<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 August 1, 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 August 31,
1998 was 21,011,558 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
     August 1, 1998, January 31, 1998
     and August 2, 1997


     Consolidated Statements of Operations                     4
     for the thirteen weeks ended
     August 1, 1998 and August 2, 1997


     Consolidated Statements of Operations                     5
     for the twenty-six weeks ended
     August 1, 1998 and August 2, 1997


     Consolidated Statements of Cash Flows                     6
     for the twenty-six weeks ended
     August 1, 1998 and August 2, 1997


     Notes to Consolidated Financial Statements                7



  Item 2 - Management's Discussion and Analysis of             9
     Financial Condition and Results of Operations




PART II - OTHER INFORMATION


  Item 4 - Submission of Matters to a Vote of                 15
     Security Holders

  Item 5 - Other Information                                  15

  Item 6 - Exhibits and Reports on Form 8-K                   16





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

                                         August 1,    January 31,   August 2,
                                           1998          1998         1997
                                        ----------    ----------   ----------
ASSETS                                  (unaudited)               (unaudited)
Current assets:
  Cash and cash equivalents              $    740     $    475     $    475
  Inventories                             117,318       93,021      104,114
  Other current assets                     12,827       11,162       10,734
                                         --------     --------     --------
    Total current assets                  130,885      104,658      115,323

Property, plant and equipment, net         51,938       48,341       54,355
Beneficial operating lease  rights, net    12,840       13,497       14,155
Intangible assets, net and other            9,717        8,842        8,250
Assets held for sale                          -            -          7,962
                                         --------     --------     --------
                                         $205,380     $175,338     $200,045
                                         ========     ========     ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                       $ 49,293     $ 42,698     $ 46,048
  Accrued expenses                         27,267       26,455       28,965
  Short-term debt                          25,800        3,100       23,600
  Current portion of long-term debt         2,000        1,000        2,000
  Obligations under capital leases            434          414          390
                                         --------     --------     --------
    Total current liabilities             104,794       73,667      101,003

Reserve for store closings                  2,933        3,096        2,492
Deferred revenue                            1,748        1,832        1,916
Long-term debt                             10,500       11,500        2,000
Obligations under capital leases            2,554        2,777        2,989

Stockholders' equity:
  Common stock, $.01 par value,
    70,000 shares authorized,
    21,012, 20,959 and
    20,844 shares issued                      210          210          208
  Additional paid-in capital               87,063       86,933       86,603
  Retained earnings(deficit)               (4,406)      (4,661)       2,850
  Treasury stock, 75 shares                   (16)         (16)         (16)
                                         --------     --------     --------
    Total stockholders' equity             82,851       82,466       89,645
                                         --------     --------     --------
                                         $205,380     $175,338     $200,045
                                         ========     ========     ========


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)




                                          August 1,          August 2,
                                            1998                1997
                                         ----------         ----------
Net sales                                 $131,396           $126,329
Cost of sales, including buying,
  receiving and occupancy costs             99,204             96,907
                                          --------           --------
    Gross profit                            32,192             29,422

Selling, general and administrative
  expenses                                  29,683             26,853

Amortization of intangible assets and
  beneficial operating lease rights            366                367
                                          --------           --------
    Operating income                         2,143              2,202

Interest expense, net                          869                632
                                          --------           --------
Income before income taxes                   1,274              1,570

Income tax provision (Note 3)                  278                377
                                          --------           --------
Net income                                $    996           $  1,193
                                          ========           ========




Basic and diluted earnings                $   0.05           $   0.06
  per share (Note 4)                      ========           ========







See Notes to Consolidated Financial Statements.





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




                                          August 1,          August 2,
                                            1998                1997
                                         ----------         ----------
Net sales                                 $259,043           $246,780
Cost of sales, including buying,
  receiving and occupancy costs            196,376            188,116
                                          --------           --------
  Gross profit                              62,667             58,664

Selling, general and administrative
  expenses (Note 2)                         60,097             54,451

Amortization of intangible assets and
  beneficial operating lease rights            733                734
                                          --------           --------
    Operating income                         1,837              3,479

Interest expense, net                        1,513              1,176
                                          --------           --------
Income before income taxes                     324              2,303

Income tax provision(Note 3)                    69                553
                                          --------           --------
Net income                                $    255           $  1,750
                                          ========           ========



Basic and diluted earnings                $   0.01           $   0.08
  per share (Note 4)                      ========           ========





See Notes to Consolidated Financial Statements.





