SECURITIES AND EXCHANGE COMMISSION
 
                             Washington, D.C. 20549


 
                                   FORM 10-Q/A
                                 AMENDMENT NO.1

                Quarterly Report Under Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


For quarterly period ended March 1, 1997

Commission File No.  0-19369


                   LITTLE SWITZERLAND, INC.

    (Exact name of registrant as specified in its charter)

Delaware                            66-0476514
(State of Incorporation)            (I.R.S Employer
                                    Identification No.)

161-B Crown Bay Cruise Ship Port
St. Thomas U.S.V.I.                             00802
(Address of Principal Executive Offices)   (Zip Code)

(809) 776-2010
(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 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       



At April 10, 1997, 8,461,488 shares of $.01 par value
common stock of the registrant were outstanding.

<PAGE>


                            LITTLE SWITZERLAND, INC.

                              INDEX TO FORM 10-Q/A

                       FOR THE QUARTER ENDED March 1, 1997


                                                             PAGE
PART I.         FINANCIAL INFORMATION

Item 1.         Financial Statements

      Consolidated Balance Sheets as of
      March 1, 1997 (unaudited) and
      June 1, 1996                                             3

      Consolidated Statements of Income
      for the three and nine months
      ended March 1, 1997 and March 2,
      1996 (unaudited)                                         4
 
 
      Consolidated Statements of Cash Flows
      for the nine months ended March 1,
      1997 and March 2, 1996 (unaudited)                       5

      Notes to Consolidated Financial
      Statements (unaudited)                                   6-12


Item 2.         Management's Discussion and Analysis
                of Financial Condition and Results
                of Operations                                 13-16


PART II. OTHER INFORMATION

Item 6.         Exhibits and Reports on Form 8-K              17

Signature Page                                                18










<PAGE>

PART I.  FINANCIAL INFORMATION                                    FORM 10-Q/A
Item 1.  Financial Statements                                     Page 3
 
                    LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
                   Consolidated Balance Sheets (in thousands)

                                                     March 1,       June 1,
                          ASSETS                      1997           1996   
                                                      ----           ----   
Current assets:                                     (unaudited)
   Cash and cash equivalents........................$  4,820      $  5,393
   Accounts receivable..............................   1,843         1,892
   Inventory........................................  46,383        43,678
   Prepaid expenses and other current assets........   3,632         1,607
                                                      ------        ------
         Total current assets.......................  56,678        52,570 
                                                      ------        ------
 
Property, plant and equipment, at cost..............  37,874        34,247
   Less -- Accumulated depreciation................. (14,863)      (12,522)
                                                      ------        ------
                                                      23,011        21,725 
                                                      ------        ------

Other assets........................................   3,382         3,582 
                                                      ------        ------  

         Total assets...............................$ 83,071      $ 77,877
                                                      ======        ======   
 
               LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
   Current portion of long term debt................$  2,219      $    832
   Unsecured notes payable..........................   9,100         7,100
   Accounts payable.................................  10,856         6,839
   Accrued and currently deferred income taxes......     751         2,002
   Other accrued expenses and deferred income.......   2,552         3,225
                                                      ------        ------ 

         Total current liabilities..................  25,478        19,998
           
Long term debt......................................   6,681         8,068

Deferred income taxes...............................      90            90 
                                                      ------        ------

         Total liabilities..........................  32,249        28,156
                                                      ------        ------ 

Commitments and contingencies.......................     ---           ---

Minority interest...................................   1,619         1,619  
                                                      ------        ------
             
Stockholders' equity:
  Preferred stock, $.01 par value--
    Authorized--5,000 shares
    Issued and outstanding--none....................     ---           ---
  Common stock, $.01 par value--
    Authorized--20,000 shares
    Issued and outstanding--8,461 shares
      at March 1, 1997 and 8,457
      at June 1, 1996...............................      85            85
  Capital in excess of par..........................  14,811        14,792
  Retained earnings.................................  34,307        33,225
                                                      ------        ------ 

      Total stockholders' equity....................  49,203        48,102
                                                      ------        ------  
      Total liabilities, minority interest
         and stockholders' equity...................$ 83,071      $ 77,877
                                                      ======        ====== 
 
