FORM 10-QSB
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB
(Mark One)
----
 X       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
----     SECURITIES EXCHANGE ACT OF 1934

                     For the Quarter Ended January 31, 1999

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 1-9135

                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          New York                                      13-3032734
 -------------------------------                  ----------------------
 (State or other jurisdiction of                    (I.R.S. Employer
 incorporation or organization)                   Identification Number)

5353 North 16th Street, Suite 190, Phoenix, AZ            85016
----------------------------------------------         ----------
  (Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code (800) 944-2534

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

APPLICABLE ONLY TO CORPORATE ISSUERS:  Indicate the number of shares outstanding
of each of the issuer's  classes of common stock,  as of the latest  practicable
date:  14,525,025 shares of common stock, $.01 par value per share, at March 12,
1999.


<PAGE>



                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)
                   ------------------------------------------
                                   FORM 10-QSB
                                   -----------
                                      INDEX
                                      -----

                                                                          Page
                                                                          ----
PART I -   FINANCIAL INFORMATION
------     ---------------------
  Item 1.  Financial Statements:


           Consolidated Balance Sheets January 31, 1999 
           (unaudited) and July 31, 1998                                  2-3


           Consolidated Statements of Operations for the six 
           month periods ended January 31, 1999 and 1998 (unaudited)      4

           Consolidated Statements of Cash Flows for the six 
           month periods ended January 31, 1999 and 1998 (unaudited)      5

           Notes to Consolidated Financial Statements (unaudited)         6-9

 Item 2.   Management's Discussion and Analysis
           of Financial Condition and Results of Operations               10-13

PART II -  EXHIBITS AND REPORTS ON FORM 8-K
-------    --------------------------------

 Item 6.   Exhibits and Reports on Form 8-K

                       None

 Signatures                                                               14



                                        1


<PAGE>


                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)
                   ------------------------------------------
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------








ASSETS                                                  January 31,    July 31,
------                                                     1999          1998
                                                       (unaudited)     audited)
                                                       ------------   ----------

CURRENT ASSETS:

Cash & cash equivalents ............................    $  160,494    $  433,943

Accounts receivable, net of allowances for
 doubtful accounts and chargebacks of
 $978,481 and $868,116, respectively and sales
 allowances of $82,764 and $83,957 ,respectively
                                                           138,941       171,529
Inventories ........................................     1,670,701     1,743,684

Prepaid expenses and other current assets ..........        43,193       876,248

                                                        ----------    ----------

Total current assets ...............................     2,013,329     3,225,404

PROPERTY AND EQUIPMENT, NET ........................       170,169       256,864


OTHER ASSETS .......................................        85,305       183,597

                                                        ----------    ----------

Total assets .......................................    $2,268,803    $3,665,865

                                                        ==========    ==========






                 See notes to consolidated financial statements










                                        2

<PAGE>


                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)
                   ------------------------------------------
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------


<TABLE>
<CAPTION>

LIABILITIES AND SHAREHOLDERS' EQUITY, (DEFICIENCEY)       January 31, 1999    July 31, 1998
---------------------------------------------------          (unaudited)        (audited)              
                                                          ----------------    -------------   
                                                                                          
CURRENT LIABILITIES

<S>                                                        <C>                <C>         
Due to related parties .................................   $    122,637       $     62,517
Accounts payable .......................................      1,201,822            818,699
Accrued expenses-other .................................        876,422          1,009,099
                                                           ------------       ------------
                                                                          
                                                                          
Total current liabilities ..............................      2,200,881          1,890,315
                                                                          
                                                                          
                                                                          
CONVERTIBLE NOTE - RELATED PARTIES .....................        500,000            500,000
                                                                          
                                                           ------------       ------------
Total liabilities ......................................      2,700,881          2,390,315
                                                                          
                                                           ------------       ------------
                                                                          
REDEEMABLE PREFERRED STOCK .............................        750,000            750,000
                                                                          
SHAREHOLDERS' EQUITY:(DEFICIENCY)                                         
  Common stock, $.01 par value,                                           
  50,000,000 shares authorized;                                           
  14,525,025 and 14,146,366 shares                                        
  issued and outstanding at January 31,1999 
  and July 31, 1998                                                                  
  Respectively .........................................        145,250            141,463
                                                                          
