SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

                                    Form 10-Q


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


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

                 For the quarterly period ended October 28, 2000

                                       OR

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

For the transition period from  -------------  to -------------



                         Commission File Number 0-19536

                              THE RIGHT START, INC.
             (Exact name of registrant as specified by its charter)


       California                                 95-3971414
       ----------                                 ----------
(State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization)                    Identification No.)


         5388 Sterling Center Drive, Unit C, Westlake Village, CA 91361
               (Address of principal executive offices) (Zip Code)

                                 (818) 707-7100
              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report.)

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

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date:

Common Stock Outstanding as of October 28, 2000 - 5,617,275 shares.


<PAGE>




                              THE RIGHT START, INC.

                               INDEX TO FORM 10-Q
                  FOR THE THIRTEEN AND THIRTY NINE WEEK PERIODS
                             ENDED October 28, 2000




                         PART I - FINANCIAL INFORMATION


Item 1.       Financial Statements (unaudited):
              Balance Sheets                                                   3
              Statements of Operations                                         4
              Statements of Cash Flows                                         5
              Notes to Financial Statements                                    6

Item 2.       Management's Discussion and Analysis of Financial
              Condition and Results of Operations                             11

Item 3.       Quantitative and Qualitative Disclosures About Market Risk      15



                           PART II - OTHER INFORMATION


Item 6.       Exhibits and Reports on Form 8-K                                17


SIGNATURES                                                                    18





                                       2
<PAGE>
<TABLE>
<CAPTION>
                              THE RIGHT START, INC.
                                 BALANCE SHEETS


                                                                           October 28, 2000       January 29, 2000
                                                                           ----------------       ----------------
                                                                             (unaudited)
                                     ASSETS
<S>                                                                     <C>                     <C>
Current assets:
     Cash and cash equivalents                                          $          259,000      $       5,199,000
     Accounts and other  receivables                                               569,000                682,000
     Due from RightStart.com, net                                                  124,000
     Merchandise inventories                                                    11,954,000              9,694,000
     Other current assets                                                        1,231,000              1,849,000
                                                                        -------------------     ------------------
                          Total current assets                                  14,137,000             17,424,000

Noncurrent assets:
     Property, fixtures and equipment, net                                       7,949,000             10,648,000
     Deferred income taxes                                                       1,400,000              1,400,000
     Other noncurrent assets                                                       170,000              1,255,000
                                                                        -------------------     ------------------

                                                                        $       23,656,000      $      30,727,000
                                                                        ===================     ==================


                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Accounts payable and accrued expenses                              $        9,035,000      $       9,566,000
     Revolving line of credit                                                    1,118,000              3,377,000
     Term note payable                                                           1,400,000
                                                                        -------------------     ------------------
                          Total current liabilities                             11,553,000             12,943,000
                                                                        -------------------     ------------------

Term note payable                                                                                       3,000,000
Senior subordinated convertible pay-in-kind notes                                3,000,000
Deferred rent                                                                    1,398,000              1,378,000

Minority interest in consolidated subsidiary                                                            3,397,000

Commitments and contingencies

Mandatorily redeemable preferred stock Series A,
     $3,000,000 redemption value                                                 2,346,000              2,088,000

Shareholders' equity:
     Convertible preferred stock Series B                                        1,547,000              1,875,000
     Convertible preferred stock Series C                                        3,733,000              3,850,000
     Convertible preferred stock Series D                                        4,045,000
     Common stock (25,000,000 shares authorized
        at no par value; 5,617,275 and 5,417,666 issued and
        outstanding at October 28, 2000 and January 29, 2000, respectively)     22,730,000             22,593,000
     Paid in capital                                                            16,481,000             16,142,000
     Deferred compensation                                                         (49,000)              (671,000)
     Accumulated deficit                                                       (43,128,000)           (35,868,000)
                                                                        -------------------     ------------------
                          Total shareholders' equity                             5,359,000              7,921,000
                                                                        -------------------     ------------------

                                                                        $       23,656,000      $      30,727,000
                                                                        ===================     ==================



                 See accompanying notes to financial statements
</TABLE>

                                       3
<PAGE>

<TABLE>
<CAPTION>
                              THE RIGHT START, INC.
                            STATEMENTS OF OPERATIONS




                                                            Thirteen Weeks Ended                Thirty-nine Weeks Ended
                                                      ----------------------------------    ---------------------------------
                                                      October 28, 2000   October 30, 1999   October 28, 2000  October 30, 1999
                                                      ----------------   ----------------   ----------------  ----------------
                                                        (unaudited)       (unaudited)        (unaudited)       (unaudited)

<S>                                                   <C>                <C>                <C>               <C>
Retail store sales                                    $     9,865,000    $    8,829,000     $   30,951,000    $   27,328,000
Online sales before promotional discounts                                     2,731,000                            2,996,000
Catalog sales                                                                   492,000                            3,050,000
Shipping and handling revenues                                                  108,000                              620,000
                                                      ----------------   ---------------    ---------------   ---------------
       Total sales                                          9,865,000        12,160,000         30,951,000        33,994,000
       Promotional discounts related to online sales                            499,000                              543,000
                                                      ----------------      ------------    ---------------      ------------
       Net sales                                            9,865,000        11,661,000         30,951,000        33,451,000

Costs and expenses:
    Cost of goods sold - merchandise                        4,947,000         6,262,000         15,428,000        16,585,000
    Cost of goods sold - shipping and handling                                  532,000                            1,105,000
    Operating expense, includes non-cash compensation of
        $65,000, $203,000, $85,000 and $1,973,000,
        respectively                                        4,262,000         4,577,000         12,514,000        14,630,000
    Marketing and advertising expense                         233,000         2,831,000            779,000         3,269,000
    General and administrative expense                        954,000         1,257,000          2,864,000         3,154,000
    Pre-opening costs                                         117,000            91,000            318,000           228,000
    Depreciation and amortization expense                     541,000           467,000          1,590,000         1,214,000
    Store closing expense                                      46,000                              387,000           151,000
                                                      ----------------   ---------------    ---------------   ---------------
                                                           11,100,000        16,017,000         33,880,000        40,336,000
                                                      ----------------   ---------------    ---------------   ---------------
Operating loss                                             (1,235,000)       (4,356,000)        (2,929,000)       (6,885,000)

