EXHIBIT 13

MANAGEMENT'S DISCUSSION AND ANALYSIS

     The following discussion summarizes the significant factors
affecting the Company's operating results for the fiscal years
ended January 25, 1997 ("1996"), January 27, 1996 ("1995"), and
January 28, 1995 ("1994"), and the Company's liquidity and
capital resources as of January 25, 1997, January 27, 1996, and 
January 28, 1995.  This discussion and analysis should be read in
conjunction with the financial statements and notes to the
financial statements included in this annual report.

Results of Operations

     Net Earnings
     1996 Compared to 1995
     Net loss was $58.5 million in 1996, compared with $19.9
million in 1995. Both years were negatively impacted by
nonrecurring charges as discussed below, which are included in
cost of merchandise sold and in selling, general, administrative
and other expenses.  During 1996, the Company recorded
nonrecurring pre-tax charges of approximately $50.0 million, or
$1.72 per share.  These charges consisted of $38.3 million for
additional markdowns and $4.5 million for advertising and other
costs incurred to allow the Company to liquidate excess inventory
and adjust merchandise assortments for the implementation of
phase three of the repositioning (discussed below), $6.1 million
associated with three stores that the Company has determined will
not reopen, $.6 million for severance costs for the elimination
of 67 positions at year-end 1996 as a corporate overhead
reduction initiative and approximately $.5 million related to
other costs. Of the total nonrecurring charges in 1996, $38.3
million is included in cost of merchandise sold and $11.7 million
is included in selling, general, administrative and other
expenses.
     During 1995, the Company announced plans to transform
Venture from a discount general merchandise chain to a
value-oriented family store, the "Repositioning".  The
Repositioning is designed to improve gross margin.  Phase one of
the Repositioning, which was completed in early March of 1996,
resulted in the reconfiguration of the store interiors and the
expansion of various merchandise assortments in order for the
Company to become a more dominant retailer in the home, family
apparel and leisure merchandise categories.  The reconfiguration
provides for destination shops showcasing category-dominant lines
with additional floor space, distinctive fixtures, graphics and
displays.  In this process, the Company downsized or exited 
several categories of historically low-margin businesses to make
room for new or expanded businesses such as the Petite Shop, Big
& Tall Shop, Women's Sizes, Sports Shop and Home Shop areas.
     The Company continued to adjust its family value store
concept and merchandise mix in 1996 with phase two of the
Repositioning, which was completed in October 1996.  Phase two
included expanding the gift department, further expansion of new
fixturing in domestics, introduction of a bath and body shop,
expansion of the luggage department, debut of a women's
coordinates fashion line and introduction of convenience
automotive accessories.  Phase three of the Repositioning, which
is being rolled out in 1997, includes opening or expanding 14
more departments, including live plants, convenience hardware,
and golf and fishing equipment, expansion of opening price point
items and the intensification of the everyday low pricing
strategy.  The success of the Repositioning is dependent upon
numerous factors including customer acceptance of the
merchandising strategy and adequate sources of capital.  The
Company intends to continue to evaluate its merchandise
assortments throughout 1997.     
     During 1995, the Company recorded nonrecurring pre-tax
charges of $45.7 million, or $1.65 per share.  These charges
consisted of $3.6 million to complete the image builder program
(discussed below) in the first quarter, $6.9 million related to
the reduction in the workforce during 1995 and the first quarter
of 1996, $8.6 million in connection with the closing of three
unprofitable stores in August of 1995, $4.1 million of severance
and other costs for the closing of ten additional
under-performing stores in the early part of 1996, $2.0 million
for costs associated with cancelled 1996 store openings, $1.6
million related to financing activities, $2.5 million for other
actions taken by management and $16.4 million (net of the $4.1
million nonrecurring LIFO credit discussed below) in connection
with phase one of the Repositioning. Of the total nonrecurring
charges in 1995, $7.0 million is included in cost of merchandise
sold and $38.7 million is included in selling, general,
administrative and other expenses.
     1995 net earnings also included a $3.8 million pre-tax
benefit, or $0.14 per share, on the curtailment of the Company's
defined benefit pension plan and a pre-tax benefit of $4.0
million, or $0.14 per share, related to real estate transactions,
primarily the reversal of recorded reserves on a closed store due
to the property being subleased. 

     1995 Compared to 1994
     Net loss was $19.9 million in 1995 as compared with net
earnings of $28.7 million in 1994.  Net earnings in 1995 were
negatively affected by the $45.7 million of nonrecurring charges
discussed above.  Net earnings in 1994 were negatively affected
by two nonrecurring items.  The first item was a $2.6 million
pre-tax charge ($0.09 per share) for the cost of asbestos
abatement in one store.  The second item was recorded in the
fourth quarter of 1994, when the Company began the roll out of
the image builder program, designed to materially broaden the
assortments of certain key merchandise categories within
housewares and domestics, while de-emphasizing and reducing
merchandise assortments in less productive categories, including
automotive and hardware.  The implementation of this program
required higher-than-normal markdowns in the de-emphasized areas
and significant expenditures to refixture stores for the newly
expanded categories.  In connection with the roll out of the
image builder program, the Company recorded a $3.0 million
pre-tax charge, or $0.11 per share, in the fourth quarter of
1994.
     The nonrecurring charges in 1996, 1995 and 1994 complicate
comparisons of the Company's financial results for these years. 
To facilitate such comparisons, certain financial information is
reported in this discussion both including and excluding these
items.

     Net Earnings as a Percent of Net Sales
     The following table sets forth certain components of net
earnings expressed as a percentage of net sales for 1996, 1995
and 1994:

                                       Percentage of Net Sales
                                       1996      1995      1994
Net sales                             100.0%    100.0%    100.0%
Cost of merchandise sold (before 
  LIFO and nonrecurring charges)       75.6      76.6      75.7
FIFO gross margin
  (before nonrecurring charges)        24.4      23.4      24.3
LIFO (before nonrecurring charges)      0.2      (0.3)     (0.1)
Selling, general, administrative and
  other expenses (excluding
  nonrecurring charges)                25.3      22.1      21.3
Nonrecurring charges                    3.3       2.4        .3

Operating income (loss)                (4.4)     (0.8)      2.8
Net interest expense                    1.9        .8        .5

Net earnings (loss) before
  income taxes                         (6.3)     (1.6)      2.3
Income taxes                           (2.4)     (0.6)      0.9

Net earnings (loss)                    (3.9)%    (1.0)%     1.4%


     Net Sales
     The Company's net sales in 1996 were $1,485.8 million, down
23.0% from $1,928.8 million in 1995.  Comparable store sales
declined 20.2% in 1996.  Comparable store sales were negatively
impacted by the elimination or reduction of historically low-
margin product lines, including certain categories of hardware,
automotive, and sporting goods, in connection with the Company's
margin-based Repositioning strategy. Other factors contributing
to the decline in comparable store sales were the disruption
caused in February and March by the remodeling done as part of
phase one of the Repositioning, the surplus of merchandise at
higher price points for which sales were not as strong as
merchandise at lower price points, the transition time for
customers to familiarize themselves with the new store layout,
disruptions in merchandise shipments from certain vendors in the
fourth quarter, and competitive store openings in some of the
Company's markets.  Total sales were also negatively impacted by
the closing of six stores on March 30, 1996, and the conversion
of four stores to temporary chain-wide clearance centers.  During
1996, the Company reopened all four clearance centers and three
of the closed stores as family value stores. The Company's plans
reflect a continuing comparable store sales decline through at
least the first half of 1997.   
     Net sales during 1995 were $1,928.8 million, a decrease of
4.4% from 1994 net sales of $2,017.3 million.  Comparable store
sales declined 9.4% in 1995, partially as a result of the
phasing-out of certain merchandise categories in the second half
of the year in anticipation of the Company's Repositioning.  The
Company opted to keep its stores open during the remodeling stage
of the transition, which began December 26, 1995 and was
completed in early March, 1996.  Total sales in 1995 were also
negatively impacted by the closing of three stores in August of
1995 (two in Illinois and one in Oklahoma), a generally weak and
promotional retail environment, the Company's discontinuation of
the Famous-Barr credit card, and competitive store openings in
some of the Company's markets. 
 
     Gross Margin
     FIFO gross margin for 1996 was $323.8 million in 1996,
compared with $440.2 million in 1995, a decrease of $116.4
million.  FIFO gross margin included nonrecurring charges of
$38.3 million incurred in the fourth quarter of 1996 for
clearance markdowns to liquidate excess inventories and balance
inventories allowing for new merchandise programs to be added at
an accelerated rate and for one-time markdowns for an expansion
of the Company's price reduction initiatives, moving more
merchandise to everyday low prices as part of phase three of the
Repositioning.  FIFO gross margin in 1995 included nonrecurring
charges of $11.2 million for clearance markdowns taken on the
categories phased-out in connection with phase one of the
Repositioning.  Excluding these nonrecurring charges in 1996 and
1995, FIFO gross margin declined $89.3 million in 1996, from
$451.4 million in 1995 to $362.1 million in 1996.  The primary
reason for the decline in gross margin in dollars is the effect
of reduced sales.  Excluding nonrecurring charges, FIFO gross
margin as a percent of sales increased to 24.4% in 1996 from
23.4% in 1995.  The increase in FIFO gross margin as a percent of
sales is primarily attributable to the exiting or downsizing of
historically low-margin product lines and expansion of
merchandise assortments in home, family apparel, and leisure
categories as part of the Repositioning, a focus on higher
initial markup opportunities throughout the store, and reduced
permanent markdowns in 1996.  These increases in FIFO gross
margin were partially offset by higher promotional markdowns and
higher shortage. 
     FIFO gross margin was $440.2 million in 1995, compared with
$488.7 million in 1994, a decrease of $48.5 million.  Excluding
nonrecurring charges, FIFO gross margin as a percent of sales was
23.4% in 1995 as compared to 24.3% in 1994.  The decline was due
to the reduction in sales of higher-margin softline items as a
percentage of total sales, the highly promotional environment,
and competitive pricing.

     LIFO
     The cost of merchandise sold included a LIFO charge of $3.4
million ($0.12 per share) in 1996, a LIFO credit(benefit) of $9.6
million ($0.35 per share) in 1995 and a LIFO credit of $2.9
million ($0.10 per share) in 1994.  The 1996 LIFO charge is
predominately a result of overall lower inventory levels at year-
end 1996 than year-end 1995.  In addition, several categories
that contain a significant portion of the Company's inventory,
such as drugs and toiletries, experienced relatively higher price
inflation in 1996.  The 1995 LIFO credit included a $4.1 million
credit related to the reduction or elimination of certain
merchandise categories, such as automotive and hardware, in
connection with the Repositioning.  The remaining LIFO credit in
1995 of $5.5 million, or $0.20 per share, resulted primarily from
an overall increase in retail mark-up at year-end 1995 over
year-end 1994.  This occurred as the categories that were
eliminated as part of the Repositioning had lower retail mark-ups
than the categories that were expanded, such as men's and women's
apparel.  The impact of inflation was nominal in 1995.  The LIFO
credit in 1994 resulted primarily from the increase in inventory
in 1994 over 1993 due to the opening of nine stores during the
year. 
 