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

                                              August 1,          August 2,
                                                1998               1997
                                             ----------         ---------
-
CASH FLOW FROM OPERATING ACTIVITIES:
  Net income                                  $    255          $  1,750
  Adjustments to reconcile net income
    to net cash used in operations:
      Depreciation and amortization              6,716             5,787
      Deferred income taxes                         -               (385)
      Increase in inventories                  (24,297)          (15,351)
      Increase in other current assets          (1,665)           (3,477)
      Increase in accounts payable               6,595             1,158
      Increase (decrease) in accrued expenses
        and other liabilities                      649            (2,454)
      Other                                        (84)              (83)
                                              ---------         --------
    Net cash used in operating activities      (11,831)          (13,055)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                          (9,579)           (6,104)
  Sale of leasehold interests                      -               2,106
  Other                                           (952)              306
                                              ---------         --------
    Net cash used in investing activities      (10,531)           (3,692)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Short-term borrowings, net                    22,700            22,600
  Payments of capital lease obligation            (203)             (249)
  Net payments of long-term debt                    -             (6,000)
  Proceeds from common stock issuance              130               409
                                              --------          --------
     Net cash provided by
      financing activities                      22,627            16,760
                                              --------          --------
Net increase in cash
  and cash equivalents                             265                13

Cash and cash equivalents:
  Beginning of period                              475               462
                                              --------          --------
  End of period                               $    740          $    475
                                              ========          ========


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   August   1,  1998  and   August   2,   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  six  months  ended  August 1, 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.   The  Company  has  prepared   the
claim  for  lost  profits,  and  anticipates  that  its  claim  will   be
reimbursed  during  the  remainder  of  fiscal  1998.   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
twenty-six  week  periods  ended  August  1,  1998  and  August  2,  1997
(in thousands):

                                               Thirteen Weeks Ended
                                            August 1,         August 2,
                                              1998              1997
                                           ---------          --------

Basic shares outstanding                     20,917            20,727

Options                                         658               642
                                            -------           -------
Dilutive shares outstanding                  21,575            21,369
                                            =======           =======

                                              Twenty-Six Weeks Ended
                                            August 1,         August 2,
                                              1998              1997
                                           ---------          --------

Basic shares outstanding                     20,906            20,675

Options                                         669               713
                                            -------           -------
Dilutive shares outstanding                  21,575            21,388
                                            =======           =======


5.   NEW ACCOUNTING PRONOUNCMENT

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
ended January 30, 1999.



                                8
<PAGE>
                     FILENE'S BASEMENT CORP.
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS



RESULTS OF OPERATIONS

For   the   quarter   ended  August  1,  1998  net  sales   were   $131.4
million,  up  4.0%  from  last  year's second  quarter  sales  of  $126.3
million.  Comparable  store  sales  for  the  second  quarter   were   up
1.9%  versus  last  year.   Net  sales and  comparable  store  sales  for
the  twenty-six  week  period ended August  1,  1998  were  up  5.0%  and
2.9%,   respectively,   versus  last  year.    These   comparable   store
increases  were  primarily  due  to  increases  in  sales  in  the   home
goods  category.   Additionally,  the  increase  in  net  sales  for  the
thirteen  and  twenty-six  week periods ended  August  1,  1998  was  due
in  part  to  the  opening  of two new stores in  the  first  quarter  of
fiscal  1998.   The  total  number  of  stores  in  operation  on  August
1, 1998 and August 2, 1997 were 47 and 45, respectively.

Cost  of  sales  as  a  percentage  of sales  was  75.5%  and  75.8%  for
the   thirteen  and  twenty-six  week  periods  ended  August   1,   1998
compared  to  76.7%  and  76.2%  for the  corresponding  periods  in  the
prior   year.    These  decreases  were  primarily  attributable   to   a
decrease in markdowns.

Selling,   general   and   administrative   expenses   for   the   second
quarter  of  1998  were  $29.7  million,  or  22.6%  of  sales,  compared
to   $26.9  million,  or  21.3%  of  sales,  for  the  same  period  last
year.     The   increase   in   selling,   general   and   administrative
expenses,   in   absolute  terms,  was  primarily  the  result   of   the
opening  of  new  stores  in the first quarter of  1998.   Payroll  as  a
percentage  of  sales  increased  primarily  due  to  incentive   bonuses
related   to   a  new  compensation  plan  implemented   in   1998.    In
addition,  depreciation  and  equipment  leasing  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
twenty-six   weeks   ended  August  1,  1998  were  $60.1   million,   or
23.2%  of  sales,  compared  to  $54.5  million  or  22.1%  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  in  connection  with  a  fire  that  took  place  at
its    Auburn   Distribution   Center.    In   addition,   the    Company
received    approximately   $0.6   million   of   proceeds    on    notes
receivable  in  excess  of  their book value  during  the  first  quarter
of 1997.