           See accompanying notes to consolidated financial statements

<PAGE>

PART I. FINANCIAL INFORMATION                                     FORM 10-Q/A
Item 1. Financial statements                                      Page 4
 


                    LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
                        Consolidated Statements of Income
                      (in thousands except per share data)
                                   (unaudited)



                                 For the three                For the nine
                                 months ended                 months ended
                              March 1,     March 2,       March 1,     March 2,
                               1997         1996           1997         1996  
 

Net sales.....................$32,624       $20,680        $65,950     $44,499
Cost of sales................. 18,126        11,794         36,918      25,352 
                              -------       -------        -------     -------
Gross profit.................. 14,498         8,886         29,032      19,147

Selling, general and
administrative expenses....... 11,263         8,259         27,211      20,961

Business interruption
insurance proceeds............    ---           ---            560        ---  
                              -------       -------        -------     -------
Operating income (loss).....  3,235           627          2,381      (1,814)

Interest expense, net.........    398           144          1,166         324 
                              -------       -------        -------     ------- 

   Income (loss) before
      income taxes............  2,837           483          1,215      (2,138)

Provision (benefit) for
income taxes..................    426            86            133        (394) 
                              -------       -------        -------     -------

Net income (loss).............$ 2,411       $   397          1,082     $(1,744) 
                              =======       =======        =======     =======

Net earnings (loss)
    per share.................$  0.28       $  0.05         $ 0.13       (0.21) 
                              =======       =======        =======     =======

Weighted average shares
    outstanding...............  8,540         8,456          8,498       8,455  
                              =======       =======        =======     =======  
                                                            `
            See accompany notes to consolidated financial statements

<PAGE>


PART I. FINANCIAL INFORMATION                                      FORM 10-Q/A
Item 1. Financial statements                                       Page 5

                    LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                 (in thousands)
                                   (unaudited)

                                                     For the nine months ended
                                                         March 1,    March 2,
                                                          1997         1996
                                                          ----         ----
Cash flows from operating activities:   
Net income (loss).....................................$  1,082    $ (1,744)
     Adjustments to reconcile net income (loss) to
       net cash provided by operating activities--
       Depreciation...................................   2,341       1,762
       Changes in assets and liabilities:
         Decrease (increase) in accounts receivable...      49        (618)
        (Increase) in inventory.......................  (2,705)     (4,816)
        (Increase) in prepaid expenses
           and other current assets...................  (2,025)       (772)
         Decrease (increase) in other assets..........     200         (73)
         Increase in accounts payable.................   4,017       2,016
        (Decrease) increase in other accrued
            expenses and deferred income..............    (950)      6,256
        (Decrease) in accrued and currently
           deferred income taxes......................    (974)       (710)
                                                        -------     -------
   Net cash provided by operating activities..........   1,035       1,301
                                                        -------     -------
Cash flows from investing activities:
     Capital expenditures.............................  (3,627)     (5,002)
     Acquisition of inventory and fixed assets........       0      (8,917)
                                                        -------     -------
   Net cash (used in) investing activities............  (3,627)    (13,919)
                                                        -------     -------
Cash flows from financing activities:
     Proceeds from unsecured notes payable............  21,500      23,800
     Repayments of unsecured notes payable............ (19,500)    (18,600)
     Proceeds from long term borrowings...............       0       8,900
     Issuance of common stock.........................      19          17
                                                        -------     -------
Net cash provided by financing activities.............   2,019      14,117
                                                        -------     -------

Net  increase  in cash and cash equivalents...........    (573)      1,499

Cash and cash equivalents, beginning of period........   5,393       2,899
                                                        -------     -------
Cash and cash equivalents, end of period..............$  4,820    $  4,398 
 
Non-cash activity:
     Issuance of preferred stock by subsidiary
        used in acquisition                           $    --     $  1,619 
                                                      ========    ========

During the nine months ended March 1, 1997 and March 2, 1996, the Company paid
income taxes of $1,354 and $316, respectively, and paid interest of $1,100 and
$120, respectively.

