SECURITIES AND

                          EXCHANGE

                          COMMISSION

                          WASHINGTON DC

                          20549

                               FORM 10-Q

           QUARTERLY REPORT PURSUANT TO SECTION
                13 OR 15 (d) OF THE SECURITIES
                EXCHANGE ACT OF 1934
                
                
                
                
  For Quarterly Period Ended November 1, 1997 COMMISSION
                                 FILE NO. 017870
                     LECHTERS, INC.
 (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                            
                NEW JERSEY                   No. 13-
2821526
STATE OR OTHER JURISDICTION OF               (I.R.S.
EMPLOYER INCORPORATION
IDENTIFICATION NO.)
  1 Cape May Street, Harrison, NEW JERSEY    07029
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)     (ZIP CODE)

Registrant's telephone number, including area code:
(973) 481-1100


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, and (2) has  been subject to such
filing requirements for the past 90 days.



                        YES  X  NO


The  number  of shares of the Registrant'
s common stock
s common stock,
without  par value, outstanding at December 3, 1997:
17,174,286:

                    LECHTERS, INC. AND SUBSIDIARIES
                               FORM 10-Q
                  FOR QUARTER ENDED
                                 NOVEMBE
                                 R 1,
                                 1997
                                 INDEX
                                 
                                                              PAGE NO. PART I.

Financial Information

       Item 1. Financial Statements

               Consolidated Balance Sheets
               November 1, 1997 and February 1, 1997             1

               Consolidated Statements of Income
               for the Thirteen and Thirty-Nine Weeks
Ended
               November 1, 1997 and November 2, 1996                2
   
               Consolidated Statements of Cash Flows
               for the Thirty-Nine Weeks Ended
               November 1, 1997 and November 2, 1996                3
    
               Consolidated Statement of Shareholders'
          Equity for the Thirty-Nine Weeks Ended
               November 1, 1997
4
    
               Notes to Consolidated Financial Statements
5-6

       Item 2. Management's Discussion and Analysis of
               Financial Condition and Results of
Operations       7-8

PART II.       Other Information

       Item 6. Exhibits and Reports
9

<PAGE>    3
                      LECHTERS, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
             (Amounts in thousands, except share
                                 and per share
                                 amounts)
           <TABLE>
           <CAPTION>
                                           November    February
                                              1,          1,
                                              1997        1997
           <S>                             <C>         <C>
                    A S S E T S
(unaudite
                                              d)
           Current Assets:
           Cash and Cash Equivalents       $ 3,901     $
                                                       7,022 Marketable
           Securities  28,762    54,084
           Accounts Receivable             14,480      5,561
           Merchandise Inventories         140,947     100,442
           Prepaid Expenses
8,689
                                                       5,734

           Total Current Assets            196,779     172,843
           Property and Equipment:
           Fixtures and Equipment          62,843      66,828
           Leasehold Improvements          100,875      102,912
                                           163,718     169,740
           Less Accumulated Depreciation     77,378       74,356
           & Amortization
                 Net Property and          86,340       95,384
           Equipment
           Other Assets                       5,896
                                                       4,106 Total Assets
           $289,015 $272,333
           
           LIABILITIES AND SHAREHOLDERS'
                       EQUITY
           Current Liabilities
           Accounts Payable                $ 24,412    $  3,264
           Dividends Payable - Preferred   --          1,010
           Stock
           Salaries, Wages and Other       18,602      13,318
           Accrued Expenses
           Taxes, Other Than Income Taxes  2,309       1,318
            Income Taxes Payable                        1,979
                                           799

