As filed with the Securities and Exchange Commission on July 30, 2003
                          Registration No. 333-105011
================================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                AMENDMENT NO. 2
                                       TO
                                    FORM S-3
                             REGISTRATION STATEMENT
                                     Under
                           The Securities Act of 1933



                            Factory 2-U STORES, INC.
             (Exact name of Registrant as specified in its charter)

                 Delaware                             51-0299573
       (State or other jurisdiction                (I.R.S. Employer
     of incorporation or organization)           Identification Number)


                                4000 Ruffin Road
                               San Diego, CA 92123
                                 (858) 627-1800
          (Address, including zip code, and telephone number, including
             area code, of Registrant's principal executive offices)


                                William R. Fields
                            Factory 2-U Stores, Inc.
                                4000 Ruffin Road
                               San Diego, CA 92123
                                 (858) 627-1800
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)


                                   Copies to:
                             Theodore H. Latty, Esq.
                            Hughes Hubbard & Reed LLP
                       350 South Grand Avenue, 36th Floor
                           Los Angeles, CA 90071-3442
                                 (213) 613-2800


     Approximate date of commencement of proposed sale to the public:  From time
to time after the effective date of this Registration Statement.

     If the only  securities  being  registered  on this Form are being  offered
pursuant to dividend or interest  reinvestment plans, please check the following
box. |_|

     If any of the securities being registered on this Form are to be offered on
a delayed or continuous  basis  pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|

     If this Form is filed to  register  additional  securities  for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list  the  Securities  Act  registration  statement  number  of the  earlier
effective registration statement for the same offering. |_|

     If this Form is a  post-effective  amendment  filed pursuant to Rule 462(c)
under the  Securities  Act,  check the following box and list the Securities Act
registration  statement number of the earlier effective  registration  statement
for the same offering. |_|


<PAGE>

                                      CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================
     Title of Each Class                          Proposed Maximum      Proposed Maximum       Amount of
        of Securities           Amount to be       Offering Price      Aggregate Offering    Registration
      to be Registered          Registered(1)        Per Share(2)        Offering Price(2)        Fee
---------------------------------------------------------------------------------------------------------
<S>                               <C>                 <C>                <C>                   <C>
Common Stock, $0.01 par value     2,590,379           $5.14              $13,314,548.06        $1,077.15
=========================================================================================================
</TABLE>

(1)  Includes 75,000 shares issuable upon exercise of warrants.

(2)  Estimated  solely  for the  purpose of  calculating  the  registration  fee
     pursuant  to Rule 457(c)  under the  Securities  Act of 1933,  based on the
     average  of the high  and low  prices  of the  common  stock on the  Nasdaq
     National Market on May 2, 2003, as reported by The Nasdaq Stock Market.

     The registrant  hereby amends this  registration  statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further  amendment  which  specifically  states  that  this  registration
statement shall  thereafter  become effective in accordance with section 8(a) of
the Securities  Act of 1933, as amended,  or until this  registration  statement
shall become  effective on such date as the Securities and Exchange  Commission,
acting pursuant to said section 8(a), may determine.

     The information in this  prospectus is not complete and may be changed.  We
may not sell these securities  until the  registration  statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to  sell  these  securities  and it is not  soliciting  an  offer  to buy  these
securities in any state where the offer or sale is not permitted.

<PAGE>

THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE  SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.



                   SUBJECT TO COMPLETION DATED JULY 30, 2003


PROSPECTUS

                            FACTORY 2-U STORES, INC.

                                2,590,379 SHARES

                                  COMMON STOCK

     This  prospectus  relates to the resale,  from time to time, by the selling
stockholders  named in this  prospectus of up to 2,590,379  shares of our common
stock.  The prices at which the selling  stockholders may sell these shares will
be determined by the  prevailing  market price for shares of our common stock or
in  negotiated  transactions.  We will not receive any of the proceeds  from the
sale of the shares sold pursuant to this prospectus.

                             ---------------------
     SEE "RISK FACTORS" ON PAGE 2 FOR  INFORMATION  YOU SHOULD  CONSIDER  BEFORE
BUYING SHARES OF OUR COMMON STOCK.

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

     Our common stock is listed on the Nasdaq  National  Market under the symbol
"FTUS." On July 30, 2003,  the last  reported  sale price of our common stock on
the Nasdaq National Market was $7.45 per share


                             ---------------------
     Neither the  Securities and Exchange  Commission  nor any state  securities
commission has approved or disapproved of these securities or determined if this
prospectus  is truthful or  complete.  Any  representation  to the contrary is a
criminal offense.

                      This prospectus is dated _____, 2003

<PAGE>



                                TABLE OF CONTENTS

                                                                            PAGE


PROSPECTUS SUMMARY.............................................................1
FACTORY 2-U STORES, INC........................................................1
RISK FACTORS...................................................................2
USE OF PROCEEDS................................................................6
SELLING STOCKHOLDERS...........................................................6
PLAN OF DISTRIBUTION..........................................................10
LEGAL MATTERS.................................................................11
EXPERTS.......................................................................11
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS.............................12
ADDITIONAL INFORMATION........................................................13
INFORMATION INCORPORATED BY REFERENCE.........................................13





<PAGE>


                               PROSPECTUS SUMMARY

     YOU  SHOULD  RELY  ONLY ON  INFORMATION  OR  REPRESENTATIONS  CONTAINED  OR
INCORPORATED  BY REFERENCE IN THIS  PROSPECTUS.  NO ONE HAS BEEN  AUTHORIZED  TO
PROVIDE YOU WITH ANY DIFFERENT INFORMATION.

                            FACTORY 2-U STORES, INC.

     We operate a chain of off-price  retail  apparel and  housewares  stores in
Arizona,  Arkansas,  California,  Idaho, Nevada, New Mexico,  Oklahoma,  Oregon,
Texas and Washington.  We sell branded casual apparel for the family, as well as
selected  domestic  and  household  merchandise  at prices  that  generally  are
significantly lower than other discount stores.

     Our stores average  approximately  15,000 total square feet and are located
mostly  in  shopping  centers.  Our  products  include  a broad  range of family
apparel,  domestic  goods and  houseware  products.  Our typical  customers  are
families  with more than the average  number of children  and average  household
income of approximately  $35,000, which generally are profiled as discount store
shoppers.  Our  merchandising  strategy is to offer first  quality  recognizable
national and discount store brands at a substantial  discount,  generally 20% to
50% below prices offered by the national  discount  chains.  Our stores are well
lit and present  the  merchandise  primarily  on hanging  fixtures.  We also use
strategically  placed  instore  signage  to  emphasize  the  savings  and create
increased customer awareness.

