDIARIES
                           Consolidated Balance Sheets
                        (in thousands, except share data)
                                   (Continued)
<CAPTION>
<S>                                             <C>                  <C>                            
                                                November 1,          February 1,
                                                   1997                 1997
                                                   ----                 ----
                                                (Unaudited)
Liabilities and Stockholders' Equity

Current liabilities:
  Current maturities of long-term debt
    and capital lease obligations                $   5,536             $  5,748
  Accounts payable                                  23,394               17,491
  Accrued salaries, wages and bonuses                2,216                2,924
  Other accrued expenses                             7,629                6,907
                                                 ---------             ---------
    Total current liabilities                       38,775               33,070

Revolving credit notes                              27,230               17,887
Long-term debt, less current maturities             12,855               14,422
Deferred rent                                        2,484                2,098
Capital lease and other long-term obligations        3,056                1,984
                                                 ---------             ---------
     Total liabilities                              84,400               69,461

Stockholders' equity:
       
Series A convertible preferred stock,
$.01 par value, 4,500,000 shares authorized,
3,638,690 and 3,727,415 shares issued and
outstanding (aggregate liquidation preference
of $36,387 and $37,274) at November 1, 1997 and
February 1, 1997, respectively                          36                   37
       
Series B junior convertible, exchangeable
preferred stock , $.01 par value, 40,000
shares authorized, 33,465 and 22,000 shares
issued and outstanding (aggregate liquidation
preference of $33,465 and $22,000) at November 1,
1997 and February 1, 1997, respectively                  -                    -
       
Common stock, $.01 par value, 80,000,000
shares authorized, 4,929,822 and 4,693,337
shares issued and outstanding at November 1, 1997
and February 1, 1997, respectively                      49                   47

Additional paid-in capital                          82,614               71,057
Accumulated deficit                                (68,413)             (59,933)
                                                  ---------            ---------

    Total stockholders' equity                      14,286               11,208
                                                  ---------            ---------

Total liabilities and stockholders' equity        $ 98,686             $ 80,669
                                                    ======               ======
</TABLE>

          See accompanying notes to consolidated financial statements.
                                      F-2
<PAGE> F-3

<TABLE>
                   FAMILY BARGAIN CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Operations
                      (in thousands, except per share data)
                                   (Unaudited)
<CAPTION>
                                                         13 Weeks Ended
                                                   -----------------------------
<S>                                               <C>                <C>
                                                  November 1,        October 26,
                                                      1997              1996
                                                      ----              ---- 

Net sales                                          $ 77,263            $ 65,557
Cost of sales                                        48,450              42,264
                                                   ---------           ---------
       Gross profit                                  28,813              23,293

Selling and administrative expenses                  25,450              21,609
Amortization of excess of cost over
       net assets acquired                              400                 467
                                                   ---------           ---------

       Operating income                               2,963               1,217

Interest expense                                     (1,357)             (1,297)
                                                   ---------           ---------

       Net income (loss)                              1,606                 (80)

Preferred stock dividends - Series A                   (864)               (885)

Preferred stock dividends - Series B                   (672)                  -
                                                    --------           ---------

       Net income (loss) applicable
              to common stock                      $     70            $   (965)
                                                   =========           =========


Net income (loss) per share applicable to
       common stock                                $   0.01            $  (0.21)

Weighted average common shares outstanding            4,930               4,693
</TABLE>
          See accompanying notes to consolidated financial statements.
                                      F-3

<PAGE> F-4
<TABLE>
                  FAMILY BARGAIN CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Operations
                      (in thousands, except per share data)
                                   (Unaudited)
<CAPTION>
                                                          39 Weeks Ended
                                                  -----------------------------
<S>                                               <C>               <C>
                                                  November 1,       October 26,
                                                     1997              1996
                                                     ----              ----

Net sales                                         $ 207,074           $ 172,891
Cost of sales                                       134,105             110,864
                                                  ---------           ---------

       Gross profit                                  72,969              62,027

Selling and administrative expenses                  71,728              58,023
Amortization of excess of cost over
       net assets acquired                            1,201               1,406
                                                  ---------           ----------

       Operating income                                  40               2,598

Interest expense                                     (3,964)             (3,607)
                                                  ----------          ----------

