<PAGE> 1
                              UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549

                                FORM 10-Q

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

    For the quarterly period ended September 27, 1997   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    2-20910

                          TRUSERV CORPORATION
    (Exact name of the registrant as specified in its charter)

                DELAWARE                            36-2099896 
    (State or other jurisdiction of              (I.R.S Employer
     incorporation or organization)           Identification No.) 

    8600 West Bryn Mawr Avenue
         Chicago, Illinois                        60631-3505
    (Address of principal executive offices)      (Zip Code)


                                (773) 695-5000
          (Registrant's telephone number, including area code)

                              not applicable
           (Former name, former address and former fiscal year,
                       if changed since last report)

    Indicate by check mark whether the registrant (1) has filed all
    reports required to be filed by Section 13 or 15(d) of the
    Securities Exchange Act of 1934 during the preceding 12 months
    (or for such shorter period that the registrant was required
    to file such reports), and (2) has been subject to such filing
    requirements for the past 90 days.
    Yes   X_  No __

    The number of shares outstanding of each of the issuer's
    classes of common stock, as of October 25, 1997.

       Class A Common Stock, $100 Par Value     548,567 Shares

       Class B Common Stock, $100 Par Value   1,787,304 Shares







<PAGE> 2
                                        
	                         			TRUSERV CORPORATION
                             -------------------

                              TABLE OF CONTENTS
                              -----------------
<TABLE>
									                                                  PAGE
									                                                 NUMBER
                                                          ------
PART  I  -  FINANCIAL INFORMATION

          <S>                                               <C>
          Important Explanatory Note                         3

          Condensed Consolidated Balance Sheets as of 
          September 27, 1997 and December 28, 1996.          4 

          Condensed Consolidated Statements of Operations
          for the Thirteen Weeks Ended September 27, 1997
          and September 28, 1996 and the Thirty-Nine Weeks
          Ended September 27, 1997 and September 28, 1996.    6            

          Condensed Consolidated Statements of Cash Flows
          for the Thirty-Nine Weeks Ended September 27,
          1997 and September 28,1996.                         7

          Notes to Condensed Consolidated Financial
          Statements                                          8

          Management's Discussion and Analysis of
          Financial Condition and Results of
          Operations.                                        10 


PART  II  - OTHER INFORMATION

 
          Submission of Matters to a Vote of Security
          Holders                                            14


          Exhibits and Reports on Form 8-K	                  15


SIGNATURE                                                    16
</TABLE>















<PAGE> 3
	                       			TRUSERV CORPORATION
                           -------------------

             			      IMPORTANT EXPLANATORY NOTE
                      --------------------------


On July 1, 1997, TruServ Corporation ( the "Company"), formerly
Cotter & Company, merged with Servistar Coast to Coast Corporation
("SCC" ) (the "Merger").  The transaction was accounted for using
the purchase accounting method. The Condensed Consolidated Balance
Sheet as of September 27, 1997 reflects the post-Merger Company. 
The Condensed Consolidated Balance Sheet as of December 28, 1996
reflects the pre-Merger Company.  The financial information for
the thirteen weeks ended September 27, 1997, reflects the
post-Merger results of theCompany.  The thirty-nine weeks ended
September 27, 1997 reflect the results of the pre-Merger Company
for the twenty-six weeks  ended June 28, 1997 and the results of
the post-Merger Company for the thirteen weeks ended September
27, 1997. The thirteen weeks and thirty-nine weeks ended
September 28, 1996  reflect the financial information of the
pre-Merger Company only.


<PAGE> 4
                    PART 1 - FINANCIAL INFORMATION
                    ------------------------------ 

Item 1.    FINANCIAL STATEMENTS     



                           TRUSERV CORPORATION
                           -------------------
                CONDENSED CONSOLIDATED BALANCE SHEETS
                -------------------------------------
                            (000'S OMITTED)

					
<TABLE>
<CAPTION>
     		                                 	September 27,	    December 28,
								                                     1997  	          1996
                                         -------------     ------------
							                                 	 (UNAUDITED)        (AUDITED)
<S>                                      <C>               <C>
ASSETS
------
   Current Assets:

     Cash and cash equivalents				      	$       4,876      $     1,662
     Accounts and notes receivable             489,710          307,205
     Inventories							                        555,847          347,554
     Prepaid expenses						                     28,215           13,517
                                          ------------      -----------
       Total current assets						            1,078,648          669,938

   Properties owned, 
       less accumulated depreciation					      255,303          167,331

   Properties under capital leases,
       less accumulated amortization					        2,641            3,680

   Goodwill, net							                        114,250              -   

   Other assets						                          	27,754           13,036
                                          ------------      -----------

   TOTAL ASSETS						                    	$  1,478,596      $   853,985
                                          ============      ===========
</TABLE>


        See Notes to Condensed Consolidated Financial Statements.