Minority interest in consolidated subsidiary loss                              (384,000)                            (401,000)
(Gain) loss on investment in RightStart.com                (2,554,000)                           3,406,000
Interest expense (income), net                                293,000           (18,000)           850,000           178,000
                                                      ----------------   ---------------    ---------------   ---------------

Income (loss) before provision for income taxes             1,026,000        (3,954,000)        (7,185,000)       (6,662,000)
Provision for income taxes                                     19,000            20,000             58,000            48,000
                                                      ----------------   ---------------    ---------------   ---------------

Net income (loss)                                     $     1,007,000    $   (3,974,000)    $   (7,243,000)   $   (6,710,000)
                                                      ================   ===============    ===============   ===============

Basic income (loss) per share                         $          0.16    $        (0.87)    $        (1.35)   $        (1.47)
                                                      ================   ===============    ===============   ===============

Basic weighted average number of shares outstanding         5,615,435         5,357,682          5,590,822         5,156,127
                                                      ================   ===============    ===============   ===============


Diluted income (loss) per share                       $          0.15    $        (0.87)    $        (1.35)   $        (1.47)
                                                      ================   ===============    ===============   ===============

Diluted weighted average number of shares outstanding       6,496,024         5,357,682          5,590,822         5,156,127
                                                      ================   ===============    ===============   ===============



                 See accompanying notes to financial statements
</TABLE>

                                       4
<PAGE>

<TABLE>
<CAPTION>


                              THE RIGHT START, INC.
                            STATEMENTS OF CASH FLOWS

                                                                                     Thirty-nine Weeks Ended
                                                                       -----------------------------------------------------
                                                                       October 28, 2000          October 30, 1999
                                                                       ----------------          ----------------
                                                                           (unaudited)                (unaudited)
<S>                                                                    <C>                       <C>
Cash flows from operating activities:
       Net loss                                                        $        (7,243,000)      $          (6,710,000)
       Adjustments to reconcile net loss
         to net cash used in operating activities:
           Depreciation and amortization                                         1,590,000                   1,214,000
           Non-cash compensation expense                                            84,000                   1,973,000
           Amortization of issued warrants                                          75,000
           Store closing expense                                                   205,000                     151,000
           Loss on investment in RightStart.com                                  3,406,000
           Minority interest in consolidated subsidiary loss                                                  (401,000)
           Changes in assets and liabilities affecting operations               (2,117,000)                   (625,000)
                                                                       --------------------      ----------------------

               Net cash used in operating activities                            (4,000,000)                 (4,398,000)
                                                                       --------------------      ----------------------

Net cash used in investing activities:
       Additions to property, fixtures and equipment                            (1,296,000)                 (2,607,000)
       Loss on investment in RightStart.com                                     (3,406,000)
                                                                       --------------------      ----------------------
                                                                                (4,702,000)                 (2,607,000)
Cash flows from financing activities:
       Net proceeds from (paydowns on) revolving line of credit                 (2,259,000)                  2,329,000
       Net payments on term note payable                                        (1,600,000)                   (500,000)
       Issuance of senior subordinated convertible pay-in-kind notes             3,000,000
       Net proceeds from issuance of Series D preferred stock                    4,484,000
       Sale of preferred stock in consolidated subsidiary, net                                              13,852,000
       Proceeds from common stock issued upon exercise of
          stock options                                                            137,000                      37,000
                                                                       --------------------      ----------------------

               Net cash provided by financing activities                         3,762,000                  15,718,000
                                                                       --------------------      ----------------------


Net increase (decrease) in cash and cash equivalents                            (4,940,000)                  8,713,000
Cash at beginning of period                                                      5,199,000                     626,000
                                                                       --------------------      ----------------------

Cash and cash equivalents at end of period                             $           259,000       $           9,339,000
                                                                       ====================      ======================




                 See accompanying notes to financial statements
</TABLE>

                                       5
<PAGE>



                              THE RIGHT START, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1:  Description of Business and Significant Accounting Policies

         The Right  Start,  Inc.  (the  "Company"  or  "Parent")  is a specialty
retailer  of high  quality  developmental,  educational  and care  products  for
infants and children.  Information  presented as of January 29, 2000 and for the
period ended  October 30, 1999 reflect the  consolidated  results of the Company
and RightStart.com  Inc.  ("RightStart.com")  which previously was the Company's
majority-owned subsidiary.

          RightStart.com was formed in April 1999 for the purpose of engaging in
electronic  commerce over the Internet and,  effective May 1, 1999,  the Company
contributed  its  catalog  assets  to  RightStart.com.   On  October  10,  2000,
RightStart.com  issued 2 million  shares of common  stock  which  decreased  the
Company's  ownership  interest in RightStart.com to 49.4% (see Note 2). The sale
of common stock and  associated  corporate  actions  resulted in  RightStart.com
being  accounted  for  under  the  equity  method  of  accounting  and no longer
consolidated  with  the  Company.  Accordingly,  the  Company  has  revised  its
financial  statements  in order to present  its  results of  operations  for the
thirteen and thirty-nine  weeks ended October 28, 2000 and its statement of cash
flows for the  thirty-nine  weeks ended October 28, 2000,  on an  unconsolidated
basis retroactive to the beginning of the current fiscal year.

         There  have been no  changes in the  Company's  significant  accounting
policies as set forth in the Company's  financial  statements for the year ended
January 29, 2000.  These unaudited  financial  statements as of October 28, 2000
and for the thirteen and thirty-nine  week periods then ended have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information  and the  rules and  regulations  of the  Securities  and
Exchange Commission. Accordingly, they do not include all of the information and
footnotes  required by generally  accepted  accounting  principles  for complete
financial  statements.  These  interim  financial  statements  should be read in
conjunction  with the Company's  Annual Report on Form 10-K/A for the year ended
January 29, 2000. In the opinion of management,  all adjustments  (consisting of
normal recurring adjustments)  considered necessary for a fair presentation have
been included.  Certain  reclassifications  have been made to conform prior year
amounts to the current year presentation.

         Operating  results for the thirteen and thirty-nine  week periods ended
October  28, 2000 are not  necessarily  indicative  of the  results  that may be
expected for the year ending February 3, 2001.