Additional paid-in capital .............................     16,200,744         16,131,512
                                                                          
Accumulated deficit ....................................    (17,528,072)       (15,747,425)
                                                                          
                                                           ------------       ------------    
Total shareholders' equity,                                               
(deficiency) ...........................................     (1,182,078)           525,550
                                                                          
                                                           ------------       ------------
Total liabilities and shareholders' equity, (deficiency)                  
                                                           $  2,268,803       $  3,665,865
                                                           ============       ============
                                                                       
</TABLE>


                 See notes to consolidated financial statements.




                                        3


<PAGE>




                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)
                   ------------------------------------------
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      -------------------------------------
                                   (UNAUDITED)
                                   -----------
<TABLE>
<CAPTION>

                                           Three Months Ended               Six Months Ended
                                               January 31,                     January 31,

                                          1999           1998            1999            1998
                                          ----           ----            ----            ----


<S>                                 <C>             <C>             <C>             <C>         
Net Sales .......................   $  1,317,404    $  1,379,724    $  3,800,034    $  3,776,063

Cost of goods sold ..............        378,969         382,707       1,091,955       1,154,098

                                    ------------    ------------    ------------    ------------

Gross profit on sales ...........        938,435         997,017       2,708,079       2,621,965


Selling, general and
administrative expenses .........      2,174,083       2,427,775       4,371,760       4,848,628
                                    ------------    ------------    ------------    ------------

Operating Loss ..................     (1,235,648)     (1,430,758)     (1,663,681)     (2,226,663)

Other (expense) income
  Non Cash Finance Charges ......        (30,060)              0         (60,120)              0
  Interest (expense) ............        (37,338)         23,738         (56,846)         61,751
  income
                                    ------------    ------------    ------------    ------------

Total other (expense)
  income ........................        (67,398)         23,738        (116,966)         61,751
                                    ------------    ------------    ------------    ------------


NET LOSS ........................   $ (1,303,046)   $ (1,407,020)   $ (1,780,647)   $ (2,164,912)

                                    ============    ============    ============    ============

Weighted average number of common
and common equivalent shares
                                      14,408,907      11,787,983      14,350,844      11,787,983
                                    ------------    ------------    ------------    ------------

BASIC LOSS PER
  SHARE AVAILABLE TO
  COMMON SHAREHOLDERS ...........   $      (0.09)   $      (0.12)   $      (0.12)   $      (0.18)

                                    ============    ============    ============    ============

</TABLE>

                 See notes to consolidated financial statements






                                        4

<PAGE>



                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)
                   ------------------------------------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                                   (UNAUDITED)
                                   -----------

                                                        Six Months Ended  
                                                        ----------------
                                                           January 31,
                                                           -----------
                                                       1999           1998
                                                       ----           ----

Cash Flows from Operating Activities:
Net Loss .......................................   $(1,780,647)   $(2,164,912)

                                                   -----------    -----------
Adjustments to Reconcile Net Loss to Net Cash
  Provided by (Used in) Operating Activities:
  Depreciation & Amortization ..................       122,263        186,182
  Non Cash Finance Charges .....................        60,120           --
  Decrease(increase) in Accounts Receivable ....        32,588       (248,926)
  Decrease in Inventory ........................        72,983        161,773
  Decrease in Prepaid Expenses & Other
  Assets .......................................       861,251        868,465
Increase Accounts Payable
  & Accrued Expenses ...........................       250,446        752,535

                                                   -----------    -----------
Total Adjustments ..............................     1,399,651      1,720,029
  Net Cash Used in Operating Activities ........      (380,996)      (444,883)
                                                   -----------    -----------

Cash Flows from Investing Activities
Capital Expenditures ...........................       (35,568)       (99,847)

                                                   -----------    -----------
Cash Flows from Financing Activities

Proceeds from Issuance of Common Stocks ........       143,115              0


Net Decrease in Cash and cash equivalents ......      (273,449)      (544,730)
Cash and cash equivalents at Beginning of Period       433,943        658,378

                                                                  -----------
                                                   ===========    ===========
Cash and cash equivalents at End of Period .....   $   160,494    $   113,648

