<PAGE>


                             UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                                  FORM 10-Q

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

     For the quarterly period ended October 31, 1998

                                     OR

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

     For the transition period from             to

                  Commission file number     0-19149


                            FILENE'S BASEMENT CORP.
            (Exact name of registrant as specified in its charter)

     Massachusetts                                      04-3016733
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                      Identification No.)

                     40 Walnut Street, Wellesley, MA 02481
                   (Address of principal executive offices)
                                  (Zip Code)

                                (617) 348-7000
             (Registrant's telephone number, including area code)




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

                           Yes  X    No_____
                                   




The  number  of shares of common stock outstanding as of  November  30,
1998 was 20,936,834 shares.

<PAGE>
                         FILENE'S BASEMENT CORP.
                            TABLE OF CONTENTS





PART I - FINANCIAL INFORMATION                              Page No.

  Item 1 - Financial Statements

     Consolidated Balance Sheets as of                         3
     October 31, 1998, January 31, 1998
     and November 1, 1997


     Consolidated Statements of Operations                     4
     for the thirteen weeks ended
     October 31, 1998 and November 1, 1997


     Consolidated Statements of Operations                     5
     for the thirty-nine weeks ended
     October 31, 1998 and November 1, 1997


     Consolidated Statements of Cash Flows                     6
     for the thirty-nine weeks ended
     October 31, 1998 and November 1, 1997


     Notes to Consolidated Financial Statements                7



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




PART II - OTHER INFORMATION




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



                                     2
<PAGE>
                          FILENE'S BASEMENT CORP.
                        CONSOLIDATED BALANCE SHEETS
                 (in thousands, except per share amounts)
                                     

                                     October 31,    January 31,    November 1,
                                        1998           1998           1997
                                     -----------    -----------   ------------
ASSETS                               (unaudited)                  (unaudited)
Current assets:                                                    
  Cash and cash equivalents           $     920      $     475      $     538
  Inventories                           128,281         93,021        118,100
  Other current assets                   14,461         11,162         13,998
                                      ---------      ---------      ---------
    Total current assets                143,662        104,658        132,636
                                                                   
Property, plant and equipment, net       54,804         48,341         55,134
Beneficial operating lease rights, net   12,512         13,497         13,826
Intangible assets, net and other          9,963          8,842          9,525
Assets held for sale                        -              -            7,962
                                      ---------      ---------      ---------
                                      $ 220,941      $ 175,338      $ 219,083
                                      =========      =========      =========
LIABILITIES AND STOCKHOLDERS' EQUITY                                           
Current liabilities                                                            
  Accounts payable                    $  48,718      $  42,698      $  46,000
  Accrued expenses                       27,278         26,455         31,133
  Short-term debt                        42,400          3,100         37,700
  Current portion of long-term debt       2,000          1,000          2,000
  Obligations under capital lease           445            414            400
                                      ---------      ---------      ---------
                                        120,841         73,667        117,233
                                                                               
Reserve for store closings                2,875          3,096          2,492
Deferred revenue                          1,707          1,832          1,874
Long-term debt                           10,500         11,500          1,500
Obligations under capital lease           2,439          2,777          2,884
                                                                               
Stockholders' equity:                                                          
  Common stock, $.01 par value, 70,000  
    shares authorized, 21,012, 20,959
    and 20,926 shares issued                210            210            209
  Additional paid-in capital             87,063         86,933         86,830
  Retained earnings (deficit)            (4,678)        (4,661)         6,077
  Treasury stock, 75 shares                 (16)           (16)           (16)
                                      ---------      ---------      ---------
    Total stockholders' equity           82,579         82,466         93,100
                                      ---------      ---------      ---------
                                      $ 220,941      $ 175,338      $ 219,083
                                      =========      =========      =========





See Notes to Consolidated Financial Statements.







