##### Table of Contents



UNITED STATES
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             November 2, 2002

---

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         0-19526

---

Goodys Family Clothing, Inc.

---

(Exact name of registrant as specified in its charter)


|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Tennessee                                                      |  | 62-0793974                             
|                                                               |  |                                        
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification Number)

|                                              |  |           
|--------------------------------------------- |  | ----------
|400
Goodys Lane         Knoxville, Tennessee |  | 37922     
|                                              |  |           
|(Address of principal executive offices)      |  | (Zip Code)

(865) 966-2000

---

(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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes [X] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

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

Common Stock, no par value,32,555,533 shares outstanding as of November 18,
2002.





---

TABLE OF CONTENTS



|                                    |                                                                                                   |                                                      |  |  |  |  |  | 
|----------------------------------- | ------------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART 1  FINANCIAL INFORMATION     
|                                    | Item 1   Condensed Consolidated Financial Statements (Unaudited)                                
|                                    |                                                                                                   | Consolidated Statements of Operations               
|                                    |                                                                                                   | Consolidated Balance Sheets                         
|                                    |                                                                                                   | Consolidated Statements of Cash Flows               
|                                    |                                                                                                   | Notes to Condensed Consolidated Financial Statements
|                                    |                                                                                                   | INDEPENDENT ACCOUNTANTS REVIEW REPORT              
|                                    | Item 2.    Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                    | Item 3  Quantitative and Qualitative Disclosures about Market Risk                              
|                                    | Item 4  Controls and Procedures                                                                 
|PART II  OTHER INFORMATION        
|                                    | Item 1  Legal Proceedings   None                                                               
|                                    | Item 2.   Changes in Securities and Use of Proceeds    None                                    
|                                    | Item 3.    Defaults Upon Senior Securities    None                                             
|                                    | Item 4.    Submission of Matters to a Vote of Security Holders    None                         
|                                    | Item 5.    Other Information    None                                                           
|                                    | Item 6.    Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                         
|EX-10.94 EMPLOYMENT AGREEMENT      
|EX-10.95 SEPARATION AGREEMENT      
|EX-15 ACCOUNTANTS' AWARENESS LETTER
|EX-99.1 SECTION 906 CERTIFICATION  
|EX-99.2 SECTION 906 CERTIFICATION  
|EX-99.3 SECTION 906 CERTIFICATION  



---



##### Table of Contents



Goodys Family Clothing, Inc.
Index to Form 10-Q
November 2, 2002

|                                |                                                                                                |  |                                                      |        |  |       | 
|------------------------------- | ---------------------------------------------------------------------------------------------- |  | ---------------------------------------------------- | ------ |  | ----- | 
|Part I  Financial Information: |                                                                                                |  |                                                      |       
|                                | Item 1  Condensed Consolidated Financial Statements (Unaudited)                               |  |                                                      |        | 
|                                |                                                                                                |  | Consolidated Statements of Operations                |        |  | 3     | 
|                                |                                                                                                |  | Consolidated Balance Sheets                          |        |  | 4     | 
|                                |                                                                                                |  | Consolidated Statements of Cash Flows                |        |  | 5     | 
|                                |                                                                                                |  | Notes to Condensed Consolidated Financial Statements |        |  | 6 - 7 | 
|                                |                                                                                                |  | Independent Accountants Review Report               |        |  | 8     | 
|                                | Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations |  |                                                      | 9 - 12 | 
|                                | Item 3  Quantitative and Qualitative Disclosures about Market Risk                            |  |                                                      | 12     | 
|                                | Item 4  Controls and Procedures                                                               |  |                                                      | 13     | 
|Part II  Other Information     |                                                                                                |  | 14                                                   |       
|                                | Item 1. Legal Proceedings                                                                      |  |                                                      |        | 
|                                | Item 2. Changes in Securities and Use of Proceeds                                              |  |                                                      |        | 
|                                | Item 3. Defaults Upon Senior Securities                                                        |  |                                                      |        | 
|                                | Item 4. Submission of Matters to a Vote of Security Holders                                    |  |                                                      |        | 
|                                | Item 5. Other Information                                                                      |  |                                                      |        | 
|                                | Item 6. (a) Exhibits                                                                           |  |                                                      |        | 
|                                | Item 6. (b) Reports on Form 8-K                                                                |  |                                                      |        | 
|Signatures                      |                                                                                                |  | 15                                                   |       

2



---



##### Table of Contents






PART 1  FINANCIAL INFORMATION




Item 1   Condensed Consolidated Financial Statements




Goodys Family Clothing, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)

