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 July 29, 2000

                                       OR

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

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


                         Commission File Number 0-19536

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


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


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

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


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

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

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

Common Stock Outstanding as of July 29, 2000 - 5,614,175 shares.


<PAGE>


                              THE RIGHT START, INC.

                               INDEX TO FORM 10-Q
                  FOR THE THIRTEEN AND TWENTY-SIX WEEK PERIODS
                               ENDED July 29, 2000




                         PART I - FINANCIAL INFORMATION


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


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


Item 3.  Quantitative and Qualitative Disclosures About Market Risk   20



                           PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K                             21


SIGNATURES                                                            22



                                     Page 2
<PAGE>


<TABLE>
<CAPTION>
                              THE RIGHT START, INC. AND SUBSIDIARY
                                  CONSOLIDATED BALANCE SHEETS



                                                                July 29, 2000    January 29, 2000
                                                                -------------    ----------------
                                                                  (unaudited)
                                             ASSETS

<S>                                                             <C>              <C>
Current assets:
     Cash and cash equivalents                                  $  1,378,000     $     5,199,000
     Accounts and other  receivables                                 638,000             682,000
     Merchandise inventories                                      10,450,000           9,694,000
     Other current assets                                          1,680,000           1,849,000
                                                                -------------    ----------------
                       Total current assets                       14,146,000          17,424,000

Noncurrent assets:
     Property, fixtures and equipment, net                        10,677,000          10,648,000
     Deferred income taxes                                         1,400,000           1,400,000
     Other noncurrent assets                                         435,000           1,255,000
                                                                -------------    ----------------

                                                                $ 26,658,000     $    30,727,000
                                                                =============    ================


                              LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Accounts payable and accrued expenses                      $ 12,315,000     $     9,566,000
     Revolving line of credit                                      4,343,000           3,377,000
     Term note payable                                             2,700,000
     Secured bridge notes payable, net of unamortized
        discount of $130,000                                       3,805,000
                                                                -------------    ----------------
                       Total current liabilities                  23,163,000          12,943,000

Term note payable                                                                      3,000,000
Deferred rent                                                      1,287,000           1,378,000

Minority interest in consolidated subsidiary                                           3,397,000

Commitments and contingencies

Mandatorily redeemable preferred stock Series A,
     $3,000,000 redemption value                                   2,257,000           2,088,000

Shareholders' equity (deficit):
     Convertible preferred stock Series B                          1,547,000           1,875,000
     Convertible preferred stock Series C                          3,733,000           3,850,000
     Common stock (25,000,000 shares authorized
        at no par value; 5,614,175 and 5,417,666 issued and
        outstanding at July 29, 2000 and January 29, 2000,
        respectively                                              22,722,000          22,593,000
     Paid in capital                                              16,673,000          16,142,000
     Deferred compensation                                          (570,000)           (671,000)
     Accumulated deficit                                         (44,154,000)        (35,868,000)
                                                                -------------    ----------------
                       Total shareholders' equity (deficit)          (49,000)          7,921,000
                                                                -------------    ----------------

                                                                $ 26,658,000     $    30,727,000
                                                                =============    ================
</TABLE>




           See accompanying notes to consolidated financial statements


                                     Page 3
<PAGE>

<TABLE>
<CAPTION>

                                            THE RIGHT START, INC. AND SUBSIDIARY
                                            CONSOLIDATED STATEMENTS OF OPERATIONS




                                                             Thirteen Weeks Ended                 Twenty-six Weeks Ended
                                                        --------------------------------     ---------------------------------
                                                        July 29, 2000     July 31, 1999      July 29, 2000     July 31, 1999
                                                         (unaudited)       (unaudited)        (unaudited)       (unaudited)
                                                        --------------    -------------      --------------    --------------
<S>                                                     <C>               <C>                <C>               <C>
Retail store sales                                      $   10,757,000    $   9,464,000      $   21,086,000    $   18,499,000

Online sales before promotional discounts                    3,915,000          265,000           8,648,000           265,000
Catalog sales                                                  277,000          869,000             901,000         2,555,000
Shipping and handling revenues                                 144,000          161,000             332,000           512,000
                                                        ---------------   --------------     ---------------   ---------------
       Total sales                                          15,093,000       10,759,000          30,967,000        21,831,000
       Promotional discounts related to online sales           399,000           39,000             982,000            39,000
                                                        --------------    -------------      --------------    --------------
       Net sales                                            14,694,000       10,720,000          29,985,000        21,792,000

