FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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

                  For the quarterly period ended July 31, 1998

                                       OR

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

           For the transition period from ____________ to ____________

                         Commission File Number - 1-6797


                             TEXFI INDUSTRIES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                  Delaware                                56-0795032
                  --------                                ----------
      (State or other jurisdiction of                  (I.R.S. Employer
        incorporation or organization)                Identification No.)


1430 Broadway, 13th Floor, New York, New York 10018
--------------------------------------------------------------------------------
                    (Address of principal executive offices)
                                   (ZIP Code)

                                 (212) 930-7200
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


                  Number of shares of Common Stock outstanding
                        at September 14, 1998 - 8,859,098


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
                                      ---     ---

<PAGE>



                              QUARTERLY REPORT ON FORM 10-Q
                           FOR THE QUARTER ENDED JULY 31, 1998

                              PART I - FINANCIAL INFORMATION


Item 1.  Consolidated Financial Statements

      Texfi Industries, Inc. (the Company") has prepared the consolidated
financial statements included herein, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. The consolidated balance
sheet as of October 31, 1997 has been taken from the audited financial
statements as of that date. Certain information and note disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading. It is suggested that these
consolidated financial statements be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's latest Annual
Report on Form 10-K/A.

      The consolidated financial statements included herein reflect all
adjustments (none of which are other than normal recurring accruals) which are,
in the opinion of management, necessary for a fair presentation of the
information included. Operating results for the thirteen-week and thirty-nine
week periods ended July 31, 1998 are not necessarily indicative of the results
that may be expected for the year ended October 30, 1998. The following
consolidated financial statements are included:

      Consolidated Statements of Income for the thirteen weeks and thirty-nine
weeks ended July 31, 1998 and August 1, 1997

      Consolidated Balance Sheets as of July 31, 1998 and October 31, 1997

      Consolidated Statements of Cash Flows for the thirteen weeks and
thirty-nine weeks ended July 31, 1998 and August 1, 1997

      Condensed Notes to Consolidated Financial Statements



                                       2
<PAGE>

                                  TEXFI INDUSTRIES, INC.

                    CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                          (in thousands, except per share data)

<TABLE>
<CAPTION>

                                       THIRTEEN WEEKS ENDED    THIRTY-NINE WEEKS ENDED
                                       ----------------------  -----------------------
                                         JULY 31,   August 1,     JULY 31,   August 1,
                                          1998        1997         1998        1997
                                       ----------  ----------   ----------  -------

<S>                                    <C>         <C>          <C>         <C>       
NET SALES ...........................  $   31,095  $   54,158   $  106,955  $  156,927
                                       ----------  ----------   ----------  ----------

COST AND EXPENSES:
   Cost of goods sold ...............      29,793      47,841       97,870     135,887
   Selling, general and
      administrative  ...............       2,676       4,013        8,703      11,464
                                       ----------  ----------   ----------   ---------
      Total .........................      32,469      51,854      106,573     147,351
                                       ----------  ----------   ----------   ---------

OPERATING (LOSS) INCOME..............      (1,374)      2,304          382       9,576
                                       ----------  ----------   ----------   ---------

OTHER EXPENSE (INCOME):
   Interest .........................       2,681       2,581        6,967       7,804
   Equity in loss of joint
      venture........................        --           423          --          982
   Impairment of note receivable.....        --          --          1,154          --
   Other, net .......................          (5)        --           (24)        (95)
                                       ----------  ----------   ----------   ---------
      Total .........................       2,676       3,004        8,097       8,691
                                       ----------  ----------   ----------   ---------

(LOSS) INCOME BEFORE INCOME TAXES....      (4,050)       (700)      (7,715)        885

Benefit from Income Taxes ...........         --          (32)         --          --
                                       ----------   ---------   ----------   --------

NET (LOSS) INCOME ...................  $   (4,050) $     (668)  $   (7,715)  $     885
                                       ==========  ==========   ==========   =========

NET (LOSS) INCOME PER SHARE:
   Basic ............................  $     (.46) $     (.07)  $     (.87)  $     .10
                                       ==========  ==========   ==========   =========

   Diluted ..........................  $     (.46) $     (.07)  $     (.87)  $     .10
                                       ==========  ==========   ==========   =========
</TABLE>


See Notes to Consolidated Financial Statements on page 6.