|                                             |  |   |         |             |  |             |         |             |  |             |         |  |  |   |         |   |  | 
|-------------------------------------------- |  | - | ------- | ----------- |  | ----------- | ------- | ----------- |  | ----------- | ------- |  |  | - | ------- | - |  | 
|                                             |  |   |         | Thirteen    |  | Thirty-nine
|                                             |  |   |         | Weeks Ended |  | Weeks Ended
|                                             |  |   |         |             |  |            
|                                             |  |   |         | November 2, |  | November 3, |         | November 2, |  | November 3,
|                                             |  |   |         | 2002        |  | 2001        |         | 2002        |  | 2001       
|                                             |  |   |         |             |  |             |         |             |  |            
|Sales                                        |  | $ | 268,324 |             |  | $           | 279,324 |             |  | $           | 835,873 |  |  | $ | 829,443 |  
|Cost of sales and occupancy expenses         |  |   | 190,660 |             |  |             | 195,996 |             |  |             | 594,860 |  |  |   | 610,807 |  
|                                             |  |   |         |             |  |             |         |             |  |             |         |  |  |   |         |  
|Gross profit                                 |  |   | 77,664  |             |  |             | 83,328  |             |  |             | 241,013 |  |  |   | 218,636 |  
|Selling, general and administrative
expenses |  |   | 82,836  |             |  |             | 82,779  |             |  |             | 235,509 |  |  |   | 238,948 |  
|                                             |  |   |         |             |  |             |         |             |  |             |         |  |  |   |         |  
|(Loss) earnings from operations              |  |   | (5,172  | )           |  |             | 549     |             |  |             | 5,504   |  |  |   | (20,312 | )
|Interest expense                             |  |   | 4       |             |  |             | 134     |             |  |             | 10      |  |  |   | 238     |  
|Investment income                            |  |   | 150     |             |  |             | 27      |             |  |             | 408     |  |  |   | 523     |  
|                                             |  |   |         |             |  |             |         |             |  |             |         |  |  |   |         |  
|(Loss) earnings before income taxes          |  |   | (5,026  | )           |  |             | 442     |             |  |             | 5,902   |  |  |   | (20,027 | )
|(Benefit) provision for income taxes         |  |   | (1,885  | )           |  |             | 166     |             |  |             | 2,213   |  |  |   | (7,510  | )
|                                             |  |   |         |             |  |             |         |             |  |             |         |  |  |   |         |  
|Net (loss) earnings                          |  | $ | (3,141  | )           |  | $           | 276     |             |  | $           | 3,689   |  |  | $ | (12,517 | )
|                                             |  |   |         |             |  |             |         |             |  |             |         |  |  |   |         |  
|(Loss) earnings per common share             |  |   |         |             |  |             |         |             |  |             |         |  |  |   |         |  
|Basic                                        |  |   |         |             |  |             |         |             |  |             |         |  |  |   |         |  
|Basic net (loss) earnings per share          |  | $ | (0.10   | )           |  | $           | 0.01    |             |  | $           | 0.11    |  |  | $ | (0.39   | )
|                                             |  |   |         |             |  |             |         |             |  |             |         |  |  |   |         |  
|Diluted                                      |  |   |         |             |  |             |         |             |  |             |         |  |  |   |         |  
|Diluted net (loss) earnings per share        |  | $ | (0.10   | )           |  | $           | 0.01    |             |  | $           | 0.11    |  |  | $ | (0.39   | )
|                                             |  |   |         |             |  |             |         |             |  |             |         |  |  |   |         |  
|Weighted
average common shares outstanding   |  |   |         |             |  |             |         |             |  |             |         |  |  |   |         |  
|Basic                                        |  |   | 32,556  |             |  |             | 32,450  |             |  |             | 32,515  |  |  |   | 32,438  |  
|                                             |  |   |         |             |  |             |         |             |  |             |         |  |  |   |         |  
|Diluted                                      |  |   | 32,556  |             |  |             | 32,501  |             |  |             | 33,122  |  |  |   | 32,438  |  
|                                             |  |   |         |             |  |             |         |             |  |             |         |  |  |   |         |  

See accompanying Notes to Condensed Consolidated Financial Statements and
Independent Accountants Review Report.

3



---



##### Table of Contents






Goodys Family Clothing, Inc. and Subsidiaries
Consolidated Balance Sheets(Dollars in thousands)

|                                       |                                                                                    |  |             |         |             |  |             |         |             |  |         |         | 
|-------------------------------------- | ---------------------------------------------------------------------------------- |  | ----------- | ------- | ----------- |  | ----------- | ------- | ----------- |  | ------- | ------- | 
|                                       |                                                                                    |  | November 2, |         | February 2, |  | November 3,
|                                       |                                                                                    |  | 2002        |         | 2002        |  | 2001       
|                                       |                                                                                    |  |             |         |             |  |            
|                                       |                                                                                    |  | (Unaudited) |         |             |  |             |         | (Unaudited)
|                                       |                                                                                    |  |             |         |             |  |             |         |            
|ASSETS                                 |                                                                                    |  |             |         |             |  |             |         |             |  |         |         | 
|Current Assets                         |                                                                                    |  |             |         |             |  |             |         |             |  |         |        
|                                       | Cash and cash equivalents                                                          |  | $           | 25,088  |             |  | $           | 53,806  |             |  | $       | 26,625  | 
|                                       | Inventories                                                                        |  |             | 261,937 |             |  |             | 179,971 |             |  |         | 282,445 | 
|                                       | Accounts receivable and other current assets                                       |  |             | 17,269  |             |  |             | 24,831  |             |  |         | 28,506  | 
|                                       |                                                                                    |  |             |         |             |  |             |         |             |  |         |         | 
|                                       | Total current assets                                                               |  |             | 304,294 |             |  |             | 258,608 |             |  |         | 337,576 | 
|Property and equipment, net            |                                                                                    |  | 116,355     |         |             |  | 128,041     |         |             |  | 134,706 |        
|Other assets                           |                                                                                    |  | 9,525       |         |             |  | 9,585       |         |             |  | 10,509  |        
|                                       |                                                                                    |  |             |         |             |  |             |         |             |  |         |         | 
|                                       | Total assets                                                                       |  | $           | 430,174 |             |  | $           | 396,234 |             |  | $       | 482,791 | 
|                                       |                                                                                    |  |             |         |             |  |             |         |             |  |         |         | 
|LIABILITIES AND SHAREHOLDERS EQUITY   |                                                                                    |  |             |         |             |  |             |         |             |  |         |        
|Current Liabilities                    |                                                                                    |  |             |         |             |  |             |         |             |  |         |        
|                                       | Accounts payable                                                                   |  | $           | 133,356 |             |  | $           | 115,063 |             |  | $       | 157,495 | 
|                                       | Accrued expenses                                                                   |  |             | 66,751  |             |  |             | 58,301  |             |  |         | 60,486  | 
|                                       | Borrowings under credit facility                                                   |  |             |        |             |  |             |        |             |  |         | 30,000  | 
|                                       |                                                                                    |  |             |         |             |  |             |         |             |  |         |         | 
|                                       | Total current liabilities                                                          |  |             | 200,107 |             |  |             | 173,364 |             |  |         | 247,981 | 
|Other long-term liabilities            |                                                                                    |  | 6,240       |         |             |  | 6,077       |         |             |  | 7,174   |        
|Deferred income taxes                  |                                                                                    |  | 16,581      |         |             |  | 14,077      |         |             |  | 17,865  |        
|                                       |                                                                                    |  |             |         |             |  |             |         |             |  |         |         | 
|                                       | Total liabilities                                                                  |  |             | 222,928 |             |  |             | 193,518 |             |  |         | 273,020 | 
|                                       |                                                                                    |  |             |         |             |  |             |         |             |  |         |         | 
|Commitments and Contingencies (Note 5) |                                                                                    |  |             |         |             |  |             |         |             |  |         |        
|                                      
|Shareholders
Equity                   |                                                                                    | 
|                                       | Preferred stock, par value $1.00 per share;                                        | 
|                                       | Authorized - 2,000,000 shares; issued and outstanding  none                       | 
|                                       | Class B Common stock, no par value;                                                | 
|                                       | Authorized - 50,000,000 shares; issued and outstanding  none                      | 
|                                       | Common stock, no par value;                                                        | 
|                                       | Authorized
- 50,000,000 shares;                                                    | 
|                                       | Issued
and outstanding  32,555,533, 32,451,130and 32,451,130 shares, respectively |  |             | 22,245  |             |  |             | 21,720  |             |  |         | 21,719  | 
|Paid-in capital                        |                                                                                    |  | 10,510      |         |             |  | 10,194      |         |             |  | 9,576   |        
|Retained earnings                      |                                                                                    |  | 174,491     |         |             |  | 170,802     |         |             |  | 178,476 |        
|                                       |                                                                                    |  |             |         |             |  |             |         |             |  |         |         | 
|                                       | Total shareholders equity                                                         |  |             | 207,246 |             |  |             | 202,716 |             |  |         | 209,771 | 
|                                       |                                                                                    |  |             |         |             |  |             |         |             |  |         |         | 
|                                       | Total liabilities and shareholders equity                                         |  | $           | 430,174 |             |  | $           | 396,234 |             |  | $       | 482,791 | 
|                                       |                                                                                    |  |             |         |             |  |             |         |             |  |         |         | 

