SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

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

                                 FORM 10-Q

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

For the quarterly period ended December 31, 1995


                         Commission File # 1-3185


                   UNITED MERCHANTS AND MANUFACTURERS, INC.           
          (Exact name of registrant as specified in its charter)


             Delaware                                     13-1426280      
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                       Identification No.)


     1650 Palisade Avenue, Teaneck, N.J.                    07666         
(Address of principal executive offices)                 (Zip Code)      


Registrant's telephone number, including area code      (201) 837-1700    


Indicate by check mark whether the registrant (1) has filed all documents 
and 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 [ ]


           APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
                PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether registrant has filed all documents and 
reports required to be filed by Section 12, 13, or 15(d) of the Securities 
Exchange Act of 1934 subsequent to the distribution of securities under a 
plan confirmed by a court.     Yes [X]  No [ ]

As of February 19, 1996, there were 17,845,000 shares of Common Stock, Par 
Value $1 per share, outstanding.





                                     1
               

<PAGE>







                 UNITED MERCHANTS AND MANUFACTURERS, INC.
                             AND SUBSIDIARIES



                                 FORM 10-Q




                               - I N D E X -




                                                                    Page  
                                                                   Number 
Part I   Financial Information

 Consolidated Statement of Operations..............................   3 

 Management's Discussion and Analysis of Financial 
  Condition and Results of Operations..............................   4 

 Consolidated Balance Sheet........................................   7 

 Consolidated Statement of Cash Flows..............................   8 
  
 Notes to Consolidated Financial Statements........................   9 

Part II  Other Information                                      

 Items.............................................................  15 

 Signatures........................................................  15 
















                                     2

<PAGE>


  PART I - FINANCIAL INFORMATION
  UNITED MERCHANTS AND MANUFACTURERS, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENT OF OPERATIONS
                                                  (000 omitted)
                                   -----------------------------------------
                                    Three Months Ended     Six Months Ended
                                       December 31           December 31
                                   -------------------   -------------------
                                      1995      1994        1995      1994
                                   --------- ---------   --------- ---------
  Net sales........................  $13,417   $16,975     $25,327   $37,094

  Cost of sales....................   (7,123)  (10,606)    (13,154)  (21,718)
  Selling, general and
   administrative expenses.........   (6,221)   (8,701)    (11,928)  (18,116)
  Amortization of goodwill.........     (180)     (180)       (360)     (360)
  Loss on termination of certain
   operation (Note B)..............               (500)                 (500)
                                   --------- ---------   --------- ---------
                    Operating Loss     ($107)  ($3,012)      ($115)  ($3,600)

  Interest expense.................   (1,786)   (2,933)     (3,510)   (5,689)
  Gain from reduction of liability
   for postretirement benefits other
   than pensions (Note C)..........                         10,731
  Gain from sale of assets not
   used in operations..............    5,421                 5,421
  Loss on sale of operation -
   (Note B)........................               (835)                 (835)
  Other income ....................      118       129         132       210
  Minority interest in net
   (earnings) losses of subsidiary.      (85)      223        (247)       (3)
  Provision for income taxes.......      (25)      (25)        (50)      (50)
                                   --------- ---------   --------- ---------
            Income (Loss) from
             Continuing Operations    $3,536   ($6,453)    $12,362   ($9,967)

  Discontinued operations (Notes A and B):
   Net earnings (loss) prior to sale
    or closing.....................                 43                  (532)
   Loss on closing.................             (7,900)               (7,900)
                                   --------- ---------   --------- ---------
               Net Earnings (Loss)    $3,536  ($14,310)    $12,362  ($18,399)

  Dividends applicable to preferred
   stock (Note E)..................    1,125     1,125       2,250     2,250
                                   --------- ---------   --------- ---------
      Net Earnings (Loss)
       Applicable to Common Shares    $2,411  ($15,435)    $10,112  ($20,649)
                                   ========= =========   ========= =========

  Average common shares outstanding   17,845    17,845      17,845    17,845

  Earnings (Loss) per common share:
   Continuing operations...........    $0.14    ($0.42)      $0.57    ($0.68)
   Discontinued operations.........     0.00     (0.44)       0.00     (0.47)
                                   --------- ---------   --------- ---------
              Net Earnings (Loss)
                  per Common Share     $0.14    ($0.86)      $0.57    ($1.15)
                                   ========= =========   ========= =========

  See Notes to Consolidated Financial Statements.