NOTE 2:  Investment in RightStart.com

         On October 10, 2000, RightStart.com issued 1.6 million shares of common
stock to a new  investor  (the  "October  Investor")  and 0.4 million  shares of
common stock to an existing minority investor.  The new issuance represented 18%
of the shares  outstanding after the issuance.  Consequently,  the percentage of
common stock  ownership of  RightStart.com  by the Company has been reduced from
60.2% to 49.4%. The October  Investor  received a seat on the Board of Directors
of RightStart.com. The current Board of Directors of RightStart.com is comprised
of the October Investor,  a representative of one of  RightStart.com's  original
minority investors,  an affiliate of the Company and the chief executive officer
of  RightStart.com  who is also the  chief  executive  officer  of the  Company.
Additionally, the October Investor and existing investors other than the Company
received certain  participatory rights in the management of RightStart.com.  The
sale  of  common  stock  and  the   associated   corporate   actions  result  in
RightStart.com  being accounted for under the equity method of accounting and no
longer consolidated with the Company.

          Accordingly,  the Right Start has revised its financial  statements in
order to present its results of  operations  for the  thirteen  and  thirty-nine
weeks ended October 28, 2000 and its statement of cash flows for the thirty-nine
weeks ended  October  28, 2000 on an  unconsolidated  basis  retroactive  to the
beginning of the current fiscal year.

         The  operating  losses of  RightStart.com  have been shown as a loss on
investment  in a  non-consolidated  subsidiary  through  October 10, 2000 in the
Company's statement of operations.  As of October 10, 2000, the Company recorded
losses  in  excess  of  its  investment  in   RightStart.com  of  $2.7  million.
Additionally,  due to the  uncertainties  surrounding  the ongoing  viability of
RightStart.com,   the  Company  has   provided  an   allowance   for   potential
uncollectibility  of $700,000 in connection with amounts owed by  RightStart.com
to the Company under the Management Services  Agreement.  In connection with the
deconsolidation of  RightStart.com,  the Company recorded a gain of $3.3 million

                                       6
<PAGE>

which  reversed the  previously  recorded loss in excess of its  investment  and
increased the Company's investment in RightStart.com to zero. The Company is not
obligated  or  committed  to  fund  any  operating   losses  or  obligations  of
RightStart.com.

         Under  the  Equity  Method,  the  carrying  value of an  investment  is
normally  adjusted on a periodic  basis to  recognize  the  investor's  share of
earnings and losses of the investee;  however,  the carrying value  generally is
not reduced  below zero and in that  situation  the equity method is, in effect,
suspended.  Accordingly,  the Company will only make future  adjustments  to the
carrying value of its investment in  RightStart.com  if and when  RightStart.com
reports net income in excess of its accumulated net losses during the period the
equity  method  of  accounting  has  been  suspended,  or if the  Company  makes
additional advances to, or investments in, RightStart.com.


NOTE 3:  Private Placements

         In September and October 2000, the Company sold a total of $3.0 million
in aggregate principal amount of its Senior Subordinated Convertible Pay-in-Kind
Notes due 2005 (the  "Convertible  Notes") to affiliates.  The Convertible Notes
bear interest at the rate of 8% per annum and are convertible  into common stock
at a price of $2.375  per  share of  common  stock.  The  Convertible  Notes are
secured by a subordinated lien on substantially all of the Company's assets.

         In  October  2000  the  Company  sold  44,900  shares  of its  Series D
Convertible  Pay-in-Kind  Preferred  Stock (the "Series D Convertible  Preferred
Stock") for $4.5 million,  a portion of which was purchased by  affiliates.  The
Series D Convertible  Preferred  Stock pays dividends at a rate of 8% per annum,
has a liquidation  preference of $100 per share and is  convertible  into common
stock at the rate of $2.00  per  share.  The  Company  can  cause  the  Series D
Convertible Preferred Stock to convert after October 6, 2001 if the Registrant's
common  stock has  traded at a price  greater  than  $3.00 per share for  twenty
consecutive  trading  days.  In  connection  with the  issuance  of the Series D
Convertible  Preferred  Stock,  the Company issued 449,000  warrants to purchase
common shares at an exercise price of $2.00.  The fair value of the warrants was
estimated using the Black-Scholes  option pricing model and has been recorded as
a reduction to retained earnings and a credit to paid in capital.

         Each of the  Convertible  Notes and the Series D Convertible  Preferred
Stock has a  pay-in-kind  feature that permits the Company to pay  dividends and
interest,  as the case may be, in  additional  securities.  The Company paid its
first  dividends and interest on December 1, 2000 in cash and may elect to do so
in the future as well.


NOTE 4:  Per Share Data

         Basic per  share  data is  computed  by  dividing  the  Company's  loss
available to common shareholders by the weighted average number of the Company's
common  shares  outstanding.  Diluted per share data is computed by dividing the
Company's loss available to common  shareholders,  plus income  associated  with
dilutive  securities by the weighted  average number of shares  outstanding plus
any potential  dilution  that could occur if  securities  or other  contracts to
issue common stock were exercised or converted into common stock in each period.

                                       7
<PAGE>


<TABLE>
<CAPTION>
                                          Thirteen weeks ended                        Thirty-nine weeks ended
                                          --------------------                        -----------------------
                                   October 28, 2000       October 30, 1999      October 28, 2000    October 30, 1999
                                   ----------------       ----------------      ----------------    ----------------
<S>                                    <C>               <C>                 <C>                 <C>

Net income (loss)                       $  1,007,000      $  (3,974,000)      $  (7,243,000)      $  (6,710,000)
Less:  Intercompany income                                     (102,000)                               (132,000)
       Preferred stock dividend              (20,000)          (525,000)            (20,000)           (525,000)
       Preferred stock accretion             (89,000)           (77,000)           (258,000)           (221,000)
                                      ---------------     ---------------     ---------------     --------------
Basic income (loss) applicable
  to common shareholders                $    898,000      $  (4,678,000)      $  (7,521,000)      $  (7,588,000)
                                        ============       =============       =============       =============
Weighted average shares, basic             5,615,435          5,357,682           5,590,822           5,156,127
Income (loss) per share, basic          $       0.16      $       (0.87)      $       (1.35)      $       (1.47)

Basic income (loss) applicable
  to common shareholders                $    898,000      $  (4,678,000)      $  (7,521,000)      $  (7,588,000)

Plus:  Interest on PIK notes                  28,000
       Preferred stock dividend               20,000
                                      ---------------     ---------------     ---------------     --------------
Income available to common share-
   holders and assumed conversions      $    946,000      $  (4,678,000)      $  (7,521,000)      $  (7,588,000)
                                        ============       =============       =============       =============