     We  define  our  fiscal  year by the  calendar  year in  which  most of our
business  activity occurs (the fiscal year ended February 1, 2003 is referred to
as fiscal 2002).

     We were  incorporated  in  Delaware  in March 1987 as BMA Life Care  Corp.,
changed our name later that month to The  Longwood  Group,  Ltd. and changed our
name in May 1992 to DRS  Industries,  Inc.  In  December  1992,  we  acquired an
interest in General  Textiles while it was operating  under Chapter 11 of the U.
S. Bankruptcy Code. General Textiles operated an off-priced apparel retail chain
known as Family Bargain Center. In May 1993, we contributed additional equity to
General  Textiles and thereby  increased  our  ownership of General  Textiles to
100%, at which time General  Textiles  emerged from  bankruptcy  protection.  In
January 1994,  we changed our name to Family  Bargain  Corporation.  In November
1995, we acquired Capin  Mercantile  Corporation and changed its name to Factory
2-U,  Inc. and began to  coordinate  the  purchasing,  warehousing  and delivery
operations for the Family  Bargain Center and Factory 2-U chains.  In July 1998,
General Textiles and Factory 2-U, Inc. were merged into a new corporate  entity,
General  Textiles,  Inc., which was a wholly-owned  subsidiary of Family Bargain
Corporation.  In November 1998,  General  Textiles,  Inc. was merged into Family
Bargain  Corporation,  at which time we converted our previous  three classes of
stock into a single  class of common stock and changed our  corporate  name from
Family Bargain Corporation to Factory 2-U Stores, Inc.

     Our principal executive offices are located at 4000 Ruffin Road, San Diego,
California  92123.  The telephone number of our principal  executive  offices is
(858) 627-1800.

<PAGE>

                                  RISK FACTORS

     An  investment  in our  common  stock  involves a high  degree of risk.  In
addition  to  the  other  information  contained  in  this  prospectus,   before
purchasing the shares  prospective  investors should carefully consider the risk
factors described below.  These factors are not intended to represent a complete
list of the  general or  specific  factors  that may affect us.  Other  factors,
including  general  economic  factors  and  business  strategies,   may  have  a
significant  effect  on  our  business,   financial  condition  and  results  of
operations.

OUR HIGH STORE CONCENTRATION IN CALIFORNIA LEAVES US PARTICULARLY SUSCEPTIBLE TO
RISKS OF DOING BUSINESS IN CALIFORNIA

     As of April 25, 2003,  we operated 127 stores in  California,  representing
over half of our total store base.  Accordingly,  our results of operations  and
financial  condition are significantly  more dependent upon trends and events in
California than are those of our competitors with more  geographically  balanced
store locations. Operating costs, such as workers' compensation and utilities in
California  have been  significantly  higher  than other  regions in the country
where  we  currently  operate.  If  operating  costs  continue  to  increase  in
California, they could continue to reduce our operating margins.

     The costs associated with workers'  compensation  insurance in the state of
California  have  increased  significantly  over the past two years.  These cost
increases  are  related  to the  average  cost per claim and the  related  state
benefits. In the state of California, the average workers' compensation claim is
significantly  higher  than the other  states  where we  currently  operate.  In
January  2003,   the  state  of  California   increased  the  maximum   workers'
compensation benefits by approximately 20 percent. With these continued workers'
compensation  cost  increases and the uncertain  economy,  the continued rise in
benefits could reduce our earnings.

     Utility  costs for  electricity  and natural gas in  California  have risen
significantly.  These  costs may  continue  to  increase  due to the  actions of
federal and state governments and agencies,  as well as other factors beyond our
control.   We  have  attempted  to  mitigate  such   increases   through  energy
conservation  measures and other cost  cutting  steps.  However,  we can make no
assurances that these measures and other steps taken will be adequate to control
the  impact  of  these  utility  cost  increases  in the  future.  In  addition,
increasing  utility costs,  together with high  unemployment,  may significantly
reduce the disposable income of our target customers. Our sales could be reduced
if our target customers have less disposable income.

     In addition, California historically has been vulnerable to certain natural
disasters and other risks, such as earthquakes and fires. At times, these events
have disrupted the local economy. These events could also pose physical risks to
our properties.

WE COULD EXPERIENCE DISRUPTIONS IN RECEIVING AND DISTRIBUTION

     Well-organized  and  managed  receiving  and  shipping  schedules  and  the
avoidance of interruptions  are vital to our success.  From time to time, we may
face unexpected  demands on our distribution  operations that could cause delays
in delivery of merchandise from our distribution  centers to our stores. A fire,
earthquake or other disaster at our distribution  centers that disrupts the flow

<PAGE>

of merchandise  could severely  impair our ability to maintain  inventory in our
stores and thus reduce sales.

     During May 2003,  we closed our two  existing  distribution  centers in San
Diego and consolidated their operations into a single,  new distribution  center
in San Diego.  We may face  unexpected or  unforeseen  demands,  disruptions  or
costs, such as may result from earthquakes or mechanical breakdowns,  that could
adversely affect our distribution  center operations and delay or interfere with
our ability to deliver merchandise from our distribution  facility to our stores
in connection with this consolidation. Any such delay or interference could lead
to a reduction in sales.

WE DEPEND UPON, BUT DO NOT HAVE LONG-TERM  AGREEMENTS  WITH, OUR VENDORS FOR THE
SUPPLY OF CLOSE-OUT AND EXCESS IN-SEASON MERCHANDISE

     Our  success  depends in large part on our  ability to locate and  purchase
quality close-out and excess in-season merchandise at attractive prices from our
vendors.  We cannot  be  certain  that  such  merchandise  will  continue  to be
available  in the  future.  Further,  we may not be able  to find  and  purchase
merchandise in quantities necessary to accommodate our immediate needs or future
growth.

     Although we believe our relationships  with our vendors are good, we do not
have long-term  agreements with any vendor.  As a result,  we must  continuously
seek out buying  opportunities from our existing suppliers and from new sources.
We  compete  for these  opportunities  with  other  wholesalers  and  retailers,
discount and deep-discount chains, mass merchandisers and various privately-held
companies  and  individuals.  Although we do not depend on any single  vendor or
group of vendors  and  believe we can  successfully  compete in seeking  out new
vendors,  a disruption in the  availability of merchandise at attractive  prices
could result in reductions in sales and gross margins.