                                       3












           UNITED MERCHANTS AND MANUFACTURERS, INC. AND SUBSIDIARIES

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                             RESULTS OF OPERATIONS

Consolidated net sales of United Merchants and Manufacturers, Inc. ("UM&M" or 
the "Company") decreased by 21% during the second quarter of fiscal 1996 which 
ended December 31, 1995, to $13.4 million from $17.0 million during last 
year's same quarter.  This decrease is the result of the sale of the Company's 
retail outlet store operation effective December 31, 1994, which had 
contributed approximately $4.3 million to net sales in last year's quarter.  
During the quarter ended December 31, 1995, the Company's remaining operation, 
its 79%-owned costume-jewelry subsidiary, Victoria Creations, Inc. 
("Victoria") , reported a 4% increase in net sales as compared to the same 
period last year.  Victoria's branded label merchandise, Givenchy, Richelieu 
and Lagerfeld, were at sales levels below those of the prior year for the 
current fiscal year's quarter as retail sales continued to underperform 
expectations and prior year's comparable period sales volume.  Sales of 
Victoria's private label lines increased during the three months ended 
December 31, 1995 over such sales for the equivalent period last fiscal year 
as new private label market channels received initial shipments of 
merchandise.  Sales of out-of-season merchandise (which is sold at lower than 
Victoria's normal margin) declined from those of the prior year's comparable 
period as less inventory was available for such sales.  

For the quarter ended December 31, 1995, the Company reported a consolidated 
operating loss of $107,000 versus an operating loss of $3.0 million in last 
year's quarter.  This improvement was the result of reduced corporate overhead 
expenses and the sale of the retail outlet store operation, which reported an 
operating loss of $855,000 during last year's quarter, together with increased 
operating income of Victoria.  Victoria reported operating income of $1.1 
million during this year's quarter as compared to an operating loss of $80,000 
for the same period last year. Victoria's increased operating results were 
primarily the result of the increased sales referred to above and increased 
gross margin.  Victoria's gross profit, as a percentage of net sales, for the 
current quarter increased 6% percentage points from that of the three months 
ended December 31, 1994.  The operation's selling, general and administrative 
expenses decreased 2% in the current year's quarter from those of last year's 
quarter primarily as the result of reductions of sales volume related expenses 
and the operation's continued emphasis on expense control.

Consolidated interest expense decreased 39% for the three months ended 
December 31, 1995 compared to such expense in the second quarter of last 
fiscal year due primarily to the reduced interest rate resulting from the 
renegotiation of borrowing arrangements in July 1995 and to lower average 
borrowings.  See Note F of Notes to Consolidated Financial Statements.

Consolidated earnings from continuing operations of the Company were $3.5 
million for the three months ended December 31, 1995 compared with a loss of 
$6.5 million for the same quarter last fiscal year. Excluding the operating 
loss of the retail store outlet operations from the fiscal 1994 quarter 
results, the loss would be $5.6 million for that quarter.  The earnings from 
continuing operations for the current quarter include gains from sale of 
assets not used in the operations of $5.4 million and reflects the reduced 
interest expense mentioned above.  The loss from continuing operations of the 
prior year's quarter includes a loss of $835,000 on sale of the retail store 
outlet operation.  
                                       4

<PAGE>

Consolidated net sales of the Company for the six months ended December 31, 
1995 decreased 32% from the net sales of $37.1 million reported for the prior 
year's first half.  The decrease is primarily the result of the sale by the 
Company of its retail store outlet operations effective December 31, 1994 as 
mentioned above.  Excluding the sales of this operation from the fiscal 1994 
first half, net sales would show a decrease of 8%.  For the six months ended 
December 31, 1995, Victoria's net sales decreased 8% from the net sales of 
$27.5 million reported in the prior year's first half.  The decrease in 
Victoria's net sales for the six months ended December 31, 1995 is attributed 
to limitations on borrowings of cash from Victoria's senior secured lender 
during the five-to six-month period prior to August 1995.  The limitations on 
borrowing constrained Victoria's ability to purchase raw materials needed to 
accept orders for finished goods for shipment during the first fiscal quarter 
of the current year.  The limitations were lessened at the end of July 1995 
when both the Company and Victoria each renegotiated its long-term debt with 
its lender (see Note F of Notes to Financial Statements).  