Weighted average shares, basic             5,615,435          5,357,682           5,590,822           5,156,127
Plus incremental shares from
   assumed conversions:
        Options                                5,530
        Series D Preferred Stock             542,747
        Warrants                              26,933
        Pay-in-kind notes                    305,379
                                      ---------------     ---------------     ---------------     --------------
Weighted average shares, diluted           6,496,024          5,357,682           5,590,822           5,156,127
Income (loss) per share, diluted      $         0.15      $       (0.87)      $       (1.35)      $       (1.47)
</TABLE>



          Additional  securities that could potentially dilute EPS in the future
that were not  included  in the  computation  of  diluted  EPS  include  options
outstanding to purchase  1,050,442 and 988,138 shares of common stock at October
28,  2000  and  October  30,  1999,  respectively;   Series  B  preferred  stock
convertible  into 549,995 and 684,167 shares of common stock at October 28, 2000
and October 30, 1999,  respectively;  Series C preferred stock  convertible into
1,866,650 and  1,925,000  shares of common stock at October 28, 2000 and October
30, 1999,  respectively;  Series D Convertible  Preferred Stock convertible into
1,702,253  shares of common  stock at October  28, 2000 and  warrants  issued to
purchasers of the Series D Convertible  Preferred Stock exercisable into 422,067
shares of common  stock as of October  28,  2000 (see Note 3);  and  Convertible
Notes convertible into 957,779 shares of Common Stock as of October 28, 2000.


NOTE 5:  Supplemental Disclosure of Cash Flow Information

         Interest  paid  amounted to $546,000 and  $314,000 for the  thirty-nine
weeks ended October 28, 2000 and October 30, 1999,  respectively.  Cash paid for
income taxes was $8,000 and $11,000 for the thirty-nine  weeks ended October 28,
2000 and October 30, 1999, respectively.


                                       8
<PAGE>

Changes  in assets  and  liabilities  which  increased  (decreased)  cash are as
follows:

<TABLE>
<CAPTION>
                                                       Thirty-nine weeks ended
                                            -----------------------------------------------
<S>                                             <C>                     <C>
                                                  October 28, 2000       October 30, 1999
Accounts and other receivables                     $     (706,000)         $    (243,000)
Merchandise inventories                                (2,938,000)            (3,067,000)
Other current assets                                     (215,000)            (1,534,000)
Other noncurrent assets                                   (38,000)              (291,000)
Accounts payable and accrued expenses                   1,710,000              4,518,000
Deferred rent                                              70,000                 (8,000)
                                                       -----------             -----------
                                                    $  (2,117,000)         $    (625,000)
                                                     =============          =============
</TABLE>

Non-cash investing and financing activities

          The following  non-cash  investing and financing  activities have been
excluded from the statement of cash flows:

          In the first  quarter of fiscal 2000,  holders  converted  $328,000 of
Series B Convertible Preferred Stock and $117,000 of Series C Preferred Stock to
common stock.

         In the thirty-nine  weeks ended October 28, 2000, the Company  recorded
preferred dividends of $258,000 which were accreted to the outstanding amount of
the preferred stock outstanding.

         In the second  quarter of fiscal  2000,  the  Company  issued  warrants
valued at $70,000  using the  Black-Scholes  option  pricing model in connection
with obtaining an amendment to the Company's credit facility.

         In  connection  with two store  closings  in the  second  quarter,  the
Company reduced accrued expenses by $50,000 and deferred rent by $50,000.

         In the third quarter, the Company recorded $439,000 of dividends on the
fully  vested  warrants  issued  in  connection  with the  sale of the  Series D
Convertible Preferred Stock.


NOTE 6:  New Accounting Pronouncements

         In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS
No.133  "Accounting For Derivative  Instruments and Hedging  Activities"  ("SFAS
133").  SFAS 133 establishes  accounting and reporting  standards for derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts  (collectively referred to as derivatives) and for hedging activities.
SFAS 133,  as  amended  by SFAS 137 and SFAS 138,  is  effective  for all fiscal
quarters  of all  fiscal  years  beginning  after  June 15,  2000.  The  Company
currently does not have or use derivative instruments.


NOTE 7:  Segment Information

         The  Company  currently  operates in one  segment,  which is the retail
segment.  The results of operations for the thirteen and thirty-nine weeks ended
October 28, 2000 reflect only the retail stores.  All operating  results for the
thirteen and  thirty-nine  weeks ended  October 28, 2000 of  RightStart.com  are
reflected as a gain (loss) on investment in RightStart.com.

         The prior year consolidated  financial  statements included the Company
and its former  majority-owned  subsidiary  which  together  had two  reportable
segments; Direct-to-customers, which included online and catalog operations (the
subsidiary),  and Retail (the  parent),  which  included  activities  related to
retail  stores.  Both segments sold products to meet the needs of the parents of
infants and small children. The  Direct-to-customers  segment also sold products
directed to older children through age twelve. Current year financial statements
include  only  operating  information  of the  Company  which as a result of the
deconsolidation of RightStart.com,  has only one reportable  segment.  Therefore
segment information is not presented below for the current year.

         The  accounting  policies  of the  segments  were  the  same  as  those
described  in the  summary  of  significant  accounting  policies.  The  Company
evaluated  performance  based on profit or loss from  operations  before  income
taxes.

                                       9
<PAGE>

         The Company charges a management fee on inventory  transferred from the
Retail segment to the  Direct-to-customers  segment.  Additionally,  charges for
services are exchanged between the two segments.

         The  Company's  reportable  segments for the prior year had  operations
that offered the same or similar products but had a different method of delivery
to their customers.