WE RELY ON CREDIT SUPPORT FROM OUR VENDORS AND THE CREDIT COMMUNITY

     Our ability to  purchase  merchandise  depends  upon our  receiving  credit
support from trade vendors or the credit community that extends  financing terms
to  certain of our  vendors.  In light of general  economic  conditions  and our
recent financial  performance,  the credit  community  withdrew or reduced their
extension of credit for our purchase orders,  which has disrupted our ability to
purchase  merchandise  and impaired our business.  This  disruption led to lower
than desired inventories, and consequently,  may have hurt the relationship with
our  customers by not meeting  their  expectations  with respect to  merchandise
assortment and quality.  Though our recently completed equity and debt financing
transactions  have led to increased  support from the credit  community  and our
vendors,  any further  improvement  in credit will be  contingent  upon improved
operating  results and  liquidity.  Any further  withdrawal  or reduction of the
extension of credit from the credit  community and our vendors may result in our
not being able to purchase  merchandise at attractive  prices,  disrupt  product
flow,  reduce  our  liquidity  and  result in a  reduction  in sales and  profit
margins.  It may also impair our ability to finance our  operations  and capital
expenditures,  pay our debt obligations,  and complete our restructuring efforts
over the next twelve months

<PAGE>

OUR SALES FLUCTUATE  ACCORDING TO SEASONAL BUYING  PATTERNS,  WHICH EXPOSE US TO
EXCESS INVENTORY RISK

     We have historically realized our highest levels of sales and income during
the third and fourth quarters of our fiscal year (the quarters ending in October
and  January) as a result of the "Back to School"  (July and August) and Holiday
(November and December) seasons.  Any adverse events during the third and fourth
quarter could  therefore  reduce sales.  In anticipation of the "Back to School"
and  Holiday  seasons,   we  may  purchase   substantial   amounts  of  seasonal
merchandise.  If for  any  reason,  including  periods  of  sustained  inclement
weather,  our net sales during these seasons were to fall below  seasonal  norms
and/or  our  expectations,  a seasonal  merchandise  inventory  imbalance  could
result. If such an imbalance were to occur, markdowns might be required to clear
excess  inventory.  Our sales,  gross margins and net income could be reduced by
higher than expected markdowns.

WE FACE INTENSE COMPETITION

     We  operate in a highly  competitive  marketplace.  We  compete  with large
discount retail chains, such as Wal-Mart, K-Mart, Target and Mervyn's, and other
off-price chains, such as TJ Maxx, Ross Stores, Marshall's and Big Lots, some of
which have  substantially  greater  resources  than ours.  We also  compete with
independent  and small chain  retailers  and flea  markets  (also known as "swap
meets"),  which serve the same low and low-middle  income market.  Over the past
two years, the retail industry has experienced price deflation, primarily due to
a weak  economy  and  intense  competition.  We compete in the  discount  retail
merchandise business, which is a highly competitive environment that subjects us
to the price  competition,  the  potential  for  lower  net sales and  decreased
operating  margins.  We expect the competition will continue and increase in the
future.  In  addressing  this  competitive  environment,  we have  initiated new
merchandise strategies, including new price point offerings, better execution of
our core  businesses and a revised print  advertising  program;  all designed to
improve customer  frequency and attract new customers.  However,  we can make no
assurances  that these  strategies  and other  actions taken will be adequate to
minimize  our  exposure  to  reduced  sales  and  lower  gross  margins  due  to
competition.

WE  HANDLE  CERTAIN   MATERIALS   THAT  COULD  EXPOSE  US  TO  LIABILITY   UNDER
ENVIRONMENTAL LAWS

     In the ordinary course of our business,  we sometimes  handle or dispose of
commonplace  household products that are classified as hazardous materials under
various  environmental laws and regulations.  We have adopted policies regarding
the handling and disposal of these products and we train our employees on how to
handle and dispose of them. We cannot assure that our policies and training will
successfully help us avoid potential  violations of these environmental laws and
regulations in the future.

OUR ANTI-TAKEOVER PROVISIONS AND CONTROL BY OUR EXISTING MAJOR SHAREHOLDER COULD
DEPRESS OUR STOCK PRICE

     In  addition  to  some   governing   provisions  in  our   Certificate   of
Incorporation  and  Bylaws,  we are also  subject to certain  Delaware  laws and
regulations  which could delay,  discourage and prevent others from initiating a

<PAGE>

potential  merger,  takeover or other  change in control,  even if such  actions
would benefit our shareholders and us.  Moreover,  we have a single  shareholder
that  currently  owns more than 20% of our voting stock.  As a result,  they may
have  certain  ability  to  influence  all  matters  requiring  the  vote of our
shareholders,  including  the  election  of Board of  Directors  and most or our
corporate actions.  They may also control our policies and potentially prevent a
change in control.  This could  adversely  affect the voting and other rights of
our other shareholders and could depress the market price of our common stock.

THE MARKET PRICE OF OUR COMMON STOCK IS SUBJECT TO SUBSTANTIAL FLUCTUATION

     The market price of our common stock has fluctuated substantially since our
recapitalization  occurred in November 1998. Trading prices for our common stock
could fluctuate significantly due to many factors, including:
o  the depth of the market for our common stock;
o  changes  in  expectations  of our  future  financial  performance,  including
   financial estimates by securities  analysts and investors;  variations in our
   operating results and financial conditions;
o  conditions or trends in our industry;
o  additions or departures of key personnel; and
o  future issuances of our common stock.