See accompanying Notes to Consolidated Financial Statements and Independent
Accountants Review Report.

4



---



##### Table of Contents






Goodys Family Clothing, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
(In thousands)

|                                                                                       |                                   |                                             |                              |                                       |        |                         |         |             |        |         |         |  
|-------------------------------------------------------------------------------------- | --------------------------------- | ------------------------------------------- | ---------------------------- | ------------------------------------- | ------ | ----------------------- | ------- | ----------- | ------ | ------- | ------- | -
|                                                                                       |                                   |                                             |                              |                                       |        | Thirty-nine Weeks Ended
|                                                                                       |                                   |                                             |                              |                                       |        |                        
|                                                                                       |                                   |                                             |                              |                                       |        | November 2,             |         | November 3,
|                                                                                       |                                   |                                             |                              |                                       |        | 2002                    |         | 2001       
|                                                                                       |                                   |                                             |                              |                                       |        |                         |         |            
|Cash Flows from Operating Activities                                                   |                                   |                                             |                              |                                       |        |                         |         |            
|Net earnings (loss)                                                                    |                                   | $                                           | 3,689                        |                                       |        | $                       | (12,517 | )          
|Adjustments to reconcile net earnings (loss) to net cash
used in operating activities: |                                   |                                             |                              |                                       |        |                         |         |            
|                                                                                       |                                   | Depreciation and amortization               |                              |                                       | 17,105 |                         |         |             | 17,742 |        
|                                                                                       |                                   | Net loss on asset disposals and write downs |                              |                                       | 527    |                         |         |             | 85     |        
|                                                                                       |                                   | Changes in assets and liabilities:          |                              |                                       |        |                         |         |             |        |        
|                                                                                       |                                   |                                             | Inventories                  |                                       |        | (81,966                 | )       |             |        | (74,725 | )      
|                                                                                       |                                   |                                             | Accounts payable             |                                       |        | 18,293                  |         |             |        | 27,638  |        
|                                                                                       |                                   |                                             | Income taxes                 |                                       |        | 14,930                  |         |             |        | (6,097  | )      
|                                                                                       |                                   |                                             | Other assets and liabilities |                                       |        | 3,965                   |         |             |        | (4,363  | )      
|                                                                                       |                                   |                                             |                              |                                       |        |                         |         |            
|                                                                                       |                                   |                                             |                              | Cash used in operating activities     |        |                         | (23,457 | )           |        |         | (52,237 | )
|                                                                                       |                                   |                                             |                              |                                       |        |                         |         |            
|Cash Flows from Investing Activities                                                   |                                   |                                             |                              |                                       |        |                         |         |            
|Acquisitions of property and equipment                                                 |                                   |                                             | (6,146                       | )                                     |        |                         | (14,049 | )          
|Proceeds from sale of property and equipment                                           |                                   |                                             | 359                          |                                       |        |                         | 20      |            
|                                                                                       |                                   |                                             |                              |                                       |        |                         |         |            
|                                                                                       |                                   |                                             |                              | Cash used in investing activities     |        |                         | (5,787  | )           |        |         | (14,029 | )
|                                                                                       |                                   |                                             |                              |                                       |        |                         |         |            
|Cash Flows from Financing Activities                                                   |                                   |                                             |                              |                                       |        |                         |         |            
|Net borrowings under credit facility                                                   |                                   |                                             |                             |                                       |        |                         | 30,000  |            
|Proceeds from exercise of stock options                                                |                                   |                                             | 526                          |                                       |        |                         | 141     |            
|                                                                                       |                                   |                                             |                              |                                       |        |                         |         |            
|                                                                                       |                                   |                                             |                              | Cash provided by financing activities |        |                         | 526     |             |        |         | 30,141  |  
|                                                                                       |                                   |                                             |                              |                                       |        |                         |         |            
|Cash and cash equivalents:                                                             |                                   |                                             |                              |                                       |        |                         |         |            
|Net decrease in cash and cash equivalents                                              |                                   |                                             | (28,718                      | )                                     |        |                         | (36,125 | )          
|Cash and cash equivalents, beginning of period                                         |                                   |                                             | 53,806                       |                                       |        |                         | 62,750  |            
|                                                                                       |                                   |                                             |                              |                                       |        |                         |         |            
|Cash and cash equivalents, end of period                                               |                                   | $                                           | 25,088                       |                                       |        | $                       | 26,625  |            
|                                                                                       |                                   |                                             |                              |                                       |        |                         |         |            
|Supplemental Disclosures:                                                              |                                   |                                             |                              |                                       |        |                         |         |            
|                                                                                       | Net income tax (refunds) payments |                                             | $                            | (11,674                               | )      |                         | $       | 1,204       |       
|                                                                                       | Interest payments                 |                                             |                              | 5                                     |        |                         |         | 102         |       

See accompanying Notes to Condensed Consolidated Financial Statements and
Independent Accountants Review Report.
5Table of Contents




Goodys Family Clothing, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

(1)  Basis of presentation

The accompanying condensed consolidated financial statements of Goodys Family
Clothing, Inc. and subsidiaries (the Company) are unaudited and have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission for interim financial statements. In the opinion of the Companys
management, the accompanying unaudited condensed consolidated financial
statements include all adjustments, consisting primarily of normal and
recurring adjustments, necessary for a fair presentation of the Companys
financial position, results of operations and cash flows for the interim
periods presented. Due to the seasonal nature of the Companys business, the
results of operations for the interim periods are not necessarily indicative of
the results that may be achieved for the entire year. The condensed
consolidated financial statements should be read in conjunction with the
audited consolidated financial statements and the notes thereto contained in
the Companys Annual Report on Form 10-K for its fiscal year ended February 2,
2002.