           See accompanying notes to consolidated financial statements

<PAGE>

FINANCIAL INFORMATION                                              FORM 10-Q/A
Item 1.  Financial statements                                      Page 6
 

                 LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
                 Notes to Consolidated Financial Statements
 
                             (unaudited)


1. CONSOLIDATED FINANCIAL STATEMENTS

     The accompanying  consolidated  financial statements include the operations
of Little  Switzerland,  Inc. (the "Company") and its wholly owned subsidiaries,
L.S.  Holding,  Inc.  and L.S.  Wholesale,  Inc.  All  significant  intercompany
balances have been eliminated in consolidation. The interim financial statements
are  unaudited  and,  in the  opinion of  management,  contain  all  adjustments
necessary to present fairly the Company's financial position as of March 1, 1997
and March 2,  1996 and the  results  of its  operations  and cash  flows for the
interim  periods  presented.  It  is  suggested  that  these  interim  financial
statements be read in  conjunction  with the financial  statements and the notes
thereto included in the Company's latest report on Form 10-K.

     Effective with the second quarter of fiscal year 1996, the Company  adopted
a "4-5-4" fiscal  calendar  wherein each fiscal  quarter  contains two four week
periods and one five week  period,  with each period  beginning  on a Sunday and
ending on a Saturday.  Previously,  the  Company  used  calendar  months for its
fiscal  periods.  The  purpose  of this  change is to  provide  more  consistent
comparability  between fiscal periods. The change in fiscal calendar resulted in
one less day in the nine month period of the current fiscal year, as compared to
the prior fiscal year. Management estimates that this one day difference did not
cause any material  incomparability in the net income of the two periods.  There
was no fiscal calendar  difference in the three month period, this year compared
to last year.

     The  results  of  operations  for the  interim  periods  presented  are not
necessarily indicative of the results to be expected for a full fiscal year, due
to the seasonal nature of the Company's operations.


2. RESTATEMENT

     In July, 1997 management disclosed to its independent auditors that certain
transactions  may have been recorded in error on the books of the Company.  As a
result, the Company engaged Arthur
<PAGE>

                                                                   FORM 10-Q/A
                                                                   Page 7



                 LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
                 Notes to Consolidated Financial Statements

                                (unaudited)


Andersen,  LLP to evaluate the matter and determine  the impact,  if any, on the
Company's previously and currently reported  consolidated  financial statements.
After  extensive  review,  analysis and  evaluation,  which focused on unlocated
differences in cash balances,  management believes that an employee  defalcation
has occurred during the current fiscal year. The estimated loss of approximately
$935,000 and  $1,693,000  has been  classified  as a general and  administrative
expense in the accompanying restated  consolidated  statements of income for the
three and nine month periods ended March 1, 1997.


3. 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.


4. TRANSACTIONS WITH AFFILIATES

     The  Company  enters  into a number  of  transactions  with  Town & Country
Corporation,  of which one of the Company's  Directors is an Executive  Officer.
The  Company  purchases  a  portion  of its  merchandise  from  Town  &  Country
Corporation   and  its   affiliated   companies  at  prices  which   approximate
arm's-length transactions.


5. CREDIT ARRANGEMENTS

     The Company  has  available a total of $17.5  million in  unsecured  credit
facilities,  of which $8.4 million is available  for borrowing  with  maturities
ranging from one to three years from March 1, 1997. Any unfunded  portion of the
facilities  can be withdrawn at the bank's  discretion.  Outstanding  borrowings
against these credit facilities totaled $9.1 million as of March 1, 1997.

<PAGE>

                                                                  FORM 10-Q/A
                                                                  Page 8


                    LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
 
                                   (unaudited)


Additionally,  in February 1996, the Company secured term debt of  approximately
$8.9 million from its two lead banks to finance the acquisition of the fixtures,
leasehold  rights and  inventories  of two stores in Barbados.  Interest on this
debt accrues at an annual interest rate of  approximately  7.25%, and is payable
monthly.  The principal is payable in equal quarterly  payments over a four year
period,  commencing  March  1997.  As of  March  1,  1997,  the  Company  was in
compliance with all restrictive covenants related to its unsecured and term debt
agreements.  Additionally,  the Company has available  separate  facilities  for
foreign exchange contracts.