<PAGE> 5
                            TRUSERV CORPORATION
                            -------------------

                 CONDENSED CONSOLIDATED BALANCE SHEETS
                 -------------------------------------

                             (000'S OMITTED)
					
<TABLE>
<CAPTION>
                                   								September 27,	    December 28,
							                                   	    1997             1996
                                           -------------     ------------
                                     							(UNAUDITED)        (AUDITED)
<S>                                          <C>               <C>  
LIABILITIES AND CAPITALIZATION
------------------------------

Current liabilities:

  Accounts payable and accrued expenses 	    $618,655           $338,440
    Short-term borrowings            	        251,117             70,594
    Current maturities of notes,
      long term debt and lease obligation      46,854             43,458
    Patronage dividends payable in cash		      10,890             16,142
                                             --------           --------
                                           
      Total current liabilities						         927,516            468,634
                                             --------           -------- 
   Long-term debt and obligations under 
       capital leases                         130,803             80,145
                                            ---------           --------
   Capitalization:
     Estimated patronage dividend payable       3,380               -
     Promissory (subordinated) and
       installment notes   		 	               181,568            185,366
     Class A common stock and partially
       paid subscriptions (Authorized
       100,000 shares; issued and fully
       paid, 549,007 and 48,480 shares)		      42,859              4,876
			                                          	
     Class B nonvoting common stock and
       paid-in capital (Authorized
       4,000,000 shares: issued and fully
       paid, 1,789,224 and 1,043,521 shares;
       issuable as partial payment of
       patronage dividend, 105,160 and 
       84,194 shares respectively)		          191,370            114,053
	
       Retained Earnings 					                	 2,001              1,751
                                           ----------          --------- 
								                                      421,178            306,046
       Foreign currency translation
         adjustment				                          (901)              (840)
                                           ----------          --------- 
  Total capitalization	                       420,277 	          305,206
                                           ----------          ---------

TOTAL  LIABILITIES AND CAPITALIZATION   			$1,478,596          $ 853,985
                                           ==========          =========
</TABLE>
        See Notes to Condensed Consolidated Financial Statements.



<PAGE> 6

                              TRUSERV CORPORATION
                              -------------------

              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              -----------------------------------------------
                                (000'S OMITTED

                                   (UNAUDITED)



<TABLE>
<CAPTION>
                        					  FOR THE THIRTEEN	      FOR THE THIRTY-NINE
				                   	        WEEKS ENDED               WEEKS ENDED   
                            -----------------------  ----------------------
                       				 	September   September    September  September
                                27,         28,           27,        28,
					                          1997        1996          1997       1996       
                            ----------- -----------  ----------- ----------

<S>                         <C>         <C>         <C>         <C>
Revenue		                  	$1,036,622  $599,893     $2,243,388  $1,822,901
	

Cost and expenses:

  Cost of revenues			          952,086   543,983      2,068,005   1,678,480
  Warehouse, general
    and administrative		        66,316    36,773        127,725      98,787
  Interest paid to
    Members                      4,237      4,393        12,789      13,778
  Other interest expense			      5,979      2,721        12,484       7,606
  Other income, net			             455        311           (14)        135   
  Income tax expense			            160        160           101         480
                           -----------  ---------    ----------  ----------

					                        1,029,233    588,341     2,221,090   1,799,266
                           -----------  ---------    ----------  ----------
   
Net margin before 
  merger integration cost	       7,389     11,552        22,298      23,635

Merger integration costs			      1,562         -          3,594       - 
                           -----------  ---------    ----------  ----------  	


Net margins			            	$     5,827  $   11,552   $   18,704  $   23,635
						 	      				         ===========  ==========   ==========  ==========
</TABLE>
		
	                   




          See Notes to Condensed Consolidated Financial Statements.




<PAGE> 7
                             TRUSERV CORPORATION 
                             -------------------

             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
             -----------------------------------------------

                     FOR THE THIRTY-NINE WEEKS ENDED 
                     -------------------------------
                              (000's Omitted)

                        					   (UNAUDITED)

<TABLE>
<CAPTION>
                              						      	September 27,	   September 28,
 							                                       1997 	           1996
                                           -------------    -------------

<S>                                       <C>              <C>
Operating activities:
  Net margins					                        	   $18,704       $ 23,635
  Adjustments to reconcile to cash and
    cash equivalents from operating
    activities:
      Statement of operations components
        not affecting cash and cash
        equivalents			                         19,931         18,828
      Net change in working capital
        components, net of acquisition   			  (41,802)      (100,410)
                                           ----------      ---------
        Net cash and cash equivalents
          used for operating activitie		       (3,167)        (57,947)
                                           ----------     ----------