       Net loss                                      (3,924)             (1,009)

Preferred stock dividends - Series A                 (2,592)             (2,624)

Preferred stock dividends - Series B                 (1,963)                  -
                                                  ----------          ----------

       Net loss applicable to common stock        $  (8,479)          $  (3,633)
                                                  ==========          ==========

Net loss per share applicable
       to common stock                            $   (1.73)          $   (0.82)

Weighted average common shares outstanding            4,893               4,441
</TABLE>

          See accompanying notes to consolidated financial statements.
                                      F-4

<PAGE> F-5
<TABLE>
                   FAMILY BARGAIN CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                 (in thousands)
                                   (Unaudited)
<CAPTION>

                                                          39 Weeks Ended
                                                   ----------------------------
<S>                                                <C>               <C>
                                                   November 1,       October 26,
                                                      1997              1996
 Cash Flows from Operating Activities
   Net loss                                        $   (3,924)       $   (1,009)
     Adjustments to reconcile net loss to net
     cash used in operating activities:
       Depreciation and amortization                    4,307             3,221
       Debt discount amortization                       1,596               785
       Loss on disposal of equipment                       94                 -
       Deferred rent expense                              386              (179)
       Gain on repurchase of subordinated notes           (75)                -
       Changes in operating assets and liabilities:
         Merchandise inventories                      (14,295)          (17,683)
         Prepaid expenses                                (669)             (777)
         Accounts payable and accrued expenses          5,805             2,540
         Other                                           (398)           (1,895)
                                                    ----------        ----------

Net cash used in operating activities                  (7,173)          (14,997)
                                                    ----------        ----------

Cash Flows from Investing Activities:
       Purchase of leasehold improvements
           and equipment                               (5,282)           (3,496)
       Sale of real property                                -             4,500
                                                    ----------        ----------
Net cash provided by (used in) investing activities    (5,282)            1,004
                                                    ----------        ----------

Cash Flows from Financing Activities:
  Borrowings on revolving credit notes                248,830           221,868
  Payments on revolving credit notes                 (239,487)         (208,115)
  Proceeds from the issuance of notes payable               -             3,100
  Payments on notes payable and capital
    lease obligations                                  (3,636)           (3,647)
  Payment of deferred debt issuance costs                (196)              (30)
  Net proceeds from issuance of preferred
    stock                                               9,594             2,856
  Payment of dividends on Series A preferred stock     (2,592)           (2,624)
                                                    ----------         ---------

Net cash provided by financing activities              12,513            13,408
                                                    ----------         ---------
</TABLE>
                                   (continued)
                                      F-5
<PAGE> F-6
<TABLE>
                   FAMILY BARGAIN CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                 (in thousands)
                                   (Continued)
<CAPTION>
                                                             39 Weeks Ended
                                                    ---------------------------
<S>                                                 <C>             <C>
                                                    November 1,      October 26,
                                                       1997             1996
                                                       ----             ----
Net increase (decrease) in cash                      $     58          $   (585)

Cash at the beginning of the period                     3,261             1,958
                                                     --------          ---------

Cash at the end of the period                        $  3,319          $  1,373
                                                     ========          =========
Supplemental disclosure of cash flow information:

   Cash paid during the period for interest           $ 1,991           $ 2,183

   Cash paid during the period for income taxes       $    16           $     -

Supplemental disclosure of non-cash investing activities:

   Capital lease purchases                            $   793           $     -
</TABLE>

          See accompanying notes to consolidated financial statements.
                                      F-6
<PAGE> F-7
                   FAMILY BARGAIN CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

(1)      Unaudited Interim Financial Statements

         The accompanying  unaudited  consolidated  financial  statements do not
         include all of the  information  and  footnotes  required by  generally
         accepted  accounting  principles  for annual  financial  statements and
         should be read in  conjunction  with the financial  statements  for the
         fiscal  year ended  February  1, 1997  included  in the Family  Bargain
         Corporation and Subsidiaries' (the Company) Form 10-K as filed with the
         Securities  and  Exchange   Commission.   The  unaudited   consolidated
         financial statements include the accounts of Family Bargain Corporation
         and its subsidiaries.  All significant  intercompany  transactions have
         been eliminated in consolidation.