6. EARNINGS PER SHARE

     Earnings  per share is based on the weighted  average  number of common and
dilutive  common  equivalent  shares  (stock  options)  outstanding  during each
period.


7. ACCOUNTING FOR INCOME TAXES

     The Company uses the  liability  method in  accounting  for income taxes in
accordance  with SFAS No. 109. This standard  determines  deferred  income taxes
based on the  estimated  future  tax  effects  of any  differences  between  the
financial  statement  and the tax basis of  assets  and  liabilities,  given the
provisions of the enacted tax laws.


8.  INTANGIBLE ASSETS

     The Company  accounts for long-lived  and  intangible  assets in accordance
with SFAS No. 121,  Accounting for the  Impairment of Long-lived  Assets and for
Long-lived  Assets to be  Disposed  of.  The  Company  continually  reviews  its
intangible  assets for events or changes in  circumstances  which might indicate
that the  carrying  amount of the assets  may not be  recoverable.  The  Company
assesses  the   recoverability   of  the  assets  by  determining   whether  the
amortization  of such  intangibles  over their  remaining lives can be recovered
through projected undiscounted future results. The amount

<PAGE>

                                                                   FORM 10-Q/A
                                                                   Page 9

                    LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

                                   (unaudited)


of impairment,  if any, is measured based on projected discounted future results
using a discount rate reflecting the Company's average cost of funds.


9.  STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 128 - EARNINGS
       PER SHARE


     In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 (SFAS No. 128), Earnings per Share, which
supersedes  Accounting  Principles Board Opinion 15, the existing  authoritative
guidance. SFAS No. 128 is designed to improve the earnings per share information
provided in the financial  statements by simplifying the existing  computational
guidelines,   revising  the   disclosure   requirements,   and   increasing  the
comparability of earnings per share on an international  basis.  SFAS No. 128 is
effective for financial  statements  for both interim and annual  periods ending
after December 15, 1997 and requires  restatement of all  prior-period  earnings
per share data presented. The new statement modifies the calculations of primary
and fully  diluted  earnings per share and replaces  them with basic and diluted
earnings  per share.  Basic  earnings  per share  includes  no  dilution  and is
calculated  by  dividing  net income by the  weighted  average  number of common
shares  outstanding  for the period.  Diluted  earnings  per share  reflects the
potential  dilution  of stock  options  that could  share in the  earnings of an
entity, similar to fully diluted earnings per share. Earnings per share in these
financial statements would not be affected under the new pronouncement.
 

10.  STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 123 -
          ACCOUNTING FOR STOCK-BASED COMPENSATION

     In December 1995, the Financial  Accounting Standards Board issued SFAS No.
123, Accounting for Stock-Based  Compensation,  which is to become effective for
fiscal years beginning  after December 15, 1995. SFAS No. 123 requires  employee
stock-based  compensation  to be either recorded or disclosed at its fair value.
Management intends to continue to account for employee stock-based  compensation
under Accounting Principles Board Opinion No. 25 and

<PAGE>

                                                                  FORM 10-Q/A
                                                                  Page 10


                    LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
 
                                   (unaudited)


will  not  adopt  the  new  accounting   provision  for  employee  stock-  based
compensation  under SFAS No.  123,  but will  include  the  additional  required
disclosures in the fiscal 1997 year end financial statements.


11.  ADVERTISING

     The Company expenses the costs of advertising as advertisements are printed
and distributed.  The Company's advertising consists primarily of advertisements
with local and national travel  magazines which are produced on a periodic basis
and  distributed  to  visiting  tourists,  and fees paid for  promotional  "port
lecturer" programs directed primarily at cruise ship passengers.


12.  COMMITMENTS AND CONTINGENCIEs

     In September 1995,  Hurricanes Luis and Marilyn inflicted damage to several
of the  Company's  stores and  caused  significant  damage to  various  islands'
infrastructures,  including hotels and other tourist facilities.  As of November
20, 1996, all stores had reopened.