Segment information for the thirteen weeks ended October 30, 1999 is as follows:
<TABLE>
<CAPTION>
                                                                     Total
                               Online           Catalog      Direct-to-Customers        Retail          Total
                               -------          --------     -------------------        ------          -----
<S>                           <C>                <C>                <C>               <C>            <C>

 Net sales                     $2,340,000         $492,000           $2,832,000        $8,829,000     $11,661,000
 Interest income (expense)        154,000                               154,000          (136,000)         18,000
 Depreciation                      63,000                                63,000           404,000         467,000
 Non-cash compensation            179,000                               179,000            24,000         203,000
 Pre-opening costs                                                                         91,000          91,000
 Minority Interest                                                      384,000                           384,000
 Store Closing Expense
 Pre-tax loss                  (2,893,000)                           (2,893,000)       (1,061,000)     (3,954,000)
 Total assets                  13,456,000          252,000           13,708,000        20,289,000      33,997,000
 Fixed asset additions            908,000                               908,000           124,000       1,032,000

</TABLE>


Segment  information  for the  thirty-nine  weeks  ended  October 30, 1999 is as
follows:
<TABLE>
<CAPTION>
                                                                     Total
                               Online           Catalog      Direct-to-Customers        Retail          Total
                               -------          --------     -------------------        ------          -----
<S>                           <C>               <C>                 <C>              <C>             <C>

 Net sales                     $3,078,000       $3,045,000           $6,123,000       $27,328,000     $33,451,000
 Interest income (expense)        155,000                               155,000          (333,000)       (178,000)
 Depreciation                      80,000            5,000               85,000         1,129,000       1,214,000
 Non-cash compensation            179,000                               179,000         1,794,000       1,973,000
 Pre-opening costs                                                                        228,000         228,000
 Minority Interest                                                      401,000                           401,000
 Store Closing Expense                                                                    151,000         151,000
 Pre-tax loss                  (3,046,000)                           (3,046,000)       (3,616,000)     (6,662,000)
 Total assets                  13,456,000          252,000           13,708,000        20,289,000      33,997,000
 Fixed asset additions          1,700,000                             1,700,000           907,000       2,607,000

</TABLE>

NOTE 8: Recent Developments

         The Company's  common stock is listed and traded on the Nasdaq National
Market. In July, the Nasdaq informed the Company that its consolidated net worth
had fallen below the Nasdaq  National  Market's  minimum-listing  requirement of
$4.0 million and  consequently  that its common stock was subject to de-listing.
The primary cause of the diminished  consolidated  net worth was attributable to
losses sustained by the Company's former subsidiary, RightStart.com. The Company
requested  that it continue to be listed at an oral hearing on October 12, 2000.
The new capital  received by the Company in the current fiscal quarter  together
with the  deconsolidation  of the  Company  and  RightStart.com  resulted in the
Company's  net  worth  exceeding  the  Nasdaq  minimum-listing  requirement.  In
November,  the Nasdaq  notified the Company that it was in  compliance  with the
minimum-listing  requirements  and accordingly  that the Company's  common stock
would continue to be listed on the Nasdaq National Market so long as the Company
maintains  compliance  with the Nasdaq's  listing  requirements.  Nasdaq  noted,
however,  that the Company had failed to evidence a market value of public float
of at least $5.0 million for several  consecutive  trading days. Nasdaq informed
the Company that should such failure  continue  for thirty  consecutive  trading
days  (beginning  November 16, 2000) that the Company would be provided a ninety
calendar  day  period  in  which to  regain  compliance  for not  less  than ten
consecutive  trading  days.  Failure would result in a transfer of the Company's
securities  to the Nasdaq  SmallCap  market or  delisting.  Given the  Company's
current public float,  its common stock would need to trade above  approximately
$1.50 per share to meet this compliance standard.


                                       10
<PAGE>
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

         When used in this report and elsewhere by management from time to time,
the words "believes,"  "anticipates," and "expects" and similar  expressions are
intended to identify  forward-looking  statements  with respect to our financial
condition,  results of operations and business.  Certain important factors could
cause  actual  results  to  differ   materially  from  those  expressed  in  our
forward-looking  statements  including but not limited to competition from other
children's  product  retailers and  limitations on access to capital to fund the
expansion and the growth in the number of our retail stores. Further information
on potential  factors that could affect our  financial  condition is included in
our filings with the  Securities  and Exchange  Commission,  including  our Form
10-K/A for the year ended  January 29, 2000 and our  Registration  Statement  on
Form S-3 (No.  333-84319).  We caution  readers not to place  undue  reliance on
forward-looking  statements,  which speak only as of the date of this filing. We
undertake   no   obligation   to  publicly   release  any   revisions  to  these
forward-looking statements to reflect events or circumstances after that date.


Retail Store Operations

         At October 28, 2000, the Company operated 53 retail stores in 16 states
throughout the United States. The stores' product mix includes a wide variety of
items to meet the needs of infants,  small  children and their care givers,  all
presented within a store designed to provide a safe,  baby-friendly  environment
for the shopping ease of new parents.


Thirteen weeks ended October 28, 2000 compared with October 30, 1999

The following table sets forth the Company's  unaudited  statement of operations
data:

<TABLE>
<CAPTION>
                                                                      Thirteen weeks ended
                                                     ------------------------------------------------------------
                                                            October 28, 2000                October 30, 1999
                                                     -------------------------------    -------------------------
<S>                                                    <C>                   <C>         <C>               <C>

Retail net sales                                        $   9,865,000         100.0%      $    8,829,000    100.0%
Cost of goods sold                                          4,947,000          50.1%           4,552,000     51.6%
Operating expense                                           4,197,000          42.5%           3,580,000     40.5%
Non-cash compensation                                          65,000           0.7%              24,000      0.3%
Marketing & advertising expenses                              233,000           2.4%             270,000      3.1%
General & administrative expenses                             954,000           9.7%             833,000      9.4%
Pre-opening costs                                             117,000           1.2%              91,000      1.0%
Store closing expense                                          46,000           0.5%
Depreciation & amortization expense                           541,000           5.5%             404,000      4.6%
                                                        -------------                     --------------
   Operating loss                                          (1,235,000)        -12.5%            (925,000)   -10.5%
Gain on investment                                         (2,554,000)        -25.9%
Interest expense                                              293,000           3.0%             136,000      1.5%
                                                        -------------                     --------------
   Income (loss) before provision for income taxes          1,026,000          10.4%          (1,061,000)   -12.0%
Provision for income taxes                                     19,000           0.2%              20,000      0.2%
                                                        -------------                     --------------
   Net income (loss)                                   $    1,007,000          10.2%    $     (1,081,000)   -12.2%
                                                        =============                     ==============


</TABLE>

         Net Sales. Retail net sales consist of gross product sales to customers
net of returns.  Retail net sales increased by $1.1 million, or 11.7%, from $8.8
million for the  thirteen  weeks ended  October 30, 1999 to $9.9 million for the
thirteen weeks ended October 28, 2000. The net sales growth reflects an increase
in the store base from 43 stores to 53 stores and a 1.5%  increase in same-store
sales.