                                                   ===========    ===========

Cash Paid during the quarter ended
Interest .......................................   $         0              0
Income Taxes ...................................   $         0              0



                 See notes to consolidated financial statements





                                        5

<PAGE>



                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)
                   ------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                January 31, 1999
                                ----------------
                                   (Unaudited)
                                   -----------



(1)   Summary of significant accounting policies:

In the opinion of management, the accompanying consolidated financial statements
contain  all of the  adjustments  necessary  to  present  fairly  the  Company's
financial  position at January  31,  1999  (unaudited)  and July 31,  1998,  the
results of its  operations  for the three and six months ended  January 31, 1999
and 1998  (unaudited)  and the cash flows for the six months  ended  January 31,
1999 and 1998 (unaudited). All adjustments are of a normal recurring nature. The
consolidated  balance sheet at July 31, 1998 was taken from audited consolidated
financial   statements   previously  filed  with  the  Securities  and  Exchange
Commission on the Company's Form 10K.

All significant  intercompany  transactions and accounts have been eliminated in
consolidation.  Interim  period  results are not  necessarily  indicative of the
results of operations for a full year.

These  quarterly  financial  statements  should be read in conjunction  with the
Company's  audited financial  statements  contained in the Annual Report on Form
10-K for the fiscal  year ended July 31,  1998,  filed with the  Securities  and
Exchange Commission.

Going Concern
During  fiscal year 1998 and during the three and six months  ended  January 31,
1999,  losses from  operations and cash used in operations  were incurred by the
Company.  The  Company  has  suffered  losses  since the  discontinuance  of its
appearances on the Home Shopping  Network  ("HSN").  The Company's  relationship
with HSN ended during January 1997, due to a contract  dispute with Ms. Adrienne
Newman.  A  description  of the Company's  relationship  with Ms. Newman and its
previous  relationship  with HSN are described in detail in the  Company's  Form
10-K filed with the Securities and Exchange Commission for the period ended July
31, 1998.

In February 1998,  the Company's  then board of directors  approved an agreement
with an  investment  group  headed by Barry W.  Blank  (the  "Blank  Group").  A
detailed  description  of the  Company's  relationship  with the Blank  Group is
contained  in the  Company's  Form 10-K filed with the  Securities  and Exchange
Commission for the period ended July 31, 1998.

The Company has been dependent upon cash provided by the Blank Group, an interim
loan group and a private equity finance  offering.  The Company has  implemented
certain  initiatives and management's  plans include a number of new initiatives
to improve upon its fiscal 1998 results. If the Company is not successful, it is
anticipated that losses from operations will continue to occur. This uncertainty
raises doubt about the company's  ability to continue as a going concern and its
ability to generate sufficient cash to support its operations.

The Company has made dramatic expense cuts during the latter part of fiscal 1998
and seeks a further  reduction of  non-operating  costs during fiscal 1999.  The
Company's  fiscal 1998  operating  results  suffered  from a shortage of readily
available and regularly produced finished goods inventory.


                                        6
<PAGE>

                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)
                   ------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                January 31, 1999
                                ----------------
                                   (Unaudited)
                                   -----------

The Company was  successful in improving the level and flow of inventory  during
the first  quarter of fiscal  1999,  at which time it  introduced  its  products
through 157 Sears  locations,  however,  the Company suffered from a shortage of
regularly produced inventory during the second quarter ended January 31, 1999.

The Company is  substantially  in default on a number of its  obligations and it
will be  necessary  for the  Company  to obtain  additional  sources  of working
capital in order to continue to operate. Management is in the process of seeking
sources of working  capital  beyond  those which can be  generated  from current
operations.  There can be no assurance  that  management  will be  successful in
obtaining  additional  capital or that such capital will be sufficient as to the
amount  that  will be  acceptable  to the  Company  or that  the  terms  will be
acceptable to the Company.

If management is unable to obtain such capital,  the Company will be required to
dramatically reduce its business or cease doing business.


Concentration of Credit Risk
Financial  instruments that potentially subject the Company to concentrations of
credit risk  consist  principally  of trade  receivables.  The  Company's  major
customers are department stores in the United States and Canada.