WE FACE EXPOSURE IN LAWSUITS

     In  April  2003,  Lynda  Bray  and  Masis  Manougian,  two of  our  current
employees,  filed a lawsuit  against us entitled "LYNDA BRAY,  MASIS  MANOUGIAN,
ETC.,  PLAINTIFFS,  VS. FACTORY 2-U STORES,  INC., ETC.,  DEFENDANTS",  Case No.
RCV071918  in the  Superior  Court of the  State of San  Bernardino  (the  "Bray
Lawsuit").  The First  Amended  Complaint  in the Bray  Lawsuit  alleges that we
violated the California  Labor Code,  Industrial Wage Commission  Orders and the
California  Unfair  Competition Act by failing to pay wages and overtime for all
hours  worked,  by failing to  document  all hours  worked,  by  threatening  to
retaliate  against  employees who sought to participate in the settlement of the
lawsuit  against us entitled  "PAMELA JEAN O'HARA,  PLAINTIFF,  VS.  FACTORY 2-U
STORES, INC., ET AL., DEFENDANTS" and by failing to inform prospective employees
of unpaid wage claims.  Plaintiffs purport to bring this action on behalf of all
persons  who were  employed  in one of our  California  stores at any time after
April 25, 2003.  Plaintiffs seek compensatory and exemplary  damages,  interest,
penalties,  attorneys' fees and disgorged  profits in an amount which plaintiffs
estimated  to be not less than  $100,000,000.  Plaintiffs  also seek  injunctive
relief requiring correction of the alleged unlawful practices.

     Although at this stage of the  litigation  it is  difficult  to predict the
outcome of the case with certainty, we believe that we have meritorious defenses
to the Bray  Lawsuit  and we are  vigorously  defending  against it. If the Bray
Lawsuit is decided  adversely,  the potential  exposure could be material to our
results of operations.

     We are  periodically  subject to legal  actions  that arise in the ordinary
course of  business  that  could  subject  us to  substantial  money  damages or
injunctive relief.

<PAGE>

OUR CUSTOMERS MIGHT REDUCE THEIR HOUSEWARE AND APPAREL  PURCHASES AS A RESULT OF
DOWNTURNS IN THE UNITED STATES ECONOMY

     Our typical  customers  are families  with more than the average  number of
children  and with  annual  household  income  of  approximately  $35,000.  This
customer base is particularly vulnerable to economic recessions, depressions and
general  slowdowns  in the overall  United  States  economy.  During  periods of
general  economic  weakness,  our customers may choose to reduce their houseware
and apparel  purchases  in favor of housing and food  expenditures,  which could
result in a reduction in our sales.

WE MAY INCUR ADDITIONAL RESTRUCTURING CHARGES

     During fiscal 2002 and fiscal 2001, we established  restructuring  reserves
related  to  our  efforts  to  improve  store  profitability,  streamline  field
operations and reduce operating costs. A large part of our restructuring  effort
was the closure of 51 stores and consolidation of three distribution  centers. A
significant portion of the costs to close these facilities is related to ongoing
rent and lease  termination  costs.  As of  February  1,  2003,  we  expect  the
remaining  costs  related  to the  closed  stores  and  distribution  centers to
approximate $12.6 million.  While we have successfully  terminated a significant
portion of the  remaining  store lease  obligations,  there can be no assurances
that we will be successful in terminating the remaining  store and  distribution
center lease obligations.  If we are not successful in terminating the remaining
lease  obligations  within  our  estimated  timeframe,  we may incur  additional
restructuring  charges and cash flow  requirements  needed to complete the lease
terminations.

WE MAY NEED TO INCREASE OUR DEFERRED TAX ASSET VALUATION ALLOWANCE

     As of February 1, 2003,  we had net deferred  tax assets of $20.5  million,
which  included a $7.7 million  deferred tax asset  valuation  allowance.  These
income tax benefits may not be realized if we are not  successful  in generating
taxable  income  in the  future.  The  likelihood  of a  material  change in our
expected  realization  of these assets is dependent on our future taxable income
and our ability to use our net operating  loss  carryforwards.  Our inability to
generate  pre-tax  income in the future may require us to increase  our deferred
tax asset valuation allowance and therefore reduce our future net earnings.


                                USE OF PROCEEDS

     We will not  receive  any of the  proceeds  from the sale of the  shares of
common stock offered pursuant to this  prospectus.  All of such proceeds will be
received by the selling stockholders.

                              SELLING STOCKHOLDERS

     On March 6, 2003,  we issued an  aggregate  of  2,515,379  shares of common
stock and  issued a  warrant  to  purchase  75,000  shares of common  stock in a
private  placement  made solely to accredited  investors (the  "Offering").  The
gross proceeds of the Offering were approximately $5,930,000. The warrant has an
exercise  price of $3.50 per share and is exercisable  for three years.  We also
agreed  to file with the  Securities  and  Exchange  Commission  a  registration

<PAGE>

statement  covering  the resale of the shares of common  stock and the shares of
common stock issuable upon exercise of the warrant.


     The  table  below  lists the  selling  stockholders  and other  information
regarding  the  beneficial   ownership  of  the  common  stock  by  the  selling
stockholders. Each of these selling stockholders purchased the shares covered by
the current resale  registration  statement in the ordinary  course of business.
Each  selling  stockholder  has sole  voting  control  over the shares  shown as
beneficially owned, except as otherwise noted.  Because the selling stockholders
may sell or  distribute  all or a portion of the  shares of common  stock at any
time and from time to time after the date of this prospectus, we cannot estimate
the number of shares of common stock that the selling stockholders may have upon
completion of this offering  (although we have assumed for purposes of the table
below that all shares offered by this prospectus will be sold in this offering).


     Except as otherwise set forth below,  no selling  stockholder  has held any
position  or  office  or  had a  material  relationship  with  us or  any of our
affiliates within the past three years other than as a result of the purchase of
shares of our common stock pursuant to the Offering.

<PAGE>


<TABLE>
<CAPTION>



=====================================================================================================
                                                                           Shares beneficially owned
                                                                              after this offering<F1>
                                                                           --------------------------
                                                Shares
                                             beneficially       Shares
                                               owned on       offered by
                                             date of this        this
   Name of selling stockholders               prospectus      prospectus      Number      Percentage
-----------------------------------------------------------------------------------------------------
<S>                                           <C>             <C>          <C>                <C>
Donald V. Weir &
     Julie E. Weir JTTIC                         25,000          25,000            0          *
Atlas Capital (Q.P.) L.P.<F2>                    55,500          55,500            0          *
Atlas Capital Master Fund, Ltd.<F3>             174,500         174,500            0          *
Westpark Capital, L.P.<F4>                      169,600          80,000       84,600          *
William A. Solemene                             150,000         150,000            0          *
Barbara Hunt Crow                               150,000         150,000            0          *
David S. Hunt                                    97,679          97,679            0          *
William Herbert Hunt Trust Estate<F5>           250,000         250,000            0          *
FlyLine Holdings, Ltd.<F6>                        6,000           6,000            0          *
Ram Trading, Ltd.<F7>                            44,000          44,000            0          *
The Pinnacle Fund, L.P.<F8>                     512,500         500,000       12,500          *
Don A. Sanders                                  100,000         100,000            0          *
Sanders Opportunity Fund, (Inst) L.P.<F9>        91,062          91,062            0          *
Sanders Opportunity Fund, L.P.<F9>               33,938          33,938            0          *
Precept Capital Master Fund, GP<F10>             37,000          37,000            0          *
Ronald Rashkow<F11>                             316,940<F12>     72,700      244,240         1.5