(2)  Credit arrangements

In May 2001, the Company entered into a five-year $130,000,000 syndicated
revolving loan and security agreement that provides for cash borrowings for
general corporate purposes, including a $95,000,000 sub-facility for the
issuance of letters of credit. Borrowings under this credit facility are
limited by collateral formulas, based principally upon the Companys eligible
inventories. The credit facility is secured primarily by the Companys
inventories, receivables and cash and cash equivalents. If availability (as
calculated pursuant to the credit facility) falls below $25,000,000, the
Company would be required, for a period of time, to comply with a financial
covenant requiring it to maintain minimum levels of tangible net worth based on
formulas. The credit facility also contains certain discretionary provisions
that enable the lender to reduce availability. The credit facility bears
interest at LIBOR plus an applicable margin or the prime rate. At November 2,
2002, the Company had no borrowings and $39,454,000 in letters of credit
outstanding under the facility.

(3)  Recent accounting pronouncements

In August 2001, the Financial Accounting Standards Board (the FASB) issued
Statement of Financial Accounting Standards No. 144 (SFAS 144), Accounting
for the Impairment or Disposal of Long-Lived Assets. SFAS 144 supersedes SFAS
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of, and the accounting and reporting provisions relating
to the disposal of a segment of a business of Accounting Principles Board
Opinion No. 30. The Company adopted SFAS 144 on February 3, 2002; the adoption
of this statement did not have a significant impact on the Companys
consolidated financial statements.

In June 2002, the FASB issued Statement of Financial Accounting Standards No.
146 (SFAS 146), Accounting for Costs Associated with Exit or Disposal
Activities. SFAS 146 supersedes Emerging Issues Task Force Issue No. 94-3.
SFAS 146 requires that the liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred, not at the date
of an entitys commitment to an exit or disposal plan. SFAS 146 will apply to
the Company beginning January 1, 2003.

6



---



##### Table of Contents



Goodys Family Clothing, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)    continued

(4)  Restructuring Accrual

The Company recorded a restructuring charge during the fourth quarter of fiscal
2001 of approximately $1,335,000 for a reduction in the Companys work force at
its corporate office and distribution centers, expected to be completed during
fiscal 2002. The following is an analysis of the activity in this restructuring
accrual from the beginning of fiscal 2002 through the third quarter of fiscal
2002:

|                                     |  |                  |          |                   |  |       |          |   |  |   |          |  
|------------------------------------ |  | ---------------- | -------- | ----------------- |  | ----- | -------- | - |  | - | -------- | -
|                                     |  | Severance and    |          |                   |  |       |          |   |  |  
|                                     |  | related payments |          | Professional fees |  | Total
|                                     |  |                  |          |                   |  |      
|Accrued balance at February 2, 2002  |  | $                | 480,000  |                   |  | $     | 332,000  |   |  | $ | 812,000  |  
|Payments                             |  |                  | (258,000 | )                 |  |       | (432,000 | ) |  |   | (690,000 | )
|Amounts (credited) charged to income |  |                  | (151,000 | )                 |  |       | 131,000  |   |  |   | (20,000  | )
|                                     |  |                  |          |                   |  |       |          |   |  |   |          |  
|Accrued balance at May 4, 2002       |  |                  | 71,000   |                   |  |       | 31,000   |   |  |   | 102,000  |  
|                                     |  |                  |          |                   |  |       |          |   |  |   |          |  
|Payments                             |  |                  | (3,000   | )                 |  |       | (3,000   | ) |  |   | (6,000   | )
|Amounts credited to income           |  |                  | (25,000  | )                 |  |       | (28,000  | ) |  |   | (53,000  | )
|                                     |  |                  |          |                   |  |       |          |   |  |   |          |  
|Accrued balance at August 3, 2002    |  | $                | 43,000   |                   |  | $     |         |   |  | $ | 43,000   |  
|                                     |  |                  |          |                   |  |       |          |   |  |   |          |  
|Payments                             |  |                  | (9,000   | )                 |  |       |         |   |  |   | (9,000   | )
|                                     |  |                  |          |                   |  |       |          |   |  |   |          |  
|Accrued balance at November 2, 2002  |  | $                | 34,000   |                   |  | $     |         |   |  | $ | 34,000   |  
|                                     |  |                  |          |                   |  |       |          |   |  |   |          |  

(5)  Contingencies

In February 1999, a lawsuit was filed in the United States District Court for
the Middle District of Georgia and was served on the Company and Robert M.
Goodfriend, its Chairman and Chief Executive Officer, by 20 named plaintiffs,
generally alleging that the Company discriminated against a class of
African-American employees at its retail stores through the use of
discriminatory selection and compensation procedures and by maintaining unequal
terms and conditions of employment. The plaintiffs further allege that the
Company maintained a racially hostile working environment. The plaintiffs
claims are being brought under Title VII of the Civil Rights Act of 1964, as
amended, and under the Civil Rights Act of 1866. The plaintiffs are seeking to
have this action certified as a class action, but only as to the issue of
promotions. By way of damages, the plaintiffs are seeking, among other things,
injunctive relief (including restructuring of the Companys selection and
compensation procedures) as well as back pay, an award of attorneys fees and
costs, and other monetary relief. The Company is disputing these claims and is
continuing to defend these matters vigorously. The Company is unable to
estimate the effect, if any, the above lawsuit may have on the Companys
financial position, results of operations or cash flows.

In addition, the Company is a party to various other legal proceedings arising
in the ordinary course of its business. The Company has various insurance
policies in place in the event of unfavorable outcomes from such proceedings.
The insurance companies level of, and willingness to, support their coverage
could vary depending upon the circumstances of each particular case. As such,
there can be no assurance as to the level of support available from insurance
policies. Management does not currently believe that the ultimate outcome of
all such pending legal proceedings (other than the matter noted in the
paragraph above), individually and in the aggregate, would have a material
adverse effect on the Companys financial position, results of operations or
cash flows.