Use of Estimates
The preparation of financial  statements in conformity  with generally  accepted
accounting principles 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 estimates.

Advertising Expenses
The Company advertises through cooperative  advertising  programs,  catalogs and
the Internet. Department store advertising costs as a percentage of consolidated
net sales was 17.5% and 14.2% for the six months ended January 31, 1999 and 1998
respectively.
The Company  expenses all  advertising  costs in the period in which the cost is
incurred.

Concentration of Revenues
The Company recognizes revenue at the time orders are shipped to customers.  For
the six months ended January 31, 1999 approximately 89.5% of the Company's sales
were made to or  through  department  stores of which  approximately  83.0% were
derived from  merchandise,  4.6% from salon  services  and 12.4% from  seasonal,
promotional  items.  One department store customer  accounted for  approximately
44.9% of the Company's net sales for the six months ended January 31, 1999,  and
one  department  store  arrangement  accounted  for  approximately  20.1% of the
Company's net sales for the six months ended January 31, 1999.

As is common in the cosmetic  industry,  the Company provides its customers with
the right to return  merchandise in order to balance inventory and stock levels.
The rate of  return  experienced  by the  Company  was 1.9% and 2.9% for the six
months ended January 31, 1999 and fiscal year ended July 31, 1998 respectively.

                                        7
<PAGE>

                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)
                   ------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                January 31, 1999
                                ----------------
                                   (Unaudited)
                                   -----------

(2) Inventory:

Inventory at January 31, 1999, and July 31, 1998 was comprised of finished goods
amounting to $873,602 and $1,049,002 respectively and components of $797,099 and
$694,682, respectively.


(3) Other Assets:

On April 23,  1998,  the  Company  and  Adrienne  Newman  reached  a  settlement
agreement  related to their  litigation  which was  initiated  by Ms.  Newman on
October 28, 1996.  Under the  settlement  agreement,  Ms.  Newman was paying the
Company $1 million dollars in monthly  installments of $50,000.  During December
1998, the Company and Ms. Newman agreed that the remaining liability of $400,000
would be  prepaid at a 10%  discount.  The  Company  received  $360,000  in full
satisfaction of Ms. Newman's remaining liability.


(4) Debt:

Related Party Loans:

During February 1998, the Company received $500,000 in financing, pursuant to an
agreement with the Blank Group. This financing is in the form of a 12% five year
note convertible into the Company's Common Stock,  commencing on August 1, 1998,
and  ending on the day before  the note is paid but no later  than  January  30,
2003,  at the rate of $0.25  per  share.  This  note is  secured  by a  security
agreement as reflected in the Company's UCC filings.

During  April 1998 an Interim  Loan Group  advanced  the  Company  $250,000.  In
connection therewith, the group also received one share of Common Stock for each
dollar  loaned  constituting  an  aggregate of 250,000  shares.  This loan bears
interest at 12% and matures on May 31, 1999.  The issuance of the 250,000 shares
is deemed to be an additional  financing cost which is valued at the fair market
value of the Company's  Common Stock at the date of the loan.  The Related Party
Loan Payable is stated net of $27,363 of deferred  financing  charges at January
31, 1999.  During June,  the Company repaid  $100,000  toward this loan from the
proceeds of its Private Placement  Offering.  This loan is secured by a security
agreement as reflected in the Company's UCC filings.


Non Cash Financing Charges:

The  Company  has  recorded  $60,120 of non cash  financing  charges for the six
months ended January 31, 1999, related to the Interim Loan groups advance to the
Company.  The issuance of the 250,000  shares of common stock is deemed to be an
additional  cost of  financing  which is valued at the fair market  value of the
Company's common stock at the date of the loan. This amount will be amortized at
the rate of  approximately  $10,000  per month  over the life of the loan  which
matures on May 31, 1999.