------------------------------
<FN>
<F1>
Assumes all shares  offered by this  prospectus  by each  selling  stockholder  will be sold in this
offering.
<F2>
Robert Alpert has sole voting and investment power over the registrant's shares.
<F3>
Robert Alpert has sole voting and investment power over the registrant's shares.
<F4>
Patrick J. Brosnahan,  as General Partner of Westpark Capital,  L.P., has sole voting and investment
power over the registrant's shares.
<F5>
J.W.  Beavers,  Jr.,  as Trustee of the  William  Herbert  Hunt Trust  Estate,  has sole  voting and
investment power over the registrant's shares.
<F6>
Forrest Tempel has sole voting and investment power over the registrant's shares.
<F7>
James R. Park has sole voting and investment power over the registrant's shares.
<F8>
Barry M. Kitt, as General Partner of Pinnacle  Advisors,  L.P. has sole voting and investment  power
over the registrant's shares.
<F9>
Mr. Don A. Sanders has sole voting and invesment  power over the  registrant's  shares,  through his
authority  as Chief  Investment  Officer  of Sanders  Opportunity  Fund,  (Inst)  L.P.  and  Sanders
Opportunity  Fund, L.P., and through his authority as Manager of Sanders  Opportunity Fund, LLC, the
sole general partner of Sanders Opportunity Fund, (Inst) L.P. and Sanders Opportunity Fund, L.P.
<F10>
D. Blair Baker, as President and CEO of Precept Capital  Management,  has sole voting and investment
power over the registrant's shares.
</FN>


<PAGE>



=====================================================================================================
                                                                           Shares beneficially owned
                                                                              after this offering<F1>
                                                                           --------------------------
                                                Shares
                                             beneficially       Shares
                                               owned on       offered by
                                             date of this        this
   Name of selling stockholders               prospectus      prospectus      Number      Percentage
-----------------------------------------------------------------------------------------------------
Three Cities Offshore II, C.V.<F13>           2,340,020         407,207    1,932,813        14.6
Three Cities Fund II, L.P.<F14>               1,383,914         240,793    1,143,121         8.7
Sanders Morris Harris Inc.<F15>                  75,000<F16>     75,000            0          *
                                              ---------       ---------
TOTAL                                         6,012,653       2,590,379
=====================================================================================================



---------------
*  less than 1%





















------------------------------
<FN>
<F11>
Mr.  Rashkow  has been a member  of our  Board  of  Directors  since  1997 and Lead  Director  since
November.4, 2002.
<F12>
Includes 45,525 shares of common stock held by members of Mr. Rashkow's family, 458 shares of common
stock held by a limited  partnership of which Mr.  Rashkow is the general  partner and 56,500 shares
which Mr. Rashkow may acquire within 60 days through the exercise of stock options.
<F13>
As the investment  advisor to both Three Cities Fund II L.P. and Three Cities Offshore II C.V., with
power to direct voting and disposition by both those Funds, Three Cities Research,  Inc. ("TCR") may
be deemed to be the beneficial  owner of the  registrant's  shares owned by both funds. In addition,
because Willem Uhrig is a general partner of TCR Offshore  Associates,  L.P., the general partner of
Three  Cities  Offshore II C.V.,  he may be deemed to be a  beneficial  owner of the shares owned by
Three Cities Offshore II C.V.
<F14>
Willem F.P. de Vogel is a general  partner of TCR  Associates,  L.P.,  the general  partner of Three
Cities Fund II, L.P., and may be deemed to be a beneficial owner of the shares owned by Three Cities
Fund II, L.P.
<F15>
Sanders  Morris  Harris Inc. is a wholly owned  subsidiary of Sanders  Morris Harris Group,  Inc., a
publicly  traded  company.  Ben T. Morris is the  President and Chief  Executive  Officer of Sanders
Morris Harris Inc. and has sole voting and investment power over the registrant's shares.
<F16>
Represents common stock issuable upon exercise of warrant.

</FN>
</TABLE>

<PAGE>

                              PLAN OF DISTRIBUTION

     The  selling  stockholders  and  any  of  their  pledgees,   assignees  and
successors-in-interest  may, from time to time,  sell any or all of their shares
of our common stock on any stock exchange,  market or trading  facility on which
the shares are traded or in private transactions. These sales may be at fixed or
negotiated  prices.  The  selling  stockholders  may  use any one or more of the
following methods when selling shares:

     o  ordinary  brokerage  transactions  and  transactions in which the broker
        dealer solicits purchasers;

     o  block trades in which the broker  dealer will attempt to sell the shares
        as agent but may position and resell a portion of the block as principal
        to facilitate the transaction;

     o  purchases  by a broker  dealer as  principal  and  resale by the  broker
        dealer for its own account;

     o  an exchange  distribution in accordance with the rules of the applicable
        exchange;

     o  privately negotiated transactions;

     o  short sales;

     o  broker  dealers  may  agree  with  the  selling  stockholders  to sell a
        specified number of such shares at a stipulated price per share;

     o  a combination of any of these methods of sale; and

     o  any other method permitted by law.

     The  selling  stockholders  may also sell  shares  under Rule 144 under the
Securities Act rather than under this prospectus.

     Broker dealers  engaged by the selling  stockholders  may arrange for other
brokers dealers to participate in sales.  Broker dealers may receive commissions
or discounts  from the selling  stockholders  (or, if any broker  dealer acts as
agent  for the  purchaser  of  shares,  from the  purchaser)  in  amounts  to be
negotiated.  The  selling  stockholders  do not  expect  these  commissions  and
discounts to exceed what is customary in the types of transactions involved.