                                       3
<PAGE>


                                  TEXFI INDUSTRIES, INC.
                                CONSOLIDATED BALANCE SHEETS
                                      (in thousands)


                                                  (UNAUDITED)
                                             JULY 31,      October 31,
                                              1998            1997
                                           -----------    ------------
                                                            Restated

ASSETS

CURRENT ASSETS:
   Cash and cash equivalents ...............  $     292         1,434
   Receivables:
      Due from factor........................    19,850        35,494
      Trade..................................     5,792         4,486
      Other .................................       421           815
   Inventories ..............................    14,228        19,914
   Prepaid Expenses..........................     2,604         1,355
                                                -------       -------
     Total...................................    43,187        63,498

PROPERTY, PLANT AND EQUIPMENT - NET .........    26,088        28,254
PROPERTY, PLANT AND EQUIPMENT HELD FOR
  DISPOSAL - NET ............................     1,214         3,318
OTHER ASSETS ................................     1,185         1,627
                                               --------      --------
                                               $ 71,674      $ 96,697
                                               ========      ========

LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES:
   Current maturities of long-term debt .....  $  1,244      $  5,015
   Current maturities of sub. debt...........       --          1,200
   Accounts payable .........................    23,595        28,110
   Other liabilities.........................     2,588         3,037
                                               --------      --------
      Total..................................    27,427        37,362

REVOLVING CREDIT LINE........................    19,060        33,919
LONG-TERM DEBT ..............................    11,800         5,500
SUBORDINATED DEBENTURES .....................    36,745        35,631
OTHER LONG-TERM OBLIGATIONS .................       247           175

COMMON SHAREHOLDERS' DEFICIT:
   Common stock, $1.00 par value ............     8,859         8,859
   Additional paid-in capital ...............    25,534        25,534
   Accumulated deficit.......................   (57,998)      (50,283)
                                               --------      --------
      Total..................................   (23,605)      (15,890)
                                               --------      --------
                                               $ 71,674      $ 96,697
                                               ========      ========

See Notes to Consolidated Financial Statements on page 6.


                                       4
<PAGE>


                                  TEXFI INDUSTRIES, INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                      (in thousands)

<TABLE>
<CAPTION>

                                          THIRTEEN WEEKS ENDED    THIRTY-NINE WEEKS ENDED
                                          ----------------------  -----------------------
                                            JULY 31,   August 1,   JULY 31,   August 1,
                                             1998        1997       1998         1997
                                          ---------    ---------  --------    -----------
OPERATING ACTIVITIES
<S>                                        <C>          <C>        <C>          <C>     
Net (loss) income ....................     $ (4,050)    $   (668)  $ (7,715)    $    885
Adjustments to reconcile net (loss)
income to net cash provided by
operating activities:
      Equity in loss of joint
          venture.....................         --           423        --           982
      Impairment of note receivable...         --           --        1,154          --
      Depreciation & amortization ....        1,400        1,324      4,282        3,873
      Loss on capitalized loan costs..          707          --         707          --
      Provision for losses on accounts
      receivable.......................         175           30        180          163
      Gain on sale of property, plant
      and equipment....................          --           --         (2)         (81)
Changes in operating assets and liabilities:
      Accounts receivable .............       2,103        1,007     14,552         (463)
      Inventories .....................       2,674        1,578      5,686          333
      Prepaid and other assets ........         (33)         452     (1,218)        (113)
      Accounts payables and accrued
      liabilities .....................       1,047       (1,049)    (4,867)       1,337
                                           --------      -------    -------      -------
NET CASH PROVIDED BY OPERATING ACTIVITIES     4,023        3,097     12,759        6,916

INVESTING ACTIVITIES
Purchases of property, plant and
 equipment ............................         (22)      (1,747)    (1,449)      (7,973)
Proceeds from sale-lease back of
 property, plant and equipment.........         --        2,446        --          6,657
Proceeds from sale of property, plant
 and equipment.........................          76          461      2,105        2,721
                                           --------      -------    -------      -------
NET CASH PROVIDED BY INVESTING ACTIVITIES        54        1,160        656        1,405

FINANCING ACTIVITIES
Proceeds from long-term debt borrowings      36,176         --       36,176         --
Net (repayments) proceeds from Revolver
 debt borrowings.......................     (31,507)      (1,431)   (38,035)       2,236
Payments on long-term debt obligations.      (8,138)      (3,105)   (10,471)      (7,528)
Investment in joint venture............         --        (1,108)    (1,179)      (2,426)
Payments for repurchase of subordinated
 debentures ...........................          --          (10)       (86)        (456)
Capitalized loan costs.................        (549)        (112)      (962)        (229)
Proceeds from employee stock plans ....         --            --         --          421
                                           --------      -------    -------      -------


NET CASH USED IN FINANCING ACTIVITIES        (4,018)      (5,766)   (14,557)      (7,982)
                                            -------      -------    -------       ------

INCREASE (DECREASE) IN CASH AND CASH
      EQUIVALENTS                                59       (1,509)    (1,142)         339
Cash and cash equivalents
 at beginning of period ................        233        2,266      1,434          418
                                           --------     --------    -------    ---------
CASH AND CASH EQUIVALENTS
      AT END OF PERIOD                     $    292     $    757    $   292    $     757
                                           ========     ========    =======    =========
</TABLE>


See Notes to Consolidated Financial Statements on page 6.