     The Company has settled all  outstanding  claims  related to the hurricanes
with its  insurance  carrier.  In  connection  with this final  settlement,  the
Company   received   approximately   $13.4  million  in  property  and  business
interruption  proceeds.  The Company recorded a net gain of  approximately  $4.7
million  in  fiscal  1996,  after  write-offs   related  to  damaged  assets  of
approximately  $8.1 million,  including  furniture  and fixtures,  inventory and
other  assets  related  to  stores  affected  by the  hurricanes.  In  addition,
approximately  $560,000,  representing  fiscal 1997 lost  profits for a store in
Marigot not reopened until November 1996, was recorded as deferred income on the
Company's  consolidated  balance  sheet as of June 1,  1996.  In the nine  month
period, the Company recorded the $560,000,  as business  interruption  insurance
proceeds, which represents lost profits for the closed Marigot store.


<PAGE>

                                                                   FORM 10-Q/A
                                                                   Page 11


                    LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
 
                                   (unaudited)


     The Company is currently  insured for property losses and related  business
interruption losses in excess of 5% of the insured value of the property subject
to a claim.  For fiscal  years 1995 and 1996,  the Company was only  insured for
wind related losses in excess of $5 million, subject to certain deductibles.


13.  ACQUISITION

     On February 16, 1996, World Gift Imports (Barbados),  Inc., a subsidiary of
LS  Holding,  Inc.  which is a  subsidiary  of  Little  Switzerland,  Inc.  (the
"Company"),  purchased the leasehold  rights,  fixtures and  inventories  of two
retail stores located in Barbados,  West Indies,  from Dacosta  Mannings Inc., a
subsidiary of Barbados  Shipping & Trading Company Limited.  The two stores were
previously  operated  under  the name of  "Louis  Bayley"  and sold  merchandise
similar  to that  carried in the  Company's  retail  stores,  such as name brand
watches, jewelry, china, crystal and gift items at duty free prices. The Company
began  operating the two stores as "Little  Switzerland"  stores on February 19,
1996.

     The  purchase  price of  approximately  $10.6  million was financed by bank
borrowing  provided by the Company's two primary  banks,  Chase Bank and Bank of
Nova Scotia,  of approximately  $8.9 million and the issuance of preferred stock
of  approximately  $1.6  million by World Gift Imports  (Barbados),  Inc. to the
seller.  The purchase price is subject to adjustment  three and four years after
the closing date, based on the sales performance of the two purchased stores and
any additional  stores that may be opened by the Company in Barbados during that
period.  The Company pays to the seller a management fee of 2.5% of its Barbados
stores'  annual  sales up to $15 million and 1.25% of annual  sales in excess of
$15 million,  so long as the preferred stock is unredeemed.  The preferred stock
may be  redeemed by the Company at face value at any time after three years from
the date of close  through  nine  years from the date of close.  Following  that
period,  the Company  retains the right of first  refusal to match any bona fide
offer from a third party to purchase the preferred stock.
 


<PAGE>

                                                                  FORM 10-Q/A
                                                                  Page 12


                    LITTLE SWITZERLAND, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
 
                                   (unaudited)


     The Acquisition has been accounted for as a purchase transaction  effective
as of February 16, 1996, in accordance with Accounting  Principles Board Opinion
No. 16, "Business  Combinations",  and accordingly,  the consolidated  financial
statements  for the period  subsequent to February 16, 1996 reflect the purchase
price  allocated  to tangible and  intangible  assets  acquired,  based on their
estimated fair values as of February 16, 1996.
 
     Unaudited  pro forma  operating  results of the Company for the nine months
ended March 2, 1996 as adjusted for the debt financing and estimated  effects of
the acquisition as if it had occurred on June 1, 1995, are as follows:
 

Net sales.................................  $50,137,000
Net (loss)................................   (1,735,000)
Net (loss) per share......................        (0.21)
 
Weighted average shares outstanding.......    8,456,000





 

















<PAGE>

                                                                  FORM 10-Q/A
                                                                  Page 13


PART I. FINANCIAL INFORMATION

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


RESULTS OF OPERATIONS


NET SALES

     Net sales for the third  quarter  ended March 1, 1997 were $32.6 million or
57.8% higher than net sales of $20.7 million for the  corresponding  period last
year.  Net sales of $66.0  million for the nine month period ended March 2, 1997
were 48.2% higher than net sales of $44.5 million for the  corresponding  period
last year.  The increase in net sales is primarily the result of sales this year
from stores  that were  closed for all or part of the prior year  periods due to
Hurricanes  Luis and Marilyn in September  1995, and sales generated by five new
stores:  the Royal Plaza store in Aruba, the Juneau store in Alaska,  two stores
in Barbados and one in St. Lucia.