For the six months ended December 31, 1995, the Company reported a 
consolidated operating loss of $115,000 versus an operating loss of $3.6 
million in last year's first half.  As with the second quarter discussed 
above, the improvement was the result of reduced corporate overhead expenses 
and the sale of the retail outlet store operation, which reported an operating 
loss of $1.2 million during last year's half, together with increased 
operating income of Victoria.  Victoria reported operating income of $2.3 
million during this year's six months as compared to operating income of $1.9 
million during the same period last year. Victoria's increased operating 
results were primarily the result of the increased gross margin and reduced 
selling, general and administrative expenses.  Victoria's gross profit, as a 
percentage of net sales, for the current half year increased 2% percentage 
points from that of the six months ended December 31, 1994.  The operation's 
selling, general and administrative expenses decreased 9% in the current 
year's six months from those of last year's first half primarily as the result 
of reductions of sales volume related expenses and the operation's continued 
emphasis on expense control.

Consolidated interest expense decreased 38% for the six months ended December 
31, 1995 compared to such expense in the first half of last fiscal year due 
primarily to the reduced interest rate resulting from the renegotiation of 
borrowing arrangements in July 1995 and to lower average borrowings.  See Note 
F of Notes to Consolidated Financial Statements.

Consolidated earnings from continuing operations of the Company were 
approximately $12.4 million for the six months ended December 31, 1995 
compared with a loss of $10.0 million for the same period last fiscal year.  
Excluding the operating loss of the retail store outlet operations from the 
fiscal 1994 six months results, the loss would be $8.8 million for that 
period.  The earnings from continuing operations for the current six months 
include gains from sale of assets not used in the operations of $5.4 million 
and reflects the reduced interest expense mentioned above.  In addition, these 
earnings include a gain of $10.7 million from reduction of liability for 
postretirement benefits other than pension reported in the quarter ended 
September 30, 1995 (see Note C of Notes to Consolidated Financial 
Statements).  The loss from continuing operations of the prior year's six 
months includes the loss of $835,000 on sale of the retail store outlet 
operation mentioned above. 

                                       5

<PAGE>


See Note B of Notes to Consolidated Financial Statements regarding the 
Company's discontinuance of its Buffalo Mill Operations.

                        LIQUIDITY AND CAPITAL RESOURCE

During the six months ended December 31, 1995, the Company sold certain 
assets, primarily land and buildings, that were not being used in its ongoing 
operations (see Statements of Operations and Cash Flows).  The cash received 
was used in its operations and to reduce its long-term debt.  As a result of 
the sales, the Company depended to a lesser extent on borrowings to finance 
its operations.  The amounts which the Company borrows under its revolving 
loan agreements fluctuate based on the Company's cash availability and 
requirements.  Working capital increased to $11.2 million at December 31, 1995 
from $7.7 million at June 30, 1995.  The Company's current ratio increased to 
1.68 to 1.0 at December 31, 1995 as compared to 1.41 to 1.0 at June 30, 1995. 

As discussed in Note F of Notes to Consolidated Financial Statements, 
effective July 31, 1995, the Company and Victoria, each renegotiated its 
borrowing arrangements with that its senior secured lender.  Currently, 
short-term needs for working capital are obtained from borrowings under the 
renegotiated revolving loan facility or from the proceeds from the sale of 
assets.  The Company does not anticipate substantial increased needs for 
long-term borrowings.