                                       5
<PAGE>


                             TEXFI INDUSTRIES, INC.

                  CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                     JULY 31, 1998

1.  Details of certain balance sheet captions are as follows (in thousands):

                                                 JULY 31,  October 31,
                                                  1998        1997
                                                --------     --------

INVENTORIES:
  Finished goods .............................  $  3,105     $  5,225
  Goods in process ...........................     7,210       10,092
  Raw materials ..............................     2,223        2,845
  Supplies ...................................     2,567        2,595
                                                --------     --------
       Total .................................    15,105       20,757
  Less reserves ..............................       877          843
                                                --------     --------
       Inventories-net........................  $ 14,228     $ 19,914
                                                ========     ========

PROPERTY, PLANT AND EQUIPMENT:
  Land and land improvements .................  $  2,220     $  2,220
  Buildings ..................................    16,019       16,019
  Machinery, equipment, etc. .................    60,961       59,042
  Construction in progress ...................       621        1,143
                                                --------     --------
       Total .................................    79,821       78,424
  Less accumulated depreciation ..............    53,733       50,170
                                                --------     --------
       Property, plant and equipment-net .....  $ 26,088     $ 28,254
                                                ========     ========

LONG-TERM DEBT:
  Term loan with variable interest ..........   $13,000     $ 10,000
  Term loans at 6.75%........................        44          515
                                                -------      -------
      Total .................................    13,044       10,515
  Less current maturities ...................     1,244        5,015
                                                -------      -------
      Due after one year ....................   $11,800      $ 5,500
                                                =======      =======

SUBORDINATED DEBENTURES:
   Senior Subordinated Debentures, 8 3/4%
    due August 1, 1999........................  $ 34,391     $ 34,400
   Subordinated Extendible Debentures,
    11%, due April 1, 2000 (Series C).........     2,354        2,431
                                                 -------      -------
   Total .....................................    36,745       36,831
    Less current maturities...................       --         1,200
                                                --------     --------
   Due after one year.........................  $ 36,745     $ 35,631
                                                ========     ========



                                       6
<PAGE>


2. Statement of Financial Accounting Standards ("SFAS") 128 "Earnings per Share"
replaced the previously computed primary and fully diluted earnings per share
("EPS") with basic and diluted EPS. Unlike primary EPS, basic EPS excludes any
dilutive effects of options, warrants, or convertible securities. Diluted EPS
includes the dilutive effect of such items. The prior period basic EPS has been
recalculated to conform to SFAS 128 provisions with no material change.

3. At July 31, 1998, shares of common stock were reserved for possible issuance
as follows:

      Stock options .....................................    858,099
      Stock options granted to an entity owned by
         certain Company executive officers..............  1,200,000
      1990 Executive Stock Purchase Plan ................    283,892
      Directors' Deferred Stock Compensation Plan .......     57,153
                                                           ---------
       Total ............................................  2,399,144

4. On August 28, 1998, the Company entered into a $40.0 million revolving credit
facility and a $13.0 million term loan agreement. The net proceeds of these
facilities were applied towards the term loan and revolving credit line
outstanding under its previously existing credit facility. The long-term debt
and revolving credit line balances as of July 31, 1998 have been adjusted to
reflect the August 28, 1998 transactions.

5. The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in these financial statements and accompanying
footnotes. Actual results may differ from those estimates and assumptions.



                                       7
<PAGE>


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

RESULTS OF OPERATIONS:

      Net sales for the thirteen weeks ended July 31, 1998 were $31,095,000 as
compared to $54,158,000 for the thirteen weeks ended August 1, 1997. This
$23,063,000 (42.6%) decrease was the result of lower sales volume at the
Company's Texfi Blends division ("Texfi Blends") totaling $17.6 million and the
divestiture of the Texfi knitted narrow fabrics business which had generated
$5.3 million in net sales in the third quarter of 1997. Year-to-date net sales
for 1998 totaling $106,955,000 decreased $49,972,000 (31.8%) when compared to
sales of $156,927,000 for the same thirty-nine week period in fiscal 1997. This
decrease reflects a combination of reduced sales of $34.8 million at the
Company's Blends division and the divestiture in October 1997 of the Company's
knitted narrow fabrics business which contributed $15.0 million in net sales
during the first three fiscal quarters of 1997. The reduction in third quarter
and year-to-date finished fabrics sales were primarily attributable to unusually
high imports of competing fabrics and finished apparel from Asia into United
States' markets, specifically the Company's missy and junior wear markets.