Investing activities:
  Additions to properties owned				           (27,509)       (16,487)
  Proceeds from sale of properties owned	       1,100            210
  Changes in other assets				                  (1,639)         3,973
                                           ----------     ----------    

    Net cash and cash equivalents used
      for investing activities	               (28,048)       (12,304)
                                           ----------     ----------
Financing activities:
  Proceeds from short-term borrowings			      180,523         75,382
  Proceeds from long-term borrowings		         52,371           -
  Payment  of  patronage dividend 				        (20,699)       (18,315)
  Purchase of common stock, net  				         (19,530)          (468)
  Payment of notes, long-term debt and
    lease obligations        					           (158,236) 	      (7,251)
                                           ----------     ---------- 

    Net cash and cash equivalents
      provided by financing activities         34,429         49,348
                                           ----------     ----------      

Net increase (decrease) in cash and
  cash equivalents	        	                    3,214        (20,903)

Cash and cash equivalents at beginning
  of the period		                               1,662         22,473   
                                           ----------     ----------   

Cash and cash equivalents at end of
  the period	                             	$    4,876     $    1,570
                                           ==========     ==========
</TABLE>
  
          See Notes to  Condensed Consolidated Financial Statements.
                                    	
 
<PAGE> 8
                             TRUSERV CORPORATION
                             -------------------

            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
            ----------------------------------------------------

                                  (UNAUDITED)

NOTE 1 - BUSINESS COMBINATIONS

On July 1, 1997, pursuant to an Agreement and Plan of Merger dated
December 9, 1996 between Cotter & Company ("Cotter"), a Delaware
corporation and Servistar Coast to Coast ("SCC"). SCC merged with
and into Cotter, with Cotter being the surviving corporation
(the "Merger"). Cotter was renamed TruServ Corporation ("TruServ"
or the "Company"), effective with the Merger. Each outstanding
share of SCC Common Stock and SCC Series A Stock (excluding those
shares canceled pursuant to Article III of the Merger Agreement)
were converted into the right to receive one fully paid and 
nonassessable share of TruServ Class A Common Stock and each two 
outstanding shares of SCC Preferred Stock were converted into the
right to receive one fully paid and nonassessable share of TruServ
Class B Common Stock.  A total of 270,498 and 1,065,510 shares of
TruServ Class A Common Stock and Class B Common Stock, respectively,
were issued in connection with the Merger.  Also 238,550 additional
shares of TruServ Class A Common Stock were purchased by pre-Merger
Stockholders of Cotter to satisfy the Class A Common Stock ownership
requirement of 60 shares per store (up to a maximum of 5 stores) 
applicable to such Members as a result of the Merger. The transaction
was accounted for using the purchase accounting method.

Immediately following the Merger, the number of outstanding Shares
was 556,758 and 1,915,793 for TruServ Class A Common Stock and
Class B Common Stock, respectively.

To refinance the existing debt of SCC and pay related fees and
expenses,the Company entered into a revolving loan agreement of 
up to $300.0 million in short-term credit facilities with a 
group of banks and an additional $50.0 million private 
long-term debt placement.  

The total purchase price of approximately $139.0 million was allocated
to assets and liabilities of the Company based on the estimated fair
value as of the date of acquisition.  The allocation was based on
preliminary estimates which may be revised at a later date.  The
excess of consideration paid over the estimated fair value of net
assets acquired in the amount of $115.0 million has been recorded
as goodwill and is being amortized on a straight-line basis over 
forty years.

In connection with the purchase business combination, an estimated
liability of $34.7 million was recognized for costs associated
with the Merger plan. The consolidation plan specifies that certain 
former SCC corporate positions, approximately 1,200 in total, 
will be eliminated substantially within one year. As of September 
27, 1997, approximately 15% of these employees have been terminated 
with the related benefits of approximately $1.8 million charged 
against the liability. The Merger plan specifies the closing of 
redundant former SCC distribution centers and the elimination of 
overlapping former SCC inventory items stockkeeping units 
substantially within a one-year period. Distribution centers 
closing costs include net occupancy and costs after facilities 
are vacated. In addition, stockkeeping unit reduction costs 
include losses on the sale of inventory items which have been 
discontinued solely as a result of the Merger. As of September 
27, 1997 no amounts relating to distribution center closing cost 
and the reduction of stockkeeping units have been charged 
against the liability.