                                     3
<PAGE>
                          FILENE'S BASEMENT CORP.
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                           Thirteen Weeks Ended
                                (Unaudited)
                 (in thousands, except per share amounts)




                                          October 31,            November 1,
                                             1998                   1997
                                          ----------             ---------- 
Net sales                                  $154,772               $152,471
Cost of sales, including buying,                         
  receiving and occupancy costs             116,905                114,342
                                           --------               -------- 
    Gross profit                             37,867                 38,129
                                                                            
Selling, general and administrative         
  expenses                                   36,620                 32,684 
                                                                               
Amortization of intangible assets and                           
  beneficial operating lease rights             367                    366
                                           --------               -------- 
    Operating income                            880                  5,079
                                                                            
Interest expense, net                         1,226                    832
                                           --------               --------  
Income (loss) before income taxes              (346)                 4,247
                                                                            
Income tax provision (benefit) (Note 3)         (74)                 1,019
                                           --------               --------  
Net income (loss)                          $   (272)              $  3,228
                                           ========               ========  
                                                                            
Basic earnings (loss) per share (Note 4)   $  (0.01)              $   0.16
                                           ========               ========
Diluted earnings (loss) per share (Note 4) $  (0.01)              $   0.15
                                           ========               ========










See Notes to Consolidated Financial Statements.





                                     4
<PAGE>
                          FILENE'S BASEMENT CORP.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                          Thirty-nine Weeks Ended
                                (Unaudited)
                 (in thousands, except per share amounts)




                                          October 31,             November 1,
                                             1998                    1997
                                          ----------              ----------
Net sales                                  $413,815                $399,251
Cost of sales, including buying,          
  receiving and occupancy costs             313,281                 302,458
                                           --------                --------
    Gross profit                            100,534                  96,793
                                                                            
Selling, general and administrative       
  expenses                                   96,717                  87,135
                                                                            
Amortization of intangible assets and     
  beneficial operating lease rights           1,100                   1,100
                                           --------                -------- 
    Operating income                          2,717                   8,558
                                                                            
Interest expense, net                         2,739                   2,008
                                           --------                --------
Income (loss) before income taxes               (22)                  6,550
                                                                            
Income tax provision (benefit) (Note 3)          (5)                  1,572
                                           --------                --------
Net income (loss)                          $    (17)               $  4,978
                                           ========                ========
                                                                            
Basic earnings per share (Note 4)          $   0.00                $   0.24
                                           ========                ========
Diluted earnings per share (Note 4)        $   0.00                $   0.23
                                           ========                ========

See Notes to Consolidated Financial Statements.






                                     5
<PAGE>
                          FILENE'S BASEMENT CORP.
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                          Thirty-nine Weeks Ended
                                (Unaudited)
                              (in thousands)

                                           October 31,           November 1,
                                              1998                  1997
                                           ----------            ----------
CASH FLOW FROM OPERATING ACTIVITIES:                                      
  Net income (loss)                         $    (17)             $  4,978
  Adjustments to reconcile net income                                     
 (loss) to net cash used in operations:
      Depreciation and amortization           10,308                 8,893
      Deferred income taxes                      -                  (1,094)
      Increase in inventories                (35,260)              (29,337)
      Increase in other current assets        (3,299)               (6,741)
      Increase in accounts payable             6,020                 1,111
      Increase (decrease) in accrued                           
        expenses and other liabilities           602                  (287)
      Other                                     (125)                 (125)
                                            --------              --------
    Net cash used in operating activities    (21,771)              (22,602)
                                                                          
CASH FLOWS FROM INVESTING ACTIVITIES                                      
  Capital expenditures                       (15,671)               (9,622)
  Sale of leasehold interests                    -                   2,106
  Other                                       (1,236)                 (299)
                                            --------              --------
    Net cash used in investing activities    (16,907)               (7,815)
                                                                          
CASH FLOWS FROM FINANCING ACTIVITIES                                      
  Short-term borrowings, net                  39,300                36,700
  Payments of capital lease obligation          (307)                 (344)
  Net payments of long-term debt                 -                  (6,500)
  Proceeds from common stock issuance            130                   637
                                            --------              --------
    Net cash provided by financing          
     activities                               39,123                30,493
                                            --------              --------
Net increase in cash and cash equivalents        445                    76
                                                                          
Cash and cash equivalents:                                                
  Beginning of period                            475                   462
                                            --------              -------- 
  End of period                             $    920              $    538
                                            ========              ========




See Notes to Consolidated Financial Statements.