         Cost of goods sold.  Cost of goods sold consists  primarily of the cost
of products sold,  inbound freight costs and inventory  shrinkage costs.  Retail
gross  margin  increased  to 49.9%  from 48.4% in the prior  year  period.  This
increase  is  due  in  part  to  reduced  freight  costs  and  increased  vendor
allowances.

         Operating   expense.   Retail  operating   expense  consists  of  store
operational  expenses,   retail  personnel  costs,  and  costs  related  to  the
distribution and warehousing of our retail merchandise. Retail operating expense
was $4.2 million for the current period as compared to $3.6 million for the same
period last year.  The $0.6  million or 17.2%  increase  primarily  reflects the
addition of ten new store locations as well as costs related to increased retail
management  staff and  related  costs.  Expense  related  to  charges  under the
Management  Services  Agreement  with  RightStart.com  amount to $13,000 for the
current quarter and $6,000 for the same period last year.

                                       11
<PAGE>

         Non-cash  compensation.  During the third quarter of 1999,  the Company
recorded  $24,000 of  non-cash  compensation  expense  associated  with  certain
non-employee  director  grants.  The current  year  reflects  $8,000  related to
non-employee director grants as well as $57,000 related to non-employee options.

         Marketing and  advertising  expense.  Retail  marketing and advertising
expense  generally  consists  of print  advertising  in  national  and  regional
publications,  as well as promotional  mailings to our customers.  Marketing and
advertising  expense  decreased  slightly  from  $270,000 for the  thirteen-week
period ended  October 30, 1999 to $233,000  for the same period this year.  This
decrease is primarily due to increased vendor cooperative advertising dollars.

         General and administrative expense.  General and administrative expense
consists primarily of the costs related to management, financial, merchandising,
inventory,  professional service fees and other administrative support.  General
and  administrative  expense  increased  by $0.2  million,  or 14.5%,  from $0.8
million for the thirteen  week period ended October 30, 1999 to $1.0 million for
the thirteen week period ended October 28, 2000.  The increase was due primarily
to increased staffing levels.  General and  administrative  expense includes net
credits in the amount of $66,000  and  $142,000  for the  current and prior year
period,  respectively.   These  credits  are  the  result  of  net  billings  to
RightStart.com under the Management Services Agreement.

         Pre-opening costs. Pre-opening costs consist primarily of non-recurring
marketing,  advertising,  and other expenses related to the opening of new store
locations.  Pre-opening  costs  increased  $26,000 from $91,000 for the thirteen
weeks  ended  October 30, 1999 to  $117,000  for the current  year.  The primary
reason for the  increase  was the  recording  of $38,000 in expenses  related to
three abandoned new store sites.

         Store closing expense.  Store closing expense consists primarily of the
write-off  of  non-recoverable  assets and costs  incurred  in closing the store
locations.  In the current period  additional  closing  expenses of $46,000 were
recorded in relation to two stores closed in the previous quarter.  There are no
other planned store closings contemplated for the remainder of Fiscal 2000.

         Depreciation and  amortization.  Depreciation and amortization  expense
increased  $0.1 million from $0.4 million in the prior period to $0.5 million in
the current period.  The increase was due to additional assets placed in service
related to new store openings.

         Gain  on  investment.   In  connection  with  the   deconsolidation  of
RightStart.com,  the Company  recorded a gain of $3.3 million which reversed the
previously recorded loss in excess of its investment and increased the Company's
investment in RightStart.com to zero.

         Interest  expense.  Interest expense increased from $0.1 million in the
thirteen  weeks ended  October 30, 1999 to $0.3 million for the same period this
year. The increase  reflects an increase in our  outstanding  borrowings for the
current period over the prior period and higher interest rates in general.

         Provision for income  taxes.  The provision for income taxes is related
to state income  taxes.  No federal or state income tax benefit was recorded for
either the current or prior period due to the uncertainty  surrounding realizing
any further tax benefits in future years.

                                       12
<PAGE>

Thirty-nine weeks ended October 28, 2000 compared with October 30, 1999
<TABLE>
The following table sets forth the Company's unaudited statement of operations data :

<CAPTION>
                                                                       Thirty-nine weeks ended
                                                     ------------------------------------------------------------
                                                            October 28, 2000                October 30, 1999
                                                     -------------------------------    -------------------------
<S>                                                   <C>                    <C>         <C>               <C>

Retail net sales                                       $   30,951,000         100.0%      $   27,328,000    100.0%
Cost of goods sold                                         15,428,000          49.8%          13,634,000     49.9%
Operating expense                                          12,429,000          40.2%          10,514,000     38.5%
Non-cash compensation                                          85,000           0.3%           1,794,000      6.6%
Marketing & advertising expenses                              779,000           2.5%             626,000      2.3%
General & administrative expenses                           2,864,000           9.3%           2,535,000      9.3%
Pre-opening costs                                             318,000           1.0%             228,000      0.8%
Store closing expense                                         387,000           1.3%             151,000      0.6%
Depreciation & amortization expense                         1,590,000           5.1%           1,129,000      4.1%
                                                        -------------                     --------------
   Operating loss                                          (2,929,000)         -9.5%          (3,283,000)   -12.0%
Loss on investment                                          3,406,000          11.0%
Interest expense                                              850,000           2.7%             333,000      1.2%
                                                        -------------                     --------------
   Income (loss) before provision for income taxes         (7,185,000)        -23.2%          (3,616,000)   -13.2%
Provision for income taxes                                     58,000           0.2%              48,000      0.2%
                                                        -------------                     --------------
   Net income (loss)                                   $   (7,243,000)        -23.4%      $   (3,664,000)   -13.4%
                                                        =============                     ==============

</TABLE>



         Net Sales. Retail net sales consist of gross product sales to customers
net of returns. Retail net sales increased by $3.6 million, or 13.3%, from $27.3
million for the  thirty-nine  weeks ended  October 30, 1999 to $31.0 million for
the  thirty-nine  weeks ended October 28, 2000. The net sales growth reflects an
increase  in the store base from 43 stores to 53 stores;  offset  somewhat  by a
1.0% decline in  same-store  sales.  The same store sales decline is due to some
cannibalization  from the  Company's  Internet  subsidiary  as well as increased
competition at certain store locations.