The Condensed Consolidated Balance Sheet as of September 27, 1997 
reflects the post-Merger Company. The Condensed Consolidated
Balance Sheet as of December 28, 1996 reflects the pre-Merger
Company. The financial information for the thirteen weeks ended 
September 27, 1997, reflects the post-Merger results of the Company. 
The thirty-nine weeks ended September


<PAGE> 9
27, 1997 reflect the results of the pre-Merger Company for 
the twenty-six weeks ended June 28, 1997 and the results of 
the post-Merger Company for the thirteen weeks ended September 
27, 1997. The thirteen weeks and thirty-nine weeks ended 
September 28, 1996  reflect the financial information of the 
pre-Merger Company only.

The results for the thirty-nine weeks ended September 27, 1997 
include merger integration cost of $3.6 million. As of September
27, 1997, certain corporate positions have been eliminated which
total $0.6 million. The Merger integration cost also includes
distribution center closing costs totaling $1.5 million. 

The following summarized unaudited pro forma operating data for the 
thirty-nine weeks ended September 27, 1997 and September 28, 1996 
are presented giving effect to the Merger, as if it had been 
consummated at the beginning of the respective periods, and 
therefore, reflect the results of the Company and SCC on a 
consolidated basis. These pro forma results have been prepared 
for comparative purposes only and do not purport to be indicative of 
the results of operations that actually would have resulted had the 
Merger been in effect  on the dates indicated, or which may result 
in the future. The pro forma results exclude one-time non-recurring 
charges or credits directly attributable to the transaction. 

The pro forma adjustment consisted of (i) an adjustment for amortization 
of the estimated excess of cost over the fair value of the net assets 
of SCC, (ii) an adjustment for interest expense on promissory notes to 
be issued in connection with the Merger, (iii) adjustment for 
interest expenses on short-term borrowings to be issued in connection 
with the Merger and (iv) an adjustment for incremental differences 
in depreciation expense.
<TABLE>
<CAPTION>
				                                        PRO FORMA
                               -----------------------------------
				                               THIRTY-NINE WEEKS ENDED  
                               -----------------------------------
                                         (000'sS OMITTED)				
				                            September 27,        September 28,
               				                1997                 1996
                               ---------------      ---------------
	         
   <S>                           <C>                 <C>
   Revenue                        $3,135,917          $3,168,264
                                  ==========          ==========   
 	         
   Net margin                     $   33,289          $   39,997
                                  ==========          ==========
</TABLE>

NOTE 2 - GENERAL
----------------

The condensed consolidated balance sheet as of September 27, 1997 
and the statements of operations for the thirteen and thirty-nine 
week periods and cash flows for the thirty-nine week periods ended 
September 27, 1997 and September 28, 1996 are unaudited.  
In the opinion of the management of the Company, these financial 
statements include all adjustments, consisting only of normal 
recurring adjustments, necessary for a fair presentation of 
financial position, results of operations and cash flow for the 
respective interim periods. The accompanying condensed consolidated 
financial statements have been prepared in accordance with the 
rules and regulation of the Securities and Exchange Commission.  
Accordingly, they do not include all of the information and 
footnotes required by generally accepted accounting principles for 
complete financial statements. This financial information should be 
read in conjunction with the consolidated financial statements for 
the year ended December 28, 1996 included in the Company's 
Post-Effective Amendment No. 6 to Form S-2 Registration Statement 
(No. 33-39477) and in the Company's 1996 Annual Report on Form 10-K.

NOTE 3 - PATRONAGE DIVIDENDS
----------------------------

In accordance with the Merger Agreement, patronage dividends earned
through June 28, 1997 were declared, and paid to former Cotter Members 
in the third quarter of 1997. The patronage dividend was distributed 
through a payment of 30% of the total distribution in cash with the 
balance being paid through the issuance of the Company's Class B 
nonvoting common stock in accordance with the patronage dividend 
policy that was changed effective in January, 1997 to increase the 
Class B nonvoting common stock requirements after payment of at 
least 20% in cash. Any further distributions after meeting the 
Class B Common Stock requirements will be in cash rather than 
in promissory notes. Such patronage dividends, consisting of 
substantially all of the Company's patronage source income, 
have been paid since 1949.The estimated patronage dividend for 
the thirteen weeks ended September 27, 1997 is

<PAGE> 10
$5,670,000 plus the dividend declared and paid for the twenty-six 
weeks ended June 28, 1997 is $18,684,000 compared to $23,584,000 
for the corresponding period in 1996.

The SCC pre-Merger patronage dividend of $19,843,000 was paid to
former SCC dealers subsequent to the third quarter. At September
27, 1997, $8,334,000 of the total dividend was payable in cash 
with the remaining amount payable in Class B Common Stock of the 
Company.

Patronage dividends will be determined at the end of each fiscal year 
for the former Cotter Members and the former SCC Members, respectively, 
as specified in the Merger Agreement.