     Selling, General, Administrative and Other Expenses
     Selling, general, administrative and other expenses were
$387.2 million, $465.4 million and $434.6 million in 1996, 1995
and 1994, respectively.  Excluding the nonrecurring charges
discussed above, selling, general, administrative and other
expenses were $375.5 million, $426.7 million and $431.0 million
in 1996, 1995 and 1994, respectively, or 25.3%, 22.1% and 21.3%
of sales. As a percent of sales, selling, general, administrative
and other expenses increased in 1996, primarily due to the
decline in sales. Selling, general, administrative and other
expenses decreased in 1996 compared to 1995 largely due to a
number of expense reduction and cost control initiatives. Payroll 
decreased $60.9 million in 1996 compared with 1995 as a result of
the reduction of the workforce by approximately 950 positions
during the second quarter of 1995, the elimination of 390 sales
support positions in connection with streamlining the Company's
store organization in the first quarter of 1996 and the decrease
in the number of stores from year-end 1995 to year-end 1996.
Other factors contributing to the decrease in selling, general,
administrative and other expenses were a decrease in retirement
expense as a result of the suspension of additional benefit
accruals under the retirement plan as of January 1, 1996, 
reduction of recorded reserves on a closed store and a decrease
in credit card fees paid due to the decline in sales.  These
decreases in selling, general, administrative and other expenses
were partially offset by an increase in advertising expense
during 1996, primarily for the costs associated with the
Repositioning and the highly promotional environment, and an
increase in stock-based compensation expense as the result of a
new restricted stock program for key executives implemented
during 1996.  Selling, general, administrative and other expenses
for 1995 included one-time pre-tax benefits of $4.0 million
related to real estate transactions and $3.8 million on the
curtailment of the Company's defined benefit pension plan.
     The increase in selling, general, administrative and other
expenses as a percentage of sales in 1995 is due to lower sales,
higher advertising expense as a result of the highly promotional
environment and higher depreciation and property tax expenses due
to an increase in the number of stores. 

     Net Interest Expense
     Net interest expense increased $11.4 million in 1996 to
$27.6 million, compared with $16.2 million in 1995.  Of this
increase, $4.9 million is due to the financing obligation
resulting from the sale/leaseback transactions in the fourth
quarter of 1995 and the first quarter of 1996, and $4.9 million
is due to higher short-term borrowings in 1996. The remaining
increase in net interest expense is primarily from a decrease in
interest income.
     Net interest expense increased $6.3 million in 1995 to $16.2
million, compared with $9.9 million in 1994. Over half of the
increase is due to 1995 reflecting a full year of interest on
certain medium term notes, which were issued in late 1994.  The
remaining increase in net interest expense is primarily due to
higher short-term borrowings in 1995 that resulted partially from
the decline in sales. 
 
     Provision for Income Taxes 
     The income tax benefit was $35.8 million in 1996 compared
with $11.9 million in 1995 and an income tax provision of $18.4
million in 1994.  The income tax benefit in 1996 and 1995
resulted from the net operating loss.  The effective income tax
rates were 38.0%, 37.4% and 39.0% in 1996, 1995 and 1994,
respectively.  Other taxes that are not affected by the Company's
operating loss caused a reduction in the effective tax rate in
1996 and 1995. 

     Inflation Impact
     Inflation did not materially affect sales growth and
operating earnings.  The Company believes that, as a result of
valuing inventory on a LIFO basis, the current cost of
merchandise is reflected in operating results.

Liquidity and Capital Resources

     Operating Activities
     Cash flow from operations improved by $49.0 million in 1996
and decreased $150.0 million in 1995.  Cash used by operations,
consisting of net income adjusted for non-cash expense items and
changes in working capital, was $32.6 million in 1996 and $81.6
million in 1995, compared with cash provided by operations of
$68.4 million in 1994.  Detailed information on the Company's
cash flows is presented in the Statement of Cash Flows in the
Financial Statements.  The increase in cash flow from operations
in 1996 is due to an increase in cash provided by working
capital, offset by the net operating loss and a reduction in
deferred taxes.  The decrease in cash provided from operations in
1995 was due primarily to the net operating loss, a decrease in
accounts payable and income taxes payable and an increase in
other current assets, offset partially by an increase in accrued
expenses.  
     The $28.8 million decrease in inventories between 1995 and
1996 is primarily attributable to the aggressive markdown and
clearance of discontinued and excess inventory in the fourth
quarter of 1996 and, to a lesser extent, two fewer stores at
year-end 1996.  The $8.7 million decrease in accounts payable in
1996 resulted from reduced inventory levels and a general
tightening of credit terms.  The decrease in accrued expenses in
1996 over 1995 is largely due to a $14.2 million reduction in
accrued liabilities resulting from the payment of construction in
process costs related principally to remodeling and refixturing
for the Repositioning.  A decrease in payroll, benefit and
insurance accruals resulting from the reduced workforce and the
suspension of benefit accruals under the retirement plan and
profit sharing plan also contributed to the decrease in accrued
expenses in 1996.      
     The decrease in non-current deferred income taxes in 1996
resulted primarily from the creation of a net operating loss
carryforward during 1996 and the conclusion of an IRS examination
that resulted in significant capital recovery adjustments. With
the completion of this IRS examination, all years through 1995
are reviewed and tentatively settled.   These decreases in non-
current deferred taxes were partially offset by an increase in
the deferred tax liability from the sale/leaseback of 16 store
properties in 1995 and 1996.  For book purposes, the
sale/leaseback transactions were recorded under the financing
method with no gain or loss recognized.  The properties continue
to be reported as assets on the books of the Company.  As future
book depreciation is recorded on the sale/leaseback assets, the
related deferred income tax liability will be reduced. 
     The decrease in accounts payable and corresponding increase
in short-term debt in 1995 reflected the Company's greater
reliance on short-term debt to fund working capital as a result
of reduced sales and earnings.  The Company's voluntary
shortening of payment terms to take advantage of additional trade
discounts, as well as a general tightening of credit terms,
contributed to the $96.0 million decrease in accounts payable in
1995.  As a result of the net operating loss in 1995, the Company
had an income tax receivable of $13.7 million in 1995, compared
with income taxes payable of $11.1 million in 1994.  The $7.0
million increase in other current assets was primarily due to the
$13.7 million income tax receivable, offset by a $4.4 million
decrease in receivables primarily from the refund of a cash bond
upon favorable dismissal of a lawsuit against the Company.  The
increase in accrued expenses in 1995 over 1994 is largely due to
$7.6 million of reserves remaining at January 27, 1996, related
to store closings.  The accrual of nonrecurring costs in
connection with the expense reductions and the Repositioning also
contributed to the increase in accrued expenses in 1995.
     The Company has taken several actions aimed at improving its
profitability.  As discussed above, the Company cut benefit costs
by suspending additional benefit accruals under its retirement
plan and streamlined its sales organization in early 1996,
eliminating 390 sales support positions.  At year-end 1996, the
Company reduced its workforce by 67 corporate positions as an
overhead reduction initiative.  The Company plans to open or
expand 14 more departments in spring of 1997 as part of phase
three of the Repositioning.  In addition, during the fourth
quarter of 1996, the Company opened nine Venture Dollar stores in
existing trade areas to test-market the new concept.  The Venture
Dollar stores carry convenience-oriented, low-priced items and
are approximately 7,000 to 10,000 square feet in size. 
 
     Investing Activities  
     The following table summarizes capital expenditures by type
for each of the last three years:

(millions)                        1996      1995      1994
New stores                         $ 3       $13       $65  
Remodeling and refixturing           1        33         8  
Distribution facilities              1         2         2  
Equipment and other                 14        13         8
Total capital expenditures         $19       $61       $83

     The decline in capital expenditures for new stores in 1996
and 1995 is due to the reduced number of new store openings.  One
new store was opened in 1996, which was a conversion of an
existing building, compared with five new stores opened in 1995
and nine new stores in 1994.  The increase in remodeling and
refixturing expenditures in 1995 is primarily the result of $25.5
million of capital expenditures to make the physical changes
necessary for phase one of the Company's Repositioning.
     The Company does not anticipate opening any new family value
stores in 1997.  The capital expenditure budget totals
approximately $18.0 million for 1997 and is expected to be used
primarily to remodel existing stores and for the ordinary repair
and replacement of store and distribution center assets.
     Investing activities in 1996 includes proceeds of $6.2
million for the sale of assets, primarily excess real estate.

     Financing Activities
     On June 28, 1996, the Company terminated its Credit
Agreement with The First National Bank of Chicago, as agent, and
a syndicate of banks and entered into an agreement with
BankAmerica Business Credit, Inc., as agent, and a syndicate of
financial institutions for a secured revolving credit facility
(the "Credit Facility") consisting of revolving credit loans and
letters of credit of up to $225 million in the aggregate, with a
sublimit of $125 million for letters of credit.  The Credit
Facility was for a term of three years through June 27, 1999, and
was secured by the inventory, equipment and substantially all
other assets of the Company, excluding leased or mortgaged real
estate and certain personal property under leases.
     The Credit Facility required the Company to meet certain
quarterly covenants, including a fixed charge coverage ratio. 
Under the terms of the Credit Facility, the Company was
prohibited from paying dividends on its common stock.  Interest
on the borrowings was payable based on multiple rate options.
Additionally, the Company was required to pay certain unused line
fees and letter of credit fees.
     As of January 25, 1997, the Company had outstanding
borrowings of $106.0 million and letters of credit of $33.3
million, leaving $12.9 million unused under this facility. 
     Subsequent to year-end 1996, the Company terminated the
Credit Facility with BankAmerica Business Credit and entered into
an agreement with BT Commercial Corporation for a secured
revolving credit facility (the "Revolving Credit Facility")
consisting of revolving credit loans and letters of credit of up
to $250 million in the aggregate, with a sublimit of $125 million
for letters of credit.  The Revolving Credit Facility is for a
term of three years, and is secured by the inventory, equipment
and substantially all other assets of the Company, excluding
leased or mortgaged real estate and certain personal property
under leases.  The Revolving Credit Facility requires the Company
to meet certain quarterly financial covenants, including minimum
interest coverage and accounts payable to inventory ratios. 
Under the terms of the Revolving Credit Facility, the Company is
prohibited from paying dividends on its common stock.  Interest
on the borrowings is payable based on multiple rate options. 
Additionally, the Company is required to pay certain unused line
fees and letter of credit fees.   As a result of the termination
of its previous Credit Facility, the Company will record an
extraordinary charge of approximately $3.5 million, before taxes,
in the first quarter of 1997.  The charge is primarily for the
write-off of unamortized deferred financing costs and the
prepayment penalties.
     The ratio of total debt (including the present value of
operating leases) to total capital was 73% at year-end 1996,
compared with 66% at year-end 1995, as detailed below: 