(6)  Reclassifications

Certain reclassifications have been made to the condensed consolidated
financial statements of prior periods to conform to the current period
presentation.

7



---



##### Table of Contents






INDEPENDENT ACCOUNTANTS REVIEW REPORT

Board of Directors and Shareholders
Goodys Family Clothing, Inc.
Knoxville, Tennessee:

We have reviewed the accompanying condensed consolidated balance sheets of
Goodys Family Clothing, Inc. and subsidiaries as of November 2, 2002 and
November 3, 2001 and the related condensed consolidated statements of
operations and cash flows for the thirteen and thirty-nine week periods then
ended. These financial statements are the responsibility of the Companys
management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with auditing standards generally accepted in the United States
of America, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express such
an opinion.

Based on our reviews, we are not aware of any material modifications that
should be made to such condensed consolidated financial statements for them to
be in conformity with accounting principles generally accepted in the United
States of America.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
Goodys Family Clothing, Inc. and subsidiaries as of February 2, 2002 and the
related consolidated statements of operations, shareholders equity and cash
flows for the year then ended (not presented herein); and in our report dated
March 18, 2002, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying consolidated balance sheet as of February 2, 2002 is fairly
stated, in all material respects, in relation to the consolidated balance sheet
from which it has been derived.

/s/Deloitte & Touche LLP
Atlanta, Georgia
November 19, 2002

8



---



##### Table of Contents






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

Forward-looking Statements

This Quarterly Report contains certain forward-looking statements which are
based upon current expectations, business plans and estimates and involve
material risks and uncertainties including, but not limited to: (i) the
Companys ability to resume historical levels of new store growth; (ii)
competition, including the impact of competitors pricing and store expansion
in markets in which the Company operates; (iii) the Companys ability to
reverse negative comparable store sales trends; (iv) the effectiveness of new
and existing advertising and promotional events by the Company; (v) weather
conditions; (vi) customer demand and trends in the apparel and retail industry
and the acceptance of merchandise acquired for sale by the Company; (vii) the
Companys ability to avoid excessive markdowns; (viii) the timely availability
to the Company of branded and private label merchandise in sufficient
quantities to satisfy customer demand; (ix) individual store performance,
including new stores; (x) the Companys ability to successfully execute its
business plans and strategies; (xi) the Companys compliance with loan
covenants and the availability of sufficient eligible collateral for borrowing;
(xii) the continued availability to the Company of adequate credit support from
vendors and factors; (xiii) unanticipated needs of the Company for additional
capital expenditures; (xiv) trends affecting the Companys financial condition
or results of operations; (xv) the outcome of pending trademark and other
litigation involving the Company; (xvi) employee relations; (xvii) the general
economic conditions within the Companys markets and an improvement in the
overall retail environment; and (xviii) global political unrest. Any
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, which generally can be identified by the use of
forward-looking terminology such as may, will, expect, estimate,
anticipate, believe, target, plan, project or continue or the
negatives thereof or other variations thereon or similar terminology, are made
on the basis of managements plans and current analysis of the Company, its
business and the industry as a whole. Readers are cautioned that any such
forward-looking statement is not a guarantee of future performance and involves
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statement as a result of various
factors. The Company does not undertake to publicly update or revise its
forward-looking statements even if experience or future changes make it clear
that any projected results expressed or implied therein will not be realized.
Additional information on risk factors that could potentially affect the
Companys financial results may be found in the Companys public filings with
the Securities and Exchange Commission. Certain of such filings may be accessed
through the Companys web site, http://www.goodysonline.com/investor.asp, then
select SEC Filings.

Results of Operations

The following table sets forth unaudited results of operations, as a percent of
sales, for the periods indicated:

|                                             |  |             |       |             |  |             |       |             |  |  |       |   |  |  |       |   
|-------------------------------------------- |  | ----------- | ----- | ----------- |  | ----------- | ----- | ----------- |  |  | ----- | - |  |  | ----- | --
|                                             |  | Thirteen    |       | Thirty-nine
|                                             |  | Weeks Ended |       | Weeks Ended
|                                             |  |             |       |            
|                                             |  | November 2, |       | November 3, |  | November 2, |       | November 3,
|                                             |  | 2002        |       | 2001        |  | 2002        |       | 2001       
|                                             |  |             |       |             |  |             |       |            
|Sales                                        |  |             | 100.0 | %           |  |             | 100.0 | %           |  |  | 100.0 | % |  |  | 100.0 | % 
|Cost of sales and occupancy expenses         |  |             | 71.0  |             |  |             | 70.2  |             |  |  | 71.2  |   |  |  | 73.6  |   
|                                             |  |             |       |             |  |             |       |             |  |  |       |   |  |  |       |   
|Gross profit                                 |  |             | 29.0  |             |  |             | 29.8  |             |  |  | 28.8  |   |  |  | 26.4  |   
|Selling, general and administrative expenses |  |             | 30.9  |             |  |             | 29.6  |             |  |  | 28.2  |   |  |  | 28.8  |   
|                                             |  |             |       |             |  |             |       |             |  |  |       |   |  |  |       |   
|(Loss) earnings from operations              |  |             | (1.9  | )           |  |             | 0.2   |             |  |  | 0.6   |   |  |  | (2.4  | ) 
|Interest expense                             |  |             |      |             |  |             |      |             |  |  |      |   |  |  |      |   
|Investment income                            |  |             |      |             |  |             |      |             |  |  | 0.1   |   |  |  |      |   
|                                             |  |             |       |             |  |             |       |             |  |  |       |   |  |  |       |   
|(Loss) earnings before income taxes          |  |             | (1.9  | )           |  |             | 0.2   |             |  |  | 0.7   |   |  |  | (2.4  | ) 
|(Benefit) provision for income taxes         |  |             | (0.7  | )           |  |             | 0.1   |             |  |  | 0.3   |   |  |  | (0.9  | ) 
|                                             |  |             |       |             |  |             |       |             |  |  |       |   |  |  |       |   
|Net (loss) earnings                          |  |             | (1.2  | )%          |  |             | 0.1   | %           |  |  | 0.4   | % |  |  | (1.5  | )%
|                                             |  |             |       |             |  |             |       |             |  |  |       |   |  |  |       |   

Thirteen Weeks Ended November 2, 2002 Compared with Thirteen Weeks Ended
November 3, 2001

OverviewDuring the third quarter of fiscal 2002, the Company remodeled three
stores and closed two stores, reducing the total number of stores in operation
at November 2, 2002 to 328, compared with 332 at November 3, 2001. During the
corresponding period of the previous fiscal year, the Company opened eight new
stores, relocated four stores and closed two stores. The net loss for the third
quarter of fiscal 2002 was $3,141,000 or (1.2%) of sales, compared with net
earnings of $276,000, or 0.1% of sales, for the third quarter of fiscal 2001.