NOTE 4- INVENTORIES
-------------------

  Inventories consisted of:
<TABLE>
<CAPTION>
                               						September 27,    December 28,
							                                  1997             1996
                                     -------------    ------------

                              							 (UNAUDITED)
                      						                  (000's OMITTED)
     <S>                             <C>             <C>
     Manufacturing inventories:
	      Raw materials					            $    2,997       $    2,797
      	Work-in-process and
         finished goods		                29,740           24,558
                                     ----------       ----------

							                                  32,737           27,355

     Merchandise inventories			         523,110          320,199
                                     ----------       ----------   

							                              $  555,847       $  347,554
	                                    ==========       ==========
</TABLE>

Item 2.  MANAGEMENT `S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
         ------------------------------------------------------------
         AND RESULTS OF OPERATIONS
         -------------------------
 
BUSINESS COMBINATION
--------------------

On July 1, 1997, TruServ Corporation (the "Company"), formerly Cotter 
& Company, merged with Servistar Coast to Coast Corporation ("SCC") 
(the "Merger"). The transaction was accounted for using the purchase 
accounting method. Accordingly, the financial information for the 
thirteen weeks ended September 27, 1997 reflects the results of the 
post-Merger Company and the financial information for the thirty-nine 
weeks ended September 27, 1997 reflects the results of the pre-Merger 
Company for the twenty-six weeks ended June 28, 1997 and the results 
of the post-Merger Company for the thirteen weeks ended September 27, 
1997.  To facilitate the comparison of interim results for 1997 and 
1996, supplemental comparisons have been provided using pro forma 
financial information. This pro forma information has been prepared 
for comparative purposes only and does not purport to be indicative 
of the results of operation that actually would have resulted had the 
Merger been in effect on the dates indicated, or which may result in 
the future.

<TABLE>
<CAPTION>
			                               THIRTY-NINE WEEKS ENDED
                   --------------------------------------------------------				
			                 September 27,  1997          September 28,1996
                   ---------------------  ---------------------------------
			                           Pro Forma               Pro Forma  Pro Forma
                     Actual      (1)        Actual       (2)        (1)
                   ---------- ----------  ----------  ---------- ----------
                                         (000's OMITTED)
<S>                <C>        <C>         <C>         <C>        <C>

Revenue			         $2,243,388 $3,135,917  $1,822,901  $2,287,434 $3,168,264
Gross margin		        175,383    218,719     144,421     181,974    236,874
Warehouse, general
 and administrative   127,725    154,732      98,787     131,194    170,147
Interest expense 		    25,273     31,767      21,384      24,318     30,013 
Merger integration
 cost                   3,594       -           -            -         -
Net margin		           18,704     33,289      23,635      26,569     39,997 
</TABLE>
    (1) Assumes the Merger was consummated on January 1.
    (2) Assumes the Merger was consummated on July 1. 


<PAGE> 11


ACTUAL THIRTY-NINE WEEKS ENDED SEPTEMBER 27, 1997 COMPARED TO ACTUAL 
--------------------------------------------------------------------
THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 1996
------------------------------------------

RESULTS OF OPERATIONS:
----------------------

Revenues for the thirty-nine weeks ended September 27, 1997 totaled 
$2,243,388,000.  This represented an increase of $420,487,000 or 23.1% 
compared to the same period last year.  The increase was due to the 
addition of Servistar Coast to Coast revenues that resulted from 
the July 1, 1997 merger of Cotter and SCC.

Gross margins increased by $30,962,000 or 21.4% and as a percentage of 
revenues, declined from 7.9% to 7.8% for the same period last year.  
Much of the percentage reduction resulted from a change in the sales 
mix between Stock, Relay and Direct Shipment Sales partially offset 
by an increase in sales volume.  The dollar increase in gross margin 
is due to the combination of Servistar Coast to Coast that resulted
from the July 1, 1997 Merger of Cotter and SCC. 

Warehouse, general and administrative expenses increased by 
$28,938,000 and, as a percentage of revenues increased to 
5.7% from 5.4% compared with the prior year. The increase was attributed 
to the increase in operating costs resulting from the Merger. Many of
potential cost efficiencies related to the Merger have not yet been 
realized and costs should be reduced as the Merger strategy is 
implemented. 

Interest paid to Members decreased by $989,000 or 7.2% primarily due 
to a lower average interest rate.  Other interest expense increased 
$4,878,000 due to higher borrowings compared to the same period last 
year. The higher borrowings was required because of the increased 
cash requirement resulting from the Merger and increased inventory 
levels. The effective borrowing rate has been lowered due to the 
renegotiation of the borrowing rates since the date of the Merger.

Merger integration costs consisted of expenses incurred with the 
consolidation and elimination of certain functions due to the 
aforementioned Merger.