                                        8
<PAGE>

                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)
                   ------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                January 31, 1999
                                ----------------
                                   (Unaudited)
                                   -----------


(5) Computation of basic loss per common share:

During fiscal year 1997, the Company  adopted SFAS No. 128 "Earnings Per Share".
This statement  establishes  standards for computing and presenting earnings per
share ("EPS").  The statement  requires the dual  presentation of both Basic EPS
and  Diluted  EPS on the  face of the  statement  of  operations.  Basic  EPS is
computed based on weighted average shares outstanding and excludes any potential
dilution.   Diluted  EPS  reflects  potential  dilution  from  the  exercise  or
conversion  of  securities  into common  stock or from other  contracts to issue
common  stock.   Diluted  EPS  is  not  presented  since  the  effect  would  be
anti-dilutive.


(6 Income Taxes:

As of July 31,  1998,  the Company  had  approximately  $4.3  million of Federal
operating  loss carry  forwards with  expirations at various dates through 2013,
however, the use of pre-acquisition  operating loss carry forwards is limited by
the Internal  Revenue Code.  The  transaction  with the Blank Group will further
limit the Company's operating loss carry forwards.  As such, the Company has not
reflected a tax provision in its  consolidated  statement of operations  for the
six months ended January 31, 1999.


(7) Other:

During  December  1998,  the Company  received  notice from the  American  Stock
Exchanges  Adjudicatory  Council  affirming  the decision of the American  Stock
Exchange staff to strike the Company's  stock from listing and  registration  on
the Exchange. The Company's stock was delisted on December 31, 1998.

The  Company's  Common Stock  currently  trades on the Over the Counter  ("OTC")
bulletin board under the symbol ADPL.

During November 1998, the Company amended the  certificate of  incorporation  of
its wholly owned subsidiary,  ARPEL COSMETICS, INC., (a Delaware Corporation) to
change its name to ADRIEN ARPEL SPA & SALON, INC.






                                        9

<PAGE>


                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)
                   ------------------------------------------
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                      ------------------------------------
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                ------------------------------------------------
                                January 31, 1999
                                ----------------



Forward Looking Statements:

Certain statements in this report under the caption "Management's Discussion and
Analysis  of  Financial   Condition  and  Results  of   Operations"   constitute
"Forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation  Reform  Act  of  1995,  including,  without  limitation,  statements
regarding future cash  requirements.  Such  forward-looking  statements  involve
known and unknown  risks,  uncertainties  and other  factors which may cause the
actual  results,  performance  and  achievements  of the  Company,  or  industry
results,  to be materially  different from any future results,  performance,  or
achievements  expressed  or implied  by such  forward-looking  statements.  Such
factors  include,  among  others,  general  economic  and  business  conditions;
industry capacity; industry trends, competition,  litigation, material costs and
availability;  the loss of any significant management personnel; the loss of any
significant  customers;  changes in  business  strategy  or  development  plans;
quality of management;  availability,  terms and deployment of capital; business
abilities  and  judgment of  personnel;  availability  of  qualified  personnel;
changes in, or the failure to comply  with,  government  regulations;  and other
factors referenced in this report.

Results of Operations:

SIX MONTHS ENDED JANUARY 31, 1999

The Company  incurred a net loss of $1,780,647  for the six months ended January
31,  1999 as  compared  to a net loss of  $2,164,912  for the six  months  ended
January 31, 1998. The net loss per common and common  equivalent  shares for the
six months  ended  January  31,  1999 was  $(0.12) as  compared to a net loss of
$(0.18) for the six months ended January 31, 1998.

Net sales for the six months ended January 31, 1999 increased to $3,800,034 from
$3,766,063  for the six months ended January 31, 1998, an increase of $23,971 or
0.6%.

The increase in sales is primarily  attributable to an increase in sales through
the  Company's  catalog  mailings  and Internet  site.  For the six months ended
January 31, 1999, sales through the Company's catalog mailings and Internet site
were $399,834  versus  $144,087 for the six months ended  January 31, 1998,  and
increase of $255,747 or 177%. The Company commenced selling products through its
Internet site  (www.adrienarpel.com)  during June 1998. During January 1999, the
Company  launched phase two of its website and continues to see sales  increases
through this venue.  This increase was offset by a decrease in sales through the
Company's  department  store  business.  Department  store  sales  decreased  to
$3,400,200 for the six months ended January 31, 1999 from $3,631,976 for the six
months ended January 31, 1998, a decrease of $231,776 or 6.4%.