9



---



##### Table of Contents



Sales  Sales for the third quarter of fiscal 2002 were $268,324,000, a 3.9%
decrease from the $279,324,000 in sales for the third quarter of fiscal 2001.
This decrease of $11,000,000 consisted primarily of a 3.9% decrease in
comparable store sales. The Company believes sales were negatively impacted
during the first two months of the fiscal third quarter of 2002 by a difficult
retail environment, general economic uncertainty, and particularly during
September, unseasonable warm weather conditions. Sales improved for the third
month of the fiscal third quarter of 2002 due, in part, to cooler, more
seasonal weather patterns in the Companys markets.

Gross profit  Gross profit for the third quarter of fiscal 2002 was
$77,664,000, or 29.0% of sales, a $5,664,000 decrease from the $83,328,000 in
gross profit, or 29.8% of sales, generated for the third quarter of fiscal
2001. The decrease in gross profit of 0.8%, as a percent of sales, for the
third quarter ended November 2, 2002 compared with the third quarter ended
November 3, 2001 resulted from (i) a 0.5% decrease in merchandise margins
reflecting increased promotional pricing activity during the quarter, and (ii)
a 0.3% increase in occupancy costs which were not leveraged due to a shortfall
in sales.

Selling, general and administrative
expenses  Selling, general and
administrative expenses for the third quarter of fiscal 2002 were $82,836,000,
or 30.9% of sales, an increase of $57,000 from $82,779,000, or 29.6% of sales,
for the third quarter of fiscal 2001. The 1.3% increase in selling, general and
administrative expenses, as a percent of sales, for the third quarter of fiscal
2002 compared with the third quarter of fiscal 2001 was due primarily to the
loss of leverage from the decline in sales as noted above and is comprised of
(i) a 1.6% increase in advertising and promotional expenses and (ii) a 0.1% net
increase in other selling, general and administrative expenses, offset by a
0.4% decrease in payroll expenses. Included in selling, general and
administrative expenses for the third quarter of fiscal 2002 is approximately
$1,200,000 of expenses related to the Companys severance agreement with its
former President and Chief Merchandising Officer. In addition, the Company
incurred approximately $530,000 of expenses during the third quarter of fiscal
2002 related to a potential acquisition of the Company. On November 1, 2002,
the Company announced that the negotiations regarding this acquisition had
ended.

Interest expense  Interest expense for the third quarter of fiscal 2002 was
$4,000, compared with $134,000 for the third quarter of fiscal 2001. The
decrease reflected the absence of borrowings under the credit facility during
the third quarter of fiscal 2002.

Investment income  Investment income for the third quarter of fiscal 2002 was
$150,000, compared with $27,000 for the third quarter of fiscal 2001. The
increase was a result of higher levels of invested funds during the third
quarter of fiscal 2002.

Income taxes  The benefit for income taxes for the third quarter of fiscal 2002
was $1,885,000, for an effective tax rate of 37.5% of loss before income taxes,
compared with a provision for income taxes of $166,000, for an effective tax
rate of 37.6% of earnings before income taxes, for the third quarter of fiscal
2001.

Thirty-nine Weeks Ended November 2, 2002 Compared with Thirty-nine Weeks Ended
November 3, 2001

Overview  During the thirty-nine weeks ended November 2, 2002, the Company
opened two new stores, relocated or remodeled six stores and closed six stores,
reducing the total number of stores in operation at November 2, 2002 to 328,
compared with 332 at November 3, 2001. During the corresponding period of the
previous fiscal year, the Company opened 18 new stores, relocated or remodeled
12 stores and closed 3 stores. Net earnings for the thirty-nine weeks ended
November 2, 2002 were $3,689,000, or 0.4% as a percent of sales, compared with
a net loss of $12,517,000, or (1.5%) as a percent of sales, for the thirty-nine
weeks ended November 3, 2001.

Sales  Sales for the thirty-nine weeks ended November 2, 2002 were
$835,873,000, an 0.8% increase from the $829,443,000 in sales for the
corresponding period of the previous fiscal year. This increase of $6,430,000
consisted of additional sales from new and transition stores that was partially
offset by a 1.6% decrease in comparable store sales. The Company experienced a
total sales increase of 7.7% in the first fiscal quarter of 2002. Total sales
decreased 1.0% and 3.9% during the second and third fiscal quarters of 2002,
respectively. The Company believes sales were negatively impacted during the
second and third quarters of fiscal 2002 due to a difficult retail environment
and general economic uncertainty.

Gross profit  Gross profit for the thirty-nine weeks ended November 2, 2002 was
$241,013,000, or 28.8% of sales, a $22,377,000 increase from the $218,636,000
in gross profit, or 26.4% of sales, generated for the corresponding period of
the previous fiscal year. The 2.4% increase in gross profit, as a percent of
sales, for the thirty-nine weeks ended November 2, 2002 compared with the
thirty-nine weeks ended November 3, 2001 resulted from (i) a 2.7% increase in
merchandise margins resulting primarily from less promotional

10



---



##### Table of Contents



pricing during the first
twenty-six weeks of the fiscal year due to lower inventory levels, offset by
(ii) a 0.3% increase in occupancy costs which were not leveraged due to a
shortfall in sales.

Selling, general and administrative
expenses  Selling, general and
administrative expenses for the thirty-nine weeks ended November 2, 2002 were
$235,509,000, or 28.2% of sales, a decrease of $3,439,000 from $238,948,000, or
28.8% of sales, for the corresponding period of the previous fiscal year. The
0.6% decrease in selling, general and administrative expenses, as a percent of
sales, for the thirty-nine weeks ended November 2, 2002 compared with the
thirty-nine weeks ended November 3, 2001 was primarily due to a reduction in
the Companys work force at its corporate office and distribution centers and
is comprised of (i) a 0.6% decrease in stores and corporate payroll expenses,
(ii) a net 0.3% decrease in all other selling, general and administrative
expenses, offset by (iii) a 0.3% increase in advertising and promotional
expenses.