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
six  months  ended  August  1, 1998 include an  inventory  loss  for  the
cost   of   merchandise  destroyed  and  an  offsetting  gain  from   the
Company's   settlement  of  the  property  portion  of  its  claim   with
the insurance

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



RESULTS OF OPERATIONS (CONTINUED)

carrier.    The  Company  has  prepared  the  claim  for  lost   profits,
and   anticipates   that  its  claim  will  be  reimbursed   during   the
remainder   of   fiscal  1998.   Gains  from  any   settlement   of   the
business  interruption  claim  will  be  recorded  by  the  Company  when
finalized with its insurance carrier.

Net   interest  expense  for  the  quarter  ended  August  1,  1998   was
$0.9   million  compared  to  $0.6  million  last  year.   Net   interest
expense  for  the  twenty-six  weeks  ended  August  1,  1998  was   $1.5
million,  compared  to  $1.2  million last year.   The  increase  in  net
interest   expense  was  due  in  part  to  higher  average   outstanding
borrowings   under  the  Company's  Revolving  Credit   and   Term   Loan
Agreement.    (See   Financial   Condition,   Liquidity    and    Capital
Resources.)

Net  income  for  the  quarter ended August 1,  1998  was  $1.0  million,
or   $0.05   per   share,  on  21.6  million  weighted   average   shares
outstanding,  compared  to  net income of  $1.2  million,  or  $0.06  per
share,   on   21.4  million  weighted  average  shares  outstanding   for
the  quarter  ended  August  2,  1997.  Net  income  for  the  twenty-six
weeks  ended  August  1,  1998  was $0.3 million,  or  $0.01  per  share,
on   21.6  million  weighted  average  shares  outstanding,  compared  to
net  income  of  $1.8  million,  or $0.08  per  share,  on  21.4  million
weighted   average   shares   outstanding  for   the   twenty-six   weeks
ended August 2, 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"),  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  commencing  on  October  31,  1998,  with   a
final payment due at maturity.

During   the   six  months  ended  August  1,  1998,  average  borrowings
under   the   Agreement   were  approximately   $27.5   million   at   an
average   interest   rate  of  7.94%.   During  the  same   period   last
year,   average   borrowings   were   $23.2   million   at   an   average
interest  rate  of  7.95%.  Excess  credit  availability  at  August   1,
1998   was   approximately  $25.5  million  compared   to   approximately
$24.2 million at August 2, 1997.


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



FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES(CONTINUED)

The    Agreement    contains   financial   covenants,    which    require
cumulative   minimum   earnings  before  interest,  taxes,   depreciation
and   amortization   and  a  minimum  cash  flow  to  fixed   obligations
ratio   for   specified  periods  during  the  term  of  the   Agreement.
During   the   quarter  ended  August  1,  1998,  the  Company   was   in
compliance with all covenants of the Agreement.

Net  cash  used  in  operating  activities  was  $11.8  million  for  the
twenty-six  weeks  ended  August  1,  1998  versus  cash  used  of  $13.1
million   during   the  same  period  last  year.    The   $1.3   million
decrease   in   cash   used   by  operations   was   primarily   due   to
decreased   payments   in   the  six  months   ended   August   1,   1998
relating   to   store  closing  charges,  the  payment  of  approximately
$1.8  million  of  performance-based bonuses  in  the  first  quarter  of
1997   related  to  fiscal  1996  results,  and  a  tax  refund  of  $1.2
million   received  in  1998.   These  reductions  in  cash   used   from
year   to   year   were  offset  by  increased  purchases  of   inventory
primarily for the new stores.

Net    cash   used   in   investing   activities   during   fiscal   1998
increased  $6.8  million  over  the  comparable  period  in  fiscal  1997
primarily  as  a  result  of  increased  capital  expenditures  of   $3.5
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  six  months
ended   August   1,  1998  was  $22.6  million  as  compared   to   $16.8
million  in  the  same  period  of the  prior  year.   The  $5.8  million
increase  was  primarily  due  to  long-term  debt  repayments  made   in
the prior year.

The   Company   believes  that  internally  generated  working   capital,
existing   vendor   and  third  party  factor  arrangements   and   funds
available   under   the   Agreement  will  be  adequate   to   meet   its
merchandise  inventory  and  normal  operating  expense  needs,  as  well
as   presently   anticipated   capital  expenditure   requirements,   for
the    remainder   of   the   fiscal   year.   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   fiscal
1998,   capital   expenditures   are   expected   to   approximate    $30
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.


                               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)

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
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 third 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 fiscal 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  operations  from  non-
compliant   systems  utilized  by  unrelated  third  party   governmental
and business entities.