Costs and expenses:
     Cost of goods sold - merchandise                        7,704,000        5,206,000          15,544,000        10,321,000
     Cost of goods sold - shipping and handling                921,000          264,000           2,096,000           573,000
     Operating expense, includes non-cash compensation of
         $51,000, $1,770,000, $103,000 and $1,770,000,
         respectively                                        5,329,000        6,078,000          10,735,000        10,178,000
     Marketing and advertising expense, including $29,000
        and $56,000 of non-cash expense for the thirteen
        and twenty-six weeks ended July 29, 2000,
        respectively                                         1,751,000          213,000           5,961,000           356,000
     General and administrative expense                      1,808,000          966,000           3,673,000         1,855,000
     Pre-opening costs                                          45,000           75,000             201,000           137,000
     Depreciation and amortization expense                     782,000          399,000           1,554,000           748,000
     Store closing expense                                     341,000          151,000             341,000           151,000
                                                        ---------------   --------------     ---------------   ---------------
                                                            18,681,000       13,352,000          40,105,000        24,319,000
                                                        ---------------   --------------     ---------------   ---------------
Operating loss                                              (3,987,000)      (2,632,000)        (10,120,000)       (2,527,000)

Minority interest in consolidated subsidiary loss           (1,033,000)         (17,000)         (3,512,000)          (17,000)
Write off of initial public offering costs                     102,000                              874,000

Interest expense, net, includes non-cash bridge
   note discount of $150,000 and $169,000 for
   the thirteen weeks and twenty-six weeks
   ended July 29, 2000                                         524,000          112,000             765,000           197,000
                                                        ---------------   --------------     ---------------   ---------------

Loss before provision for income taxes                      (3,580,000)      (2,727,000)         (8,247,000)       (2,707,000)
Provision for income taxes                                      19,000           20,000              39,000            29,000
                                                        ---------------   --------------     ---------------   ---------------

Net loss                                                $   (3,599,000)   $  (2,747,000)     $   (8,286,000)   $   (2,736,000)
                                                        ===============   ==============     ===============   ===============

Basic and diluted loss per share                        $        (0.66)   $       (0.56)     $        (1.52)   $        (0.57)
                                                        ===============   ==============     ===============   ===============

Basic and diluted weighted average number of shares
     outstanding                                             5,614,175        5,058,878           5,578,515         5,055,349
                                                        ===============   ==============     ===============   ===============




                                 See accompanying notes to consolidated financial statements
</TABLE>

                                     Page 4
<PAGE>

<TABLE>
<CAPTION>
                                 THE RIGHT START, INC. AND SUBSIDIARY
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                        Twenty-six Weeks Ended
                                                                ----------------------------------------
                                                                  July 29, 2000          July 31, 1999
                                                                -----------------      ----------------
                                                                   (unaudited)           (unaudited)
Cash flows from operating activities:
<S>                                                             <C>                    <C>
       Net loss                                                 $      (8,286,000)     $     (2,736,000)
       Adjustments to reconcile net loss
         to net cash provided by (used in) operating activities:
           Depreciation and amortization                                1,554,000               748,000
           Non-cash compensation expense                                  103,000             1,770,000
           Non-cash advertising expense                                    56,000
           Amortization of issued warrants                                 27,000
           Store closing expense                                          201,000               151,000
           Amortization of bridge note discount                           169,000
           Minority interest in consolidated subsidiary loss           (3,512,000)              (17,000)
           Changes in assets and liabilities affecting operations       3,041,000                64,000
                                                                -----------------      ----------------

                Net cash used in operating activities                  (6,647,000)              (20,000)
                                                                -----------------      ----------------

Net cash used in investing activities:
       Additions to property, fixtures and equipment                   (1,904,000)           (1,575,000)
                                                                -----------------      ----------------

Cash flows from financing activities:
       Net proceeds from revolving line of credit                         966,000             2,332,000
       Net payments on term note payable                                 (300,000)             (500,000)
       Net proceeds from issuance of secured bridge notes               3,935,000
       Sale of preferred stock in consolidated subsidiary, net                               13,865,000
       Proceeds from common stock issued upon exercise of
          stock options                                                   129,000                37,000
                                                                -----------------      ----------------

                Net cash provided by financing activities               4,730,000            15,734,000
                                                                -----------------      ----------------