The combination of decreased gross margins, increase of expenses 
and increased borrowing costs, resulted in a net margin of 
$18,704,000 compared to $23,635,000 for the same period last year.

ACTUAL THIRTY-NINE WEEKS ENDED SEPTEMBER 27, 1997 COMPARED TO PRO FORMA 
-----------------------------------------------------------------------
THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 1996 ASSUMING THE MERGER WAS 
------------------------------------------------------------------
CONSUMMATED JULY 1, 1996
------------------------

RESULTS OF OPERATIONS:
----------------------

Revenues for the thirty-nine weeks ended September 27, 1997 totaled 
$2,243,388,000. This represented a decrease of $43,996,000 or 1.9% 
compared to the same period last year.  The decrease was due to seasonal 
merchandise which was affected by adverse weather conditions. 

Gross margins decreased by $6,591,000 or 3.6% and as a percentage of 
revenues, declined from 8.0% to 7.8% for the same period last year.  
The reduction resulted from the decrease in sales volume plus a change 
in the sale mix between Stock, Relay and Direct Shipment Sales. 

Warehouse, general and administrative expenses decreased by $3,469,000 
and, as a percentage of revenues remained comparable with prior year. 
The decrease was attributed to the Company's continued efforts to 
reduce operating costs through reduction of duplicate office and 
distribution center functions. 

Interest paid to Members decreased by $1,189,000 or 8.5% primarily 
due to a lower average interest rate.  Other interest expense 
increased $2,144,000 or 20.7% due to higher borrowings compared to  
the same period last year. The higher borrowings was required
because of the increased cash requirement to increase inventory
levels to provide improved service levels to the Members.


<PAGE> 12
Merger integration costs consisted of expenses incurred with the 
consolidation and restructuring of certain functions due to the 
aforementioned Merger.

The combination of decreased gross margin and increased
borrowing costs, resulted in a net margin of $18,704,000 
compared to $26,569,000 for the same period last year.

PRO FORMA THIRTY-NINE WEEKS ENDED SEPTEMBER 27, 1997 COMPARED TO 
----------------------------------------------------------------
PRO FORMA THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 1996 ASSUMING THE
----------------------------------------------------------------- 
MERGER WAS CONSUMMATED  JANUARY 1 
---------------------------------

RESULTS OF OPERATIONS:
----------------------

Revenues for the thirty-nine weeks ended September 27, 1997 totaled 
$3,135,917,000.  This represented a decrease of $32,347,000 or 1.0% 
compared to the same period last year.  The decrease was due to 
seasonal merchandise which was affected by adverse weather conditions.  

Gross margins decreased by $18,155,000 or 7.7% and as a percentage of 
revenues, declined from 7.5% to 6.9% for the same period last year.  
The reduction resulted from the decrease in sales volume plus a change 
in the sale mix between Stock, Relay and Direct Shipment Sales.  

Warehouse, general and administrative expenses decreased by $15,415,000 
or 9.1% and, as a percentage of revenues decreased from 5.4% to 4.9%. 
The decrease was attributed to the Company's continued efforts to 
reduce operating costs through reduction of duplicate office and 
distribution center functions. 

Interest paid to Members decreased by $1,189,000 or 8.3% primarily due 
to a lower average interest rate.  Other interest expense increased 
$2,943,000 or 18.8% due to higher borrowings compared to  the same 
period last year. The higher borrowings were required because of 
of the need to increase inventory levels to provide improved service
levels to the Members.

The combination of decreased gross margin and increased borrowing 
costs partially offset by operating expenses decreases resulted 
in a net margin of $33,289,000 compared to $39,997,000 for the 
same period last year.
<TABLE>
<CAPTION>
			                                     THIRTEEN WEEKS ENDED
				                           -----------------------------------------
			                	           September 27,        Septeber 28,1996
			                                1997        -------------------------
  			                             Actual         Actual    Pro Forma (1)
                               -------------   ----------  -------------

<S>                            <C>            <C>         <C> 
Revenue				                    $ 1,036,622     $ 599,893   $ 1,064,376
Gross margins 			                   84,536        55,910        93,463
Warehouse, general and 
  administrative expense            66,316        36,773        69,180
Interest  expense	                  10,216         7,114        10,048
Merger integration cost              1,562          -             -
Net margin		 	                       5,827        11,552        14,486     
</TABLE>
(1) Assumes the Merger was consummated at July 1.


<PAGE> 13

ACTUAL THIRTEEN WEEKS ENDED SEPTEMBER 27, 1997 COMPARED TO ACTUAL THIRTEEN 
--------------------------------------------------------------------------
WEEKS ENDED SEPTEMBER 28, 1996
------------------------------

RESULTS OF OPERATIONS:
----------------------

Revenues for the thirteen weeks ended September 27, 1997 totaled 
$1,036,622,000.  This represented an increase of $436,729,000 or 
72.8% compared to the same period last year.  The increase was 
due to the addition of Servistar Coast to Coast revenues that 
resulted from the July 1, 1997 merger of Cotter and SCC.