         In the opinion of  management,  the  unaudited  consolidated  financial
         statements  as of and for the 13 weeks and 39 weeks  ended  November 1,
         1997 and October 26, 1996 reflect all adjustments (which include normal
         recurring  adjustments)  necessary  to  present  fairly  the  financial
         position,  results  of  operations  and  cash  flows  for  the  periods
         presented.  Due to the seasonal nature of the Company's  business,  the
         results of operations  for the interim  period may not  necessarily  be
         indicative of the results of operations for a full year.

(2)      Long-term Debt and Revolving Credit Notes

         Effective  June 2, 1997,  Factory 2-U,  amended its agreement  with its
         working  capital  lender to increase its revolving  credit  facility to
         $15.0 million from $10.0  million,  with  borrowings  limited to 65% of
         eligible  inventory (as  defined),  an interest rate of prime plus 3/4%
         per  annum  and  an  expiration   date  (subject  to  annual  one  year
         extensions) of November 1999.

         Effective June 2, 1997, General Textiles amended its agreement with its
         working  capital  lender to increase its revolving  credit  facility to
         $35.0  million  from $25.0  million,  with  advances  limited to 65% of
         eligible  inventory (as  defined),  an interest rate of prime plus 3/4%
         per  annum  and  an  expiration   date  (subject  to  annual  one  year
         extensions) of November 1999.

         On September 24, 1997, the Company amended certain terms and conditions
         of its  revolving  credit  facilities.  Under  the  amended  terms  and
         conditions, the Company's debt covenants will be reset to be reflective
         of anticipated  earnings,  capital  expenditures and cash flow over the
         remaining term of the revolving  credit  facilities.  In addition,  the
         borrowings may exceed the 65% limit of eligible inventory not to exceed
         $3.5  million,  between  October 1, 1997 and October 31, 1997 and $1.75
         million commencing  November 1, 1997 through and including December 15,
         1997. Such excess  borrowings will bear interest at an interest rate of
         prime plus 3% per annum.

         At  November  1,  1997,  the  Company's  estimation  of cash flows that
         determine  the timing and amounts of  payments of certain  subordinated
         debt were the same as estimated for
                                      F-7

<PAGE> F-8
                   FAMILY BARGAIN CORPORATION AND SUBSIDIARIES
              Notes to Consolidated Financial Statements, continued

         February  1,  1997.  Consequently,  there  were no  adjustments  to the
         carrying  value of such debt during the 39 weeks ended November 1, 1997
         except for recurring amortization of debt discount.

(3)      Earnings per Share

         In February  1997,  the  Financial  Accounting  Standards  Board issued
         Statement of Financial  Accounting Standard No. 128, Earnings per Share
         (SFAS No.  128),  which the  Company  will adopt for interim and annual
         periods ending after  December 15, 1997.  This Statement sets forth the
         basis for the computation of "basic"  earnings per share and "dilutive"
         earnings per share from the previous method of computing both "primary"
         and "fully diluted"  earnings per share.  Early  implementation of SFAS
         No. 128 is not  permitted.  However,  had the Company  applied SFAS No.
         128,  there  would have been no  difference  between the loss per share
         reported  under  SFAS No.  128 and the loss per share  reported  on the
         accompanying  consolidated statement of operations for the 13 weeks and
         39 weeks ended November 1, 1997.

         The  preferred  stock  and  other  common  stock  equivalents  were not
         considered as converted because the calculation was anti-dilutive.

(4)      Provision for Income Taxes

         No provision  for income taxes has been  reflected in the  accompanying
         consolidated  statements  of  operations  for the 13 weeks and 39 weeks
         ended November 1, 1997 and October 26, 1996 since the Company generated
         tax losses during these  periods.  Although such losses would  increase
         the Company's net operating loss carry forwards (NOLs),  realization of
         such NOLs is less than likely due to limitations on utilization of NOLs
         and the  Company's  history of losses.  As a result,  a full  valuation
         allowance  has been  recognized  against  the net  deferred  tax assets
         arising  from the  increased  NOLs and no benefit  for income  taxes is
         reflected in the accompanying consolidated statements of operations.