      For the comparable thirteen-week period, cost of goods sold, as a
percentage of net sales, increased from 88.3% in 1997 to 95.8% in 1998. For the
comparable thirty-nine week periods in 1997 and 1998, cost of goods sold as a
percentage of net sales similarly rose from 86.6% to 91.5%. These increases in
the cost of goods sold are attributable to volume related manufacturing
inefficiencies.

      Selling, general and administrative expenses ("SG&A") increased from 7.4%
to 8.6% as a percentage of net sales for the thirteen weeks ended July 31, 1998
when compared to same period a year ago and increased from 7.3% to 8.1% for the
comparable thirty-nine week periods. While total SG&A expenses declined, these
expenses as a percentage of net sales increased primarily due to the constant
fixed costs having been spread over a declining sales volume.

      Interest expense remained relatively constant at $2,681,000 during the
third thirteen-week period in 1998 as compared to $2,581,000 in 1997. For the
comparable thirty-nine week periods, interest expense decreased $837,000 (10.7%)
from $7,804,000 to $6,967,000. These decreases resulted from a $31.0 million
reduction in total indebtedness during the twelve-month period from August 1,
1997 through July 31, 1998, the benefits of which were somewhat offset by the
$707,000 write-off of deferred loan costs associated with the March 15, 1996
Credit Facility.



                                       8
<PAGE>


RESULTS OF OPERATIONS (continued):

      The 1997 third quarter and year-to-date net income includes $423,000 and
$982,000, respectively, equity in loss of joint venture which represented the
Company's 50% participation in Rival Sport, LLC ("Rival"), a joint venture with
NHL Enterprises to market and source a branded line of hockey-related apparel.
The Company sold its ownership interest in Rival on December 18, 1997 to an
entity affiliated with certain Company executive officers in consideration for
the issuance by the buyer to the Company of a secured $4.5 million ten-year
balloon note which bears interest at 5.0% per annum and which requires
prepayments from a portion of cash distributions, if any, that the buyer may
receive from Rival. As of the end of the first fiscal quarter of 1998, due to
continued and anticipated future losses at Rival, the Company increased its
reserve to $4.5 million, the face amount of the note, against its note
receivable.

FINANCIAL CONDITION:

      At July 31, 1998, working capital equaled $15.8 million, a decrease of
$10.3 million from October 31, 1997. This decrease in working capital is due
primarily to the decreases in accounts receivable($14.7 million), inventories
($5.7 million), and cash and cash equivalents ($1.1 million) which were not
entirely offset by decreases in accounts payable and other liabilities ($4.9
million) and current maturities ($5.0 million) and an increase in prepaid
expenses ($1.3 million).

      During the first thirty-nine weeks of 1998, operating activities generated
net cash of $12.8 million. This cash was generated as a result of net loss of
$7.7 million adjusted for the impairment of note receivable of $1.1 million,
provision for losses on accounts receivable of $175,000, and depreciation and
amortization of $5.0 million, none of which required cash. In addition,
decreases in accounts receivable of $14.6 million and inventories of $5.7
million which more than offset decreases in accounts payable and other
liabilities of $4.9 million and increases in prepaid and other assets of $1.2
million contributed to the net cash flow from operations. Net cash flow provided
by operations of $12.8 million, $2.1 million in proceeds from the sale of
property, plant and equipment, and $36.2 million proceeds from long-term debt
borrowings and $1.1 million cash on hand provided funds to repay long-term debt
and debentures of $10.6 million, purchase property, plant and equipment totaling
$1.5 million, reduce the revolving credit line by $38.1 million, and pay loan
costs of $962,000.

                                       9

<PAGE>


FINANCIAL CONDITION (continued):

      On August 28, 1998, the Company entered into a $40.0 million credit
facility that expires on August 31, 2000. Net proceeds of $23.2 million from the
credit facility were applied toward the previously existing revolving credit
line. The credit facility is secured by a first lien on substantially all of the
Company's working capital assets and a second lien on substantially all of the
Company's property, plant and equipment which is subordinate to the security
interests of Back Bay Capital, LLC securing the term loan entered into on August
28, 1998 as described below. The credit facility currently provides for the
Company to elect interest rates based upon a Eurodollar or prime interest rate
plus applicable margin. In addition, the Company may choose interest periods of
1, 2, 3 or 6 months with respect to its Eurodollar rate elections. As of August
28, 1998, funds available under the new credit facility, which represents the
difference between the borrowing base as defined by the facility agreement and
the revolving credit line outstanding, approximated $4.0 million.