           Total Current Liabilities
46,122   20,889
           Long-term Debt
           5% Convertible Subordinated
           Debentures
              due September 27, 2001 (Net
59,706
           of Unamortized                              58,853
              Discount of $5,294 and
           $6,147, respectively)
           Total Long-Term Debt            59,706        58,853
           Deferred Income Taxes and       22,942      22,183
           Other Deferred Credits
           Shareholders' Equity:
           Convertible Preferred Stock,
           $100 Par Value
              Authorized 1,000,000
           Shares,
              Issued and Outstanding -
           Series A - 149,999
              Shares; Series B - 50,001    20,000      20,000
           Shares
           Common Stock, No Par Value,
              Authorized 50,000,000
           Shares,
              Issued and Outstanding       58          58
           17,155,086
           Unrealized Holding Gain (Loss)
           on Available
              for Sales Securities         2           (29)
           Additional Paid-in Capital      62,273      62,273
           Retained Earnings                77,912
                                                       88,106
Total Shareholders' Equity    160,245       170,408
           Total Liabilities and           $289,015    $272,333
           Shareholders'Equity
           </TABLE>
           See accompanying notes to consolidated
           financial statements.
           
           
                                 -1 -
<PAGE>    4
                   LECHTERS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF INCOME
       (Amounts in thousands, except share and per
share data)

       
    <TABLE>
    <CAPTION>
                               Thirteen Weeks
                                   Thirty-Nine Weeks
                                   Ended
                                   Ended
                             Novembe  Novembe
                              Novembe   November r 1,     r 2,     r 1,
                              2,
                               1997      1996
1997      1996
                                (unaudited)
(unaudited)
    <S>                      <C>      <C>      <C>      <C>
    Net Sales                $        $
$279,95  $
                             99,711   98,495   4        276,214
    Cost of Goods Sold
    (including                        73,178            208,405
       occupancy and         74,902
212,320
    indirect costs)
    Gross Profit             24,809   25,317
67,634     67,809
    Selling, General and
       Administrative         27,989  27,085
83,372  78,446
    Expenses
    Operating Loss           (3,180)  (1,768)
(15,738  (10,637)
                                               )
    Other Expenses
    (Income):
    Interest Expense         1,153    1,177    3,433    3,919
    Interest Income          (412)    (307)
(1,718)  (1,152)
    Net Investment
       (Gain/Income) Loss                                      19
                             (131)    15       (175)
    Total Other Expenses
1,540     2,786
    (Income)                 610      885
    Loss Before Income       (3,790)  (2,653)
(17,278  (13,423)
    Taxes                                      )
    Income Tax Benefit                                   (5,504)
                             (1,554)  (1,088)
(7,084)
    Net Loss                 (2,236)
(10,194  (7,919)
                                      (1,565)  )
    Preferred Stock                                           589
    Dividend Requirement     253      253      758
    Net Loss Applicable to
    Common                   ($2,489  ($1,818
($10,95  ($8,508)
      Shareholders           )        )        2)
    Net Loss Per Common                                  ($0.50)
    Share                    ($0.15)  ($0.11)
($0.64)
    Weighted Average Common
    Shares                   17,155,  17,155,
17,155,  17,155,00
       Outstanding           000      000      000      0
    </TABLE>
        
    See accompanying notes to consolidated financial



statements.



















                                 - 2 -




<PAGE>    5
                   LECHTERS, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS

                        (Amounts in thousands)
      <TABLE>
      <CAPTION>
                                        Thirty-Nine
                                       Weeks Ended
                                       November 1,
                                       November 2,
                                            1997         1996

(unaudited)
      <S>                              <C>
<C>
      Cash Flows From Operating
      Activities:
      Net Loss                         ($10,194)
($7,919)
      Adjustments to Reconcile Net
      Loss to Net
   Cash Used In  Operating
Activities:
Depreciation and Amortization    12,917       12,609
Deferred Rent                    694          625
Other                            982          1,256
Changes in Assets and
Liabilities:
Increase in Accounts Receivable  (8,919)      (5,632)
Increase in Merchandise          (40,505)     (35,947)
Inventories
Increase in Prepaid Expenses     (2,955)      (6,074)
Increase in Accounts Payable,
  Accrued Expenses and Taxes
Other                            27,423       26,109
  Than Income Taxes
Decrease in Income Taxes         (1,180)      (861)
Payable
(Increase) Decrease in Other      (1,251)            152
Assets