(5)      Dividends

         The Series B Junior Convertible,  Exchangeable  Preferred Stock pays no
         dividend through  December 31, 2001.  Beginning in 2002, the Company is
         obligated to pay a dividend to holders of the Series B Preferred  Stock
         in the amount of $60 per share  subject to  increases  of $20 per share
         every year thereafter until 2005 up to a maximum of $120 per share. The
         Company imputes dividends on the Series B Preferred Stock utilizing the
         effective  interest method to provide a level yield until the permanent
         dividend of $120 per share is payable.  The Company expects  conversion
         prior to any actual  payment of  dividends,  therefore the liability is
         zeroed to additional paid in capital.  The accreted dividends therefore
         increase  the  carrying  value of that part of the  additional  paid in
         capital attributable to the Series B Preferred Stock.

                                      F-8

<PAGE> F-9
                   FAMILY BARGAIN CORPORATION AND SUBSIDIARIES
              Notes to Consolidated Financial Statements, continued

(6)      Reclassifications

         Certain  reclassifications  have  been  made to the  February  1,  1997
         amounts to conform to the November 1, 1997 presentation.

                                      F-9

<PAGE> 3

Item 2.   Management's Discussion and Analysis
            of Financial Condition and Results of Operations

General

Management's  discussion of the results of operations  provides  analyses of the
Company's  operations  during  the 13 and 39 weeks  ended  November  1, 1997 and
October 26, 1996.

Results of Operations

The following  discussion and analysis  should be read in  conjunction  with the
Company's Consolidated Financial Statements and notes thereto included elsewhere
in this Form 10-Q.  As of  November  1, 1997 there were 168 stores in  operation
compared to 147 stores as of October 26, 1996.

13 Weeks Ended November 1, 1997 Compared to the 13 Weeks Ended October 26, 1996

Net sales were $77.3 million for the 13 weeks ended November 1, 1997 compared to
$65.6  million for the 13 weeks ended  October  26,  1996,  an increase of $11.7
million, or 17.8%. Of the total increase,  $13.0 million was attributable to the
opening of new stores and expansion of existing stores offset by a $1.3 million,
or 2.2%, decrease in comparable store sales.

Gross profit was $28.8 million for the 13 weeks ended  November 1, 1997 compared
to $23.3  million  for the 13 weeks  ended  October  26,  1996,  an  increase of
approximately $5.5 million. As a percentage of sales, gross profit was 37.3% for
the 13 weeks  ended  November  1, 1997  compared to 35.5% for the 13 weeks ended
October  26,  1996.  The  increase  in the  gross  profit  margin  is  primarily
attributable  to a higher  markup  partially  offset  by a higher  markdown  and
increased shrink.

Selling and  administrative  expenses  were $25.5 million for the 13 weeks ended
November 1, 1997  compared to $21.6  million for the 13 weeks ended  October 26,
1996,  an increase of  approximately  $3.9  million.  As a percentage  of sales,
selling and  administrative  expenses  decreased to 32.9% for the 13 weeks ended
November  1, 1997 from  33.0%  for the 13 weeks  ended  October  26,  1996.  The
decrease as a percentage  of sales is primarily  due to closure of the Company's
New York  office  partially  offset by higher  occupancy,  store  operating  and
preopening costs.

Amortization of excess of cost over net assets acquired was $0.4 million for the
13 weeks ended  November 1, 1997 compared to $0.5 million for the 13 weeks ended
October 26,  1996.  The decrease is a result of the  write-down  in the carrying
value of excess of cost over net assets acquired  disclosed in the  consolidated
financial statements for the fiscal year ended February 1, 1997.

Interest  expense was $1.4  million for the 13 weeks ended  November 1, 1997 and
$1.3  million for the 13 weeks  ended  October 26,  1996.  The  increase of $0.1
million was  attributable  primarily to  increased  debt  discount  amortization
arising from changes in the projected  timing and payment of the  reorganization
securities of General Textiles.

                                      -3-

<PAGE> 4

The net income  applicable  to common  stock was $0.1  million  for the 13 weeks
ended  November 1, 1997  compared to a net loss of $1.0 million for the 13 weeks
ended  October  26,  1996.  The  increase  in net income for the 13 weeks  ended
November 1, 1997 is a result of the  operating  factors  cited  above  offset by
accreted dividends of $0.7 million on the Series B Preferred Stock.