Interest expense  Interest expense for the thirty-nine weeks ended November 2,
2002 was $10,000, a decrease of $228,000 compared with the corresponding period
of the previous fiscal year. This decrease reflected the absence of borrowings
under the credit facility for the thirty-nine weeks ended November 2, 2002.

Investment income  Investment income for the thirty-nine weeks ended November
2, 2002 was $408,000, a decrease of $115,000 compared with the corresponding
period of the previous fiscal year, primarily as a result of an increase in
invested funds that was offset by a decrease in interest rates during the
period.

Income taxes  The provision for income taxes for the thirty-nine weeks ended
November 2, 2002 was $2,213,000 for an effective tax rate of 37.5% of earnings
before income taxes, compared with a benefit of ($7,510,000), for an effective
tax rate of 37.5% of loss before income taxes, for the corresponding period of
the previous fiscal year.

Liquidity and Capital Resources

Financial position  The Companys primary sources of liquidity are cash flows
from operations, including credit terms from vendors and factors, and
borrowings under its credit facility as discussed below. At November 2, 2002,
the Companys working capital was $104,187,000 compared with $89,595,000 at
November 3, 2001. Additionally, inventories at November 2, 2002 were 7.3% lower
than inventories at November 3, 2001, and on a per square foot basis, were 5.8%
lower when compared to November 3, 2001. Trade payables, as a percent of
inventories, were 50.9% at November 2, 2002 compared with 55.8% at November 3,
2001.

In May 2001, the Company entered into a five-year $130,000,000 syndicated
revolving loan and security agreement that provides for cash borrowings for
general corporate purposes, including a $95,000,000 sub-facility for the
issuance of letters of credit. Borrowings under this credit facility are
limited by collateral formulas, based principally upon the Companys eligible
inventories. The credit facility is secured primarily by the Companys
inventories, receivables and cash and cash equivalents. If availability (as
calculated pursuant to the credit facility) falls below $25,000,000, the
Company would be required, for a period of time, to comply with a financial
covenant requiring it to maintain minimum levels of tangible net worth based on
formulas. The credit facility also contains certain discretionary provisions
that enable the lender to reduce availability. The credit facility bears
interest at LIBOR plus an applicable margin or the prime rate.

At November 2, 2002, the Company had no cash borrowings and $39,454,000
outstanding for letters of credit under the credit facility compared with
$30,000,000 in cash borrowings and $33,931,000 outstanding for letters of
credit at November 3, 2001. During the thirty-nine weeks ended November 2,
2002, there were no cash borrowings at any time compared with an average of
$3,758,000 in borrowings (with the highest balance of $32,500,000 in October
2001) for the corresponding period of the previous fiscal year. Letters of
credit outstanding averaged $38,214,000 during the thirty-nine weeks ended
November 2, 2002 compared with $36,676,000 during the thirty-nine weeks ended
November 3, 2001. The highest balance of letters of credit outstanding during
the thirty-nine weeks ended November 2, 2002 was $59,698,000 (in April 2002)
compared with $49,169,000 (in June 2001) during the thirty-nine weeks ended
November 3, 2001. For the periods ended November 2, 2002 and November 3, 2001,
the highest balance of direct borrowings and letters of credit, on a combined
basis, was $59,698,000 (in April 2002) compared with $63,931,000 (in October
2001), respectively.

Cash Flows  Cash used in operating activities for the thirty-nine weeks ended
November 2, 2002 was $23,457,000 compared with $52,237,000 for the
corresponding period of the previous fiscal year. Cash used for increases in
inventory during the thirty-nine weeks ended November 2, 2002 and November 3,
2001 was $81,966,000 and $74,725,000, respectively. Accounts payable provided
cash of $18,293,000 and $27,638,000 in the thirty-nine weeks ended November 2,
2002 and November 3, 2001, respectively. Other assets and liabilities provided
cash of $3,965,000 in the thirty-nine weeks ended November 2, 2002, while in the corresponding period of the

11



---



##### Table of Contents



previous
fiscal year, $4,363,000 in cash was used in other assets and liabilities.
Depreciation and amortization expenses were $17,105,000 and $17,742,000 for the
thirty-nine weeks ended November 2, 2002 and November 3, 2001, respectively.
During the second quarter of fiscal 2002, the Company received tax refunds of
approximately $16,500,000 related to net operating loss carrybacks from fiscal
2001.

Cash flows from investing activities reflected a $5,787,000 and $14,029,000 net
use of cash for the thirty-nine weeks ended November 2, 2002 and November 3,
2001, respectively. Cash was used primarily to fund capital expenditures for
new, relocated and remodeled stores and for other corporate purposes.

Cash provided by financing activities was $526,000 and $30,141,000 for the
thirty-nine weeks ended November 2, 2002 and November 3, 2001, respectively.
The Company had no cash borrowings under the its credit facility during the
thirty-nine weeks ended November 2, 2002, compared with $30,000,000 outstanding
under the credit facility at November 3, 2001. During the thirty-nine weeks
ended November 2, 2002, the Company realized $526,000 from the issuance of
common stock resulting from the exercise of stock options, compared with
$141,000 during the corresponding period of the previous year.

In June 1999, the Board of Directors authorized the Company to purchase up to
$20,000,000 of its Common Stock. Through November 2, 2002, the Company had
purchased 1,118,300 shares of its common stock for an aggregate of $7,400,000
since the plans inception. The Company made no purchases during fiscal 2001 or
during the thirty-nine weeks ended November 2, 2002.

In fiscal 1999, the Company entered into a split-dollar life insurance
agreement, whereby the Company agreed to pay the premiums for certain
second-to-die policies insuring the lives of Mr. and Mrs. Robert M. Goodfriend,
which policies are owned by a trust for the benefit of the Goodfriends
children. The Company had planned to pay premiums on such policies of $2.4
million in fiscal 2002, and repay in fiscal 2003 a $1.3 million loan that had
been taken against such policies in fiscal 2001. However, the Company has
postponed premium payments on these split-dollar policies pending clarification
of certain ambiguities in the Sarbanes-Oxley Act of 2002. The Company has
certain rights under this agreement, including the right to terminate these
policies at any time prior to the occurrence of certain restricting events.