                                     6
<PAGE>
                        FILENE'S BASEMENT CORP.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   BASIS OF PRESENTATION

The   accompanying   unaudited  consolidated   financial   statements   are
presented   in   accordance  with  the  requirements  of  Form   10-Q   and
consequently  do  not  include  all the disclosures  normally  required  by
generally  accepted  accounting principles or those normally  made  in  the
Company's  Form  10-K filing.  Reference should be made  to  the  Company's
Annual  Report  on  Form  10-K  for  additional  disclosures,  including  a
summary   of  the  Company's  accounting  policies.   Certain  prior   year
amounts   have   been  reclassified  to  conform  to   the   current   year
presentation.   The  results  of the periods ended  October  31,  1998  and
November  1,  1997  are not necessarily indicative of  the  results  for  a
full  fiscal  year  because  the Company's business,  in  common  with  the
businesses  of  retailers  generally, is subject  to  seasonal  influences,
with  higher  levels  of sales and income generally realized  in  the  fall
season.    The   information  furnished,  in  the  opinion  of  management,
includes   all   normal  recurring  adjustments  necessary   for   a   fair
presentation of the results of operations for the periods reported.


2.   DISTRIBUTION CENTER FIRE

During  February  1998, the Company had a fire in its  Auburn  Distribution
Center.    The   Company   expects   that   its   property   and   business
interruption  insurance  will  fully  cover  all  losses  incurred  by  the
Company  in  connection with the fire.  The results  for  the  nine  months
ended  October  31,  1998  include  an  inventory  loss  for  the  cost  of
merchandise  destroyed  and an offsetting gain from the  Company's  partial
settlement  of  the  property  portion of  its  claim  with  the  insurance
carrier.  Gains  from  the  settlement of any business  interruption  claim
will  be  recorded  by  the  Company  when  finalized  with  its  insurance
carrier.


3.   INCOME TAXES

The  Company  is  using  an  effective tax rate  of  approximately  22%  to
compute  taxes  for  the  current fiscal year, reflecting  the  realization
of  certain  deferred  tax assets, which were not  previously  expected  to
be realized in prior years.


4.   EARNINGS PER SHARE

In  accordance  with  Statement of Financial  Accounting  Standards  (SFAS)
No.  128,  "Earnings  per  Share", basic earnings  per  share  is  computed
using  the  weighted  average  number of  shares  outstanding  during  each
period.
                                   
                                   
                                   
                                   7
<PAGE>
                        FILENE'S BASEMENT CORP.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


4.   EARNINGS PER SHARE (CONTINUED)
                                   
Diluted  earnings  per  share  is computed using  the  weighted  number  of
outstanding  shares  plus the weighted average number  of  dilutive  common
equivalent shares outstanding during each period.

The  following  is  a  reconciliation of the  outstanding  shares  used  in
calculating  earnings  per  share for the  thirteen  week  and  thirty-nine
week   periods   ended  October  31,  1998  and  November   1,   1997   (in
thousands):

                                               Thirteen Weeks Ended
                                            October 31,      November 1, 
                                               1998             1997
                                             ---------        ---------
                                               
Basic shares outstanding                       20,937           20,818
                                                
Options                                           -              1,358
                                              -------          -------
Dilutive shares outstanding                    20,937           22,176
                                              =======          =======
                                               
                                               Thirty-nine Weeks Ended
                                            October 31,       November 1,  
                                               1998              1997
                                             ---------         ---------