(millions)                                        1996      1995
Debt:
 Short-term borrowings                            $106      $115
 Current and long-term debt                        183       172
 Present value of operating lease payments         256       262
Total debt                                        $545      $549
Capitalization:
 Shareowners' investment                           182       241
 Total debt                                        545       549
 Deferred gain, income taxes and ITC                23        39
Total capitalization                              $750      $829
Total debt divided by total capitalization          73%       66%

     Of the $125.7 million of cash flows provided by financing
activities in 1995 (see Statement of Cash Flows), $115.0 million
is from the increase in outstanding short-term borrowings.  The
Company relied on short-term debt to provide additional working
capital in 1995 because of the reduced net sales and net earnings
and the reduction in the accounts payable balance.
     Cash flows from financing activities in 1995 includes
proceeds of $25.0 million from the sale/leaseback of ten store
properties. Cash flows from financing activities in 1996 includes
proceeds of $15.0 million from the sale/leaseback of six store
properties.   The proceeds from the sale/leaseback transactions
were used to meet working capital and capital expenditure needs
associated with the Company's Repositioning and for other
corporate purposes.  The sale/leasebacks were accounted for as
financing transactions in accordance with Statement of Financial
Accounting Standards No. 98, "Accounting for Leases," because of
the below-market rents. The obligation from the sale/leaseback
transactions is included in long-term debt and current maturities
of long-term debt.
     The increase in long-term debt in 1996 over 1995 is due
primarily to the $15.0 million obligation from the 1996
sale/leaseback, net of other regularly-scheduled maturities of
long-term debt and capital leases.
     Proceeds from the issuance of $56.0 million of medium-term
debt securities accounted for most of the Company's cash flow
from financing activities in 1994.  The medium term notes have
interest rates ranging from 8.77% to 9.32%.  During the fourth
quarter of 1996,(i) Standard & Poor's lowered the ratings of the
medium term notes and 6.75% revenue bonds due March 1, 2009 from
B to B- and lowered the ratings of the Company's preferred stock
from B- to CCC+ and (ii) Moody's Investor Services lowered the
ratings of the medium term notes from B1 to B3 and lowered the
ratings on the Company's preferred stock from b2 to caa.  Debt
ratings by various rating agencies reflect the agencies' opinions
of the ability of the issuers to repay debt obligations
punctually.  Lower ratings generally result in higher future
borrowing costs.  At the end of 1996, the Company had $94.0
million available to be issued under the 1994 shelf registration
statement filed with the Securities and Exchange Commission.
     The net book value of property collateralized under
long-term debt and capital lease arrangements has increased from
$113.9 million at year-end 1995 to $138.9 million at the end of
1996.  The increase is attributable to the net book value of the
property included in the sale/leaseback transaction during 1996,
which was accounted for as a financing as previously discussed.  
At year-end 1996, the Company had five stores, one distribution
center, one photo studio and one undeveloped new store site
unencumbered.  However, these properties were mortgaged under the 
Revolving Credit Facility entered into subsequent to year-end
1996.
     Dividends on common shares were $3.7 million and $10.0
million in 1995 and 1994, respectively.  On March 3, 1995, the
Company announced a change in its dividend policy, reducing the
quarterly dividend on its common stock from $.145 to $.07 for the
second quarter of 1995.  The Company later announced the
elimination of the common stock dividend, commencing with the
third quarter of 1995.  The Company is prohibited from paying a
dividend on its common stock during the remaining term of the
Revolving Credit Facility.  The Company paid dividends of $2.5
million in 1996, 1995 and 1994 on its cumulative convertible
preferred stock.  
     On March 2, 1995, the Company's Board of Directors
authorized the repurchase of up to 500,000 shares of the
Company's common stock and 300,000 depository shares representing
its cumulative convertible preferred stock in the open market or
through privately negotiated transactions.  No shares were
repurchased during 1995 or 1996, and the Company does not
currently anticipate any repurchases in 1997.
     With the elimination of the common stock dividend, moderate
planned capital expenditures in 1997, and ongoing cost control
efforts, the Company believes that working capital and capital
expenditure requirements for 1997 will be funded through a
combination of cash flows from operations and borrowings under
its existing Revolving Credit Facility.  Although the Company
believes its liquidity is sufficient to meet its current and
anticipated needs for 1997, if providers of the goods and
services to the Company materially tighten credit terms, vendors
stop shipping goods, the Company's sales are significantly below
plan, customers do not accept the Repositioning strategy, or
other unanticipated material negative events occur, the Company
may need to consider alternative sources of funding. 

Forward Looking Statements

     Certain matters discussed above, such as the Company's
expectations with respect to 1997 sales, the amounts of future
capital expenditures, and the sources and adequacy of funds for
future working capital and capital expenditure requirements,
constitute "forward looking" statements and as such are based on
assumptions and estimates.  Actual results may differ materially
from those in the forward looking statements.  Factors that could
cause actual results to differ materially from the forward
looking statements include, but are not limited to: (i) economic
and weather conditions in the regions in which the Company's
stores are located and their effect on the buying patterns of the
Company's customers, (ii) consumer spending and debt levels,
(iii) the level of support provided by the Company's numerous
providers of goods and services, (iv) inventory imbalances caused
by fluctuations in consumer demand, (v) competition, including
specifically price competition, (vi) cost and availability of
capital and (vii) the success of the Company's Repositioning
strategy.




STATEMENT OF EARNINGS

(dollars in thousands, except per share)
                                                  FISCAL YEAR ENDED

                                     January 25,     January 27,     January 28,
                                        1997            1996            1995
Net sales                            $1,485,759      $1,928,808      $2,017,283

Cost and expenses:
  Cost of merchandise sold            1,165,325       1,478,946       1,525,691
  Selling, general, administrative 
    and other expenses                  387,173         465,377         434,598
  Net interest expense:
    Interest expense                     28,724          18,394          11,309
    Interest income                      (1,148)         (2,168)         (1,395)
    Net interest expense                 27,576          16,226           9,914

Earnings (loss) before income 
  taxes                                 (94,315)        (31,741)         47,080
Provision (benefit) for 
  income taxes                          (35,837)        (11,886)         18,367

NET EARNINGS (LOSS)                     (58,478)        (19,855)         28,713

Dividends on preferred stock              2,500           2,500           2,500

NET EARNINGS (LOSS) AVAILABLE
  TO COMMON SHAREOWNERS              $  (60,978)     $  (22,355)     $   26,213

NET EARNINGS (LOSS)
  PER COMMON SHARE                   $    (3.38)     $    (1.29)     $     1.53

AVERAGE COMMON SHARES
  OUTSTANDING (IN THOUSANDS)             18,025          17,308          17,181




See Accompanying Notes to the Financial Statements.




BALANCE SHEET

(dollars in thousands, except par value)
                                                     January 25,     January 27,
                                                        1997            1996
ASSETS
Current assets:
  Cash and cash equivalents                          $   10,178      $   57,465
  Accounts receivable, net                               14,013          14,290
  Merchandise inventories                               274,393         303,200
  Other current assets                                   19,354          21,409
Total current assets                                    317,938         396,364
Property and equipment, at cost:
  Land                                                   56,254          63,380
  Buildings and improvements                            253,718         260,559
  Furniture, fixtures and equipment                     201,916         186,824
  Property under capital leases                          21,000          21,000
                                                        532,888         531,763
Accumulated depreciation and amortization              (168,977)       (145,212)
Net property and equipment                              363,911         386,551
Other assets, net                                         5,811           5,228

Total assets                                         $  687,660      $  788,143

LIABILITIES AND SHAREOWNERS' INVESTMENT
Current liabilities:
  Current maturities of long-term debt               $    4,371      $    3,905
  Short-term debt                                       105,979         115,000
  Accounts payable                                      124,118         132,806
  Accrued expenses                                       65,282          84,036 
Total current liabilities                               299,750         335,747
Long-term debt                                          179,059         168,529
Other liabilities                                         3,838           3,915
Deferred income taxes                                     4,012          18,440
Deferred investment tax credits                               -              56
Deferred gain on sale/leaseback                          19,070          20,507
Shareowners' investment:
  Common stock, par value $1.00; 50,000,000 shares 
    authorized, 18,286,224 and 17,345,557 
    outstanding for 1996 and 1995, respectively          18,286          17,346
  Preferred stock, par value $1.00; 2,500,000 shares 
    authorized, 76,930 outstanding for 1996 and 1995         77              77
  Contributed capital                                    95,388          90,345
  Retained earnings                                      72,203         133,181
  Deferred Compensation                                  (4,023)              -
  Total shareowners' investment                         181,931         240,949

Total liabilities and shareowners' investment        $  687,660      $  788,143




See Accompanying Notes to Financial Statements


<TABLE>

STATEMENT OF SHAREOWNERS' INVESTMENT

(dollars in thousands, except per share)
<CAPTION>
                                                                                               TOTAL
                       COMMON STOCK     PREFERRED STOCK  CONTRIBUTED  RETAINED   DEFERRED   SHAREOWNERS'
                    SHARES     DOLLARS  SHARES  DOLLARS    CAPITAL    EARNINGS COMPENSATION  INVESTMENT
<S>               <C>         <C>       <C>     <C>       <C>         <C>       <C>           <C>
BALANCE AT
JANUARY 29, 1994  17,083,347  $ 17,083  76,930  $    77   $ 87,174    $143,021          -     $247,355

Net earnings               -         -       -        -          -      28,713          -       28,713
Contribution to
  profit sharing
  plan                41,594        42       -        -        874           -          -          916
Dividends:
  Common stock
  ($0.58 per share)        -         -       -        -          -      (9,982)         -       (9,982)
  Preferred stock
  ($32.50 per share)       -         -       -        -          -      (2,500)         -       (2,500)
Exercise of
  stock options       67,695        68       -        -        524           -          -          592
Distribution of
  spin-off
  incentives          52,429        52       -        -        933           -          -          985
Other                 12,467        13       -        -        247           -          -          260
BALANCE AT
JANUARY 28, 1995  17,257,532  $ 17,258  76,930  $    77   $ 89,752    $159,252          -     $266,339