      On August 28, 1998, the Company entered into a $13.0 million term loan
with Back Bay Capital, LLC. The $12.5 million in net proceeds from the term loan
were applied toward the term loan ($8.0 million) outstanding under the
previously existing credit facility and revolving credit line ($4.5 million) of
the new credit facility. The new term loan is payable in 23 equal monthly
installments of $100,000 beginning October 1, 1998 with a balloon payment on
August 31, 2000. The term loan is secured by a first lien on substantially all
of the Company's property, plant and equipment, with a second lien on
substantially all of the Company's working capital assets which is subordinate
to the aforesaid revovling credit facility's security interest. The term loan
provides for interest on the unpaid principal balance at 12.0% per annum payable
monthly in arrears. There is an additional provision for 3.0% per annum interest
that is accrued and added to the unpaid principal balance monthly in arrears.

      Both the credit and term loan facilities place limitations on the
Company's rental expense, additional indebtedness, acquisitions, capital
expenditures, payment of subordinated debentures, and sale or disposal of
assets. The Company is required to maintain minimum capital funds and comply
with a debt service coverage ratio, each as defined by the facilities. In
addition, the Company is required to consummate an exchange offer with the
holders of not less that $27.1 million in principal of its 8-3/4% Senior
Subordinated Debentures due August 1, 1999 on or before April 30, 1999 on terms
as set forth in the facilities.


                                       10
<PAGE>

FINANCIAL CONDITION (continued):

      As of July 31, 1998, the Company had outstanding approximately $34.4
million of its Senior Subordinated Debentures due August 1, 1999 ("8-3/4%
Debentures"). The 8-3/4% Debentures, which cannot be called prior to their
maturity date, are unsecured obligations but contain covenants that place
limitations on the use of proceeds from disposal of assets and on the incurrence
of additional indebtedness and senior indebtedness (as defined in the indenture)
if such indebtedness would exceed stated ratios of capitalization and earnings
after such incurrence. The debenture definition of indebtedness does not include
revolver credit line borrowings or operating lease obligations. The Company was
prohibited from incurring additional indebtedness because of a violation of the
defined limitations. The Company executed a Third Supplemental Indenture dated
as of August 28, 1998 whereby, the requisite debenture holders waived the
restriction on the incurrence of additional indebtedness under both the August
28, 1998 Revolving Credit Facility and Term Loan and Security Agreements
referred to above and eliminated the monthly $600,000 sinking fund deposits
which were scheduled to begin on the last business day of September 1998.

      As of July 31, 1998 the Company has approximately $2.4 million of its
Series C Debentures outstanding. The annual interest rate of these debentures
may be adjusted at the sole discretion of the Company on April 1st of each year
until maturity in the year 2000. The Company set the Series C interest rate at
13% for the period April 1, 1998 through March 31, 1999. The Series C Debentures
are redeemable on April 1st of each year, in whole or in part, at the option of
the holder or the Company for the principal amount thereof plus accrued interest
through the date of redemption.

      Management believes cash flows from operations and funds available under
the revolving credit line will provide the Company with sufficient sources of
funds to meet its fiscal 1998 cash needs, and, assuming no significant
deterioration in current market conditions or interest rates, for the
foreseeable future.


                                       11
<PAGE>


FORWARD LOOKING INFORMATION:

      Statements contained in the foregoing discussion and elsewhere in this
report that are not based on historical fact are considered "forward looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are based on management's present assumptions as to
future trends, and changes in current economic trends, prevailing interest
rates, availability and cost of raw materials, laws affecting the Company's
business and similar factors could affect the validity of such assumptions.



                                       12
<PAGE>

                          PART II.  OTHER INFORMATION

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

     (a)    Exhibits

            Exhibits to this report are listed in the accompanying index to
            exhibits.

     (b)    Reports on Form 8-K

            No reports on Form 8-K were filed during the quarter ended July 31,
            1998.


                                       13
<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.

                              TEXFI INDUSTRIES, INC.
                                   (Registrant)



Date:  September 14, 1998    By:/s/ Robert P. Ambrosini
                                ---------------------------
                                   Robert P. Ambrosini
                                   Chief Financial Officer
                                   and Executive Vice President


                                       14
<PAGE>

                             TEXFI INDUSTRIES, INC.
                                INDEX TO EXHIBITS

*3(a)(1)    Restated Certificate of Incorporation of Registrant dated August 13,
            1969, filed as Exhibit (3)(a)(1) to Registrant's Form 10-K Annual
            Report for the fiscal year ended October 31, 1980.