     The selling  stockholders  may from time to time pledge or grant a security
interest in some or all of the shares of our common  stock or warrants  owned by
them and, if they default in the performance of their secured  obligations,  the
pledgees or secured  parties may offer and sell the shares of common  stock from
time to time under this  prospectus,  or under an amendment  to this  prospectus
under  Rule  424(b)(3)  or other  applicable  provision  of the  Securities  Act
amending the list of selling stockholders to include the pledgee,  transferee or
other successors in interest as selling stockholders under this prospectus.

<PAGE>

     The selling  stockholders  also may  transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in  interest  will  be the  selling  beneficial  owners  for  purposes  of  this
prospectus.

     The selling stockholders and any broker dealers or agents that are involved
in selling the shares may be deemed to be  "underwriters"  within the meaning of
the Securities Act in connection with such sales. In such event, any commissions
received  by such  broker  dealers or agents and any profit on the resale of the
shares  purchased  by them  may be  deemed  to be  underwriting  commissions  or
discounts  under the Securities  Act. Each selling  stockholder  has informed us
that it does not have any agreement or  understanding,  directly or  indirectly,
with any person to distribute our common stock.

     We are required to pay all fees and expenses  incident to the  registration
of the shares.  The  selling  stockholders  are  required to pay all selling and
other expenses they incur. We have agreed to indemnify the selling  stockholders
against certain losses, claims,  damages and liabilities,  including liabilities
under the Securities Act.

     Under applicable rules and regulations under the Securities Exchange Act of
1934, any person engaged in the  distribution  of shares may not  simultaneously
engage in market making activities with respect to our common stock for a period
of two  business  days  prior  to the  commencement  of  such  distribution.  In
addition,  each selling security holder will be subject to applicable provisions
of the Exchange Act and the associated rules and regulations  under the Exchange
Act, including  Regulation M, which provisions may limit the timing of purchases
and sales of shares of our common  stock by the  selling  stockholders.  We will
make copies of this prospectus  available to the selling  stockholders  and have
informed  them  of the  need  for  delivery  of  copies  of this  prospectus  to
purchasers at or prior to the time of any sale of the shares.

                                 LEGAL MATTERS

     The  validity  of the  common  stock  will be passed  upon for us by Hughes
Hubbard & Reed LLP.

                                    EXPERTS

     The financial  statements of Factory 2-U Stores,  Inc. appearing in Factory
2-U Stores,  Inc.'s  Annual  Report  (Form 10-K) for the year ended  February 1,
2003, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included  therein and incorporated  herein by reference.
Such financial  statements are incorporated herein by reference in reliance upon
such report  given on the  authority of such firm as experts in  accounting  and
auditing.

     The financial  statements  of Factory 2-U Stores,  Inc. for the years ended
February  2, 2002 and  February  3, 2001,  incorporated  in this  prospectus  by
reference to the Annual Report on Form 10-K for the year ended  February 1, 2003
have been so  incorporated  in  reliance on the report of Arthur  Andersen  LLP,
independent  accountants.  On May 1, 2002, we filed a current report on Form 8-K
indicating  that  we had  terminated  Arthur  Andersen  LLP  as our  independent
auditor.  On May 8, 2002 we filed a current  report  on Form 8-K  reporting  the
engagement of Ernst & Young LLP as our  independent  auditor.  After  reasonable
efforts,  we  are  unable  to  obtain  Arthur  Andersen  LLP's  consent  to  the

<PAGE>

incorporation  by reference of their audit reports for the financial  statements
and schedules from our fiscal years ended February 2, 2002 and February 3, 2001.
Accordingly,  Arthur  Andersen LLP has not  consented to the  inclusion of their
reports in this  prospectus,  and we have dispensed with the requirement to file
their consent in reliance on Rule 437a under the Securities Act.  Because Arthur
Andersen  LLP has  not  consented  to the  inclusion  of  their  report  in this
prospectus,  you will not be able to recover  against Arthur  Andersen LLP under
Section 11 of the  Securities  Act for any untrue  statements of a material fact
contained  in  the  financial   statements   audited  by  Arthur   Andersen  LLP
incorporated  by  reference  in this  prospectus  or any  omissions  to  state a
material fact required to be stated therein.


               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     In this  prospectus,  we have  made  both  historical  and  forward-looking
statements.  All of our statements  other than those of historical  fact are, or
may be deemed to be,  forward-looking  statements  within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. These forward-looking statements are not based on historical facts, but
rather reflect our current  expectations  concerning  future results and events.
These  forward-looking  statements  generally  may be  identified  by the use of
phrases such as "believe," "expect,"  "anticipate," "intend," "plan," "foresee,"
"likely," "will" or other similar words or phrases.  Similarly,  statements that
describe  our  objectives,   plans  or  goals  are  or  may  be  forward-looking
statements.  These  forward-looking  statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results,  performance
or  achievements  to be  different  from  any  future  results,  performance  or
achievements expressed or implied by these statements.

     The following  important  factors,  among  others,  could affect our future
results,  causing these results to differ materially from those expressed in any
of our  forward-looking  statements:  general  economic and business  conditions
(both  nationally  and in the regions where we operate),  trends in our business
and consumer preferences,  especially as may be impacted by economic weakness on
consumer  spending,  the  effect  of  government  regulations  and  legislation,
litigation  and other  claims  that may be  asserted  against us, the effects of
intense  competition,  changes in our business  strategy or  development  plans,
including anticipated growth strategies and capital expenditures,  the costs and
difficulties  of attracting and retaining  qualified  personnel,  the effects of
increasing labor, utility, fuel and other operating costs, our ability to obtain
adequate quantities of suitable  merchandise at favorable price and on favorable
terms  and  conditions,  the  effectiveness  of our  operating  initiatives  and
advertising  and promotional  strategies and other risk factors  described below
under "RISK FACTORS."

     Although we believe our plans,  intentions  and  expectations  reflected in
these forward-looking  statements are reasonable,  we can give no assurance that
these  plans,  intentions  or  expectations  will be achieved.  Actual  results,
performance or achievements  could differ  materially  from those  contemplated,
expressed  or  implied  by the  forward-looking  statements  contained  in  this
prospectus.  You  should  not rely on these  forward-looking  statements,  which
reflect  our  position as of the date of this  prospectus.  We do not assume any
obligation to revise forward-looking statements.