Net loss                   -         -       -        -          -     (19,855)         -      (19,855)
Dividends:
  Common stock 
  ($0.215 per share)       -         -       -        -          -      (3,716)          -       (3,716)
  Preferred stock 
  ($32.50 per share)       -         -       -        -          -      (2,500)          -       (2,500)
Exercise of 
  stock options        9,438         9       -        -         82           -           -           91
Other                 78,587        79       -        -        511           -           -          590
BALANCE AT 
JANUARY 27, 1996  17,345,557  $ 17,346  76,930  $    77   $ 90,345    $133,181           -     $240,949

Net loss                   -         -       -        -          -     (58,478)          -      (58,478)
Contribution to 
  profit sharing 
  plan               199,985       200       -        -        760           -           -          960
Dividends:
  Preferred stock 
  ($32.50 per share)       -         -       -        -          -      (2,500)          -       (2,500)
Restricted Stock  
  granted to
  employees (net of 
  forfeitures)       755,014       755       -        -      4,239           -  $   (5,446)        (452)
Earned Compensation        -         -       -        -          -           -       1,423        1,423
Other                (14,332)      (15)      -        -         44           -           -           29
BALANCE AT
JANUARY 25, 1997  18,286,224  $ 18,286  76,930  $    77   $ 95,388    $ 72,203  $   (4,023)    $181,931

</TABLE>

<TABLE>

Outstanding common shares are net of shares held in treasury.  Treasury share activity for the last three
years is summarized below:

<CAPTION>
                                                                    1996        1995        1994
<S>                                                                <C>         <C>         <C>
Balance, beginning of year                                            -           -        30,134
Shares acquired                                                    34,115         -           -
Shares distributed:
  Spin-off incentives                                                 -           -       (30,134)
BALANCE, END OF YEAR                                               34,115         -           -  

</TABLE>


See accompanying Notes to Financial Statements








STATEMENT OF CASH FLOWS
(dollars in thousands, except per share)           FISCAL YEAR ENDED

                                     January 25,     January 27,     January 28,
                                        1997            1996            1995
OPERATING ACTIVITIES:
  Net earnings (loss)                $  (58,478)     $  (19,855)     $   28,713
  Expenses not requiring the 
    outlay of cash:
    Depreciation and amortization        32,512          31,165          27,771
    Deferred income tax and ITC         (14,484)         (1,006)          4,741
    Other                                 2,099           5,593             845
  Working capital and other               5,801         (97,467)          6,328
                                        (32,550)        (81,570)         68,398
INVESTING ACTIVITIES:
  Capital expenditures                  (18,797)        (61,300)        (83,332)
  Proceeds from sale of assets            6,229               -               -
  Other                                     776           1,254             473
                                        (11,792)        (60,046)        (82,859)
FINANCING ACTIVITIES (see note below):
  Short-term borrowings (payments)       (9,021)        115,000               -
  Proceeds from sale/leaseback           15,000          25,000               -
  Additions to long-term debt                 -               -          56,000
  Repayments of long-term debt           (4,004)         (8,347)         (3,438)
  Financing costs                        (2,314)           (411)           (824)
  Dividends                              (2,500)         (6,216)        (12,482)
  Proceeds from stock options 
    and spin-off incentives                  -              681           1,837
  Other                                    (106)              -               -
                                         (2,945)        125,707          41,093
Change in cash and cash equivalents     (47,287)        (15,909)         26,632
Cash and cash equivalents, 
  beginning of year                      57,465          73,374          46,742
Cash and cash equivalents,
  end of year                        $   10,178      $   57,465      $   73,374

WORKING CAPITAL AND OTHER CHANGES:
  Accounts receivable, net           $      277      $   (2,987)     $   (2,912)
  Merchandise inventories                28,807           8,827         (28,905)
  Other current assets                    2,055          (6,988)          1,412
  Accounts payable                       (8,687)        (96,017)         33,389
  Accrued expenses                      (16,531)         11,139           9,750
  Income taxes payable                        -         (11,057)         (5,133)
Total working capital change              5,921         (97,083)          7,601
Other                                      (120)           (384)         (1,273)
Total working capital and other      $    5,801      $  (97,467)     $    6,328

Cash paid (received) during the year:
  Interest                           $   27,667      $   18,803      $   11,450
  Income taxes                          (26,322)          9,248          17,047

Non-cash financing activities during 1996 and 1994 included contributions by the
Company of its common stock to the Venture Profit Sharing Plan, which
represented the 1995 and 1993 Company contributions, respectively.  The 1995
contribution consisted of 199,985 shares of common stock with an average market
price of $4.80 per share.  The 1993 contribution consisted of 41,594 shares of
common stock with an average market price of $22.02 per share.  During 1996, the
Company granted 862,514 shares of restricted stock with a weighted average fair
value of $7 per share.  $1,423 was charged to expense in 1996 related to
restricted stock.




See Accompanying Notes to the Financial Statements.




NOTES TO FINANCIAL STATEMENTS
(dollars in thousands, except per share)

1. Description of Business and Summary of Significant Accounting  
   Policies

     Description of Business  Venture Stores, Inc. (the
"Company"), was incorporated in Delaware in 1969 as a wholly
owned name-holding subsidiary of The May Department Stores
Company ("May").  The Venture discount retail store business
operated as a division of May from its inception in 1970.  In the
fall of 1989, in anticipation of its divestiture of the Venture
discount retail store business, May transferred the assets and
liabilities of the business to the Company.  On October 11, 1989,
May announced its intent to distribute the Company's outstanding
shares of common stock to May's common shareowners (the
"spin-off").  May completed the spin-off of the Company on
November 3, 1990.
     The Company operates family value stores focusing on quality
home, family and leisure merchandise located in nine Midwestern
and Southwestern states. 
     Use of Estimates  The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from
those estimates.
     Fiscal Year  The Company's fiscal year ends on the last
Saturday in January.  Fiscal years 1996, 1995 and 1994 ended on
January 25, 1997, January 27, 1996, and January 28, 1995,
respectively.  Each of these fiscal years included 52 weeks. 
References to years relate to fiscal years rather than calendar
years.
     Cash and Cash Equivalents  The Company considers all highly
liquid investments with an original maturity of three months or
less when purchased to be cash equivalents.  The carrying amount
of cash and cash equivalents approximates its fair value at
January 25, 1997, and January 27, 1996, because of the short
maturity of these instruments.
     Merchandise Inventories  Merchandise inventories are valued
at the lower of cost or market as determined primarily by the
retail inventory method and are stated on the LIFO (last-in,
first-out) cost basis.  The accumulated LIFO reserves were
$20,207 and $16,855 as of January 25, 1997, and January 27, 1996,
respectively.
     Property and Equipment  Property and equipment are recorded
at cost and include expenditures for new facilities and
expenditures that substantially increase the useful lives of
existing facilities.
     Depreciation is provided on a straight-line basis over the
estimated useful lives of the assets.  Property under capital
leases and leasehold improvements are depreciated over the
shorter of their economic lives or the related lease terms.
     Interest expense related to the construction of property and
equipment is capitalized so that net interest expense will
properly reflect that portion related to current operations.  The
capitalized interest is included as part of the cost of the
related asset and is amortized over its estimated useful life. 
Capitalized interest costs were $143, $1,020 and $1,790 in 1996,
1995 and 1994, respectively.
     Deferred Gain on Sale/Leaseback  The gain on sale/leaseback
resulted from the Company's selling and subsequently leasing back
29 of its stores and two distribution center facilities in 1990
and is being amortized on a straight-line basis over the life of
the lease.
     Net Sales  Net sales include sales of merchandise, services
and certain leased departments. Sales are net of returns and
exclude sales tax.  Leased department sales were $1,364, $2,810
and $3,969 in 1996, 1995 and 1994, respectively.
     Cost and Expenses  Selling, general, administrative and
other expenses include, among other items, buying, store
occupancy and warehousing costs.
     Preopening Expenses  Expenses associated with the opening of
new stores are expensed during the year they are incurred.
     Advertising  Advertising costs are expensed at the time the
advertising takes place. 
     Income Taxes  Income taxes are accounted for using the
liability method prescribed by Statement of Financial Accounting
Standards (SFAS) No. 109, "Accounting for Income Taxes."  The
liability method accounts for deferred income taxes by applying
statutory tax rates in effect at the date of the balance sheet to
differences between the book and tax basis of assets and
liabilities.  Adjustments to deferred taxes resulting from
statutory rate changes flow through the tax provision in the year
of the change.  Investment Tax Credits (ITC) had been deferred
and were amortized over the depreciable life of the property.
     Stock-Based Compensation  The Company measures compensation
expense for its stock-based employee compensation plans using the
intrinsic value method prescribed by APB Opinion No. 25,
"Accounting for Stock Issued to Employees."  This method measures
compensation cost as the excess, if any, of the stock's market
value at the time of grant over the amount the employee is
required to pay.
     Net Earnings (Loss)per Common Share  Net earnings (loss) per
common share are computed by dividing net earnings (loss), after
deducting preferred dividend requirements, by the weighted
average number of common shares outstanding.  There was no
material effect on net earnings (loss) per common share due to
common stock equivalents during the years presented. 
     Reclassifications  Certain reclassifications have been made
to the prior years' financial statements to conform to the
current year presentation.