During recent years, the Company has incurred significant losses from 
operations and as of December 31, 1995 has a stockholders' equity deficit.  As 
discussed in the Company's 1995 Annual Report on Form 10-K, in June 1994, the 
Company reduced its senior secured indebtedness by approximately $63,400,000.  
While that was a substantial, positive development for the Company, as of June 
30, 1995, the Company's independent auditors' report stated that the recurring 
losses from operations, net deficiency in  stockholders' equity and 
significant debt owed by the Company raise substantial doubt as to the 
Company's ability to continue as a going concern.  The Company's ability to 
continue as a going concern depends on its ability to improve the 
profitability of its existing operation and the possible development of other 
business activities.  With regard to the development of other business 
activities, the Company has taken certain steps toward establishing, through a 
subsidiary, a reinsurance business.  This subsidiary is seeking seek to 
acquire certain types of existing life insurance policies and other long-term 
annuity contracts from mainly life insurance companies.  Over a period of 
time, the Company is hopeful that it will generate profits and positive cash 
flow as it services these policies.  There can be no assurances that the 
Company will succeed in improving the profitability of its existing operation 
or establishing a profitable business in the insurance field.

See Note C of Notes to Consolidated Financial Statements for information 
regarding the Company's filing of a notice to terminate its pension plan. 

See Note I - Subsequent Event regarding the Company and Victoria filing 
petitions for reorganization relief under Chapter 11 of the U. S. Bankruptcy 
Code.




                                       6

<PAGE>


    UNITED MERCHANTS AND MANUFACTURERS, INC. AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEET
                                                           (000 omitted)
                                                        -------------------
                                                          Dec 31   June 30
                                                           1995      1995
                           ASSETS                       --------- ---------
    Current Assets:
     Cash...............................................   $1,230      $965
     Receivables, net of allowances of $2,863,000 at
      December 31, 1995 and $2,481,000 at June 30, 1995.    6,648     7,419
     Inventories (Note G)...............................   17,678    16,430
     Prepaid expenses and other current assets..........    2,030     1,113
     Net assets of discontinued operations..............        2       689
                                                        --------- ---------
                                   Total Current Assets   $27,588   $26,616

    Property, Plant and Equipment (Note G)..............  $10,250   $12,565
     Less accumulated depreciation and amortization.....    7,487     7,924
                                                        --------- ---------
                                                           $2,763    $4,641

    Goodwill............................................   20,301    20,662
    Other Assets and Deferred Charges (Note G)..........    4,566     6,509
                                                        --------- ---------
                                                          $55,218   $58,428
                                                        ========= =========
       LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
    Current Liabilities:
     Trade payables.....................................   $5,155    $6,418
     Accrued expenses and sundry liabilities (Note G)...   11,260    12,468
                                                        --------- ---------
                              Total Current Liabilities   $16,415   $18,886

    Long-Term Debt (Note F).............................   79,921    81,071
    Other Long-Term Liabilities (Note G)................    5,683    17,881
    Minority Interest...................................    1,871     1,624

    Stockholders' Equity (Deficit):
     Preferred stock, par value $1 per share; 10,000,000
      shares authorized; 450,000 shares outstanding.....     $450      $450
     Common stock, par value $1 per share: 40,000,000
      shares authorized; 17,845,000 shares outstanding
      (excluding 22,800 shares held in treasury)........   17,845    17,845
     Capital in excess of par value.....................   64,674    64,674
     Retained earnings (deficit)........................ (124,054) (136,416)
     Unrealized pension liability adjustment............   (3,587)   (3,587)
     Notes receivable from stock purchase agreement.....   (4,000)   (4,000)
                                                        --------- ---------
                   Total Stockholders' Equity (Deficit)  ($48,672) ($61,034)
                                                        --------- ---------
                                                          $55,218   $58,428
                                                        ========= =========

    See Notes to Consolidated Financial Statements.