         Cost of goods sold.  Cost of goods sold consists  primarily of the cost
of products sold,  inbound freight costs and inventory  shrinkage costs.  Retail
gross margin remained  relatively  unchanged for the  thirty-nine  weeks of this
year as compared to the prior year.

         Operating   expense.   Retail  operating   expense  consists  of  store
operational  expenses,   retail  personnel  costs,  and  costs  related  to  the
distribution and warehousing of our retail merchandise. Retail operating expense
was $12.4  million for the current  period as compared to $10.5  million for the
same period last year. The $1.9 million or 18.2% increase primarily reflects the
addition of ten new store locations as well as costs related to increased retail
management  staff and  related  costs.  Expense  related  to  charges  under the
Management Services Agreement with RightStart.com amount to $36,000 for the nine
months this year and $6,000 for the same period last year.

         Non-cash  compensation.  For the  thirty-nine  weeks ended  October 30,
1999, the Company recorded $1.8 million of non-cash compensation expense related
to the  vesting of  performance  options  granted to  executive  officers of the
Company. For the thirty-nine weeks ended October 28, 2000, non-cash compensation
expense  reflects  $28,000  related to  non-employee  director grants as well as
$57,000 related to non-employee options.

         Marketing and  advertising  expense.  Retail  marketing and advertising
expense  generally  consists  of print  advertising  in  national  and  regional
publications,  as well as promotional  mailings to our customers.  Marketing and
advertising  expense increased from $0.6 million for the thirty-nine week period
ended  October  30, 1999 to $0.8  million  for the same  period this year.  This
growth reflects increased  utilization of promotional  mailings to our customers
as well as  expenses  incurred  to  increase  brand  awareness  in our  regional
markets.

         General and administrative expense.  General and administrative expense
consists primarily of the costs related to management, financial, merchandising,
inventory,   professional   service  fees  and  other   administrative   support
attributable  to Retail Store  Operations.  General and  administrative  expense
increased 12.9% to $2.9 million for the current period from $2.5 million for the
comparable  period last year.  The  increase is due  primarily to an increase in
staffing and related  costs.  General and  administrative  expense  includes net
credits in the amount of $289,000  and  $155,000  for the current and prior year
period,  respectively.   These  credits  are  the  result  of  net  billings  to
RightStart.com under the Management Services Agreement.

                                       13
<PAGE>

         Pre-opening costs. Pre-opening costs consist primarily of non-recurring
marketing,  advertising,  and other expenses related to the opening of new store
locations. Pre-opening costs increased $90,000 from $228,000 for the thirty-nine
weeks ended  October 30, 1999 to $318,000  for the current  fiscal  period.  The
increase was due to the five stores  opened during the fiscal period and opening
costs  related to five stores  opened at the end of the prior year versus  seven
stores  opened in the prior period and costs related to two stores opened at the
end of fiscal year 1998.

         Depreciation and  amortization.  Depreciation and amortization  expense
increased  $0.5 million from $1.1 million in the prior period to $1.6 million in
the current period.  The increase was due to additional assets placed in service
related to new store openings.

         Loss on investment. As of October 10, 2000, the Company recorded losses
in excess of its  investment in  RightStart.com  of $2.7 million and recorded an
allowance for  potential  uncollectibility  of $0.7 million in  connection  with
amounts owed by  RightStart.com  to the Company  under the  Management  Services
Agreement.

         Interest expense.  Interest expense increased from $0.3 million for the
thirty-nine  weeks ended  October  30, 1999 to $0.9  million for the same period
this year. The increase  reflects an increase in our outstanding  borrowings for
the current period over the prior period and higher interest rates.

         Provision for income  taxes.  The provision for income taxes is related
to state income  taxes.  No Federal or state income tax benefit was recorded for
either the current or prior period due to the uncertainty  surrounding realizing
any tax benefits in future years.



Liquidity and Capital Resources

         Our  ability to fund our  operations,  open new  stores on our  planned
timeframe and maintain  compliance  with our Credit Facility is dependent on our
ability to generate  sufficient cash flow from operations and secure  financing.
Historically,  we  have  incurred  losses  and may  continue  to  incur  losses,
depending  on the success of our  business  strategy.  Losses  could  negatively
affect  working  capital,  the  extension  of  credit by our  suppliers  and our
operations.

         In the first  thirty-nine weeks of Fiscal 2000, we used $4.0 million in
cash in our  operating  activities  compared to $4.4 million in cash used in our
operating  activities for the same period of Fiscal 1999. In the current period,
investing  activity  includes the loss on investment in  RightStart.com  of $3.4
million and $1.3 million for fixed asset additions  compared to $2.6 million for
fixed asset additions for the same period last year. The primary source of funds
for  the  use of  cash  in  financing  activities  in the  current  period  were
borrowings  under the  Company's  $13.0  million  credit  facility  (the "Credit
Facility"),  the sale of Series D Convertible Preferred Stock and warrants which
netted  proceeds of $4.5 million and the issuance of $3.0 million of Convertible
Notes. The net proceeds of $7.5 million were used to reduce amounts  outstanding
on the existing Credit Facility.

         As of October 28, 2000,  amounts  outstanding under the Credit Facility
consist of a term loan of $1.4  million  and $1.1  million  under its  revolving
credit line, which become due and payable in February 2001. The Company plans to
renew or  replace  the  Credit  Facility  prior to such  date.  The  Company  is
currently in  negotiations  with  potential  lenders,  however,  there can be no
assurance that a new or replacement facility will be obtained.


         During the first  thirty-nine  weeks of Fiscal 2000, our primary source
of liquidity for operations was from borrowings under the Credit  Facility.  The
Credit Facility consists of a $10.0 million revolving line of credit for working
capital (the "Revolving Line") and a $3.0 million capital  expenditure  facility
(the "Capex  Line"),  subject to reduction  beginning May 1, 2000.  Availability
under the Revolving Line is subject to a defined  borrowing  base. As of October
28, 2000  borrowings of $1.1 million were  outstanding  under the Revolving Line
and  borrowings  of $1.4 million  were  outstanding  under the Capex Line;  $5.2
million was  available  for  borrowing  at October 28, 2000 under the  Revolving
Line.  Interest  accrues on the  Revolving  Line at prime plus 1.0% and at prime
plus 1.5% on the Capex  Line.  At October  28,  2000,  the bank's  prime rate of
interest was 9.5%. The Credit  Facility  terminates on February 19, 2001, and on
such date, all borrowings thereunder are immediately due and payable. Borrowings
under the  Credit  Facility  are  secured  by  substantially  all of our  assets
(including   our  stock  in   RightStart.com,   but   excluding  the  assets  of
RightStart.com).  We expect to either  renew or replace  the Credit  Facility by
January 2001.