Net increase (decrease) in cash and cash equivalents                   (3,821,000)           14,139,000
Cash at beginning of period                                             5,199,000               626,000
                                                                -----------------      ----------------

Cash and cash equivalents at end of period                      $       1,378,000      $     14,765,000
                                                                =================      ================



                      See accompanying notes to consolidated financial statements
</TABLE>
                                     Page 5
<PAGE>


                      THE RIGHT START, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1:  Description of Business and Significant Accounting Policies

     The Right Start,  Inc. (the "Company" or "Parent") is a specialty  retailer
of high quality  developmental,  educational  and care  products for infants and
children.  The  consolidated  financial  statements  include  the results of the
Company and its majority-owned subsidiary, RightStart.com Inc. ("RightStart.com"
or the "Subsidiary"). RightStart.com was formed in April 1999 for the purpose of
engaging in electronic  commerce over the Internet.  Effective May 1, 1999,  the
Company  contributed  its  catalog  assets to  RightStart.com  and in July 1999,
RightStart.com  issued preferred stock to certain  investors (then  representing
33% on a fully-diluted basis) of RightStart.com's outstanding capital stock. The
preferred stock converted to common stock of RightStart.com in October 1999. The
Company's ownership interest in RightStart.com was 60.2% at July 29, 2000.

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

     Operating  results for the thirteen and twenty-six  week periods ended July
29, 2000 are not necessarily  indicative of the results that may be expected for
the year ending February 3, 2001.


NOTE 2:  Bridge Notes Payable

     In April 2000,  the  Subsidiary  sold secured bridge notes to affiliates in
the aggregate principal amount of $2,275,000 (the "Bridge Notes"),  and warrants
to purchase  113,753  shares of its common  stock at an exercise  price of $6.70
(the "Bridge  Warrants").  The Bridge Notes are secured by substantially  all of
the assets of the Subsidiary.  Using the Black-Scholes model, the estimated fair
value of the Bridge Warrants was calculated at $286,000 and has been recorded as
a reduction in the carrying  amount of the Bridge  Notes,  with a  corresponding
increase in  shareholders'  equity.  The  discount on the Bridge  Notes is being
amortized over the term of the notes as additional  interest expense.  A default
on the Bridge  Notes would permit such holders to foreclose on the assets of the
Subsidiary and require the Subsidiary, to the extent it has not already done so,
to issue to the  holders  of the  notes,  additional  warrants  to  purchase  an
aggregate of 8,740,220 shares, or approximately  48.9% of the outstanding common
stock of the  Subsidiary,  at an exercise  price of $0.25 per share,  payable in
cash or by  surrender of Bridge  Notes.  The Bridge Notes are due and payable on
October 18, 2000.

     In June 2000, the Subsidiary sold junior secured  convertible  bridge notes
to affiliates  in the aggregate  principal  amount of  approximately  $1,660,000
("the Convertible  Bridge Notes").  The Convertible Bridge Notes are subordinate
to the Bridge  Notes,  are  convertible  at  anytime  into  common  stock of the
Subsidiary  at a price of $.25 per share and are due and  payable on October 18,
2000.


NOTE 3:  Write off of Initial Public Offering Costs

     On January 18, 2000, RightStart.com filed a registration statement with the
Securities  and  Exchange  Commission  with respect to an offering of its common
stock.  Costs  of $0.8  million,  incurred  in  connection  with  the  offering,
including  audit fees,  legal fees,  various  filing fees and printer costs were
deferred pending the completion of the offering. On May 19, 2000, RightStart.com
filed  to  withdraw  this  registration  statement  because  of  adverse  market
conditions and expensed the deferred  costs in the first  quarter.  In addition,
the Company expensed $0.1 million of related legal costs in the current quarter.

                                     Page 6
<PAGE>

NOTE 4:  Per Share Data

     On December 15, 1998,  the  Company's  shareholders  approved a one-for-two
reverse split of the Company's common stock,  which had previously been approved
by the Company's  Board of Directors.  The reverse split was effective  December
15, 1998. All references in the consolidated  financial statements to shares and
related prices,  weighted average number of shares,  per share amounts and stock
plan data have been adjusted to reflect the reverse split.