2.  Repositioning Program and Other Nonrecurring Items

     During 1995, the Company announced plans to transform
Venture from a discount general merchandise chain to a
value-oriented family store, the "Repositioning".  The
Repositioning is designed to improve gross margin.  Phase one of
the Repositioning, which was completed in early March of 1996,
resulted in the reconfiguration of the store interiors and the
expansion of various merchandise assortments in order for the
Company to become a more dominant retailer in the home, family
apparel and leisure merchandise categories.  The reconfiguration
provides for destination shops showcasing category-dominant lines
with additional floor space, distinctive fixtures, graphics, and
displays.  In this process, the Company downsized or eliminated
certain merchandise categories with historically lower than
average margins and replaced this with merchandise categories
with higher initial mark-ups.
     The Company continued to adjust its family value store
concept and merchandise mix in 1996 with phase two of the
Repositioning, which was completed in October 1996.  Phase two
included expanding the gift department, further expansion of new
fixturing in domestics, introduction of a bath and body shop,
expansion of the luggage department, debut of a women's
coordinates fashion line, and introduction of convenience
automotive accessories.  Phase three of the Repositioning, which
is being rolled out in 1997, includes opening or expanding 14
more departments, expansion of opening price point items and the
intensification of the everyday low pricing strategy.  The
Company intends to continue to evaluate its merchandise
assortments throughout 1997.
     The success of the Company's Repositioning and its effect on
future operations is dependent upon numerous factors including
customer acceptance of the new store format and merchandising
strategy, the level of support provided by the Company's numerous
providers of goods and services, cost and availability of
capital, and competition, including specifically price
competition.  
     The Company's 1996, 1995 and 1994 net earnings were
adversely affected by nonrecurring charges, which are included in
cost of goods sold and in selling, general, administrative and
other expenses.
     1996 net earnings included nonrecurring pre-tax charges of
$50,040, or $1.72 per share.  Included in these charges, which
were recorded in the fourth quarter, is approximately $42,820 for
additional markdowns, advertising and other costs incurred to
liquidate excess inventory and adjust merchandise assortments for
the implementation of phase three of the Repositioning. 
Nonrecurring charges in 1996 also included approximately $6,100
associated with three stores that the Company has determined will
not reopen, $615 for severance costs for the elimination of 67
positions at year-end 1996 as a corporate overhead reduction
initiative, and approximately $505 related to other costs.
     1995 net earnings included nonrecurring pre-tax charges of
$45,692, or $1.65 per share.  The total cost of phase one of the
Repositioning was approximately $42,400, of which approximately
$26,000 consisted of property and equipment that was capitalized
and approximately $16,400 of nonrecurring expense which is
included in the Company's results of operations for the fiscal
year ended January 27, 1996.
     The first quarter of 1995 also included $3,600 of
nonrecurring charges to complete the image builder program, which
began in the fourth quarter of 1994.  This program was designed
to materially broaden the assortments of certain key merchandise
categories within housewares and domestics, while de-emphasizing
and reducing merchandise assortments in less productive
categories, including automotive and hardware.
     In addition to refocusing its merchandising strategy, during
1995 the Company took other actions to improve profitability. 
First, the Company reduced its workforce by approximately 950
positions in the second quarter of 1995.  In the first quarter of
1996, the Company announced an additional realignment of its
store organization, which included the elimination of 390
positions.  Included in the nonrecurring charges in 1995 is
approximately $6,900 related to the reduction in the workforce
during 1995 and the first quarter of 1996.  Second, the Company
closed three unprofitable stores.  As a result of these store
closings, the Company recorded reserves of approximately $8,600,
which is included in nonrecurring charges in 1995.  Third, prior
to year end 1995, the Company announced it would close ten stores
in various markets in the first quarter of 1996.  Of these ten
stores, seven were reopened during 1996.  Nonrecurring charges in
1995 included approximately $4,100 related to the closing of
these locations.  Nonrecurring charges in 1995 also included
approximately $2,000 for costs associated with cancelled 1996
store openings, $1,600 related to financing activities and $2,500
for other actions taken by management during the year.
     During 1995, the Company recorded pre-tax benefits of
$4,000, or $0.14 per share, related to real estate transactions,
primarily the reversal of recorded reserves on a closed store due
to the property being subleased, and $3,800, or $0.14 per share,
on the curtailment of the Company's defined benefit pension plan
as discussed in Note 11. These gains are included in selling,
general, administrative and other expenses.
     1994 net earnings included a $2,586 pre-tax charge, or $0.09
per share, related to the cost of asbestos abatement in one store
and a $3,000 pre-tax charge, or $0.11 per share, related to the
image builder program.

3.  Environmental Costs

     In October 1989, the Company recorded a pre-tax charge of
$7,700 for spin-off related environmental testing and cleanup
costs associated with property that was subject to sale/leaseback
or mortgage financing.
     The reserves for environmental costs were $2,774 at January
25, 1997, and $3,042 at January 27, 1996, including $2,374 and
$2,342, respectively, classified as other long-term liabilities
on the balance sheet.

4.  Relationship with May

     Until the end of January 1995, the Company had an agreement
with May's Famous-Barr department store company whereby
Famous-Barr credit cards were accepted as third-party credit
cards at the Company's stores.  This agreement was subject to a
prescribed reduction in the Company's use of the Famous-Barr
credit card on a store-by-store basis that began in October 1993. 
Total sales on Famous-Barr credit cards were $48,384 for 1994, and
were 7.5% of total third-party credit sales for that year. The
related accounts receivable were owned and serviced by
Famous-Barr, and the Company had no exposure for uncollected
accounts.

5.  Taxes

     The provision (benefit) for income taxes for the last three
years were:
                                       1996      1995      1994
Current:
Federal                             $(25,031) $ (9,812) $ 10,287
State and local                           27    (2,153)    1,909
Taxes currently payable (receivable) (25,004)  (11,965)   12,196

Deferred:
Federal                               (8,438)      275     5,570
State and local                       (2,339)       58     1,057
Deferred taxes                       (10,777)      333     6,627
Amortization of ITC                      (56)     (254)     (456)
Total provision (benefit)
  for income taxes                  $(35,837) $(11,886) $ 18,367


     The differences between the statutory federal income tax
rates and the effective income tax rates for the last three years
were:
                                       1996      1995      1994
Statutory federal income tax rate      35.0%     35.0%     35.0%
State and local income taxes, 
  net of federal tax benefit            3.3       4.3       4.1
Other, net                             (0.4)     (2.7)      0.9
Deferred ITC amortization                .1       0.8      (1.0)
Effective income tax rate              38.0%     37.4%     39.0%


     The provisions for deferred income taxes consisted of:
                                       1996      1995      1994
Spin-off incentives and 
  environmental costs               $    105  $    513  $    390
Accrued liabilities                    4,693    (5,992)     (949)
Inventory                             (1,254)    1,491     2,098
Gain on sale/leaseback                   603       582       754
Depreciation                           2,927     3,452     5,815
NOL carryforward                     (12,348)        -         -
AMT credit carryforward               (3,257)        -         -
Other, net                            (2,246)      287    (1,481)
Total                               $(10,777) $    333  $  6,627


     Deferred tax assets were:
                                      January 25,     January 27,
                                         1997            1996
Current                               $   11,007      $   12,882
Noncurrent                                35,481          19,580
Deferred tax assets                   $   46,488      $   32,462


     Deferred tax liabilities were:
                                      January 25,     January 27,
                                         1997            1996
Current                               $   15,969      $   14,390
Noncurrent                                39,493          38,020
Deferred tax liabilities              $   55,462      $   52,410


     The significant deferred tax assets were:
                                      January 25,     January 27,
                                         1997            1996
Merchandise inventories               $    1,391      $    1,639
Property and equipment                     4,775           1,637
Accrued liabilities                       12,746          16,150
Deferred gain on sale/leaseback            8,007           8,722
NOL carryforward                          12,348               -
AMT credit carryforward                    3,257               -
Other                                      3,964           4,314
Deferred tax assets                   $   46,488      $   32,462


     The significant deferred tax liabilities were:
                                      January 25,     January 27,
                                         1997            1996
Merchandise inventories               $   12,153      $   13,443
Property and equipment                    38,409          35,959
Accrued liabilities                        3,366              80
Other                                      1,534           2,928
Deferred tax liabilities              $   55,462      $   52,410


     Taxes other than income taxes consisted of:
                                       1996      1995      1994
Payroll                             $ 14,444  $ 19,673  $ 19,003
Real estate and personal property     23,753    21,889    19,134
Total                               $ 38,197  $ 41,562  $ 38,137

     As of January 25, 1997, the Company had a net operating loss
carryforward of $31,660 which expires in the year 2012 and an
alternative minimum tax credit carryforward of $3,257 which is
available to reduce federal regular income taxes over an
indefinite period.
     In connection with the spin-off, the Company and May entered
into a Tax Sharing Agreement to provide for the payment of taxes
and for the entitlement to tax refunds for periods ending on and
prior to the spin-off date, and to provide for various related
matters.  The Company and May each agreed to indemnify the other
party in specified circumstances, including the possible
occurrence of certain events after the spin-off that might make
the spin-off a taxable transaction.

6.  Accrued Expenses

     The major components of accrued expenses were:
                                      January 25,     January 27,
                                         1997            1996
Real estate and 
  personal property taxes             $   19,489      $   19,399
Insurance reserves                        12,974          16,018
Closed store reserves                      6,518           7,619
Construction in progress                   4,869          19,041
Payroll and benefits                       6,009           8,413
Reserve for environmental costs              400             700
Current deferred income taxes              4,962           1,508
Other                                     10,061          11,338
Total                                 $   65,282      $   84,036

7.  Notes Payable

     On June 28, 1996, the Company terminated its Credit
Agreement with The First National Bank of Chicago, as agent, and
a syndicate of banks and entered into an agreement with
BankAmerica Business Credit, Inc., as agent, and a syndicate of
financial institutions for a secured revolving credit facility
(the "Credit Facility") consisting of revolving credit loans and
letters of credit of up to $225,000 in the aggregate, with a
sublimit of $125,000 for letters of credit.  The Credit Facility
was for a term of three years through June 27, 1999, and was
secured by the inventory, equipment and substantially all other
assets of the Company, excluding leased or mortgaged real estate
and certain personal property under leases.
     The Credit Facility required the Company to meet certain
quarterly covenants, including a fixed charge coverage ratio. 
Under the terms of the Credit Facility, the Company was
prohibited from paying dividends on its common stock.  Interest
on the borrowings was payable based on multiple rate options. 
Additionally, the Company was required to pay certain unused line
fees and letter of credit fees.
     Subsequent to year-end 1996, the Company terminated the
Credit Facility with BankAmerica Business Credit and entered into
an agreement with BT Commercial Corporation for a  secured
revolving credit facility (the "Revolving Credit Facility")
consisting of revolving credit loans and  letters of credit of up
to $250,000 in the aggregate, with a sublimit of $125,000 for
letters of credit.  The Revolving Credit Facility is for a term
of three years, and is secured by the inventory, equipment and
substantially all other assets of the Company, excluding leased
or mortgaged real estate and certain personal property under
leases.  The Revolving Credit Facility requires the Company to
meet certain quarterly financial covenants, including minimum
interest coverage and accounts payable to inventory ratios. 
Under the terms of the Revolving Credit Facility, the Company is
prohibited from paying dividends on its common stock.  Interest
on the borrowings is payable based on multiple rate options. 
Additionally, the Company is required to pay certain unused line
fees and letter of credit fees.   As a result of the termination
of its previous Credit Facility, the Company will record an
extraordinary charge of approximately $3,500, before taxes, in
the first quarter of 1997.  The charge is primarily for the
write-off of unamortized deferred financing costs and the
prepayment penalties.
     During 1995, the Company entered into a Revolving Letter of
Credit Agreement, which expired February 28, 1996, in the amount
of $25,000.
     Short term borrowings for the last three years were:
                                       1996      1995      1994
Short-term borrowings at year-end   $105,979  $115,000         -
Weighted average interest rate on
  short-term borrowings at year-end     7.82%     6.79%        -
Outstanding letters of credit       $ 33,318  $ 56,712  $ 44,200
Average short-term borrowings       $115,176  $ 71,305  $ 37,612
Average interest rate
 on average balance                     7.34%     7.02%     5.47%
Maximum balance outstanding         $195,431  $137,169  $ 88,200

     Unused credit facilities were $12,910 and $28,288 at January
25, 1997, and January 27, 1996, respectively.