Cost of goods  sold as a  percentage  of net sales was 28.7% for the six  months
ended  January 31, 1999, as a compared to 30.6% for the six months ended January
31,  1998.  The  decrease  is  primarily  related to changes  which the  Company
implemented related to its salon operations. 





                                       10

<PAGE>

                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)
                   ------------------------------------------
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                      ------------------------------------
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                ------------------------------------------------
                                January 31, 1999
                                ----------------


During the six months  ended  January 31, 1998,  the  majority of the  Company's
department  store  locations  offered full salon services in addition to product
sales.  The Company ceased full salon  services in many of its department  store
locations during fiscal 1998. Full salon services remain available through 56 of
the Company's store locations which includes 38 Bay department  stores in Canada
and 18 leased  locations  throughout the United States.  The leased locations in
the United States  include 16 of the  Company's  Bloomingdale  department  store
installations and 2 of the Company's Kaufmann  department store locations.  Also
contributing to the decrease in the cost of goods sold percentage is a change in
the Company's sales mix since a larger percentage of the Company's current sales
are at retail versus wholesale.

Selling,  general and  administrative  expenses  decreased to $4,371,760 for six
months ended January 31, 1999 from  $4,848,628  for the six months ended January
31,  1998,  a  decrease  of  $476,868  or  9.8%.   This  decrease  is  primarily
attributable to a reduction in administrative  costs. The Company had undertaken
a program to reduce  administrative  costs since changing  management during the
last two quarters of fiscal 1998.

The Company recorded net interest expense of $56,846 during the six months ended
January  31,  1999 as  compared  to net  interest  income of $61,751 for the six
months ended January 31, 1998. The interest  expense is related to the Company's
related party loans with the Blank Group and the Interim Loan Group. The Company
recorded $60,120 of non cash financing  charges for the six months ended January
31, 1999 related to The financing arrangement with the Interim Loan Group.

THREE MONTHS ENDED JAUARY 31, 1999

The Company incurred a net loss of $1,303,046 for the three months ended January
31, 1999 as  compared to a net loss of  $1,407,020  for the three  months  ended
January 31, 1998. The net loss per common and common  equivalent  shares for the
three  months  ended  January  31, 1999 was $(0.09) as compared to a net loss of
$(0.12) for the three months ended January 31, 1998.

Net sales for the three months ended  January 31, 1999  decreased to  $1,317,404
from $1,379,724  recorded in the three months ended January 31, 1998, a decrease
of $62,320 or 4.5%.  The  decrease  in sales is due  primarily  to a decrease in
sales  through  the  Company's  leased  main floor  locations.  The  Company has
experienced some staffing problems at several of its leased locations during the
three months ended January 31, 1999.  This  decrease was partially  offset by an
increase in sales through the Company's  catalog mailings and Internet site. For
the three months ended January 31, 1999,  sales  through the  Company's  catalog
mailings and Internet  site were  $164,562  versus  $78,124 for the three months
ended January 31, 1998, and increase of $86,438 or 110.6%

Cost of goods sold as a  percentage  of net sales was 28.8% for the three months
ended  January 31, 1999 as compared to 27.7% for the three months ended  January
31, 1998.

Selling,  general and administrative expenses for the three months ended January
31, 1999  decreased to  $2,174,083  from  $2,427,775  for the three months ended
January 31, 1998, a decrease of $253,692 or 10.4%.



                                       11
<PAGE>

                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)
                   ------------------------------------------
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                      ------------------------------------
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                ------------------------------------------------
                                January 31, 1999
                                ----------------


The Company recorded net interest expense of $37,338 during the six months ended
January 31, 1999 as  compared  to net  interest  income of $23,738 for the three
months ended January 31, 1998. The interest  expense is related to the Company's
related party loans with the Blank Group and the Interim Loan Group. The Company
recorded  $30,060  of non cash  financing  charges  for the three  months  ended
January 31, 1999  related to the  financing  arrangement  with the Interim  loan
Group.



LIQUIDITY AND CAPITAL RESOURCES

The Company had a working  capital  deficit of $187,552 at January 31,  1999,  a
decrease of $1,522,641 from working capital of $1,335,089 at July 31, 1998.