Basic shares outstanding                       20,916            20,723

Options                                           -               1,244
                                              -------           -------
Dilutive shares outstanding                    20,916            21,967
                                              =======           =======


5.   NEW ACCOUNTING PRONOUNCMENTS

The   Financial   Accounting  Standards  Board   issued   SFAS   No.   131,
"Disclosures  about  Segments of an Enterprise  and  Related  Information",
in  June  1997.   The statement establishes standards for  the  way  public
business   enterprises  report  information  and  operating   segments   in
annual   financial   statements   and  requires   reporting   of   selected
information  in  interim financial reports.  The required  disclosures  for
SFAS  No.  131,  which  is  effective  for  fiscal  years  beginning  after
December  15,  1997,  will be included in the Company's  annual  report  on
Form 10-K for the fiscal year ending January 30, 1999.

The  Accounting  Standards Executive Committee of  the  American  Institute
of Certified Public Accountants issued Statement of Position 98-5,


                                   8
<PAGE>
                        FILENE'S BASEMENT CORP.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


5.   NEW ACCOUNTING PRONOUNCMENTS (Continued)

"Reporting  on  the  Costs of Start-Up Activities", in  April  1998.   This
statement  establishes  the  accounting for costs  of  start-up  activities
and  requires  that  all  costs  of  start-up  activities  be  expensed  as
incurred.   The  statement is effective for fiscal  years  beginning  after
December  15,  1998.   The Company is presently evaluating  the  impact  of
this  statement  in  light  of  the  start-up  costs  capitalized  in  1998
relating  to  the  new  retail format being tested in  1999.  (See  Outlook
section  of  accompanying  Management's  Discussion  and  Analysis.)   This
statement will be adopted in the fourth quarter of 1998.








































                                   9
<PAGE>
                     FILENE'S BASEMENT CORP.
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS



RESULTS OF OPERATIONS

For  the  quarter  ended October 31, 1998 net sales  were  $154.8
million,  up 1.5% from last year's third quarter sales of  $152.5
million.  Comparable store sales for the third quarter were  down
5.0% versus last year.  Net sales for the thirty-nine week period
ended  October  31,  1998 were up 3.6% versus  last  year,  while
comparable  sales  for  the  same  period  remained  flat.    The
comparable store decrease in the third quarter was primarily  due
to  declining  sales of women's sportswear,  offset  in  part  by
increased  sales in the home goods category.  Overall,  sales  in
the  third  quarter were weak due to unseasonably  warm  weather.
The  increase in net sales for the thirteen and thirty-nine  week
periods ended October 31, 1998 was due to the opening of two  new
stores in the first quarter of 1998 and four additional stores in
the  third  quarter  of  1998. The  total  number  of  stores  in
operation  on October 31, 1998 and November 1, 1997 were  51  and
45, respectively.

Cost  of  sales as a percentage of sales was 75.5% and 75.7%  for
the  thirteen and thirty-nine week periods ended October 31, 1998
compared to 75.0% and 75.8% for the corresponding periods in  the
prior  year.  The increase in cost of sales in the third  quarter
of  1998  was primarily attributable to an increase in  occupancy
costs,  as  a percentage of sales, for the Company's new  stores.
In general, the Company has improved its purchase markup over the
prior  year,  which  has helped offset the  increasing  occupancy
costs.