Net Cash Used In Operating        (22,988)    (15,682)
Activities

Cash Flows From Investing
Activities:
Capital Expenditures             (4,499)      (6,624)
Decrease in Available for Sale
   Securities                     25,376       25,836

Net Cash Provided by
  Investing Activities            20,877      19,212

Cash Flows From Financing
Activities:
Issuance of Preferred Stock      --           20,000
Payment of Senior Notes Payable  --           (20,250)
Payment of Preferred Stock                              --
Dividend                         (1,010)

Net Cash Used In Financing
  Activities                       (1,010)    (250)

Net (Decrease) Increase  in
Cash and                         (3,121)      3,280
  Cash Equivalents
Cash and Cash Equivalents,
Beginning of                        7,022     4,234
  Period

Cash and Cash Equivalents, End   $  3,901     $ 7,514
of Period

Supplemental Disclosure of Cash
Flows
  Information:

Non Cash Investing Activities:

Unrealized Holding Loss
Adjustment                       $      54    ($  144)
  on Available for Sale
Securities
Cash Paid During the Period
for:
Interest                         $ 3,378      $ 4,546

      Income Taxes                     $ 2,061      $  847
      </TABLE>

      See accompanying notes to consolidated financial
      statements.
                                 - 3 -
<PAGE>    6
                     LECHTERS, INC. AND SUBSIDIARIES

             CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

                         (Amounts in thousands)
<TABLE>
<CAPTION>
                  Common   Preferre Addition            Unrealiz
                  Stock       d        al     Retained     ed
                   Issued   Stock    Paid-In  Earnings  Holding    Total
                             Issued  Capital              Gain
                                                         (Loss)
<S>              <C>       <C>      <C>       <C>       <C>      <C>
Balance,         $58       $20,000  $62,273   $88,106   ($ 29)   $170,408
February 1, 1997

Net Loss Thirty-
Nine Weeks       --        --       --        (10,194)  --       (10,194)
   Ended
November 1, 1997

Unrealized
Holding Loss        --                                      31         31
   Adjustment              --       --        --

Balance,
November 1, 1997 $58       $20,000  $62,273   $ 77,912  $    2   $
   (unaudited)                                                   160,245

</TABLE>

See accompanying notes to consolidated financial statements.






















































                                 - 4 -
<PAGE>    7
                    LECHTERS, INC. AND SUBSIDIARIES
                                   
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   
                              (UNAUDITED)
                                   
                                   
1.   GENERAL
     The accompanying unaudited Consolidated Financial Statements have
     been prepared in accordance with the instructions for Form 10-Q
     and do not include all the information and footnotes required by
     generally accepted accounting principles for complete financial
     statements.  In the opinion of management, all adjustments
     (consisting of normal recurring accruals) considered necessary for
     a fair presentation for interim periods have been included.
     The Company's results of operations for the thirteen and thirty
     nine weeks ended November 1, 1997 are not necessarily indicative
     of the operating results for the full year.
     Certain reclassifications have been made to the financial
     statements of the prior year to conform with the classifications
     used for Fiscal 1997.
2.   NET LOSS PER SHARE
     Net loss per share data were computed by dividing net loss,
     reduced by the Convertible Preferred Stock Dividend requirement,
     by the weighted average number of common shares outstanding during
     the thirteen and thirty-nine weeks ended November 1, 1997 and
     November 2, 1996.
     Stock options, which are common stock equivalents, were excluded
     from the weighted average of outstanding shares because inclusion
     would reduce the loss per share.
     Neither the Company's 5% Convertible Subordinated Debentures
     issued in September 1991 nor the Convertible Preferred Stock
     issued in April 1996 qualified as common stock equivalents at the
     time of issuance.  Consequently, both were excluded from the
     calculations of primary net loss per share for the periods ended
     November 1, 1997 and November 2, 1996.
     For the purpose of computing fully diluted net loss per share, the
     assumed conversion of such debentures would have an antidilutive
     effect on fully diluted loss per share for the thirteen and thirty-
     nine weeks ended November 1, 1997 and November 2, 1996.  With
     respect to the Convertible Preferred Stock, conversion of such
     preferred stock would have an anti-dilutive effect on the
     calculation of fully diluted loss per share for the thirteen and
     thirty-nine weeks ended November 1, 1997 and November 2, 1996.
     