Beginning  in the third  quarter  of fiscal  1997 the  Company  began  suffering
significant  losses  from  operations  as a  result  of  the  discontinuance  of
appearances on the Home Shopping  Network  ("HSN").  The Company appeared on HSN
from April 1995 through January 1997 and ended its relationship  with HSN due to
a contract dispute with Ms. Adrienne  Newman.  Ms. Newman had been the Company's
spokesperson  on HSN under the name  Adrien  Arpel.  During the period  that the
Company appeared on HSN the Company recorded profits and generated positive cash
flows from operations.

During February 1998, the Company received  $500,000 of working capital under an
agreement with an investment group. The $500,000 investment was in the form of a
12% five year note  convertible  into the  Company's  Common  Stock,  commencing
August 1, 1998 and  ending on the day  before the note is paid but no later than
January 30, 2003, at a rate of $0.25 per share.

During April 1998, the Company  received an additional  $250,000 advance from an
interim  loan  group.  The advance was needed by the Company in order to provide
assistance with respect to settling  certain trade  payables,  which were due to
key inventory  suppliers.  This advance bears interest at 12% and matures on May
31, 1999. In connection  therewith,  the members of this group also received one
share of the Company's  Common Stock for each dollar  loaned.  In June 1998, the
Company repaid $100,000 plus interest to one of the members of this group.

During  May 1998,  the  Company  commenced  a private  placement  offering  (the
"Offering") designed to raise up to $3 million in equity financing. The Offering
consisted of the issuance of up to 60 units (the "Units"), each in the amount of
$50,000.  Each Unit offered  consisted of 50,000 shares of the Company's  Common
Stock and 50,000 Class A Warrants.  Each Class A Warrant  entitles the holder to
purchase  one share of the  Company's  Common Stock and 50,000 Class A warrants.
Each Class A Warrant  entitles  the holder to purchase one share of Common Stock
at $4.00 per share.  The Class A Warrants are exercisable at any time commencing
upon issuance until May 31, 2001 and the Class B Warrants are exercisable at any
time  commencing  upon issuance until May 31, 2003. This Offering was terminated
on August 31, 1998 at which time 40.84 Units had been sold and gross proceeds of
$2,042,000 had been raised. The net proceeds received by the Company amounted to
$1,756,120 after paying $285,880 of placement fees and other Offering expenses.


                                       12
<PAGE>

                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)
                   ------------------------------------------
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                      ------------------------------------
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                ------------------------------------------------
                                January 31, 1999
                                ----------------


The Company has been dependent upon the receipt of the above mentioned  proceeds
in order to reduce past due  accounts  payable and invest in the  production  of
finished goods inventory.  The Company's results have suffered from the shortage
of readily available and regularly produced finished goods inventory. During the
six months ended January 31, 1999,  the Company  recorded  losses of $1,780,647.
The  Company has been  successful  in  reducing  operating  expenses by $476,868
during the six months  ended  January  31, 1999 but has not  achieved  the sales
levels necessary to return the Company to profitability or a positive cash flow.
Although  the Company  continues to implement  operating  cost  controls and its
plans  include  additional  sources of  revenue,  it will be  necessary  for the
Company to obtain additional sources of working capital in order to meet current
operating requirements.

The Company is substantially in default on a number of its current  obligations.
Management is in the process of seeking  sources of working capital beyond those
which can be generated from current  operations.  There can be no assurance that
management  will be  successful  in  obtaining  additional  capital or that such
capital  will be  sufficient  as to the amount  that will be  acceptable  to the
Company or that the terms which will be acceptable to the Company.

If management is unable to obtain such capital,  the Company will be required to
dramatically reduce its business or cease doing business.






























                                       13


<PAGE>


                   ADRIEN ARPEL, INC., (Formerly Alfin, Inc.)





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.





                                      ALFIN, INC.
                                      --------------------------

                                      Registrant)




                                      /s/ Charles R. Hoover
                                      -------------------------------------
                                          Charles R. Hoover
                                          President & Chief Operating Officer





Dated: March 12, 1999                 /s/ Michael D. Ficke
                                      ---------------------------------------
                                          Michael D. Ficke
                                          Chief Financial Officer




















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