*3(a)(2)    Certificate of Amendment of Certificate of Incorporation of
            Registrant dated March 16, 1972, filed as Exhibit (3)(a)(2) to
            Registrant's Form 10-K Annual Report for the fiscal year ended
            October 31, 1980.

*3(a)(3)    Certificate of Amendment of Certificate of Incorporation of
            Registrant dated March 27, 1978, filed as Exhibit (3)(a)(3) to
            Registrant's Form 10-K Annual Report for the fiscal year ended
            October 31, 1980.

*3(a)(4)    Certificate of Amendment of Certificate of Incorporation of
            Registrant dated May 19, 1986, filed as Exhibit 4.4 to Registrant's
            Form S-8 Registration Statement (No. 33-14697).

*3(a)(5)    Certificate of Amendment of Certificate of Incorporation of
            Registrant dated March 20, 1987, filed as Exhibit 4.5 to
            Registrant's Form S-8 Registration Statement (No. 33-14697).

*3(a)(6)    Certificate of Amendment of Certificate of
            Incorporation of Registrant dated September 28, 1987, filed
            as Exhibit 4(a)(6) to Registrant's Form S-2 Registration
            Statement (No. 33-16794).

*3(a)(7)    Certificate of Designations of Registrant dated
            November 20, 1987, filed as Exhibit 4(a)(7) to Registrant's
            Form S-2 Registration Statement (No. 33-16794).

*3(a)(8)    Certificate of Designations of Registrant dated March
            8,1988 filed as Exhibit 4(a)(8) to Registrant's Form S-2
            Registration Statement (No. 33-20131).


                                       1
<PAGE>

*3(a)(9)    Certificate of Designations of Registrant dated August 4 1988, 
            filed as Exhibit 4(d)(9) to Registrant's Form 10-Q Quarterly 
            Report for the fiscal quarter ended July 29, 1988.

*3(b)(1)    Bylaws of Registrant, filed as Exhibit 4.6 to
            Registrant's Form S-8 Registration Statement (No. 33-14697).

*3(b)(2)    Amendment to Bylaws of Registrant, filed as Exhibit
            4(b)(2) to Registrant's Form S-2 Registration Statement
            (No. 33-16794).

*3(b)(3)    Amendment to Bylaws of Registrant adopted by Registrant's Board of
            Directors on January 18, 1991, filed as Exhibit 3(b)(3) to
            Registrant's Form 10-K Annual Report for the fiscal year ended
            November 2, 1990.

*3(b)(4)    Amendment to Bylaws of Registrant adopted by Registrant's Board of
            Directors on August 31, 1994, filed as Exhibit 4(b)(4) to
            Registrant's Form 10-Q Quarterly Report for the fiscal quarter ended
            July 29, 1994.

*3(b)(5)    Amendment to Bylaws of Registrant adopted by Registrant's Board of
            Directors on September 7, 1994, filed as Exhibit 4(b)(5) to
            Registrant's Form 10-Q Quarterly Report for the fiscal quarter ended
            July 29, 1994.

*4(a)(1)    Indenture between Registrant and Rhode Island Hospital Trust
            National Bank, Trustee, with a copy of Subordinated Debentures due
            April 1, 1995, Series A, Subordinated Debentures due April 1, 1995,
            Series B and Subordinated Extendible Debentures due April 1, 2000,
            Series C attached, filed as Exhibit 4(f) to Registrant's Form S-2
            Registration Statement (No. 33-32485).


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<PAGE>

*4(a)(2)    Indenture dated September 8, 1993 between Registrant and The First
            Union National Bank of North Carolina, Trustee, with copy of 8-3/4%
            Senior Subordinated Debenture due August 1, 1999, filed as Exhibit
            4(c)(2) to Registrant's Form 10-Q Quarterly Report for the fiscal
            quarter ended July 30, 1993.

*4(a)(3)    First Supplemental Indenture dated as of March 10, 1995, between
            Registrant and First Union National Bank of North Carolina, as
            Trustee, filed as Exhibit 4(a)(1) to Registrant's Form 8-K Current
            Report as of March 15, 1996.

*4(a)(4)    Second Supplemental Indenture dated as of March 15, 1996, between
            Registrant and First Union National Bank, formerly known as First
            Union National Bank of North Carolina, as Trustee, filed as Exhibit
            4(a)(2) to Registrant's Form 8-K Current Report as of March 15,
            1996.