39 weeks Ended November 1, 1997 Compared to the 39 weeks Ended October 26, 1996

Net sales were $207.1  million for the 39 weeks ended  November 1, 1997 compared
to $172.9  million for the 39 weeks ended October 26, 1996, an increase of $34.2
million.  This increase in sales was  attributable  to the opening of new stores
and expansion of existing  stores offset by a $0.5 million,  or 0.3% decrease in
comparable store sales.

Gross profit was $73.0 million for the 39 weeks ended  November 1, 1997 compared
to $62.0  million for the 39 weeks ended  October 26, 1996, an increase of $11.0
million,  or 17.7%. As a percentage of sales,  gross profit was 35.2% for the 39
weeks ended  November 1, 1997  compared to 35.9% for the 39 weeks ended  October
26, 1996. The decrease in the gross profit margin is primarily  attributable  to
an increase in the markdown and shrink offset by a higher initial markup.

Selling and  administrative  expenses  were $71.7 million for the 39 weeks ended
November 1, 1997  compared to $58.0  million for the 39 weeks ended  October 26,
1996,  an increase  of $13.7  million.  As a  percentage  of sales,  selling and
administrative  expenses  increased to 34.6% for the 39 weeks ended  November 1,
1997 from 33.6% for the 39 weeks ended October 26, 1996. The increase in selling
and administrative  expenses as a percentage of sales was primarily attributable
to a $1.8 million charge in the 2nd quarter for payments due under an employment
contract  related  to the  resignation  of the  Company's  President  and  Chief
Executive Officer and increased  preopening  costs.  Savings from the closure of
the  Company's  New York office has been offset by higher store labor costs (due
to increases in the minimum wage) and store operating costs.

Amortization of excess of cost over net assets acquired was $1.2 million for the
39 weeks ended  November 1, 1997 compared to $1.4 million for the 39 weeks ended
October 26,  1996.  The decrease is a result of the  write-down  in the carrying
value of excess of cost over net assets acquired  disclosed in the  consolidated
financial statements for the fiscal year ended February 1, 1997.

Interest  expense  was $4.0  million  for the 39 weeks  ended  November  1, 1997
compared to $3.6 million for the 39 weeks ended  October 26, 1996.  The increase
of  $0.4  million  was   attributable   primarily  to  increased  debt  discount
amortization  arising  from changes in the  projected  timing and payment of the
reorganization securities of General Textiles.

For loss  periods,  such as those  presented  in this Form 10-Q,  the  Company's
preferred stock is assumed not converted and the related  dividends are added to
the loss for purposes of loss per share calculation.  The increased loss for the
39 weeks ended November 1, 1997 is a result of the operating factors cited above
and by accreted dividends of $2.0 million on the Series B Preferred Stock.

                                      -4-
<PAGE> 5
Liquidity and Capital Resources

Family Bargain Corporation

As  of  November  1,  1997,  Family  Bargain   Corporation  (the  "Parent")  had
outstanding  indebtedness in the principal  amount of $2.6 million,  no material
change from its debt  obligations  at February 1, 1997.  The entire $2.6 million
outstanding principal amount is due during the next twelve months.

Distributions  of cash from General  Textiles and Factory 2-U,  (the  "Operating
Subsidiaries")  to  the  Parent  company  to pay  Parent  company  debt  service
obligations and preferred  stock  dividends for the Series A 9 1/2%  Convertible
Preferred  Stock (the  "Series A  Preferred  Stock") (if  declared)  and certain
administrative  expenses are limited under a plan of reorganization  and certain
debt  agreements of the  Operating  Subsidiaries.  Permitted  cash payments from
General Textiles include payments pursuant to a tax sharing  agreement,  certain
subordinated debt of General Textiles (which the Parent holds), and a management
agreement.  Permitted  cash payments by Factory 2-U to the Parent are limited to
payments  pursuant  to a  management  agreement  and a guaranty  fee  agreement.
Management  believes  that  permitted  cash flows to the Parent  company will be
adequate to finance its  administrative  expenses and meet the obligations under
its  existing  indebtedness  as they  become  due for at least  the next  twelve
months.  The  ability of the Company to make  dividend  payments on its Series A
Preferred  Stock  as  they  become  due  will be  dependent  on the  results  of
operations of the Company. To date the Company has used its borrowing facilities
to fund dividend payments.