Selling,  general  and  administrative  expenses  for  the  third
quarter  of 1998 were $36.6 million, or 23.7% of sales,  compared
to  $32.7  million, or 21.4% of sales, for the same  period  last
year.   The  increase  in  selling,  general  and  administrative
expenses,  in  absolute  dollars, was  primarily  the  result  of
opening new stores in the first and third quarters of 1998.   The
increase  as  a  percentage of sales was  primarily  due  to  the
decrease  in  comparable store sales.  In addition, depreciation,
equipment  leasing, and system development costs increased  as  a
percentage  of  sales  primarily due  to  the  Company's  ongoing
efforts  to replace or repair systems affected by the  Year  2000
problem.    (See  Financial  Condition,  Liquidity  and   Capital
Resources.)  Selling, general and administrative expenses for the
thirty-nine  weeks ended October 31, 1998 were $96.7 million,  or
23.4% of sales, compared to $87.1 million, or 21.8% of sales,  in
the  prior year period.  In addition to the reasons stated above,
the  Company  incurred approximately $0.8 million of expenses  in
the  first  quarter of 1998 in connection with a fire  that  took
place  at  its  Auburn  Distribution Center.   The  Company  also
received   approximately  $0.6  million  of  proceeds  on   notes
receivable in excess of their book value during the first quarter
of 1997, which was recorded as income.


                               10
<PAGE>
                     FILENE'S BASEMENT CORP.
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS



RESULTS OF OPERATIONS (CONTINUED)

The  Company  expects that its property and business interruption
insurance will fully cover all losses incurred by the Company  in
connection with the fire mentioned above. The results for the nine
months  ended October 31, 1998 include an inventory loss for  the
cost  of  merchandise destroyed and an equal and offsetting  gain
from the Company's partial settlement of the property portion  of
its  claim with the insurance carrier.  Gains from any settlement
of  the  business  interruption claim will  be  recorded  by  the
Company when finalized with the insurance carrier.

Net  interest expense for the quarter ended October 31, 1998  was
$1.2  million  compared to $0.8 million last year.  Net  interest
expense for the thirty-nine weeks ended October 31, 1998 was $2.7
million compared to $2.0 million last year.  The increase in  net
interest  expense  was due in part to higher average  outstanding
borrowings  under  the Company's Amended and  Restated  Revolving
Credit   and  Term  Loan  Agreement.  (See  Financial  Condition,
Liquidity and Capital Resources.)

Net loss for the quarter ended October 31, 1998 was $0.3 million,
or  $0.01  per  diluted share, on 20.9 million  weighted  average
shares  outstanding, compared to net income of $3.2  million,  or
$0.15  per diluted share, on 22.2 million weighted average shares
outstanding for the quarter ended November 1, 1997.  Net loss for
the thirty-nine weeks ended October 31, 1998 was $17,000 compared
to  net  income of $5.0 million, or $0.23 per diluted  share,  on
22.0  million weighted average shares outstanding for the thirty-
nine weeks ended November 1, 1997.


FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

On  January  30,  1998, the Company entered into an  Amended  and
Restated   Revolving   Credit  and  Term  Loan   Agreement   (the
"Agreement"),  as amended on September 14, 1998 and  October  31,
1998, which replaced the Revolving Credit and Term Loan Agreement
dated  May  23, 1996, as amended June 28, 1996. The new  facility
expires  on  February  3,  2001  and  includes  a  $65.0  million
revolving  credit  facility  and  a  $12.5  million  term   loan.
Principal  payments of the term loan are due  in  nine  quarterly
installments  of $500,000, which commenced on November  2,  1998,
with a final payment due at maturity.




                               11
<PAGE>
                     FILENE'S BASEMENT CORP.
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS



FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES(CONTINUED)


During the nine months ended October 31, 1998, average borrowings
under  the  Agreement  were approximately  $35.7  million  at  an
average  interest  rate of 7.88%.  During the  same  period  last
year,  average  borrowings  were  $27.1  million  at  an  average
interest rate of 7.97%. Excess credit availability at October 31,
1998  was  approximately $14.7 million compared to  approximately
$17.1 million at November 1, 1997.

The   Agreement  contains  financial  covenants,  which   require
cumulative  minimum earnings before interest, taxes, depreciation
and  amortization  (EBITDA)  and a minimum  cash  flow  to  fixed
obligations  ratio for specified periods during the term  of  the
Agreement.  As of October 31, 1998, the Company was in compliance
with all covenants of the Agreement.