     Net sales of $19.1  million  for stores  which were open for the full three
month  period  this  year and last year  increased  1.2% from net sales of $18.9
million  for the same period  last year.  Net sales of $16.0  million for stores
which were open for the full nine month  period this year  decreased  18.1% from
net sales of $19.6 million for the same period last year. This decrease reflects
the  temporary  shift of tourism  last year to islands such as Aruba and Curacao
that were undamaged by Hurricanes Luis and Marilyn, in September 1995.


GROSS PROFIT

     Gross profit as a  percentage  of net sales during the three and nine month
periods ended March 1, 1997 were 44.4% and 44.0%, respectively,  compared to the
three and nine month periods ended March 2, 1996 of 43.0% each. This increase in
gross  margin  percentage  reflects  the  strengthening  of the U.S.  dollar  as
compared to the European currencies in which the Company purchases a substantial
portion of its merchandise.




<PAGE>


                                                                   FORM 10-Q/A
                                                                   Page 14


PART I. FINANCIAL INFORMATION


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


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Third  quarter  selling,   general  and  administrative  expenses  ("SG&A")
increased  36.4% to $11.3 million for the three month period ended March 1, 1997
from $8.3 million for the same period last year. As a percent to net sales, SG&A
expenses  decreased to 34.5% for the quarter  ended March 2, 1997 from 39.9% for
the same quarter last year. Nine month SG&A increased 29.8% to $27.2 million for
the period ended March 2, 1997 from $21.0 million for the same period last year.
As a percent to net sales,  SG&A  decreased  to 41.3% for the nine month  period
this year from 47.1% for the same period  last year.  In July,  1997  management
disclosed to its independent  auditors that certain  transactions  may have been
recorded in error on the books of the Company.  As a result, the Company engaged
Arthur Andersen, LLP to evaluate the matter and determine the impact, if any, on
the  Company's   previously  and  currently  reported   consolidated   financial
statements.  After extensive review,  analysis and evaluation,  which focused on
unlocated  differences  in cash balances,  management  believes that an employee
defalcation  has occurred  during the current fiscal year. The estimated loss of
approximately  $935,000  and  $1,693,000  has been  classified  as a general and
administrative  expense in the accompanying restated consolidated  statements of
income for the three and nine month periods ended March 1, 1997.


BUSINESS INTERRUPTION INSURANCE PROCEEDS

     For the nine  month  period  ended  March 1,  1997,  the  Company  recorded
$560,000,  as Business  interruption  insurance  proceeds,  which represents the
insurance  recovery for lost profits  from its closed  Marigot  store during the
period. No Business interruption insurance proceeds,  were recorded in the three
month period ended March 1, 1997.





<PAGE>

                                                                  FORM 10-Q/A
                                                                  Page 15
 

PART I. FINANCIAL INFORMATION

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


OTHER

     Net  interest  expense for the nine month  periods  ended March 1, 1997 and
March 2, 1996 totaled $1.2 million and $324,000,  respectively.  The increase is
due  to  higher  average  borrowings  this  year  to  support  construction  and
inventories for three new stores, and the interest on long term debt utilized in
the acquisition of the fixtures,  leasehold rights and inventories of two stores
in Barbados in February 1996.

     The Company's  effective  income tax rates for the nine month periods ended
March 1, 1997 and March 2, 1996  consisted of a provision of  approximately  11%
and a benefit of 18%,  respectively.  The lower  effective  rate for the current
year is the result of the  anticipated  utilization of net operating  losses for
two of the Company's foreign subsidiary corporations.