8.  Long-Term Debt

     Long-term debt and capital lease obligations were:
                                      January 25,     January 27,
                                         1997            1996
10.19% to 11.87% 
     mortgage notes due 2000          $   65,822      $   67,053
8.77% to 9.32% medium 
     term notes due 1998-2004             56,000          56,000
Industrial revenue bonds due 2006*         9,400           9,400
6.75% revenue bonds due 2009               4,910           4,910
Obligations from sale/leaseback
     transactions                         39,734          24,999
Capital lease obligations                  7,564          10,072
                                         183,430         172,434
Less current maturities                   (4,371)         (3,905)
Total long-term debt                  $  179,059      $  168,529

* This is a variable-rate instrument with interest payable
monthly. The interest rate is adjusted weekly; it was 3.45% and
3.15% per annum as of January 25, 1997, and January 27, 1996,
respectively.

     During 1994, the Company filed a shelf registration
statement with the Securities and Exchange Commission with
respect to the offering from time to time of up to $150,000 of
the Company's medium term notes or other debt or equity
securities. 
     During 1995, the Company entered into a sale/leaseback
transaction for $25,000 involving ten store properties.  During
1996, the Company entered into a sale/leaseback transaction for
$15,000 involving six store properties.  Both of these
transactions were accounted for as financings in accordance with
Statement of Financial Standards No. 98, "Accounting for Leases,"
and the related obligations are included in long-term debt and
current maturities of long-term debt.  The obligations are being
amortized over the lease terms.
     The total annual maturities of long-term debt and capital
leases are $4,371, $8,388, $18,420, $62,589 and $1,260 for 1997-
2001, respectively. 
     The net book value of property and equipment collateralized
under long-term debt, including the sale/leaseback transactions
and capital lease agreements, was $138,882 and $113,920 as of
January 25, 1997, and January 27, 1996, respectively.  Pursuant
to an amendment to the mortgage notes, the Company prepaid $5,000
in November of 1995 and granted security interests in two
additional stores.  In return for this prepayment and additional
security, all financial covenants have been eliminated under the
mortgage notes.
     The fair value of the Company's long-term debt and capital
leases, based on quoted market prices when available or
discounted cash flows, using current interest rates for similar
debt, is estimated to be approximately $148,300 and $151,100 at
January 25, 1997, and January 27, 1996, respectively. The
increase in the spread between the fair value and carrying amount
of long-term debt in 1996 compared with 1995 is due to lower
quoted prices on the medium term notes and higher interest rates.

9.  Lease Obligations

     The Company leased 92 of its family value stores and two of
its distribution centers as of January 25, 1997.  The leases
usually contain renewal options and provide for payment by the
Company of real estate taxes and other expenses and, in certain
instances, increased rentals based on a percentage of sales.

     Rental expense for operating leases consisted of:

                                       1996      1995      1994
Minimum rentals                     $ 36,122  $ 37,592  $ 33,851
Contingent rentals based on
  defined sales volume                     -       566       514
Real property rentals                 36,122    38,158    34,365
Equipment rentals                      2,516     2,240     1,969
Total                               $ 38,638  $ 40,398  $ 36,334

     Sublease revenues from operating leases were $4,998, $6,576
and $4,601 in 1996, 1995 and 1994, respectively, and are not
deducted from the minimum rentals above.  Rental revenues,
including sublease revenues, were $8,308, $11,133, and $7,950 in
1996, 1995 and 1994, respectively, and are included as a
reduction of selling, general, administrative and other expenses
in the statement of earnings.
     Future minimum lease payments under noncancelable leases
(operating leases are net of sublease revenues) as of January 25,
1997, are as follows:
                                        Capital       Operating
                                        Leases         Leases
1997                                  $    3,214      $   33,958
1998                                       3,214          34,307
1999                                       3,214          33,787
2000                                         962          32,080
2001                                         511          30,845
Thereafter                                 1,213         273,692
Total minimum lease payments          $   12,328      $  438,669
Less:
  Imputed interest component               4,764
Present value of net minimum lease 
  payments including current maturities
  of capital leases of $2,705         $    7,564


     The present value of future required payments under
operating leases at January 25, 1997, was $255,553.
     The components of property under capital leases were:
                                      January 25,     January 27,
                                         1997            1996
Cost                                  $   21,000      $   21,000
Accumulated amortization                 (13,525)        (11,540)
Net book value                        $    7,475      $    9,460

     On January 25, 1996 the Company sold ten store properties.
Simultaneously, the Company entered into a 25-year below market
lease of these properties with the new owner.  On January 29,
1996, the Company completed the sale/leaseback of six additional
store properties.  The proceeds of $25,000 in 1995 and $15,000 in
1996 from the sale/leaseback transactions provided additional
cash to meet needs for the Company's Repositioning and for other
corporate purposes.  Future minimum lease payments and minimum
sublease revenues as of January 25, 1997 under the sale/leaseback
transactions completed in 1996 and 1995 are as follows:

                                         Lease        Sublease
                                       Payments       Revenues
1997                                  $    5,100      $     90
1998                                       5,100      $     91
1999                                       5,100      $     91
2000                                       5,100      $     91
2001                                       5,100      $     91
Thereafter                                96,900      $    950
Total minimum lease payments          $  122,400      $  1,404
Less: 
  Imputed interest component              82,666
Present value of minimum lease 
  payments including current 
  maturities of obligation from 
  sale/leaseback of $298              $   39,734

10.  Common and Preferred Stock

     As of January 25, 1997, 50,000,000 shares of $1 par value
common stock were authorized, with 18,320,339 issued and
18,286,224 outstanding. There were 50,000,000 shares authorized,
with 17,345,557 issued and outstanding as of January 27, 1996. 
There were 34,115 and 0 shares held in treasury as of January 25,
1997, and January 27, 1996, respectively.
     During May 1992, the Company completed a public offering of
769,300 Depositary Shares, each representing one-tenth of a share
of Cumulative Convertible Preferred Stock.  The offering was
priced at $50 per Depositary Share, with an annual dividend rate
of $3.25 per Depositary Share.  The Cumulative Convertible
Preferred Stock is convertible at the option of the holder into
the common stock of the Company at an initial conversion price of
$38 per common share.
     The Company has 2,500,000 shares of $1 par value preferred
stock authorized, with 76,930 Cumulative Convertible shares
issued and outstanding as of January 25, 1997, and January 27,
1996.

11.  Retirement and Profit Sharing

     Effective January 1, 1990, the Company adopted the Venture
Stores, Inc., Retirement Plan ("Venture Retirement Plan") and the
Venture Stores, Inc., Supplementary Retirement Plan ("Venture
Supplementary Plan").  The Venture Retirement Plan is a defined
benefit pension plan that covers substantially all associates of
the Company who are at least 21 years of age, have completed one
year of employment and are paid for 1,000 or more hours in a
year.  The Venture Retirement Plan is noncontributory and
benefits are based upon years of credited service, amount of pay
and covered compensation. Effective January 1, 1996, the Venture
Retirement Plan was amended to suspend benefit accruals.  Under
the amendment, service continues to be credited for purposes of
determining eligibility to participate and vested status.  In the
fourth quarter of 1995, the Company recorded a $3,827 gain,
included in selling, general, administrative and other expenses,
related to the curtailment of the Venture Retirement Plan.  The
Venture Supplementary Plan is a noncontributory and unfunded plan
that covers associates whose compensation in any year equaled or
exceeded twice the Social Security wage base in that year.  Both
plans operate on a calendar year.  Pension expense for both plans
is based on information provided by an outside actuarial firm,
which uses assumptions to estimate the total benefits ultimately
payable to associates and then allocates this cost to service
periods.
     The Venture Retirement Plan is funded with at least the
minimum but no more than the maximum funding that is required
under ERISA (Employee Retirement Income Security Act of 1974).
     The following tables summarize the funded status of the
plans, components of pension expense and actuarial assumptions as
of December 31 of each year.
     Funded Status of the Venture Retirement Plan:
                                       1996      1995      1994
Actuarial Present Value of 
  Benefit Obligations: 
    Vested benefit obligation       $(15,016) $(19,764) $(12,925)
    Nonvested benefit obligation        (959)   (1,444)   (4,251)
Accumulated benefit 
  obligation (ABO)                   (15,975)  (21,208)  (17,176)
  Estimated effect of future
    salary increases                       0         0    (4,844)
Projected benefit obligation (PBO)   (15,975)  (21,208)  (22,020)

Plan assets at fair value (primarily 
  equity and fixed-income securities) 19,653    21,461    19,666
Excess of plan assets over PBO         3,678       253    (2,354)
Unrecognized net (gain) loss          (1,669)        0     1,363
Unrecognized prior service cost            0         0      (256)
Prepaid(accrued) pension cost       $  2,009  $    253  $ (1,247)

     Status of the Venture Supplementary Plan:
                                       1996      1995      1994
Actuarial Present Value of 
  Benefit Obligations: 
    Vested benefit obligation       $ (1,322) $ (1,423) $   (634)
    Nonvested benefit obligation        (155)     (530)      (26)
Accumulated benefit 
  obligation (ABO)                    (1,477)   (1,953)     (660)
  Estimated effect of future
    salary increases                    (443)   (1,516)     (564)
Projected benefit obligation (PBO)    (1,920)   (3,469)   (1,224)
Plan assets at fair value                  0         0         0
Excess of PBO over plan assets        (1,920)   (3,469)   (1,224)
Unrecognized net (gain) loss          (1,278)      328      (861)
Unrecognized prior service cost          999     1,070       260
Unrecognized obligation                  193       241       290
Accrued pension cost                $ (2,006) $ (1,830) $ (1,535)

     Components of Pension Expense: 
                                       1996      1995      1994
Service cost                        $    388  $  2,519  $  2,857
Interest on PBO                        1,544     1,805     1,746
Actual return on assets               (2,446)   (4,874)      374
Net amortization and deferral            899     3,404    (1,750)
Total                               $    385  $  2,854  $  3,227
 
     Actuarial Assumptions: 
                                       1996      1995      1994
Discount rate                          7.50%     7.00%     8.00%
Expected return on plan assets         8.00%     8.00%     8.00%
Salary increase                        5.00%     5.00%     5.00%

     Effective January 1, 1990, the Company adopted the Venture
Stores, Inc., Profit Sharing Plan ("Venture Profit Sharing
Plan").  The plan operates on a calendar year.  Associates
eligible for the Venture Retirement Plan are also eligible to
participate in the Venture Profit Sharing Plan. The employer
matching rate is variable and discretionary.  Effective January
1, 1996, the Company matches 0% to 100% of each associate's
contributions up to 5% of pay.  Prior to January 1, 1996, the
Company matched 25% to 75% of each associate's contribution up to
5% of pay.  Prior to January 1, 1996, the Company matched 25% to
75 % of each associate's contribution up to 5% of pay.  The
matching rate was 0%, 25% and 25% in 1996, 1995 and 1994,
respectively.  The Company's matching contributions charged to
expense were $1,151 and $1,003 in 1995 and 1994, respectively.
     As of January 25, 1997, and January 27, 1996, there were no
significant postretirement benefits other than pensions.