Net  cash used in operating activities was $21.8 million for  the
thirty-nine  weeks  ended October 31, 1998 versus  cash  used  of
$22.6 million during the same period last year.  The $0.8 million
decrease  in cash used by operations was primarily due a decrease
in  EDITDA from $17.5 million in 1997 to $13.0 million  in  1998.
This  decrease was offset by decreases in the Company's  accounts
receivable in 1998.

Net  cash used in investing activities during 1998 increased $9.1
million over the comparable period in 1997 primarily as a  result
of  increased capital expenditures of $6.0 million  for  the  new
stores. In addition, in 1997, the Company received proceeds  from
the sale of leasehold interests totaling $2.1 million.

Net  cash provided by financing activities during the nine months
ended  October  31, 1998 was $39.1 million as compared  to  $30.5
million  in the same period of the prior year.  The $8.6  million
increase  was  due to long-term debt repayments of  $6.5  million
made in the prior year and increased short-term borrowings during
1998.

During  the third quarter of 1998, the Company, as well as  other
regional, predominantly apparel, retailers, experienced  a  sharp
decline  in  sales,  due  to, in large  part,  unseasonably  warm
weather.   As  a  result,  the  Company's  Amended  and  Restated
Revolving  Credit and Term Loan Agreement was amended  to  reduce
its  third  quarter EBITDA covenant in order for the  Company  to
remain in compliance with its covenants.  Amendment or waiver  of
the covenants for the fourth quarter will also be required, which
amendment  or  waiver the Company expects  it  will  be  able  to
obtain.



                               12
<PAGE>
                     FILENE'S BASEMENT CORP.
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS



FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

                                

In  addition,  the  warm weather has continued  into  the  fourth
quarter  and has created a highly competitive retail environment.
These  factors could cause sales to continue at unseasonably  low
levels,  a  higher  than  expected level of  markdowns  to  clear
inventory  and  could materially adversely affect fourth  quarter
net income.

The  Company is also negotiating with its lenders to increase the
revolving   credit  facility  to  accommodate  the   opening   of
approximately ten new stores in 1999, nine of which are  expected
to be the new retail format discussed in the Outlook section.  It
is  expected  that the new facility will be in place by  year-end
with  an  increased borrowing base capacity and less  restrictive
covenants.

The  Company believes that internally generated working  capital,
existing  vendor and third party factor arrangements,  and  funds
available  from  its  lenders  will  be  adequate  to  meet   its
merchandise inventory and normal operating expense needs, as well
as  presently  anticipated capital expenditure  requirements  for
fiscal  1999.  However, the Company's operating results  and  the
adequacy  of its working capital could be adversely affected  if,
for  any  reason,  the Company's borrowing  base  was  to  become
impaired,  or otherwise be deemed ineligible, thereby diminishing
the  level of available funds.  During 1998, capital expenditures
are expected to approximate $27 million.

The Company's business is seasonal, reflecting increased consumer
demand  in the fall season.  The second half of each fiscal  year
provides  a  greater portion of the Company's  annual  sales  and
operating profit.

YEAR 2000

The Company utilizes software and related technologies throughout
its  business  that  will be affected by the Year  2000  problem,
which  is common to most corporations, and concerns the inability
of  information systems, primarily computer software programs, to
properly recognize and process date sensitive information as  the
year 2000 approaches.

The Company's State of Readiness

The  Company  has completed a review of its computer  systems  to
identify  the  systems that could be affected by  the  Year  2000
problem and has developed an implementation plan to resolve the


                               13
<PAGE>
                     FILENE'S BASEMENT CORP.
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS



FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

issue.  As part of this plan, most non-compliant systems will  be
replaced  with new systems that will provide certain  competitive
benefits  as  well  as  ensure Year 2000 compliance  in  time  to
minimize  any disruptive effects on operations.  The  Company  is
currently  in  the  process of modifying and  testing  these  new
systems.  The Company is also in the process of inventorying  and
assessing   potential   problem  areas  in  its   non-information
technology  systems  that  use  embedded  technology,   such   as
microprocessors. This evaluation is expected to be  completed  in
the fourth quarter of 1998.