<PAGE>

                             ADDITIONAL INFORMATION

     We have filed with the  Securities  and Exchange  Commission a registration
statement  on Form S-3 under the  Securities  Act with  respect to the shares of
common stock offered in this  prospectus.  This  prospectus does not contain all
the  information  set forth in the  registration  statement and the exhibits and
schedules  thereto.  For further  information  about us and our common stock, we
refer you to the  registration  statement  and to the exhibits  filed with them.
Statements  in this  prospectus  as to the  contents  of any  contract  or other
document referred to are not necessarily  complete. We refer you to those copies
of  contracts  or other  documents  that  have  been  filed as  exhibits  to the
registration statements, and statements relating to such documents are qualified
in all respects by such reference. Anyone may inspect a copy of the registration
statements  without charge at the Securities  and Exchange  Commission's  Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain
copies of all or any portion of the  registration  statements  by writing to the
Securities and Exchange  Commission's  Public  Reference Room, 450 Fifth Street,
N.W.,  Washington,  D.C.  20549,  and  paying  prescribed  fees.  You may obtain
information  on the  operation  of the  Public  Reference  Room by  calling  the
Securities  and  Exchange  Commission  at  1-800-SEC-0330.   In  addition,   the
Securities  and Exchange  Commission  maintains a Web site at  www.sec.gov  that
contains  reports,  proxy  and  information  statements  and  other  information
regarding  companies such as ours that file  electronically  with the Securities
and Exchange Commission.

                     INFORMATION INCORPORATED BY REFERENCE

     The  Securities  and  Exchange  Commission  allows  us to  "incorporate  by
reference"  the  information  that we file with  them.  This  means  that we can
disclose  important  information  to you in this  prospectus by referring you to
another document filed  separately with the Securities and Exchange  Commission.
The  information  incorporated  by reference is  considered to be a part of this
prospectus,  and information that we file later with the Securities and Exchange
Commission will automatically update and supersede this information.

     We incorporate by reference in this  prospectus the documents  listed below
and any future filings made by us with the  Securities  and Exchange  Commission
under Sections 13(a),  13(c), 14 or 15(d) of the Securities Exchange Act of 1934
until our offering is complete:

o  Annual Report on Form 10-K for the fiscal year ended February 1, 2003,  filed
   on May 2, 2003; and

o  Quarterly  Report on Form 10-Q for the  quarter  ended May 3, 2003,  filed on
   June 17, 2003.

o  The  description  of the  Company's  Common Stock  contained in the Company's
   Registration  Statement  filed with the  Securities  and Exchange  Commission
   under the Exchange Act and subsequent  amendments and reports filed to update
   such description.

     We  will  provide  without  charge  to each  person  to whom a copy of this
prospectus is delivered,  upon such person's written or oral request,  a copy of
any or all of the  information  incorporated  by  reference  in this  prospectus
(other than exhibits to such  documents,  unless such exhibits are  specifically
incorporated   by  reference   into  the   information   that  this   prospectus

<PAGE>

incorporates).  Requests  should be directed to Factory 2-U Stores,  Inc.,  4000
Ruffin Road,  San Diego,  CA 92123,  Attention:  Investor  Relations,  telephone
number (858) 627-1800.

     Any  statement  contained  in a  document  incorporated  or  deemed  to  be
incorporated  by  reference  in  this  prospectus   shall  be  deemed  modified,
superseded  or replaced  for  purposes of this  prospectus  to the extent that a
statement  contained in this  prospectus or in any  subsequently  filed document
that also is or is deemed to be  incorporated  by reference  in this  prospectus
modifies,  supersedes  or replaces  such  statement.  Any statement so modified,
superseded or replaced shall not be deemed, except as so modified, superseded or
replaced, to constitute a part of this prospectus.

<PAGE>

                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS



Item 14.  Other Expenses of Issuance and Distribution

     The  following  table  sets  forth  the  costs  and  expenses,  other  than
underwriting discounts and commissions, payable by Registrant in connection with
the sale of common stock being registered.  All amounts are estimates except the
SEC registration fee.

          SEC registration fee.........................................$1,100.20
          Legal fees and expenses........................................$10,000
          Accounting fees and expenses....................................$5,000
          Miscellaneous expenses..........................................$5,000
                 Total...............................................$ 21,100.20

Item 15.  Indemnification of Directors and Officers

     Section 145 of the Delaware  General  Corporation Law authorizes a court to
award,  or a corporation's  board of directors to grant,  indemnity to directors
and officers in terms  sufficiently broad to permit such  indemnification  under
certain  circumstances  for liabilities  (including  reimbursement  for expenses
incurred)  arising under the Securities Act of 1933, as amended (the "Securities
Act"). The Registrant's  Restated  Certificate of Incorporation  and Bylaws,  as
amended, provide for indemnification of its directors,  officers,  employees and
other agents to the maximum extent permitted by the Delaware General Corporation
Law. In addition,  the  Registrant has entered into  Indemnification  Agreements
with its executive officers and directors. The Registrant has also purchased and
maintains  insurance for its officers,  directors,  employees and agents against
liabilities  that an officer,  a director,  an employee or an agent may incur in
his capacity as such.

Item 16.  Exhibits and Financial Statement Schedules

     (a)  Exhibits

          Exhibit     Description                               Method of Filing
          Number
            2.1      Plan and Agreement of Merger dated June            +
                     18,   1998   between   Family   Bargain
                     Corporation and General Textiles,  Inc.
                     (incorporates     by    reference    to
                     Registration Statement on Form S-2, No.
                     333-58797,  filed  with the  Securities
                     Exchange   commission  on  October  14,
                     1998)
            4.1      Form of Subscription  Agreement,  dated            *
                     as of March 6, 2003
            4.2      Warrant  to  Purchase  Common  Stock of            *
                     Factory   2-U   Stores,   Inc.,   dated
                     March 6, 2003

<PAGE>


          Exhibit     Description                               Method of Filing
          Number
            4.3      Form of Registration  Rights Agreement,            *
                     dated as of March 6, 2003
            5.1      Opinion of Hughes Hubbard & Reed LLP               *
           23.1      Consent of Ernst & Young LLP                Filed herewith
           23.2      Notice  Regarding   Consent  of  Arthur            *
                     Andersen LLP
           23.3      Consent  of  Hughes  Hubbard & Reed LLP
                     (included in Exhibit 5.1)
           24.1      Power of Attorney                                  *


          ------------------
          +  Incorporated  by reference to  Registration  Statement on Form S-2,
          No.333-58797 filed with the SEC on October 14, 1998.
          * Previously filed