12.  Stock-Based Compensation Plans 

     The Company has a stock option plan (the "Stock Option
Plan") that authorizes the granting of options to purchase common
stock to management associates of the Company.  The Stock Option
Plan provides for the granting of options to purchase not more
than 800,000 shares of common stock.  The options are granted at
the market price on the date of grant, have a maximum term of 10
years, may be exercised in installments only after stated
intervals of time and are conditioned upon continued active
employment with the Company, except for periods following
retirement, disability or death.  Beginning in June 1993, the
Company stopped granting any additional options under this plan.
     The Company also established a plan (the "Stock Appreciation
Rights Plan") under which stock appreciation rights can be
granted in connection with options granted under the Stock Option
Plan.  The aggregate number of shares of common stock as to which
rights may be exercised shall not exceed 270,000 shares.  The
rights may be exercised only upon surrender of the related
options.  There were no rights outstanding as of January 25,
1997, nor January 27, 1996.
     In May 1993, the shareowners approved a long-term
performance plan (the "1992 LTPP") under which awards may be
granted to associates of the Company.  In May 1996, the
shareowners approved an amendment to the 1992 LTPP to allow for
implementation of a restricted stock program for key executives. 
Under the 1992 LTPP, incentive stock options, nonqualified stock
options, stock appreciation rights, restricted stock and
performance awards may be granted.  A maximum of 1.5 million
shares of common stock may be issued under the 1992 LTPP, as
amended.  Options granted under the plan will be granted at the
market price on the date of grant, have a maximum term of 10
years, may be exercised in installments after stated intervals of
time and are conditioned upon continued active employment with
the Company, except for periods following retirement, disability
or death.  Restricted stock grants may be issued at a purchase
price less than market price on the date of grant, or as a bonus,
and may be subject to restrictions, conditions, terms and/or
performance goals such as return on net assets, earnings per
share, share price change, return on equity, free cash flow per
share and operating earnings.  The market price in excess of the
purchase price of restricted stock is charged to income ratably
over the period during which the restrictions lapse.  The Company
granted 862,514 shares, 70,000 shares and 15,000 shares of
restricted stock under the 1992 LTPP in 1996, 1995 and 1994,
respectively, and cancelled 107,500, 3,333 and 3,333 shares in
1996, 1995 and 1994, respectively.  The weighted average fair
value of restricted stock granted was $7, $8 and $20, in 1996,
1995 and 1994, respectively.  
     The Company accounts for these stock-based compensation
plans under APB Opinion No. 25, "Accounting for Stock Issued to
Employees."  Accordingly, no compensation cost has been
recognized for its stock option plans.  The compensation cost
that has been charged against income for restricted stock  was
$1,423, $106 and $62 for 1996, 1995 and 1994, respectively. 
     Had compensation cost for the Company's stock-based
compensation plans been determined based on the fair value at the
grant dates for awards under these plans consistent with the
method of FASB Statement No. 123, "Accounting for Stock-Based
Compensation", the Company's net earnings and net earnings per
common share would approximate the pro forma amounts indicated
below:

                                         1996            1995
Net Earnings (Loss)     As Reported   $ (58,478)      $ (19,855)
                        Pro Forma     $ (58,782)      $ (20,332)

Net Earnings (Loss)     As Reported   $   (3.38)      $   (1.29)
  Per Common Share      Pro Forma     $   (3.40)      $   (1.32)


     Because the Statement 123 method of accounting has not been
applied to options granted prior to January 29, 1995, the
resulting pro forma compensation cost may not be representative
of that to be expected in future years.
     The following table sets forth the share option activity for
the last three years.  The options expire between five and 10
years from the date of grant.

(shares in thousands)   1996           1995           1994
                          Wtd. Avg.      Wtd. Avg.      Wtd. Avg.
                          Exercise       Exercise       Exercise
                   Shares   Price  Shares  Price  Shares  Price
Outstanding at
  beginning of year   900     $13     573    $19     493    $12
Granted                47     $ 7     608    $ 7     214    $22
Exercised               -       -      (9)   $ 8     (68)   $ 9
Forfeited            (247)    $13     (87)   $19     (40)   $22
Expired              (124)    $21    (185)   $13     (26)   $20
Outstanding at
  end of year         576     $10     900    $13     573    $19
Exercisable at
  end of year         205     $15     145    $24     230    $15
Weighted average
  fair value of
  options granted             $ 4            $ 4

     The options outstanding at January 25, 1997 have exercise
prices between $3 and $31, with a weighted average remaining
contractual life of 7 years.
     The fair value of each option grant is estimated on the date
of grant using the Black-Scholes option pricing model with the
following assumptions used for grants in 1996 and 1995:  weighted
average risk-free interest rate of 6.2 and 6.3 percent for 1996
and 1995, respectively; expected dividend yield of 0 percent;
expected life of 4 years for options with a contractual term of 
5 years, and 6 years for options with a contractual term of 10
years; expected volatility of 60 percent.

13. Shareowner Rights Plan

     On September 25, 1990, the Company adopted a Shareowner
Rights Plan ("Rights Plan").  One Right is attached to each
outstanding share of the Company's common stock.  The Rights
become exercisable only under certain circumstances involving a
substantial purchase or tender offer for the Company's common
stock by a person or group.  The Rights will expire at the close
of business on September 25, 2000, unless previously redeemed by
the Company.
     When exercisable, each Right entitles the owner to purchase
from the Company one one-hundredth of a share of Junior
Participating Preferred Stock, par value $1.00 per share ("Rights
Plan Preferred Stock"), for $60.00, subject to adjustment to
prevent dilution.  Because of the nature of the Rights Plan
Preferred Stock's dividend, liquidation and voting rights, the
value of one one-hundredth of a share should approximate the
value of one share of common stock.
     If the required conditions related to substantial purchase
or tender offer for the Company's common stock are met, each
holder of a Right (other than an "Acquiring Person" or an
"Adverse Person") will have the right to receive, upon exercise
at the then-current exercise price, common stock of the Company
or acquiring company having a value equal to two times the
exercise price of the Right.
     Until a Right is exercised, the holder, as such, will have
no rights as a shareowner of the Company.  The Rights have
certain anti-takeover effects, because the Rights will cause
substantial dilution to a person or group that acquires a
substantial interest in the Company without the prior approval of
the Board of Directors.

14.  Pending Litigation

     The Company is a party to a number of legal proceedings
arising in the ordinary course of business.  While the outcome of
these legal proceedings cannot be predicted with certainty,
management does not expect these matters to have a material
adverse effect on the Company's financial position or results of
operations.

15.  Long-Lived Assets

     In March 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards (SFAS) No.121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of."  This standard requires
that long-lived assets, certain intangibles and goodwill related
to those assets to be held and used, be reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.  This standard also
requires that long-lived assets and certain identifiable
intangibles to be disposed of be reported at the lower of
carrying amount or fair value less cost to sell.  The Company
adopted this Statement in fiscal 1996 and determined that no
impairment loss needs to be recognized.

16.  Quarterly Results (unaudited)

     Summarized below are the quarterly results for the last two
years.

                                                      Net (Loss)
                                                       Earnings
                      Cost of       Net    Earnings  Available to
            Net     Merchandise  Earnings   (Loss)      Common
           Sales       Sold       (Loss)   per share  Shareowners
1996
First   $  351,240  $  260,336   $  1,737   $ 0.06     $  1,112 
Second     329,423     246,218     (3,810)   (0.24)      (4,435)
Third      330,233     246,506     (9,203)   (0.54)      (9,828)
Fourth     474,863     412,265    (47,202)   (2.62)(1)  (47,827)
Year    $1,485,759  $1,165,325   $(58,478)  $(3.38)    $(60,978)

1995
First   $  440,916  $  332,047   $ (3,192)  $(0.22)    $ (3,817)
Second     456,830     348,629    (17,341)   (1.04)     (17,966)
Third      444,612     345,460    (12,580)   (0.76)     (13,205)
Fourth     586,450     452,810     13,258     0.73(2)    12,633
Year    $1,928,808  $1,478,946   $(19,855)  $(1.29)    $(22,355)

(1) Fully diluted and primary loss common share in the fourth
quarter of 1996 were $2.62.
(2) Fully diluted and primary earnings per common share in the
fourth quarter of 1995 were $0.72 and $0.73, respectively.

     The estimated full-year LIFO provision is adjusted
periodically based on changes in estimates of certain variables. 
Therefore, the provisions that are reported each quarter may not
necessarily be representative of the actual full-year provision. 
The following table shows what the pro-forma per share impact of
the LIFO charge (credit) would have been had the final variables
been known at the beginning of the year.

                                   1996             1995(1)
                              Pro        As      Pro        As
Quarter                      Forma    Reported  Forma    Reported
First                       $ 0.03    $ 0.02   $(0.04)   $ 0.02
Second                        0.03     (0.02)   (0.05)     0.01
Third                         0.03      0.02    (0.05)     0.02
Fourth                        0.03      0.10    (0.06)    (0.25)
Total                       $ 0.12    $ 0.12   $(0.20)   $(0.20)

(1) Excludes $0.15 per share LIFO credit in the fourth quarter of
1995 related to the reduction of certain LIFO inventories in
connection with the Repositioning.