The  replaced systems generally fall into three major categories:
merchandise  management  systems,  store  operating  systems  and
supporting network and sub-systems. The installation phase of the
merchandise management systems has begun, with final testing  and
implementation expected to take place in the spring of 1999.  The
store  operating  systems, which primarily consist  of  point  of
sales systems, are in the initial assessment phase with a planned
rollout  of  the  new  systems  in the  third  quarter  of  1999.
Supporting  network  and  other  sub-systems  implementation   is
scheduled over 1998 and 1999.

The  Company  will communicate with most of its key  vendors  and
other  business partners seeking their assurances  they  will  be
Year 2000 compliant. Based on responses, the Company will develop
contingency  plans  for those areas which pose  significant  risk
from the Year 2000 problem, however the Company could potentially
experience disruptions to some aspects of its operation from non-
compliant systems utilized by unrelated third party, governmental
and business entities.


The Costs to Address the Year 2000 Issue

While  it is not possible at this time to predict the total  cost
of  this  effort,  the investment, whether leased,  purchased  or
expensed,  in  new software and equipment needed to achieve  Year
2000  compliance  and  enhance  existing  systems,  is  currently
estimated  at approximately $31.0 million, of which $7.9  million
had  been incurred through October 31, 1998.  The expense portion
of  the total project is estimated at $11.9 million of which $2.3
million  and $3.2 million is expected to be incurred in 1998  and
1999,  respectively. Through October 31, 1998, $1.5  million  has
been  expensed. Funding requirements have been incorporated  into
the Company's capital and operating plans and are not expected to
have  a  material  adverse  impact  on  the  Company's  financial
condition or liquidity.


                               14
<PAGE>
                     FILENE'S BASEMENT CORP.
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS



FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

Risk Analysis

Like  most  large business enterprises, the Company is  dependent
upon  its own internal computer technology and relies upon timely
performance by its business partners.  As noted above,  a  large-
scale  Year  2000 failure could impair the Company's  ability  to
timely  deliver  product to stores, resulting in  potential  lost
sales  opportunities and additional expenses. The Company's  Year
2000  program  seeks  to  identify and  minimize  this  risk  and
includes  testing  of  its  systems and  purchased  hardware  and
software,  to  ensure, to the extent feasible, all  such  systems
will  function  before and after the Year 2000.  The  Company  is
continually refining its understanding of the risk the Year  2000
poses to its significant business partners based upon information
obtained  through  its surveys and interviews.   That  refinement
will continue throughout 1998 and 1999.

Contingency Plans

Following  its  risk analysis, the Company's plans  to  design  a
contingency plan in which appropriate backup plans will  be  made
to  attempt to minimize disruption to the Company's operations in
the  event of a Year 2000 failure. The level of planning required
is  a  function  of the risks ascertained through  the  Company's
investigative  efforts.   The  Company  anticipates   contingency
planning across the enterprise will be completed by the summer of
1999.

Because of the Company's extensive efforts to formulate and carry-
out  an  effective  Year 2000 program, the Company  believes  its
program   will  be  completed  on  a  timely  basis  and   should
effectively  minimize  disruption to  the  Company's  operations,
however,  there  can  be no assurance that the  Company  will  be
successful in this respect.

OUTLOOK

The Company plans to open nine stores  during  1999  to  test the
feasibility of a new retail format to supplement the traditional
Filene's  Basement  specialty stores.   Principal  elements  will
include larger stores operating during weekends only. Merchandise
will be warehoused at these units, reducing the current lead time
between vendor and point of sale, and providing greater volume of
merchandise  at  the  store.  The new format  will  leverage  the
current Filene's Basement infrastructure, vendor relations and



                               15
<PAGE>
                     FILENE'S BASEMENT CORP.
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS



FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
                                
OUTLOOK (Continued)

name  recognition.  The capital required to open stores  of  this
kind  will  be significantly less than required for a traditional
Filene's Basement specialty store.