 4(a)(5)    Tripartite Agreement dated as of August 14, 1998, between
            Registrant, First Union National Bank, formerly known as First Union
            National Bank of North Carolina, as Initial Trustee, and Norwest
            Bank, Minnesota, National Association, as successor Trustee.

 4(a)(6)    Third Supplemental Indenture dated as of August 28, 1998, between
            Registrant and Norwest Bank, Minnesota, National Association, as
            successor Trustee.

*4(b)(1)    Specimen Common Stock ($1 par value) certificates,
            filed as Exhibit 4.01 to Amendment No. 2 to Registrant's
            Form S-1 Registration Statement (No. 2-41653).

*4(c)(1)    Rights Agreement dated July 22, 1988 between Registrant and The
            First Union National Bank of North Carolina, as Rights Agent, filed
            as Exhibit 1 to Registrant's Form 8-K Current Form dated July 22,
            1988.

*4(c)(2)    Form of Rights Certificate, filed as Exhibit B to Exhibit 1 to
            Registrant's Form 8-K Current Form dated July 22, 1988.


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<PAGE>

*4(c)(3)    Amendment to Rights Agreement between Registrant and The First Union
            National Bank of North Carolina dated October 31, 1988, filed as
            Exhibit 4(e)(3) to Registrant's Form S-2 Registration Statement (No.
            33-32485).

*4(c)(4)    Second Amendment to Rights Agreement dated May 24, 1994 between
            Registrant and The First Union National Bank of North Carolina, as
            Rights Agent, filed as Exhibit 4(e)(4) to Registrant's Form 10-Q
            Quarterly Report for the fiscal quarter ended April 29, 1994.

*4(c)(5)    Third Amendment to Rights Agreement dated December 16, 1994 between
            Registrant and The First Union National Bank of North Carolina, as
            Rights Agent, filed as Exhibit 4(c)(5) to Registrant's Form 10-K
            Annual Report for the fiscal year ended October 28, 1994.

*4(d)(1)    Credit agreement dated as of March 15, 1996 among Registrant, as
            Borrower, certain Lenders referred to therein, NationsBank, N.A., as
            Agent, and NationsBanc Commercial Corporation, as Disbursing Agent,
            filed as Exhibit 2(a)(1) to Registrant's Form 8-K Current Report as
            of March 15, 1996.

*4(d)(2)    Security Agreement dated as of March 15, 1996 between Registrant, as
            Grantor, and NationsBank, N.A., as Agent for certain Lenders
            referred to therein, and NationsBanc Commercial Corporation, as
            Disbursing Agent, filed as Exhibit 2(a)(2) to Registrant's Form 8-K
            Current Report as
            of March 15, 1996.

*4(d)(3)    Form of Deed of Trust and Security Agreement (North Carolina
            property) dated as of March 15, 1996 between Registrant, as Grantor,
            TIM, Inc., as Trustee, and NationsBank, N.A., as Beneficiary and
            Agent for certain Lenders referred to therein, and NationsBanc
            Commercial Corporation, as Disbursing Agent, filed as Exhibit
            2(a)(3) to Registrant's Form 8-K Current Report as of March 15,
            1996.


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<PAGE>

*4(d)(4)    Form of Mortgage and Security Agreement (South Carolina property)
            dated as of March 15, 1996 between Registrant, as Grantor, and
            NationsBank, N.A., as Beneficiary and Agent for certain Lenders
            referred to therein, and NationsBanc Commercial Corporation, as
            Disbursing Agent, filed as Exhibit 2(a)(4) to Registrant's Form 8-K
            Current Report as of March 15, 1996.

*4(d)(5)    Deed to Secure Debt and Security Agreement (Georgia property) dated
            as of March 15, 1996 between Registrant, as Grantor, and
            NationsBank, N.A., as Beneficiary and Agent for certain Lenders
            referred to therein, and NationsBanc Commercial Corporation, as
            Disbursing Agent, filed as Exhibit 2(a)(5) to Registrant's Form 8-K
            Current Report as of March 15, 1996.

*4(d)(6)    Form of Assignment of Factoring Proceeds dated as of March 15, 1996,
            filed as Exhibit 2(a)(6) to Registrant's Form 8-K Current Report as
            of March 15, 1996.

*4(d)(7)    First Amendment dated May 10, 1996 to the Credit Agreement dated as
            of March 15, 1996 among Registrant, as Borrower, certain Lenders
            referred to therein, NationsBank, N.A., as Agent, and NationsBanc
            Commercial Corporation, as Disbursing Agent, filed as Exhibit
            2(a)(7) to Registrant's Form 10-Q dated May 3, 1996.