OutlookThe Company relocated one store on November 7, 2002 and does not
plan any additional store openings or relocations for the remainder of the
fiscal year. However, the Company may close up to two more stores prior to the
end of the fiscal year. Management estimates that capital expenditures of
approximately $2,500,000 will be required during the remainder of fiscal 2002,
primarily related to store improvements, management information systems and
general corporate purposes. The Company may also continue purchasing shares of
its common stock, from time to time, in the open market or in privately
negotiated transactions, depending on price, prevailing market conditions and
other factors in accordance with its stock repurchase plan.

Selling, general and administrative expenses for fiscal 2002 are expected
to be at or below budgeted levels, reflecting the savings realized as part of
the restructuring program previously announced (see Note 4 to Notes to
Condensed Consolidated Financial Statements). However, with lower comparable
store sales for the first nine months of fiscal 2002 and higher than planned
advertising expenditures for the second half of fiscal 2002, the Company now
believes that the decline in its selling, general and administrative expense
rate for fiscal 2002, as compared with the prior fiscal year, will be less than
the 100 basis points previously announced.

The Companys primary needs for capital resources are for the opening of new
stores, relocating and remodeling of existing stores, purchase of store
inventories, capital expenditures and for normal operating purposes. Management
believes that its existing working capital, together with cash flows from
operations, including credit terms from vendors and factors, and the borrowings
available under the credit facility, will be sufficient to meet the Companys
operating and capital expenditure requirements. However, among other things, an
adverse outcome of pending litigation (as described in Note 5 - Contingencies in
the Notes to Condensed Consolidated Financial Statements) or the unavailability
of borrowings under the credit facility could negatively affect working
capital.




Item 3  Quantitative and Qualitative Disclosures about Market Risk

The Company has no material investments or risks in market risk sensitive
instruments.

12



---



##### Table of Contents






Item 4  Controls and Procedures

Within the 90 days prior to the date of this Form 10-Q, the Company carried out
an evaluation, under the supervision and with the participation of the
Companys management, including the Companys Chairman and Chief Executive
Officer along with the Companys Chief Financial Officer and Chief Accounting
Officer, of the effectiveness of the design and operation of the Companys
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based
upon that evaluation, the Companys Chairman and Chief Executive Officer along
with the Companys Chief Financial Officer and Chief Accounting Officer
concluded that the Companys disclosure controls and procedures are effective
in timely alerting them to material information relating to the Company
(including its consolidated subsidiaries) required to be included in the
Companys periodic SEC filings. There have been no significant changes in the
Companys internal controls or in other factors which could significantly
affect internal controls subsequent to the date the Company carried out its
evaluation.

13



---



##### Table of Contents






PART II  OTHER INFORMATION




Item 1  Legal Proceedings- None




Item 2.   Changes in Securities and Use of Proceeds- None




Item 3.    Defaults Upon Senior Securities- None




Item 4.    Submission of Matters to a Vote of Security Holders- None




Item 5.    Other Information- None




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

(a)  Exhibits -

|      |  |                                                                                                                        
|----- |  | -----------------------------------------------------------------------------------------------------------------------
|10.94 |  | Employment agreement between the Registrant and
Thomas Carey dated August 15, 2002.                                    
|10.95 |  | Separation agreement between the Registrant and
Lana Cain Krauter dated October 16, 2002.                              
|15    |  | Accountants Awareness Letter                                                                                          
|99.1  |  | Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|99.2  |  | Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|99.3  |  | Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

(b)  Reports on Form 8-K -



| |  | On October 1, 2002, the Company filed a Current Report on Form 8-K
reporting under item 5 of its issuance of a press release concerning its
entering into a non-binding Letter of Intent for the acquisition by a
private equity group of 100% of its outstanding common stock for a
purchase price of between $6.50 and $7.50 per share.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | On November 4, 2002, the Company filed a Current Report on Form 8-K
reporting under item 5 of its issuance of a press release concerning the
termination of negotiations for the previously announced acquisition by
a private equity group.                                                                                             

14



---



##### Table of Contents



GOODYS FAMILY CLOTHING, INC.




SIGNATURES



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

|      |  |                   |  |                                                                                                                                   
|----- |  | ----------------- |  | ----------------------------------------------------------------------------------------------------------------------------------
|      |  |                   |  | GOODYS FAMILY CLOTHING, INC.
       (Registrant)                                                                                 
|     
|      |  |                   |  |                                                                                                                                   
|     
|Date: |  | November 22, 2002 |  | /s/ Robert M. GoodfriendRobert M. Goodfriend
Chairman of the Board and
Chief Executive Officer                                    
|     
|      |  |                   |  |                                                                                                                                   
|     
|Date: |  | November 22, 2002 |  | /s/ Edward R. CarlinEdward R. Carlin
Executive Vice President,
Chief Financial Officer and Secretary
(Principal Financial Officer)
|     
|      |  |                   |  |                                                                                                                                   
|     
|Date: |  | November 22, 2002 |  | /s/ David G. PeekDavid G. Peek
Senior Vice President and
Chief Accounting Officer
(Principal Accounting Officer)                  

15



---



##### Table of Contents



GOODYS FAMILY CLOTHING, INC.
CERTIFICATION PURSUANT TO
RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert M. Goodfriend, Chairman of the Board and Chief Executive Officer of
the Company, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Goodys Family
Clothing, Inc. (the registrant);                                                                                                                                                                                                                       
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

/s/ Robert M. Goodfriend

Robert M. Goodfriend
Chairman of the Board and Chief Executive Officer
November 22, 2002

16



---



##### Table of Contents



GOODYS FAMILY CLOTHING, INC.
CERTIFICATION PURSUANT TO
RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Edward R. Carlin, Executive Vice President, Chief Financial Officer and
Secretary of the Company, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Goodys Family
Clothing, Inc. (the registrant);                                                                                                                                                                                                                       
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

/s/ Edward R. Carlin

Edward R. Carlin
Executive Vice President, Chief Financial Officer and Secretary
November 22, 2002

17



---



##### Table of Contents



GOODYS FAMILY CLOTHING, INC.
CERTIFICATION PURSUANT TO
RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David G. Peek, Senior Vice President and Chief Accounting Officer of the
Company, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Goodys Family
Clothing, Inc. (the registrant);                                                                                                                                                                                                                       
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

/s/ David G. Peek

David G. Peek
Senior Vice President and Chief Accounting Officer
November 22, 2002

18