The objective of the program is to test the concept of increasing
sales through such new stores, with a goal of reducing costs  and
improving  operating  margins.   The  Company  intends  to   open
additional  specialty stores of the traditional format  as  well.
Due  to  the factors discussed below, there is no guarantee  that
the Company will achieve these expectations.

The  Accounting  Standards Executive Committee  of  the  American
Institute  of  Certified Public Accountants issued  Statement  of
Position  (SOP)  98-5 in April 1998.  This statement  establishes
the accounting for costs of start-up activities and requires that
all  costs  of start-up activities be expensed as incurred.   The
statement is effective for fiscal years beginning after  December
15, 1998.  The Company is presently evaluating the impact of this
statement  in  light  of the start-up costs capitalized  in  1998
relating  to  the  new  retail  format  discussed  above.    This
statement will be adopted in the fourth quarter of 1998.

This  Quarterly  Report  on  Form 10-Q  contains  forward-looking
statements.   For  this purpose, any statements contained  herein
that  are not statements of historical fact may be deemed  to  be
forward-looking statements.  Without limiting the foregoing,  the
words  "believes", "anticipates", "plans", "expects" and  similar
expressions  are intended to identify forward-looking statements.
Factors which may cause actual results to differ materially  from
those indicated by such forward-looking statements include, among
others:  (i)  economic and weather conditions  which  affect  the
buying  patterns of the Company's customers, (ii) actions of  the
Company's  competitors and the Company's ability  to  respond  to
such  actions,  (iii)  the  continued support  of  the  Company's
numerous  providers  of goods and services,  (iv)  the  continued
success  of the Company's efforts to implement planned  strategic
initiatives, (v) unexpected store closings and the related higher
markdowns  associated with inventory liquidations  and  (vi)  the
unanticipated impact of the Year 2000 problem.






                               16
<PAGE>
                     PART II - OTHER INFORMATION



ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

    10.40.1   First Amendment Agreement amending the Revolving Credit
              and Term Loan Agreement among the Company, Filene's
              Basement, Inc. and Filene's Basement Corp. (FBC) and
              BankBoston, N.A.  Dated as of September 14, 1998. (filed
              herewith)
             
    10.40.2   Second Amendment Agreement amending the Revolving Credit
              and Term Loan Agreement among the Company, Filene's
              Basement, Inc. and Filene's Basement Corp. and
              BankBoston, N.A.  Dated as of October 31, 1998. (filed
              herewith)
             
    27        Financial Data Schedule

(b) Reports on Form 8-K

    None































                                  17
<PAGE>
                              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,  being  also  its
principal financial officer.




                                               FILENE'S BASEMENT CORP.

                                                /s/ Steven Siegel
                                                ---------------------
                                                Steven Siegel
                                                Executive Vice President
                                                & Chief Financial Officer
                                   
                                   

DATE:  December 15, 1998

                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   

                                   
                                   
                                  18
<PAGE>
                             EXHIBIT INDEX

                Pursuant to Item 601 of Regulation S-K




                                   
Exhibit                   Title


10.40.1       First Amendment Agreement amending the Revolving Credit
             and Term Loan Agreement among the Company, Filene's
             Basement, Inc. and Filene's Basement Corp. (FBC) and
             BankBoston, N.A.  Dated as of September 14, 1998. (filed
             herewith)
             
10.40.2       Second Amendment Agreement amending the Revolving Credit
             and Term Loan Agreement among the Company, Filene's
             Basement, Inc. and Filene's Basement Corp. and
             BankBoston, N.A.  Dated as of October 31, 1998. (filed
             herewith)
             
27               Financial Data Schedule