                                         7








    UNITED MERCHANTS AND MANUFACTURERS, INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENT OF CASH FLOWS                   (000 omitted)
                                                        -------------------
                                                          Six Months Ended
                                                            December 31
                                                        -------------------
                                                           1995      1994
                                                        --------- ---------
    Cash Flows from Operating Activities:
     Net earnings (loss)................................  $12,362  ($18,399)
     Adjustments to reconcile net earnings (loss) to net
      cash used for operating activities:
       Depreciation and amortization....................      611       806
       Minority interest................................      247         3
       Amortization of bond discount....................      584       505
       Gain from reduction of liability for
        postretirement benefits other than pensions.....  (10,731)
       Gain on sale of assets not used in operations....   (5,421)
       Accrued loss on sale or shutdown of operations...              9,235
        less cash portion of accruals...................             (3,204)
     Decrease (increase) in assets:
      Receivables.......................................      771     3,804
      Inventories.......................................   (1,248)    2,038
      Prepaid expenses and other current items..........     (917)      (73)
      Other assets......................................    1,943       113
     Increase (decrease) in liabilities:
      Trade payables ...................................   (1,263)     (296)
      Accrued expenses and sundry liabilities...........     (139)    2,774
      Other long-term liabilities.......................   (1,694)     (404)
                                                        --------- ---------
                 Net Cash Used for Operating Activities   ($4,895)  ($3,098)

    Cash Flows from Investing Activities:
     Additions to property, plant and equipment.........    ($109)    ($242)
     Proceeds from sale of assets not used in operations    6,316
     Disposition of property, plant and equipment.......                103
     Net change in assets of discontinued operations....      687     1,415
                                                        --------- ---------
              Net Cash Provided by Investing Activities    $6,894    $1,276

    Cash Flows from Financing Activities:
     Increase (decrease) in long-term debt..............  ($1,734)   $3,265
                                                        --------- ---------
    Net Cash Provided by (used for) Financing Activities  ($1,734)   $3,265
                                                        --------- ---------
                                       Increase in Cash      $265    $1,443
    Cash at beginning of period.........................      965       662
                                                        --------- ---------
                                  Cash at end of period    $1,230    $2,105
                                                        ========= =========
    ----------
    Supplemental disclosures of cash flow information:
     Interest paid......................................   $2,057    $5,184
     Income taxes paid..................................       50        50

    See Notes to Consolidated Financial Statements.

                                         8







         UNITED MERCHANTS AND MANUFACTURERS, INC. AND SUBSIDIARIES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - BASIS OF PRESENTATION AND LIQUIDITY

Basis of Presentation - The accompanying consolidated financial statements 
of United Merchants and Manufacturers, Inc. ("UM&M" or the "Company") and 
its subsidiaries have been prepared in accordance with generally accepted 
accounting principles for interim financial information and with the 
instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, 
they do not include all of the information and footnotes required by 
generally accepted accounting principles for complete financial 
statements.  In the opinion of management, all adjustments (consisting of 
normal recurring accruals) considered necessary for a fair presentation 
have been included.  The results of operations of interim periods are 
subject to year-end audit and adjustments and are not necessarily 
indicative of the results of operations of the fiscal year.  For further 
information, refer to the consolidated financial statements and footnotes 
included thereto in the Company's Annual Report on Form 10-K for the year 
ended June 30, 1995.

Liquidity - During each of the three years ended June 30, 1995, the 
Company incurred significant losses from operations and as of December 31, 
1995 has a stockholders' equity deficit.  As discussed in the Company's 
Annual Report on Form 10-K, the Company refinanced its senior debt as of 
June 30, 1994 and thereby reduced the total indebtedness of the Company.  
While this was a substantial, positive development for the Company, as of 
June 30, 1995, the Company's independent auditors' report stated that the 
recurring losses from operations, net deficiency in stockholders' equity 
and significant debt owed by the Company raise substantial doubt as to the 
Company's ability to continue as a going concern.  The consolidated 
financial statements have been prepared assuming that the Company will 
continue as a going concern and do not include any adjustments that might 
result from the outcome of this uncertainty.   See Note I below regarding 
subsequent event. 

NOTE B - DISPOSITIONS AND TERMINATIONS OF CERTAIN OPERATIONS

In January 1995, the Company sold its retail outlet store operations for 
cash and the assumption by the buyer of certain of the operation's 
liabilities.  As of December 31, 1994, the Company recognized a loss of 
$1.3 million for the sale and the loss from operations from December 31, 
1994 to date of sale.  The statements of operations and cash flows 
presented herein include the results of the retail store operations for 
the three and six months ended December 31, 1994.  Net sales for the three 
and six months ended December 31, 1994 include $4.3 million and $9.8 
million, respectively, and operating loss includes $0.9 million and $1.2 
million, respectively, from these operations.