     
     
     
     
     

                                 - 5 -
     <PAGE>    8
3.   RECENT ACCOUNTING PRONOUNCEMENTS
     In February 1997, the Financial Accounting Standards Board issued
     Statement of Financial Accounting Standards (SFAS No. 128)
     "Earnings per Share."  The statement is effective for financial
     statements for periods ending after December 15, 1997, and changes
     the method in which net income per share will be determined.
     Adoption of this statement by the Company will not have a material
     impact on net income per share.
     
     
4.  AMENDMENT OF THE AMENDED AND RESTATED CREDIT AGREEMENT

   On September 11, 1997, the Company and a group of banks executed
    Amendment No. 1 of the Amended and Restated Credit Agreement



    (Credit Agreement) dated May 23, 1996. The significant terms of



    Amendment No. 1 included the authorization of the Company to



    purchase, redeem or retire up to one million shares in aggregate of



    its common stock, to make loans to employees, and allows letters of



    credit to have extended expiration dates rather than automatically



    expiring 90 days after issuance.  The termination date of the



    Credit Agreement remains May 22, 1998.  The Board of Directors of



    the Company, at its Meeting held September 11, 1997, authorized the



    purchase, redemption or retirement by the Company of its common



    stock to the extent permitted under the Credit Agreement.



    



    



    



    



    



    



                                 - 6 -
                                   
                                   
                                   
                                   
<PAGE>    9
PAGE>     9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS
THIRTEEN WEEKS ENDED NOVEMBER 1, 1997 IN COMPARISON WITH THIRTEEN WEEKS
ENDED NOVEMBER 2, 1996.
Net sales for the thirteen weeks ended November 1, 1997 increased
$1,216,000 to $99,711,000, a 1.2% increase over $98,495,000 reported
for the comparable thirteen week period of the prior fiscal year. The
sales increase was in part attributable to increased advertising
activity by the Company in support of the Lechters Housewares stores.
For the third quarter of Fiscal 1997, the Company's comparable store
sales increased 0.4% versus the prior year. By division, comparable
store sales for Lechters Housewares increased 2.8% and Famous Brands
Housewares Outlets decreased 6.4%.  During the third quarter of Fiscal
1997, the Company opened one store and closed four.
Gross Profit for the quarter decreased $508,000 to $24,809,000 and was
24.9% as a percent of net sales, which was 0.8 percentage points below
the gross profit rate for the third quarter of the  prior year. The
decrease in gross margin was primarily attributable to an increase in
cost of goods sold expense.  The increase was a result of additional
price reductions related to a merchandise mix shift and assortment
transition occurring primarily in the Company's Famous Brands
Housewares Outlets division.
Selling, general and administrative expenses totaled $27,989,000, an
increase of $904,000 over the same period of the prior year. At 28.1%
as a percent of net sales, the expense rate for the third quarter was
0.6 percentage points higher than the rate for comparable period of
Fiscal 1996. The increase in selling, general and administrative
expenses was due to the planned increase in payroll, particularly in
the Service Office, and additional advertising expenditures for
promotion of the Company's Lechters Housewares division.
Other Expenses for the quarter were $610,000, a $275,000 decrease from
the comparable period of the prior year. As a percent of sales, other
expenses declined 0.3% to 0.6%. The decrease was primarily attributable
to higher interest income and investment income, primarily dividends,
which were the result of higher balances of invested cash and
marketable securities.
THIRTY-NINE WEEKS ENDED NOVEMBER 1, 1997 IN COMPARISON WITH THIRTYNINE
WEEKS ENDED NOVEMBER 2, 1996.
Net sales for the thirty-nine weeks ended November 1, 1997 increased
$3,740,000 to $279,954,000, a 1.4% increase over $276,214,000 reported
for the comparable thirty-nine week period of the prior fiscal year.
The sales increase was primarily attributable to additional promotional
activities of the Company.  Through the first three quarters of Fiscal
1997, the Company's comparable store sales increased 0.2% versus the
prior year.  By division, comparable store sales for Lechters
Housewares increased 2.6% and Famous Brands Housewares Outlets
decreased 7.3%.  Year to date, the Company has opened four stores and
closed eleven stores. The net decrease of seven stores for the year has
reduced the Company's retail selling space by 39,500 square feet to
approximately 2,406,500. As of November 1, 1997, the Company operated
642 stores as compared with 647 stores at November 2, 1996, a decrease
of 0.8%.