     This quarterly  report on Form 10-Q contains  certain  statements  that are
"forward-looking   statements"  as  that  term  is  defined  under  the  Private
Securities  Litigation  Reform Act of 1995 and releases issued by the Securities
and Exchange Commission.  The words "believe," "expect," "anticipate," "intend,"
"estimate" and other  expressions  which are  predictions of or indicate  future
events  and  trends  and which do not  relate  to  historical  matters  identify
forward-looking statements. Forward-looking statements involve known and unknown
risks,  uncertainties  and other  factors,  which may cause the actual  results,
performance or achievements of the Company to differ materially from anticipated
future  results,  performance  or  achievements  expressed  or  implied  by such
forward- looking  statements.  The Company  undertakes no obligation to publicly
update or  revise  any  forward-looking  statement,  whether  as a result of new
information, future events or otherwise.

     The future operating  results and performance  trends of the Company may be
affected by a number of factors,  including,  without limitation, the following:
(i) the frequency of tourist visits to the locations where the Company maintains
retail stores (ii) the Company's ability to retain  relationships with its major
suppliers  of product for resale  (iii)  weather in the  Company's  markets (iv)
actions of the Company's competitors and the Company's ability
<PAGE>

                                                                   FORM 10-Q/A
                                                                   Page 16
 

PART I. FINANCIAL INFORMATION

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


to  respond to such  actions  (v)  economic  conditions  that  affect the buying
patterns of the Company's customers (vi) availability of new tourist markets for
expansion and (vii) the continued  success of the Company's efforts to implement
its planned strategic initiatives.
 

LIQUIDITY AND CAPITAL RESOURCES

     Net cash provided by operations during the nine month period ended March 1,
1997 was $1.0 million,  compared to $1.3 million  provided by operations for the
same  nine  month  period  last  year.  The  decrease  in net cash  provided  by
operations  primarily  reflects a $6.2 million  advance on  hurricane  insurance
proceeds in the prior year.

     The Company's working capital position as of March 1, 1997 and June 1, 1996
was  $31.2  million.  Current  ratios  were 2.2 and 2.6 as of the same  periods,
respectively.  Capital  expenditures were  approximately $3.6 million during the
nine month period ended March 1, 1997,  compared to  approximately  $5.0 million
during the same period last year. Major capital  expenditures  this year include
new in-store merchandise systems and related hardware,  upgrade of the Company's
central  computer  system,  new stores in Juneau,  Alaska and St. Lucia, and the
refurbishment of stores in St. Thomas, Marigot and Antigua.

     The Company has total unsecured credit facilities of $17.5 million provided
by its two lead  banks.  As of  March 1,  1997,  short-term  borrowings  of $9.1
million were outstanding against these facilities. Additionally, the Company has
secured  facilities  through  its two  lead  banks  for the  acquisition  of the
leasehold  rights,  fixed assets and  inventory  of two stores in Barbados.  The
total borrowing  provided for the acquisition was $8.9 million at an approximate
7.25% interest  rate,  with terms of interest only, for the first year and equal
principal  payments due  quarterly  over the following  three years.  It remains
management's expectation that funds available from operations and bank financing
will be sufficient to fund  operations and expansion for at least the next three
years.

<PAGE>


                                                                  FORM 10-Q/A
                                                                  Page 17


PART II.  OTHER INFORMATION
 

Item 6.  Exhibits and Reports of Form 8-K

(a)   Exhibits

                  3.1      The Amended and Restated Certificate of Incorpo-
                           ration of the Company is incorporated herein by
                           reference to Exhibit 3.3 to Amendment No. 1 to
                           the Company's Registration Statement on Form S-1,
                           Registration No. 33-40907, filed with the
                           Securities and Exchange Commission on July 10,
                           1992 ("Amendment No. 1 to the Form S-1").

                  3.2      The Amended and Restated By-Laws of the Company
                           are incorporated herein by reference to Exhibit
                           3.4 to Amendment No. 1 to the Form S-1/

 
(b)   Reports on Form 8-K

     No Form 8-K was  issued by the  registrant  during the three  month  period
ended March 1, 1997.






















<PAGE>

                                                                   FORM 10-Q/A
                                                                   Page 18


                 LITTLE SWITZERLAND, INC. AND SUBSIDIARIES


                                 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.


                                  LITTLE SWITZERLAND, INC.


Date: October 3, 1997           /s/ Ronald J. Lataille   

                                 Ronald J. Lataille
                                 Vice President and
                                 Chief Financial Officer