Discontinued Operations:

In December 1994, the Company announced that it would close its Buffalo 
Mill division, which was its Apparel Textiles segment.  At that time, the 
Company made a provision for losses of $7.9 million for the closing and 
ongoing costs of the division.

                                     9

<PAGE>


NOTE C - BENEFITS 

Notice of Intent to Terminate Pension Plan:

The discussion in the following paragraph relates to the United Merchants 
and Manufacturers, Inc. pension plan.  The Retirement Savings Plan of 
Victoria Creations, Inc., the Company's 79%-owned subsidiary, is not 
affected.

The UM&M pension plan covers approximately 8,800 persons, of whom 36 are 
current employees.  At present, of the 8,800 who have vested benefits in 
the plan, 4,500 are receiving pension payments; the others will receive 
payments beginning when they become 65 years of age.  As set forth in the 
Notes to Consolidated Financial Statements in the Company's Annual Report 
on Form 10-K for the year ended June 30, 1995, the Company's obligation 
for benefits, as projected by actuaries, of $68.8 million exceeded the 
assets held in the pension plan trust fund of $ 62.9 million by $5.9 
million or 9%.  This underfunding was due in large part to the performance 
of the investment markets during the calendar year 1994.  As a result of 
this underfunded position, the Company was scheduled to make minimum 
funding payments of approximately $730,000 each quarter to its pension 
plan trust fund beginning October 15, 1995.  In addition, the Company was 
scheduled to make a payment of approximately $2.9 million to its pension 
plan trust fund on March 15, 1996.  The Company did not make the payments 
due October 15, 1995 and January 15, 1996.  Effective November 28, 1995, 
the Company determined that it could not make the contributions necessary 
to fund its pension plan.  At that time, the Company filed with the 
Pension Benefit Guarantee Corporation ("PBGC") a Distress Termination - 
Notice of Intent to Terminate form.  The proposed date of the termination 
of the Company's pension plan is January 31, 1996.  If the application for 
a distress termination is accepted by the PBGC, the PBGC will take over 
administration of the pension plan, the Company will not make further 
contributions to the pension plan and the Company's employees will not 
earn additional benefits under the pension plan.  The Company believes 
that the PBGC will ensure that the employees covered by the pension plan 
receive the amounts due to them under the pension plan to the extent that 
the payments do not exceed the PBGC maximum guaranteed benefit 
(approximately $30,000 a year at age 65).  

The Internal Revenue Code provides for a tax of 10 percent on the amount 
of the accumulated funding deficiency determined as of the end of the plan 
year.  If such tax is imposed, and the applicable accumulated funding 
deficiency is not paid within the taxable period, the Internal Revenue 
Service may impose a tax equal to 100 percent of the funding deficiency.

Postretirement Benefits Other Than Pensions:

Effective July 1, 1993, the Company adopted Statement of Financial 
Accounting Standards No. 106, "Employers' Accounting for Postretirement 
Benefits Other Than Pensions".  The statement requires accrual of the cost 
of providing postretirement benefits, including medical and life insurance 




                                    10

<PAGE>


coverage, during the active service period of the employee rather than the 
pay-as-you-go (cash) basis which the company used prior to adoption.  The 
company elected to immediately recognize the accumulated postretirement 
benefit obligation equal to the discounted present value of expected 
future benefit payments attributed to employees' service rendered prior to 
July 1, 1993.  This resulted in a one-time, non-cash charge against 
earnings of $15.3 million as of July 1, 1993.  

Effective August 31, 1995, the Company discontinued the Company-sponsored 
medical plan for its employees, other than those of its 79%-owned 
subsidiary, Victoria Creations, Inc., and its retirees.  The 
discontinuance resulted in a non-cash gain of $10.7 million from the 
reduction of a portion of the Company's liability for postretirement 
benefits other than pension.  The discontinuance will reduce the Company's 
ongoing cash expenses by more than $1 million a year.