                               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)

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  $5.6   million
had  been  incurred  through  August 1,  1998.  The  expense  portion  of
the   total  project  is  estimated  at  $12.6  million  of  which   $3.5
million   and  $5.1  million  is  expected  to  be  incurred  in   fiscal
1998  and  fiscal  1999,  respectively.  Through  August  1,  1998,  $0.9
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.

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.



                                
                               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)

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   is   planning   pilot   programs   to   determine    the
feasibility   of  new  retail  formats  to  supplement  the   traditional
Filene's    Basement   specialty   stores.    Principal   elements    are
expected  to  include  larger  stores,  with  variable  operating  times.
Merchandise   would   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  would
leverage   the   current   Filene's   Basement   infrastructure,   vendor
relations   and   name  recognition.   The  capital  required   to   open
stores  of  this  kind  would be significantly  less  than  required  for
a traditional Filene's Basement specialty store.

The   programs   are   still   in  the  preliminary   stages,   and   the
objective  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.

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.


                               14
<PAGE>
                   PART II - OTHER INFORMATION


ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The  Annual  Meeting  of  Stockholders of  Filene's  Basement  Corp.  was
held  on  June  25,  1998,  for the purpose of  electing  three  Class  I
Directors   of  the  Company  to  serve  until  the  year   2001   Annual
Meeting   of   Stockholders   or  until   their   successors   are   duly
elected  and  qualified.   The  following  sets  forth  the  results   of
shareholder voting:

Election of Class I Directors:
                                         Votes in             Votes
                                          Favor              Withheld
                                         --------            --------
Election of Samuel J. Gerson
  as Class I Director                   18,503,119            367,159

Election of Robert P. Henderson
  as Class I Director                   18,503,685            366,593

Election of Paul D. Pagnucci
  as Class I Director                   18,504,385            365,893


ITEM 5    OTHER INFORMATION

Stockholder Proposals for 1999 Annual Meeting

Stockholder  proposals  submitted pursuant  to  Rule  14a-8  under  the
Securities  and  Exchange  Act  of  1934,  as  amended  (the  "Exchange
Act"),  and  intended  to  be presented at the  Company's  1999  Annual
Meeting  of  Stockholders must be received by  the  Company  not  later
than  January  20,  1999  in order to be considered  for  inclusion  in
the Company's proxy materials for that meeting.

In  addition,  in  accordance with recent amendments  to  Rules  14a-4,
14a-5   and   14a-8   under  the  Exchange  Act,  written   notice   of
stockholder  proposals  submitted outside the processes  of  Rule  14a-
8  for  consideration  at  the  1999  Annual  Meeting  of  Stockholders
must  be  received  by  the  Company on or  before  April  5,  1999  in
order to be considered timely for purposes of Rule 14a-4.

In   addition,  the  Company's  Restated  By-Laws  also  establish   an
advance   notice  procedure  with  respect  to  stockholder  nomination
of   candidates   for  election  as  directors.   A  notice   regarding
stockholder  nominations  for  director  must  be  accompanied   by   a
petition  signed  by  at  least  100  record  holders  representing  in
the  aggregate  at  least  1%  of the outstanding  shares  entitled  to
vote  for  directors.  Such notice must be received  by  the  clerk  of
the  Company  not  less  than 60 days or more than  90  days  prior  to
the  applicable  stockholder  meeting,  provided,  however,  that,   in
the  event  the  date  of  the  meeting is not  publicly  announced  by
the  Company  more  than  70  days prior to  the  meeting,  the  notice
must  be  received  by  the  Company  not  later  than  the  close   of
business on the


                               15
<PAGE>
                   PART II - OTHER INFORMATION


ITEM 5    OTHER INFORMATION (CONTINUED)

tenth  day  following  the  day  on  which  such  announcement  of  the
date  of  the  meeting is made.  Any such notice must  be  written  and
contain  certain  specified  information  concerning  the  persons   to
be nominated and
the  stockholder  submitting  the  nomination,  all  as  set  forth  in
the   Company's  Restated  By-Laws.   The  presiding  officer  of   the
meeting   may  refuse  to  acknowledge  any  director  nomination   not
made  in  compliance  with  such  advance  notice  requirements.    The
Company   has  not  yet  publicly  announced  the  date  of  the   1999
Annual  Meeting.   The  advance notice provisions of the  Company's  
Restated  By-Laws supersede the notice requirements contained in recent
amendments to Rule 14a-14 under the Exchange Act.


ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits


    27    Financial Data Schedule


(b) Reports on Form 8-K

    None




























                               16
<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:  September 15, 1998

                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                

                                
                                
                                17
<PAGE>
                          EXHIBIT INDEX

             Pursuant to Item 601 of Regulation S-K




                                
Exhibit                   Title


27   Financial Data Schedule