                                  -7-
                                   
                                   
<PAGE>    10
<PAGE>    10
Gross Profit for the year to date decreased $175,000 to $67,634,000
and was 24.2% as a percent of net sales and was 0.3 percentage points
below the gross profit rate for the comparable year to date period of
the prior year. The slight decrease in the gross margin rate was
primarily attributable to higher levels of price reductions in support
of the Company's increased advertising, a shift in merchandise mix and
an assortment transition in the Company's Famous Brands Housewares
Outlets division.

Selling, general and administrative expenses totaled $83,372,000, an
increase of $4,926,000 over the prior year. At 29.8% as a percent of
net sales, the expense rate for the year to date was 1.4 percentage
points higher than the rate for comparable thirty-nine week period of
Fiscal 1996. The increase in selling, general and administrative
expenses was due to planned increases in payroll expenses both at the
stores and Service Office and additional advertising expenditures for
promotion of the Company's  Lechters Housewares division.

Other Expenses for the fiscal year to date were $1,540,000, a
$1,246,000 decrease from $2,786,000 reported for the comparable period
of the prior year. As a percent of sales, other expenses declined 0.4%
to 0.6%. The decrease was attributable to the lower interest expense
due to the repayment of  the Company's senior notes during the prior
fiscal year. The Company also earned higher interest income and
increased investment income, primarily dividends, which were the result
of higher balances of invested cash and marketable securities.

LIQUIDITY AND CAPITAL RESOURCES.

Cash, cash equivalents and marketable securities increased $13,523,000
over the balances at the close of the third quarter of Fiscal 1996.
This increase was a significant reason for the aforementioned
improvement in Other Expenses.

Cash flow during the thirty-nine weeks ended November 1, 1997 as
reflected on the Statements of Cash Flows, was a net decrease in cash
and cash equivalents of $3,121,000. Operating activities, comprised of
the operating loss of $10,194,000 adjusted for non-cash expenses such
as depreciation and amortization and by changes in operating assets,
has utilized $22,988,000 of cash during Fiscal 1997 to date.
Significant components of operating activities for the year to date
included depreciation and amortization which provided cash of
$12,917,000, merchandise inventories which increased using $40,505,000
of cash and accounts payable, accrued expenses and taxes other than
income taxes which increased and provided cash of $27,423,000. The
increases in inventory and accounts payable were normal as the Company
has rebuilt its inventories in preparation for the upcoming holiday
sales period. Due to inventory management programs instituted during
Fiscal 1996, inventory levels at February 1, 1997 were significantly
lower resulting in the higher change in this asset for the year to
date, although total merchandise inventories were $4,898,000 lower at
November 1, 1997 than at November 2, 1996. Investing activities,
capital expenditures and reductions in marketable (available for sale)
securities produced $20,877,000 in cash.  Capital expenditures used
$4,499,000 of cash while the decrease in available for sale securities
provided $25,376,000 of cash.

Capital expenditures were primarily for construction of and fixtures
for new locations and for enhancements to the information technology
infrastructure. Financing activities utilized $1,010,000 of cash as the
Company paid its initial dividend on  the convertible preferred stock
issued in April 1996.

                                  -8-
<PAGE>    11


Item 6-   Exhibits and Reports on Form 8-K
     None
                              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.



                              LECHTERS, INC.

                              By:  /s/ John W. Smolak
                                   John W. Smolak
                                   Senior Vice President and

                                   Chief Financial Officer

                                   

Date:     December 5, 1997









































                                 - 9 -