In a further step to reduce ongoing costs, on February 5, 1996, the 
Company notified its employees and retirees that effective February 29, 
1996, the Company was discontinuing its group life insurance program which 
was predominately paid for by the Company.  The discontinuance will result 
in a non-cash gain of $4.0 million from the reduction of the balance of 
the Company's liability for postretirement benefits other than pension.  

NOTE D - INCOME TAXES

The provisions for income taxes for the three and six months ended 
December 31, 1995 and 1994 varied from the expected relationship to 
earnings (loss) before income taxes since the losses before income taxes 
did not result in income tax benefits and the Company had net operating 
loss carryforwards to offset the earnings.  The amounts shown as 
provisions for income taxes are for state and local income taxes.

NOTE E - DIVIDENDS APPLICABLE TO PREFERRED STOCK

The Company has not declared nor paid any cash dividends on its 10% 
Cumulative Preferred Stock in order to retain its available cash for use 
in its operations. For financial statement purposes, cumulative preferred 
dividends are deducted from the results of operations in determining 
earnings applicable to common shares whether or not such dividends are 
declared or paid.
















                                    11

<PAGE>


NOTE F - LONG-TERM DEBT   

Long-term debt consists of the following:
                                                         (000 omitted)    
                                                      ------------------  
                                                       Dec 31   June 30   
                                                        1995      1995    
                                                      --------  --------  
  Secured term loans - see below....................  $ 11,889  $ 12,000  
  Revolving loans - see below.......................    13,246    15,784  
  3 1/2% Senior Subordinated Secured Debentures
   due 2009 (net of unamortized discount of
   $46,395,000 at December 31, 1995 and 
   $46,908,000 at June 30, 1995)....................    22,747    22,234  
  5% Subordinated Notes due 2019:
   Issued to former senior lender...................    30,000    30,000  
   Issued in settlement of lawsuit (net of
    unamortized discount of $20,876,000 at
    December 31, 1995 and $20,947,000 at 
    June 30, 1995)..................................     1,124     1,053  
  Other.............................................       915            
                                                      --------  --------  
                                Total Long-Term Debt  $ 79,921  $ 81,071  
                                                      ========  ========  

The revolving loans fluctuate based on the Company's cash availability or 
requirements.  The term loans and revolving loans are secured by 
substantially all of the Company's assets.

Effective July 31, 1995, the Company and its 79%-owned subsidiary, 
Victoria Creations, Inc. ("Victoria"), each renegotiated its borrowing 
arrangements with its current lender.  Under the terms of the amended 
agreements, the Company's borrowings under the revolving and term loans 
with the lender were converted to a term loan.  This term loan will be 
repayable from collections of certain accounts receivable and sales of 
inventory other than those of Victoria and a portion of the proceeds of 
sales of the Company's other assets, primarily real property.  The term 
loan matures July 31, 2000 and bears interest at the rate of 12% a year.  

The new arrangements for Victoria consist of a term loan ($4,760,000 at 
December 31, 1995) payable $60,000 a month with the balance due June 15, 
2000 and a revolving loan, based on Victoria's eligible accounts 
receivable and inventories, having a term ending June 15, 1998.  The 
revolving loan will be renewed automatically for successive one year 
periods thereafter unless terminated by either party upon thirty days 
notice.  These loans bear interest at prime rate plus 3 1/2%, or currently 
12% a year.









                                    12

<PAGE>


NOTE G - SUPPLEMENTAL BALANCE SHEET INFORMATION

Supplemental information regarding certain balance sheet captions is as 
follows:
                                                        (000 omitted)     
                                                      ------------------  
                                                       Dec 31    June 30  
                                                        1995      1995    
                                                      --------  --------  
Inventories:
 Raw materials......................................  $  4,950  $  5,120  
 Work in process....................................       649       484  
 Finished goods.....................................    12,079    10,826  
                                                      --------  --------  
                                                      $ 17,678  $ 16,430  
                                                      ========  ========  