         The Credit Facility,  as amended through October 23, 2000, requires the
Company at all times  during  Fiscal  2000,  to maintain  net worth  (defined to
include equity,  additional  paid-in  capital,  retained  earnings  (accumulated
deficit) and  subordinated  debt, "Net Worth") of $6,600,000 as of September 30,
2000 and  $8,000,000  as of October 31, 2000 and for the balance of the term. At
October  28,  2000,  Net  Worth,  as  defined  in  the  Credit  Agreement,   was
$10,705,000.  The Credit  Facility also  requires  that the  Company's  earnings

                                       14
<PAGE>

before interest,  taxes,  depreciation,  amortization and non-recurring  charges
("EBITDA") be no less than zero for the twelve months ended October 28, 2000 and
$400,000 for the twelve  months ending  February 3, 2001.  For the twelve months
ended October 28, 2000, EBITDA, as defined in the Credit Agreement, was $49,000.
In addition,  the Company's  capital  expenditures  are limited to $3,000,000 in
Fiscal 2000. The Company is required to make principal reductions of $100,000 on
the Capex Line per month  beginning  May 1, 2000.  The Company  believes that it
will be able to meet its financial  covenants or be able to amend such covenants
as appropriate.

         The Company's  common stock is listed and traded on the Nasdaq National
Market. In July, the Nasdaq informed the Company that its consolidated net worth
had fallen below the Nasdaq  National  Market's  minimum-listing  requirement of
$4.0 million and  consequently  that its common stock was subject to de-listing.
The primary cause of the diminished  consolidated  net worth was attributable to
losses sustained by the Company's former subsidiary, RightStart.com. The Company
requested  that it continue to be listed at an oral hearing on October 12, 2000.
The new capital  received by the Company in the current fiscal quarter  together
with the  deconsolidation  of the  Company  and  RightStart.com  resulted in the
Company's  net  worth  exceeding  the  Nasdaq  minimum-listing  requirement.  In
November,  the Nasdaq  notified the Company that it was in  compliance  with the
minimum-listing  requirements  and accordingly  that the Company's  common stock
would continue to be listed on the Nasdaq National Market so long as the Company
maintains  compliance  with the Nasdaq's  listing  requirements.  Nasdaq  noted,
however,  that the Company had failed to evidence a market value of public float
of at least $5.0 million for several  consecutive  trading days. Nasdaq informed
the Company that should such failure  continue  for thirty  consecutive  trading
days  (beginning  November  16,2000) that the Company would be provided a ninety
calendar  day  period  in  which to  regain  compliance  for not  less  than ten
consecutive  trading  days.  Failure would result in a transfer of the Company's
securities  to the Nasdaq  SmallCap  market or  delisting.  Given the  Company's
current public float,  its common stock would need to trade above  approximately
$1.50 per share to meet this compliance standard.


Impact of Inflation

         The  impact of  inflation  on the  results of  operations  has not been
significant during our last three fiscal years.


Seasonality

         Our business is not  significantly  impacted by seasonal  fluctuations,
when compared to many other specialty  retail  operations.  Our products are for
the most part need-driven and the customer is often the end user of the product.
We do experience an increase in sales during the  Christmas  holiday  season due
primarily to an increased demand for gifts and toys.


Other Matters

New Accounting Requirements

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting for Derivative
Instruments and Hedging Activities," effective beginning in the first quarter of
2000. SFAS No. 133 establishes accounting and reporting standards for derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts,  and for hedging  activities.  It requires companies to recognize all
derivatives  as either  assets or  liabilities  on the balance sheet and measure
those  instruments  at fair  value.  SFAS No. 133 as amended by SFAS No. 137 and
SFAS 138, is effective for all fiscal  quarters of fiscal years  beginning after
June 15,  2000.  SFAS No. 133 is effective  for our first fiscal  quarter in the
year  2001  and is not  expected  to have a  material  effect  on our  financial
position.


ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk

         In the ordinary  course of operations,  we face no  significant  market
risk from derivative instruments.  Our purchase of imported products subjects us
to a minimum amount of foreign currency risk. Foreign currency risk is that risk
associated with recurring transactions with foreign companies, such as purchases
of goods from foreign vendors.  If the strength of foreign currencies  increases
compared  to the United  States  dollar,  the price of imported  products  could
increase.  We have no commitments,  however,  for future  purchases with foreign
vendors  and,  additionally,  we  have  the  ability  to  source  many  products
domestically in the event of significant import price increases.

         See  "Management's  Discussion and Analysis of Financial  Condition and
Results of Operations -- Liquidity and Capital Resources" above for a discussion
of our debt  obligations,  the  interest  rates of which are linked to the prime

                                       15
<PAGE>

rate. We have not entered into any  derivative  financial  instruments to manage
interest  rate  risk,  currency  risk  or for  speculative  purposes  and we are
currently not evaluating the future use of these instruments.

                                       16
<PAGE>

                                     PART II

                                OTHER INFORMATION

Item 6.       Exhibits and Reports on Form 8-K

              The  Company  filed a report on Form 8-K on October 11,  2000,  as
amended on October 19,  2000,  with respect to its October 10, 2000 closing of a
private placement financing.


The following exhibits of The Right Start, Inc. are included herein:


Exhibit Number


10.1    Eleventh  Amendment  to  Loan  and Security Agreement and Waiver, dated
        October 23, 2000, between Heller Financial, Inc. and the Company.

10.2    Common Stock Purchase Agreement, dated as  of  October 10, 2000  between
        RightStart.com and Michael Targoff.


27      Financial Data Schedule.


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                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned and thereunto duly authorized.


                              THE RIGHT START, INC.



Date:  December 12, 2000                                         /s/ JERRY WELCH
                                                                     Jerry Welch
                                                         Chief Executive Officer


Date:  December 12, 2000                                 /s/ RAYMOND P. SPRINGER
                                                             Raymond P. Springer
                                                         Chief Financial Officer


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