General Textiles

General Textiles  finances its operations  through credit provided by suppliers,
amounts  borrowed  under  its  $35.0  million   revolving  credit  facility  and
internally generated cash flow.

At November 1, 1997, General Textiles was obligated to non-affiliate  holders of
its subordinated notes and reorganization securities in the face amount of $22.9
million with a carrying value of $12.5 million,  of which  management  estimates
principal  payments in the amount of approximately  $1.3 million will be paid in
the next twelve months.

As of November 1, 1997,  General Textiles had $19.2 million  outstanding and 
$7.8 million available to borrow under its revolving credit facility.

Effective  September 24, 1997, the Company  amended certain terms and conditions
of its revolving  credit facility.  Under the amended terms and conditions,  the
covenants  will be reset  to be  reflective  of  anticipated  earnings,  capital
expenditures  and cash  flow over the  remaining  term of the  revolving  credit
facility.  In addition,  the borrowings may exceed the 65% of eligible inventory
not to exceed  $3.5  million,  between  October 1, 1997 and October 31, 1997 and
$1.75 million  commencing  November 1, 1997 through and  including  December 15,
1997.  Such excess  borrowings  will bear  interest at an interest rate of prime
plus 3% per annum.

                                      -5-

<PAGE> 6

Factory 2-U

Factory 2-U  finances  its  operations  through  credit  provided by  suppliers,
amounts  borrowed under its revolving  credit facility and internally  generated
cash flow.  Effective June 2, 1997,  Factory 2-U, amended its agreement with its
working  capital  lender to  increase  its  revolving  credit  facility to $15.0
million from $10.0 million,  with advances limited to 65% of eligible  inventory
(as  defined),  an interest  rate of prime plus 3/4% per annum and an expiration
date (subject to annual one year extensions) of November 1999.

As of November 1, 1997,  Factory 2-U had $8.0 million  outstanding  and $2.0
million  available to borrow under its revolving credit facility.

Effective  September 24, 1997,  Factory 2-U amended certain terms and conditions
of its revolving  credit facility.  Under the amended terms and conditions,  the
covenants  will be reset  to be  reflective  of  anticipated  earnings,  capital
expenditures  and cash  flow over the  remaining  term of the  revolving  credit
facility.

Capital Expenditures

The Company's  planned  future  capital  expenditures  include costs to open new
Family  Bargain  Center and  Factory 2-U stores,  to  renovate  and/or  relocate
existing  stores,  to  expand  its  central   administrative   and  distribution
facilities  and to upgrade its  information  systems.  Management  believes that
future  expenditures  will be financed  from  internal cash flow and the General
Textiles and Factory 2-U revolving credit  facilities.  Through November 1, 1997
the Company has spent  approximately $6.1 million on capital  expenditures.  The
Company anticipates spending  approximately $1.9 million during the remainder of
the current fiscal year.

Inflation

In general,  the Company  believes that it will be able to offset the effects of
inflation  by  increasing  operating  efficiency,   monitoring  and  controlling
expenses and increasing prices to the extent permitted by competitive factors.

Seasonality and Quarterly Fluctuations

The Company  historically  has  realized  its highest  level of sales and income
during the third and fourth  quarters of the fiscal year (the quarters ending in
fiscal  October  and  January)  as a result of the "Back to School"  (August and
September) and Christmas (November and December) seasons. If the Company's sales
are  substantially  below  seasonal  expectations  during  the third and  fourth
quarters, the Company's annual operating results will be adversely affected. The
Company  historically has realized lower sales in its first two quarters,  which
often has resulted in the Company incurring losses during those quarters.

Deferred Tax Assets

The  Company  has net  operating  loss  ("NOL")  carryforwards  for  Federal and
California income tax purposes.  The utilization of these NOLs will be partially
limited  due to  restrictions  imposed  under the  Federal and State laws upon a
change in ownership.

                                      -6-

<PAGE> 7

At November 1, 1997,  the  Company's  total net  deferred  income tax assets,  a
significant  portion  of  which  relates  to NOLs  discussed  above,  have  been
subjected to a 100% valuation  allowance since realization of such assets is not
more likely than not in light of the Company's recurring losses from operations.