*4(d)(8)    Waiver Agreement dated June 14, 1996 to the Credit Agreement dated
            as of March 15, 1996 among Registrant, as Borrower, certain Lenders,
            referred to therein, NationsBank, N.A., as Agent, and NationsBanc
            Commercial Corporation, as Disbursing Agent, filed as Exhibit 2(a)
            (8) to Registrant's Form 10-Q dated May 3, 1996.

*4(d)(9)    Second Amendment dated September 12, 1996 to the Credit Agreement
            dated as of March 15, 1996 among Registrant, as Borrower, certain
            Lenders referred to therein, NationsBank, N.A., as Agent, and
            NationsBanc Commercial Corporation, as Disbursing Agent, filed as
            Exhibit 2(a)(9) to Registrant's Form 10-Q dated August 2, 1996.

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<PAGE>

*4(d)(10)   Third Amendment dated January 30, 1997 to the Credit Agreement dated
            as of March 15, 1996 among Registrant, as Borrower, certain Lenders
            referred to therein, NationsBank, N.A., as Agent, and NationsBanc
            Commercial Corporation, as Disbursing Agent, filed as Exhibit
            4(d)(10) to Registrant's Form 10-Q dated January 31, 1997.

*4(d)(11)   Waiver and Consent Agreement dated June 12, 1997 to the Credit
            Agreement dated March 15, 1996 among Registrant, as Borrower,
            certain Lenders referred to therein, and NationsBank, N.A., as
            Agent, filed as Exhibit 4(d)(11) to Registrant's Form 10-Q for the
            fiscal quarter ended August 1, 1997.

*4(d)(12)   Fourth Amendment dated June 19, 1997 to the Credit Agreement dated
            March 15, 1996 among Registrant, as Borrower, certain Lenders
            referred to therein, and NationsBank, N.A., as Agent, filed as
            Exhibit 4(d)(12) to Registrant's Form 10-Q filed for the fiscal
            quarter ended August 1, 1997.

*4(d)(13)   Fifth Amendment dated October 8, 1997 to the Credit Agreement dated
            March 15, 1996 among Registrant, as Borrower, certain Lenders
            referred to therein, and NationsBank, N.A., as Agent filed as
            Exhibit 4(d)(13) to Registrant's Form 10-K filed for the fiscal year
            ended October 31, 1997.

*4(d)(14)   Amended and Restated Loan and Security Agreement dated December 19,
            1997 to the Credit Agreement dated March 15, 1996 among Registrant,
            as Borrower, the Financial Institutions referred to therein, and
            BankBoston, N.A., as Agent filed as Exhibit 4(d)(14) to Registrant's
            Form 10-K for the fiscal year ended October 31, 1997.

*4(d)(15)   Forbearance Agreement dated June 5, 1998 among Registrant, as
            Borrower, the Financial Institutions referred to therein, and
            BankBoston, N.A., as Agent, filed as Exhibit 4(d)(15) to
            Registrant's Form 10-Q filed for the fiscal quarter ended May 1,
            1998.


                                       6
<PAGE>

 4(d)(16)   Forbearance Agreement Extension dated July 21, 1998 among
            Registrant, as Borrower, the Financial Institutions referred to
            therein, and BankBoston, N.A., as Agent.

 4(d)(17)   Forbearance Agreement Extension dated August 21, 1998 among
            Registrant, as Borrower, the Financial Institutions referred to
            therein, and BankBoston, N.A., as Agent.

 4(d)(18)   Loan and Security Agreement dated August 28, 1998 among Registrant,
            as Borrower, the Financial Institutions referred to therein, and
            BankBoston, N.A., as Agent.

 4(d)(19)   Term Loan and Security Agreement dated August 28, 1998 among
            Registrant, as Borrower and Back Bay Capital LLC.

 4(d)(20)   Ledger Debt Payment Agreement dated August 28, 1998 among
            Registrant, as Borrower and the CIT Group/Commercial Services, Inc.

 10(a)(1)   Employment   Agreement  dated  May  1,  1998  between   Registrant
            Borrower and Robert P. Ambrosini.

 10(d)(1)   Second  Amendment  dated  June 17,  1998 to the Stock  and  Option
            Purchase  Agreement  dated May 24,  1994  between  Registrant  and
            Chadbourne Corporation.

 10(d)(2)   Option Purchase Agreement dated June 17, 1998 between Registrant and
            Mentmore Holdings Corporation.

 11         Computation of Earnings Per Share

* Incorporated by reference to previous filing.


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