Gross margins increased by $28,626,000 or 51.2% and as a 
percentage of revenues, declined from 9.3% to 8.2% for the same 
period last year. Much of the reduction resulted from the change 
in the sale mix between Stock, Relay and Direct Shipment Sales 
partially offset by an increase in sales volume. The dollar 
increase om gross margin is due to the addition of SErvistar 
Coast to Coast revenues that resulted from the July 1, 1997 
Merger of Cotter and SCC.

Warehouse, general and administrative expenses increased by 
$29,543,000 or 80.3% and, as a percentage of revenues increased 
from 6.1% to 6.4%. The increase was attributed to the increase 
in operating costs resulting from the Merger. Many of the potential 
cost efficiencies related to the Merger have not yet been realized and
cost should be reduced as the Merger strategy is implemented. 

Interest paid to Members decreased by $156,000 or 3.6% primarily 
due to a lower average interest rate.  Other interest expense 
increased $3,258,000 or 119.7% due to higher borrowings compared 
to the same period last year. The higher borrowings was required 
because of the increased cash requirement resulted from the Merger 
and increased inventory levels.

Merger integration costs consisted of expenses incurred with the 
consolidation and restructuring of certain functions due to the 
aforementioned Merger.

The combination of the increase in expenses and increased borrowing 
costs, resulted in a net margin of $5,827,000 compared to $11,552,000 
for the same period last year.

ACTUAL THIRTEEN WEEKS ENDED SEPTEMBER 27, 1997 COMPARED TO PRO FORMA 
--------------------------------------------------------------------
THIRTEEN WEEKS ENDED SEPTEMBER 28, 1996 ASSUMING THE MERGER WAS 
---------------------------------------------------------------
CONSUMMATED ON JULY 1, 1996
----------------------------

RESULTS OF OPERATIONS:
----------------------

Revenues for the thirteen weeks ended September 27, 1997 totaled 
$1,036,622,000.  This represented a decrease of $27,754,000 or 2.6% 
compared to the same period last year.  The decrease was due to 
seasonal merchandise which was affected by adverse weather conditions.  

Gross margins decreased by $8,927,000 or 9.6% and as a percentage of 
revenues, declined from 8.8% to 8.2% for the same period last year.  
The reduction resulted from the decrease in sales volume plus a change 
in the sale mix between Stock, Relay and Direct Shipment Sales.  

Warehouse, general and administrative expenses decreased by $2,864,000 
or 4.1% and, as a percentage of revenues remained comparable with prior 
year. The decrease was attributed to the Company's continued efforts to 
reduce operating costs through reduction of duplicate office and
distribution center functions.

Interest paid to Members decreased by $356,000 or 7.8% primarily due 
to a lower average interest rate.  Other interest expense increased 
$524,000 or 9.6% due to higher borrowings compared to the same period 
last year. The higher borrowings was required because of increased 
cash requirement to increase inventory levels to provide improved
service levels to the Members.

Merger integration costs consisted of expenses incurred with the 
consolidation and restructuring of certain functions due to the 
aforementioned merger.

The continued effort of expense reduction, partially offset by the 
combination of decreased gross margin and increased borrowing costs, 
resulted in a net margin of $5,827,000 compared to $14,486,000 for 
the same period last year.

LIQUIDITY AND CAPITAL RESOURCES:
--------------------------------

The Company has a seasonal need for cash.  During the first nine 
months of the year, as seasonal inventories are purchased for resale 
of manufacture and shipment, cash and cash equivalent are used for 
operating activities.  In the last quarter of the year, the Company 
anticipates that cash and cash equivalents will be provided by operating 
activities and financing activities.

Accounts and notes receivable increased by $182,505,000 due to 
(1) seasonal payment terms extended to the Company's Members and 
(2) the additional Members resulting from the Merger. Short-term 
borrowings increased by $180,523,000 and accounts payable and 
accrued expenses increased by $280,712,000.

At September 27, 1997, net working capital decreased to $151,132,000 
from $201,304,000 at December 28, 1996. The current ratio decreased 
to 1.16 at September 27, 1997 compared to 1.40 at December 28, 1996.