Cautionary Statement Regarding Forward-Looking Information

Statements,   other  than  those  based  on  historical  facts,   which  address
activities,  events or developments  that the Company expects or anticipates may
occur in the future are forward-looking statements which are based upon a number
of assumptions  concerning  future  conditions  that may ultimately  prove to be
inaccurate.  Actual events and results may  materially  differ from  anticipated
results  described in such  statements.  The  Company's  ability to achieve such
results  is  subject  to certain  risks and  uncertainties,  including,  but not
limited to,  economic and weather  conditions that affect buying patterns of the
Company's  customers,  changes in consumer spending and the Company's ability to
anticipate  buying  patterns and  implement  appropriate  inventory  strategies,
continued  availability of capital and financing,  competitive factors and other
factors  affecting  the  Company's   business  beyond  the  Company's   control.
Consequently,  all of the  forward-looking  statements  are  qualified  by these
cautionary  statements  and  there  can be no  assurance  that  the  results  or
developments  anticipated by the Company will be realized or that they will have
the expected effects on the Company or its business or operations.

                                      -7-

<PAGE> 8


                           PART II - OTHER INFORMATION

Item 1.    Legal Proceedings

The Company is at all times  subject to pending and  threatened  legal  actions,
which arise out of the normal course of business.  In the opinion of management,
based in part on the advice of legal counsel,  the ultimate disposition of these
matters will not have a material  adverse  effect on the  financial  position or
results of operations of the Company.

Item 2.    Changes in Securities
                  None.

Item 3.     Defaults Upon Senior Securities
                  None.

Item 4.    Submission of Matters to a Vote of Security Holders
                  None.

Item 5.    Other Information
                  None.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

         10.1     Amendment  No.  7 to Loan and  Security  Agreement,  dated  as
                  of  September  24,  1997,  between Factory 2-U and Finova
                  Capital Corporation (7 pages)
         10.2     Amendment  No.  10 to Loan and  Security  Agreement,  dated as
                  of  September  24,  1997,  between General Textiles and Finova
                  Capital Corporation (10 pages)
         10.3     Acknowledgment   and  Reaffirmation   (Re:   Affiliate  Debt,
                  Management  Fees,   Intercreditor Agreement),  dated as of
                  September  24,  1997,  between  Family  Bargain  Corporation 
                  and Finova Capital Corporation (2 pages)
         10.4     Separation  Agreement,  dated August 1, 1997, between Family
                  Bargain Corporation and William W. Mowbray (9 pages)
         11.1     Computation of per share loss (1 page) 
         27       Financial Data Schedule (1 page)

(b)      Reports on Form 8-K
                  None.

                                      -8-

<PAGE> 9


                                   SIGNATURES

Pursuant  to the  requirements  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.


FAMILY BARGAIN CORPORATION

Date: November 24, 1997




By:    /s/  Jonathan W. Spatz
       Name:  Jonathan W. Spatz
       Title: Executive Vice President and Chief Financial Officer
              (duly authorized officer and principal financial officer)

                                      -9-

<PAGE> 10
<TABLE>
                                  EXHIBIT INDEX
<CAPTION>
<S>     <C>                                                              <C>

Exhibit
Number  Description                                                       Page

10.1    Amendment No. 7 to Loan and Security Agreement, dated as         11 - 17
        of September 24, 1997, between Factory 2-U and Finova 
        Capital Corporation (7 pages)

10.2    Amendment No. 10 to Loan and Security Agreement, dated as        18 - 27
        of  September 24, 1997, between General Textiles and Finova
        Capital Corporation (10 pages)

10.3    Acknowledgment and Reaffirmation (Re: Affiliate Debt,            28 - 29
        Management Fees, Intercreditor Agreement), dated as of
        September 24, 1997, between Family Bargain Corporation and
        Finova Capital Corporation (2 pages)

10.4    Separation Agreement, dated August 1, 1997, between              30 - 38
        Family Bargain Corporation and William W. Mowbray (9 pages)

11.1    Computation of per share loss (1 page)                                39
27      Financial Data Schedule (1 page)                                      40
</TABLE>
                                      -10-