Report of Independent Public Accountants

To Venture Stores, Inc.:

     We have audited the accompanying balance sheet of Venture
Stores, Inc. (a Delaware corporation), as of January 25, 1997,
and January 27, 1996, and the related statements of earnings,
shareowners' investment and cash flows for each of the three
fiscal years in the period ended January 25, 1997.  These
financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.
     We conducted our audits in accordance with generally
accepted auditing standards.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our
opinion.
     In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Venture Stores, Inc., as of January 25, 1997, and January 27,
1996, and the results of its operations and its cash flows for
each of the three fiscal years in the period ended January 25,
1997, in conformity with generally accepted accounting
principles.


/s/ Arthur Andersen LLP

St. Louis, Missouri
March 27, 1997

FIVE-YEAR SUMMARY
                                      1996     1995     1994     1993     1992
Income Statement Data: (in millions)
  Net sales                         $ 1,486  $ 1,929  $ 2,017  $ 1,863  $ 1,718
  Gross margin (FIFO)                   324      440      489      472      458
  LIFO                                  3.4     (9.6)    (2.9)     0.5     (1.7)
  Selling, general, administrative
     and other expenses                 387      465      435      391      373
  Nonrecurring charges (1)             50.0     45.7      5.6       -        -
  Operating income (loss)               (67)     (16)      57       80       87
  Net interest expense                   28       16       10        8        8
  Pre-tax earnings (loss)(2)            (44)      14       53       72       80
  Net earnings (loss) (3)               (58)     (20)      29       44       49

Per Share Data:
  Earnings (loss) per common share before 
    extraordinary item and cumulative 
    effect of accounting change       (3.38)   (1.29)   1.53     2.43      2.82
  Extraordinary item and cumulative 
    effect of accounting change 
    per common share                      -        -       -     0.61     (0.13)
  Earnings (loss) per common share    (3.38)   (1.29)   1.53     3.04      2.69
  Dividends per common share              -     0.215   0.580    0.575     0.555

Balance Sheet Data: (in millions)
  Working capital(4)                     18       61       95       75       93
  Total assets                          688      788      779      669      595
  Long-term debt                        179      169      153      100       92
  Shareowners' investment               182      241      266      247      202
  Debt to Total Capital (including 
    present value of operating leases)   73%      66%      58%      55%      58%

Selected Statistical Information: 
(dollars in millions, except sales per square foot)
  Total sales increase (decrease)     (23.0)%   (4.4)%     8.3%     8.4%   12.7%
  Comparable store sales 
    increase (decrease)               (20.2)%   (9.4)%     0.0%     0.4%    3.8%
  Sales per square foot             $   133   $  168    $  188   $  191   $ 189
  Total retail square footage 
    (in millions)                      11.2     11.5      10.7      9.8     9.1
  Capital expenditures              $    19   $   61    $   83   $   97   $  79
  Depreciation and amortization          33       31        28       23      19
  Rent                                   39       40        36       35      34
  Present value of operating leases     256      262       261      250     240
  Average shares outstanding 
    (in thousands)                   18,025   17,308    17,181   17,020  16,856
  Stores open at year-end               113      115       113      104      93

(1)  Nonrecurring charges: Store closings, expense reduction and repositioning
programs ($50.0 million) in 1996; Store closings, expense reduction and
repositioning programs ($45.7 million) in 1995; Asbestos ($2.6 million) and
remerchandising program ($3.0 million) in 1994.
(2)  Before nonrecurring charges of $50.0 million in 1996, $45.7 million in 1995
and $5.6 million in 1994.
(3)  Before cumulative effect of accounting change in 1993 ($10.3 million) and
extraordinary item in 1992 ($2.2 million after-tax charge).
(4)  Working capital is defined as current assets less current liabilities.




BOARD OF DIRECTORS

Robert N. Wildrick

Chairman, President and Chief Executive Officer
of Venture Stores, Inc. 

Background: Chairman of Venture Stores, 1996-Present; President 
and CEO, 1995-Present; Corporate Executive Vice President for 
Merchandising and Sales Promotion and Chief Merchandising Officer
of Belk Stores Services, Inc. ("Belk"), 1991-1995; Other Belk
positions: Corporate Senior Vice President, 1982-1991; Vice
President, General Manager Corporate Buying Office, 1980-
1982; Corporate Vice President and General Merchandise Manager, 
1977-1980; Group Vice President Merchandise Sales and Promotion, 
1974-1977; Various management positions at Sanger-Harris 
Department Stores, 1970-1974; Various management positions at 
Bamberger Department Stores, 1968-1970.


James H. Ferstl 

Executive Vice President, Chief Merchandising Officer
of Venture Stores, Inc.

Background: Executive Vice President and Chief Merchandising 
Officer for Venture Stores, 1996-Present; Executive Vice
President of Product Development and Marketing, 1995-1996;
Corporate Vice President and General Merchandise Manager of
Gottschalks Department Stores, Inc., 1987-1995; Senior Vice
President/General Manager of Platt Music Corporation, 
1984-1987; Executive Vice President of Broadway Southwest
Department Stores, 1981-1984; Regional Vice President of
Sanger-Harris Department Stores, 1965-1981.


Robert L. Berra (1,2)

Retired

Background: Senior Vice President-Administration of 
Monsanto Company, 1980-1989; Vice President-Personnel, 1974-
1980; Corporate Vice President-Personnel and Public Relations at 
Foremost McKesson, Inc., 1970-1974; Adjunct faculty member, 
Washington University and University of Illinois.


Kimberly A. Delsing (1,2)

President and Chief Executive Officer
of The Delsing Group
(Concept and brand development for the skincare, beauty and
fashion industry)

Background: President and CEO of The Delsing Group, 1997-Present;
President and CEO of H20 Plus, 1996-1997; Chairman of Unilever
Prestige Personal Products, 1994-1996; President and CEO of 
Elizabeth Arden, 1994-1996; President and CEO of Calvin Klein
Cosmetics, 1990-1994; Executive Vice President of Calvin Klein 
Cosmetics, 1986-1990; Vice President of Sales at Calvin Klein
Cosmetics, 1983-1986;  Field Sales Manager of Warner Cosmetics, 
1979-1983.


Timothy F. Finley (1,3) 
Chairman and Chief Executive Officer 
of Jos. A. Bank Clothiers, Inc.

Background: Chairman and CEO of Jos. A. Bank Clothiers,
1990-Present; Chairman of the Finley 
Group, 1985-Present; President of Fred's, Inc., 1989-1990;
Executive Vice President of Cannon Mills Company, 1981-1985;
Partner with Deloitte, Haskin & Sells, 1979-1981.


H. Edwin Trusheim (1,3) 

Retired

Background: Chairman of General American Life Insurance 
Company, 1992-1995; Chairman and CEO, 1988-1992; Chairman, 
President and CEO, 1986-1988; President and CEO, 1981-1986; 
President, 1979-1981.


Lawrence J. Young (2,3)

Chairman, President and Chief Executive Officer 
of Angelica Corporation 
(Textile linen supplier and uniform manufacturer and marketer)

Background: Chairman, President and CEO of Angelica, 1990-
present; President and CEO, 1989-1990; President and Chief 
Operating Officer, 1988-1989; Executive Vice President, 1984-
1988; President, Angelica Uniform Group, 1980-1988; Corporate 
Controller, 1972-1985.




Standing Board Committees
(1) Compensation & Development Committee
(2) Nominating Committee
(3) Audit Committee




SHAREOWNER INFORMATION

Management Directory

Robert N. Wildrick*
Chairman, President and 
Chief Executive Officer 

Executive
Vice Presidents

James H. Ferstl* 
Chief Merchandising Officer

Russell E. Solt* 
Finance and Administration

Senior Vice Presidents 

R. Neal Black
Product Development and
Hardlines Merchandise Management

Eugene Caldwell* 
Chief Financial Officer 

Cliff J. Campeau 
Marketing 

Jerry L. DeBoer 
General Merchandise Manager-
Ladies Apparel, Accessories, 
Cosmetics and Shoes

Robert B. Hensley 
Human Resources, Asset Protection,
Distribution, and Administrative Services

Donald W. Mielke 
Director of Stores

Edwin R. Uchtman, Jr. 
General Merchandise Manager-
Mens, Boys, Childrens, Toys, 
Sporting Goods, Juvenile and Luggage


Vice Presidents

James G. Baker, Jr. 
Merchandise Financial Planning

Joe M. Carter
New Business Development

Ken A. Corwin
Stores

Daniel T. Dasinger 
Distribution and Transportation

Gary M. Deutsch 
Treasury and Finance 

Jerome T. Pramik
General Merchandise Manager-
Domestics, Home Decor, 
Electronics, Books, Music and
Lifestyle Furniture

Kent A. Swank 
Facilities Management and 
Real Estate

Mike J. Williams 
Recruitment, Associate Development 
and Benefits

*Executive Officers


Shareowner Information

Corporate Office

Venture Stores, Inc.
2001 E. Terra Lane 
O'Fallon, MO 63366-0110

Annual Meeting Date

Friday, June 20, 1997, 9:30 a.m.
The Stouffer Renaissance Hotel, 
9801 Natural Bridge Road, 
St. Louis, MO 63134

Shareowner Inquiries

Communications concerning 
shareowner records, including 
loss of stock certificates, 
should be directed to our 
transfer agent and registrar:
The Bank of New York 
Shareholder Relations Dept. - 11E
P.O. Box 11258
Church Street Station
New York, NY 10286
(800) 524-4458

Send certificates for transfer 
and address changes to:

Bank of New York
Receive and Deliver Dept. - 11W
P.O. Box 11002
Church Street Station
New York, NY 10286

Internet Address:
http://stkxfer.bankofny.com

Common Stock

Shares of Venture Stores, Inc., 
common stock are listed and 
traded on the New York Stock 
Exchange (trading symbol VEN). 
The stock is quoted as "VentSt"
in the daily newspapers.

Preferred Stock

Depositary shares of Venture 
Stores, Inc., cumulative convertible 
preferred stock are listed and 
traded on the New York Stock 
Exchange (trading symbol VEN-PR). 
The stock is quoted as "VentSt-pf"
in the daily newspapers.

Financial Reports

Copies of the Company's Annual 
Report, Form 10-K annual report 
and Form 10-Q quarterly reports to 
the Securities and Exchange 
Commission are available free of 
charge to shareowners upon request. 
Contact: Venture Stores, Inc.
Investor Relations
Mail Station 260
2001 E. Terra Lane
O'Fallon, MO 63366-0110
(314) 281-6801

Investor Information 

Security analysts, investment 
professionals and shareowners 
should direct their financial 
inquiries to: 
Venture Stores, Inc.
Investor Relations
Mail Station 260
2001 E. Terra Lane
O'Fallon, MO 63366-0110
(314) 281-6801