At September 27, 1997, the Company had established a $300,000,000 
five-year revolving credit facility with a group of banks and had 
various short-term lines of credit available under informal agreements 
with lending banks, cancelable by either party under specific 
circumstances.  Borrowing under this agreements were $251,117,000 at 
September 27, 1997.t 

The Company's capital is primarily derived from Class A common stock 
and retained earnings, together with promissory (subordinated) notes 
and nonvoting Class B common stock issued in connection the  Company's 
annual patronage dividend.  The Company believes the funds derived 
from these capital resources, as well as operations and the credit 
facilities noted above will be sufficient to satisfy  capital needs.

Total capital expenditures, including those made under capital leases, 
were $27,509,000 for the thirty-nine weeks ended September 27, 1997 
compared to $16,487,000 during the comparable period in 1996.  These 
capital expenditures related to additional equipment and technological 
improvements at the regional distribution centers and at the World 
Headquarters.  Funding of any additional 1997 capital expenditures 
is anticipated to come from operations and external sources, if 
necessary.

A portion of the Company's information systems are not "Year 2000 
Complaint".  This means that the Company will need to incur certain 
costs to modify non-compliant systems prior to the Year 2000 in order 
to ensure that those systems continue to serve the needs of the 
Company and its Membership.  Based upon an initial investigation of our 
systems, we estimate that such costs could exceed $10,000,000.  Actual 
costs may exceed this estimate depending on our merger efforts and 
system resource constraints.  Further, based upon current FASB 
Guideline, costs incurred to modify systems to be Year 2000 compliant 
must be expensed.  Accordingly, such costs will reduce our patronage 
dividends in years in which they were incurred.

                				PART II - OTHER INFORMATION
                    ---------------------------

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         ---------------------------------------------------

At the Company's Annual Meeting of Stockholders held on April 1, 1997,  
the Stockholders approved the Agreement and Plan of Merger dated 
December 9, 1966, providing for the merger of Servistar Coast to Coast 
Corporation with and into Cotter & Company, thereafter known as TruServ 
Corporation.  The agreement and Plan of Merger addressed, among other 
things, the following items:

<TABLE>
    <C>  <S>                           
    (a)  Additional capital requirements;
    (b)  New form of Retail Member Agreement;

<PAGE>  16
    (c)  Revised By-Laws and 
    (d)  Restatement of Certificate of Incorporation, including 
         without limitation:
           1) Authorizing an increase in the maximum outstanding 
              Class A Common Stock to 750,000 shares and Class B 
              Common Stock to 4,000,000 shares;
           2) Elimination of cumulative voting;
           3) Elimination of required uniform ownership of Class 
              A Common Stock and
           4)  Changing the corporate name.
</TABLE>

The approval of the new form of Retail Member Agreement automatically 
superseded all prior Cotter & Company Retail Member Agreements.

The nomination of the listed initial Board of Directors of TruServ 
Corporation:
<TABLE>
                 <S>                       <C>
                	W. (Bill) Blagg			         Peter G. Kelly
                	William M. Claypool		      Robert J. Ladner
                	Daniel A. Cotter			        Paul E. Pentz
                	Jay Feinsod			             George V. Sheffer
                	Dave Guthrie			            Dennis A. Swanson
	                William M. Halterman		     John Wake, Jr.
                	William Hood			            John M. (Mitch) West, Jr.
                	James Howensteine		        Barbara B. Wilkerson
                 Jerrald T. Kabelin
</TABLE>
The number of affirmative votes cast for the above items was 37,520, 
the number of negative votes cast was 2,100 and the number of 
abstentions was 540.

In addition, the Stockholders of Class B Common Stock voted to 
increase the number of authorized shares of Class B Common Stock 
to 4,000,000 shares. The number of affirmative votes was 927,296, 
the number of negative votes cast was 47,881, and the number of 
abstentions was 6,904.

The Company consummated the merger on July 1, 1997.

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K
         --------------------------------

         (a)  Exhibits

              Exhibit 4. Instruments defining the rights of security 
              holders, including indentures, incorporated herein by 
              reference those items included as Exhibits 4A through 
              4G, inclusive, in the Company `s Post-Effective Amendment 
              No. 4 to Form S-2 to Form S-4 Registration Statement 
              (No. 33-18397) filed with the Securities and Exchange  
              Commission on  July 2, 1997.         


         (b)  Reports on Form 8-K

              1)  Current Report on Form 8-K dated as of March 5, 1997.
              2)  Form 8K/A Amendment to Current Report on Form 8-K, 
                  dated March 26, 1997.
        
       





<PAGE> 17

                                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. 





						                                     	TRUSERV CORPORATION


<TABLE>

<S>      <C>                               <C> 
Date:    November 11, 1997					            By: /S/ KERRY J. KIRBY
                            							        Executive Vice-President
							                                    and Chief Financial Officer
</TABLE>

   (Mr. Kirby is the principal accounting officer and has been duly 
          authorized to sign on behalf of the Registrant.)