Item 17.  Undertakings

     The undersigned Registrant hereby undertakes:

     (1)  To file,  during any period in which offers or sales are being made, a
          post-effective amendment to this Registration Statement:

          (a)  To include any  prospectus  required  by Section  10(a)(3) of the
               Securities Act;

          (b)  To reflect in the  prospectus  any facts or events  arising after
               the  effective  date of the  Registration  Statement (or the most
               recent post-effective  amendment thereof) which,  individually or
               in  the  aggregate,   represent  a  fundamental   change  in  the
               information   set   forth   in   the   Registration    Statement.
               Notwithstanding the foregoing, any increase or decrease in volume
               of  securities  offered (if the total dollar value of  securities
               offered  would not  exceed  that  which was  registered)  and any
               deviation  from  the low or  high  end of the  estimated  maximum
               offering  range may be reflected in the form of prospectus  filed
               with the  Securities  and  Exchange  Commission  pursuant to Rule
               424(b)  if, in the  aggregate,  the  changes  in volume and price
               represent  no  more  than a 20  percent  change  in  the  maximum
               aggregate  offering  price  set  forth  in  the  "Calculation  of
               Registration Fee" table in the effective registration statement;

          (c)  To include any material  information  with respect to the plan of
               distribution   not  previously   disclosed  in  the  Registration
               Statement  or any  material  change  to such  information  in the
               Registration Statement.

Provided,  however,  that  clauses  (a) and (b) do not apply if the  information
required  to be  included  in a  post-effective  amendment  by such  clauses  is
contained in periodic  reports  filed with or furnished  to the  Securities  and
Exchange Commission by the Registrant pursuant to Section 13 or Section 15(d) of

<PAGE>

the Exchange Act of 1934 that are  incorporated by reference in the Registration
Statement.

     (2)  That,  for  the  purpose  of  determining   any  liability  under  the
          Securities Act, each such  post-effective  amendment shall be deemed a
          new registration statement relating to the securities offered therein,
          and the offering of such securities at that time shall be deemed to be
          the initial bona fide offering thereof.

     (3)  To remove from registration by means of a post-effective amendment any
          of  the  securities  being  registered  which  remain  unsold  at  the
          termination of the offering.

     (4)  That, for purposes of determining  any liability  under the Securities
          Act, each filing of the Registrant's annual report pursuant to Section
          13(a) or Section  15(d) of the  Exchange Act that is  incorporated  by
          reference in this  Registration  Statement shall be deemed to be a new
          registration statement relating to the securities offered therein, and
          the offering of such securities at that time shall be deemed to be the
          initial bona fide offering thereof.

     Insofar as indemnification for liabilities arising under the Securities Act
may  be  permitted  to  directors,  officers  and  controlling  persons  of  the
Registrant pursuant to the foregoing  provisions,  or otherwise,  the Registrant
has been advised that in the opinion of the Securities  and Exchange  Commission
such  indemnification  is against  public policy as expressed in the  Securities
Act,  and  is,  therefore,   unenforceable.  In  the  event  that  a  claim  for
indemnification  against  such  liabilities  (other  than  the  payment  by  the
Registrant of expenses incurred or paid by a director,  officer,  or controlling
person of the  Registrant  in the  successful  defense  of any  action,  suit or
proceeding)  is  asserted by such  director,  officer or  controlling  person in
connection with the securities being registered hereunder,  the Registrant will,
unless in the opinion of its counsel the matter has been settled by  controlling
precedent,  submit to a court of appropriate  jurisdiction  the question whether
such  indemnification  by it is  against  public  policy  as  expressed  in  the
Securities Act and will be governed by the final adjudication of such issue.

                                   SIGNATURES


     Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the  requirements  for filing on Form S-3 and has duly caused this  Amendment
No. 2 to Registration  Statement to be signed on its behalf by the  undersigned,
thereunto duly  authorized,  in San Diego,  California,  on the 30th day of July
2003.


                                                 FACTORY 2-U STORES, INC.

                                                 By: /S/ WILLIAM R. FIELDS
                                                     ---------------------------
                                                     William R. Fields
                                                     Chief Executive Officer and
                                                     Chairman of Board

<PAGE>


     Pursuant to the  requirements  of the  Securities  Act of 1933, as amended,
this  Registration  Statement  has been signed by the  following  persons in the
capacities and on the dates indicated:

           Signature                                        Title
-----------------------------------          -----------------------------------

       /S/ WILLIAM R. FIELDS                  Chief   Executive    Officer   and
-----------------------------------           Chairman  of the Board  (Principal
          William R. Fields                   Executive Officer)


      /S/ DOUGLAS C. FELDERMAN                Executive Vice President and Chief
-----------------------------------           Financial    Officer    (Principal
         Douglas C. Felderman                 Accounting Officer)


                 *
-----------------------------------           Director
          Peter V. Handal


                 *
-----------------------------------           Director
           Ronald Rashkow


                 *
-----------------------------------           Director
      William Robert Wright II



-----------------------------------           Director
        Willem F.P. de Vogel


*By    /S/ DOUGLAS C. FELDERMAN
   --------------------------------
        Douglas C. Felderman
          Attorney-in-fact

<PAGE>


                                  EXHIBIT INDEX

Exhibit     Description                                         Method of Filing
Number
  2.1       Plan and Agreement of Merger dated June 18, 1998            +
            between Family Bargain  Corporation  and General
            Textiles,  Inc.  (incorporates  by  reference to
            Registration   Statement   on  Form   S-2,   No.
            333-58797,  filed with the  Securities  Exchange
            commission on October 14, 1998)
  4.1       Form  of  Subscription  Agreement,  dated  as of            *
            March 6, 2003
  4.2       Warrant to Purchase  Common Stock of Factory 2-U            *
            Stores, Inc., dated March 6, 2003
  4.3       Form of Registration Rights Agreement,  dated as            *
            of March 6, 2003
  5.1       Opinion of Hughes Hubbard & Reed LLP                        *
 23.1       Consent of Ernst & Young LLP                          Filed herewith
 23.2       Notice Regarding Consent of Arthur Andersen LLP             *
 23.3       Consent of Hughes  Hubbard & Reed LLP  (included
            in Exhibit 5.1)
 24.1       Power of Attorney                                           *


------------------
+ Incorporated by reference to Registration Statement on Form S-2, No. 333-58797
filed with the SEC on October 14, 1998.
* Previously filed