Property, plant and equipment:
 Land and buildings.................................  $  1,931  $  3,596  
 Machinery, equipment and other.....................     8,319     8,969  
                                                      --------  --------  
                                                      $ 10,250  $ 12,565  
Less accumulated depreciation and amortization......     7,487     7,924  
                                                      --------  --------  
                   Net Property, Plant and Equipment  $  2,763  $  4,641  
                                                      ========  ========  

Other assets and deferred charges:
 Interest receivable - sale of stock................. $  1,947  $  1,873  
 Assets held for sale................................    1,653     3,260  
 Deposits............................................      283       291  
 Deferred royalty expenses...........................      272       350  
 Other...............................................      411       735  
                                                      --------  --------  
                                                      $  4,566  $  6,509  
                                                      ========  ========  

Accrued expenses and sundry liabilities:
 Accrued pension liability........................... $  5,968  $  5,116  
 Accrued workers compensation........................    1,359     1,095  
 Accrued interest....................................    1,223     1,210  
 Accrued compensation expenses.......................      862     1,428  
 Accrued taxes other than payroll....................      381       735  
 Postretirement benefits other than pension..........      300     1,370  
 Other...............................................    1,167     1,514  
                                                      --------  --------  
                                                      $ 11,260  $ 12,468  
                                                      ========  ========  








                                    13

<PAGE>


                                                        (000 omitted)     
                                                      ------------------  
                                                       Dec 31    June 30  
                                                        1995      1995    
                                                      --------  --------  
Other long-term liabilities:
 Postretirement benefits other than pension.......... $  3,692 $  13,355  
 Deferred shutdown costs.............................    1,948     3,732  
 Other...............................................       43       794  
                                                      --------  --------  
                                                      $  5,683  $ 17,881  
                                                      ========  ========  

NOTE H - LEGAL PROCEEDINGS  

The Company is a defendant in various lawsuits.  It is not expected that 
these suits will result in judgements which in the aggregate would have a 
material adverse effect on the Company's financial position.


NOTE I - SUBSEQUENT EVENT

Effective February 22, 1996, the Company and its 79%-owned subsidiary, 
Victoria Creations, Inc., filed petitions for reorganization relief under 
Chapter 11 of the  Bankruptcy Code in the United States Court for the 
Southern District of New York.  

The filing became necessary because the Company's secured lender refused 
to extend necessary funding for Victoria's current operations and the 
Company guarantees Victoria's debt to the lender.  Consequently, the 
Company and Victoria are unable to meet their immediate financial 
commitments.  After a thorough review of all alternatives, the Company was 
compelled to take this action to preserve its assets, provide for 
continuing operation and protect the interests of its stockholders, 
creditors, customers, employees and suppliers.

Subject to bankruptcy court approval of post-petition financing, the 
Company and Victoria plan to continue to operate their businesses as 
debtors-in-possession while the reorganization is pending.  If 
post-petition financing is not ordered by the court, it is likely that the 
Company will be liquidated.















                                    14


<PAGE>



                 UNITED MERCHANTS AND MANUFACTURERS, INC.
                             AND SUBSIDIARIES

                        PART II - OTHER INFORMATION


Item 2.  Changes in Securities

         Information required under this item is contained in Part I, 
         Note F of Notes to Consolidated Financial Statements, which is 
         incorporated herein by reference.


Item 6.  Exhibits and Reports on Form 8-K

         (A) Reports on Form 8-K during quarter - None

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.


                                  UNITED MERCHANTS AND MANUFACTURERS, INC.
                                              (Registrant)



Date:   February 23, 1996         By     /s/  Norman R. Forson            
                                              Norman R. Forson
                                          Senior Vice President and
                                            Corporate Comptroller




















                                    15

<PAGE>


         UNITED MERCHANTS AND MANUFACTURERS, INC. AND SUBSIDIARIES

                                 FORM 10-Q


                             INDEX TO EXHIBIT


The following exhibit is being filed herewith:

Exhibit No.

    (27) Financial Data Schedule as of and for the quarter ended December 
         31, 1995 is filed herewith as Exhibit EX-1.






































                                    E-1

<PAGE>