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


                                                 Thirteen weeks ended           Twenty-six weeks ended
                                                 --------------------           ----------------------
                                                29-Jul-00      31-Jul-99       29-Jul-00       31-Jul-99
                                                ---------      ---------       ---------       ---------

<S>                                           <C>            <C>             <C>             <C>
Net loss                                      $(3,599,000)   $(2,747,000)    $(8,286,000)    $(2,736,000)
Less:  Preferred stock accretion                  (86,000)       (73,000)       (169,000)       (143,000)
                                              -----------    -----------     -----------     -----------
Basic and diluted loss applicable
  to common shareholders                      $(3,685,000)   $(2,820,000)    $(8,455,000)    $(2,879,000)
                                              ===========    ===========     ===========     ===========

Weighted average shares                         5,614,175      5,058,878       5,578,515       5,055,349
Loss per share, basic and diluted               $   (0.66)     $   (0.56)      $   (1.52)      $   (0.57)
</TABLE>


     Securities  that could  potentially  dilute EPS in the future that were not
included  in the  computation  of diluted  EPS  because to do so would have been
antidilutive for the periods presented  include options  outstanding to purchase
992,232 and 701,161  shares of common  stock at July 29, 2000 and July 31, 1999,
respectively;  Series B preferred stock  convertible  into 549,995 and 1,000,000
shares of common stock at July 29, 2000 and July 31, 1999, respectively;  Series
C preferred  stock  convertible  into  1,866,650 and 1,925,000  shares of common
stock at July 29,  2000 and July 31,  1999,  respectively;  and  113,753  Bridge
Warrants to purchase  common stock of  RightStart.com  at July 29,2000 (see Note
2).


NOTE 5:  Supplemental Disclosure of Cash Flow Information

      Interest paid amounted to $352,000 and $191,000 for the  twenty-six  weeks
ended July 29, 2000 and July 31, 1999, respectively.  Cash paid for income taxes
was $8,000 and $11,000 for the twenty-six weeks ended July 29, 2000 and July 31,
1999, respectively.





                                     Page 7
<PAGE>




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


                                               Twenty-six weeks ended
                                          ---------------------------------
                                             July 29, 2000     July 31, 1999
                                             -------------     -------------

Accounts and other receivables            $       44,000      $  (106,000)
Merchandise inventories                         (756,000)        (674,000)
Other current assets                             212,000         (149,000)
Other noncurrent assets                          764,000          (31,000)
Accounts payable and accrued expenses          2,818,000        1,044,000
Deferred rent                                    (41,000)         (20,000)
                                             ------------      ----------
                                            $  3,041,000      $    64,000
                                             ===========       ==========

Non-cash investing and financing activities

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

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

     In the twenty-six weeks ended July 29, 2000, the Company recorded preferred
dividends of $169,000.

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

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

NOTE 6:  New Accounting Pronouncements

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


NOTE 7:  Segment Information

     The  Company  has  two  reportable  segments;  Direct-to-customers,   which
includes online and catalog  operations,  and Retail,  which includes activities
related to the Company's retail stores.  Both segments sell products to meet the
needs of the  parents of infants  and small  children.  The  Direct-to-customers
segment also sells products directed to older children through age twelve.

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

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

      The Company's  reportable  segments have operations that offer the same or
similar products but have a different method of delivery to their customers.

                                     Page 8
<PAGE>

Segment information for the thirteen weeks ended July 29, 2000 is as follows:
<TABLE>
<CAPTION>
                                                                        Total Direct
                                       Online         Catalog           to-Customers     Retail           Total
                                       ------         -------           ------------     ------           -----
<S>                                  <C>              <C>              <C>            <C>             <C>
 Net sales                           $3,597,000       $340,000         $3,937,000     $10,757,000     $14,694,000
 Interest expense                       208,000                           208,000         316,000         524,000
 Depreciation                           273,000                           273,000         509,000         782,000
 Non-cash compensation                   42,000                            42,000           9,000          51,000
 Pre-opening costs                                                                         45,000          45,000
 Minority Interest                                                      1,033,000                       1,033,000
 Store closing expense                                                                    341,000         341,000
 Pre-tax Income (Loss)               (2,028,000)      (219,000)        (2,247,000)     (1,333,000)     (3,580,000)
 Total assets                         4,830,000        252,000          5,082,000      21,576,000      26,658,000
 Fixed asset additions                  172,000                           172,000         491,000         663,000
</TABLE>


Segment information for the thirteen weeks ended July 31, 1999 is as follows:


<TABLE>
<CAPTION>
                                                                        Total Direct
                                       Online         Catalog           to-Customers     Retail           Total
                                       ------         -------           ------------     ------           -----
<S>                                    <C>          <C>                <C>             <C>            <C>
 Net sales                             $228,000     $1,028,000         $1,256,000      $9,464,000     $10,720,000
 Interest expense                                                                         112,000         112,000
 Depreciation                            18,000                            18,000         381,000         399,000
 Non-cash compensation                                                                  1,770,000       1,770,000
 Pre-opening costs                                                                         75,000          75,000
 Minority Interest                                                         17,000                          17,000
 Store closing expense                                                                    151,000         151,000
 Pre-tax loss                          (332,000)                         (332,000)     (2,395,000)     (2,727,000)
 Total assets                        15,455,000        252,000         15,707,000      18,111,000      33,818,000
 Fixed asset additions                   74,000                            74,000         732,000         806,000
</TABLE>



Segment information for the twenty-six weeks ended July 29, 2000 is as follows:

<TABLE>
<CAPTION>
                                                                        Total Direct
                                       Online         Catalog           to-Customers     Retail           Total
                                       ------         -------           ------------     ------           -----
<S>                                  <C>            <C>                <C>            <C>             <C>
 Net sales                           $7,795,000     $1,104,000         $8,899,000     $21,086,000     $29,985,000
 Interest expense                       208,000                           208,000         557,000         765,000
 Depreciation                           505,000                           505,000       1,049,000       1,554,000
 Non-cash compensation                   83,000                            83,000          20,000         103,000
 Pre-opening costs                                                                        201,000         201,000
 Minority Interest                                                      3,512,000                       3,512,000
 Store closing expense                                                                    341,000         341,000
 Pre-tax loss                        (5,702,000)      (294,000)        (5,996,000)     (2,251,000)     (8,247,000)
 Total assets                         4,830,000        252,000          5,082,000      21,576,000      26,658,000
 Fixed asset additions                  766,000                           766,000       1,138,000       1,904,000
</TABLE>



                                    Page  9
<PAGE>

Segment information for the twenty-six weeks ended July 31, 1999 is as follows:

<TABLE>
<CAPTION>
                                                                        Total Direct
                                       Online         Catalog           to-Customers     Retail           Total
                                       ------         -------           ------------     ------           -----
<S>                                    <C>          <C>                <C>            <C>             <C>
 Net sales                             $228,000     $3,065,000         $3,293,000     $18,499,000     $21,792,000
 Interest expense                                                                         197,000         197,000
 Depreciation                            18,000          5,000             23,000         725,000         748,000
 Non-cash compensation                                                                  1,770,000       1,770,000
 Pre-opening costs                                                                        137,000         137,000
 Minority Interest                                                         17,000                          17,000
 Store closing expense                                                                    151,000         151,000
 Pre-tax Income (Loss)                 (332,000)       179,000           (153,000)     (2,554,000)     (2,707,000)
 Total assets                        15,455,000        252,000         15,707,000      18,111,000      33,818,000
 Fixed asset additions                   74,000                            74,000       1,501,000       1,575,000
</TABLE>




NOTE 8: Recent Developments

     The  Company's  common  stock is listed and  traded on the Nasdaq  National
Market.  The Nasdaq has informed the Company that its consolidated net worth has
fallen  below  the  Nasdaq   minimum-listing   requirement  of  $4  million  and
consequently will be de-listed. The Company has requested that it continue to be
listed and has been  notified  that its request  will be  considered  at an oral
hearing on October 12, 2000.  The primary cause of the  diminished  consolidated
net worth is  attributable to losses  sustained by the Company's  majority-owned
subsidiary,  RightStart.com  Inc. The Company expects that a sale,  merger or an
additional equity infusion involving RightStart.com could decrease the Company's
ownership in its  subsidiary  to less than 50%. A  subsidiary  that is less than
majority-owned  would not be included in the consolidated results of its parent.
Additionally,  the  Company is in the process of raising  additional  capital to
fund its expansion  plans. The new capital  together with a  deconsolidation  is
expected   to  result  in   substantially   more  net  worth   than  the  Nasdaq
minimum-listing  requirement.  However,  if the Company is not successful in its
appeal,  it is expected that the Company will be de-listed which could adversely
affect the marketability of its common stock and hinder the Company's ability to
raise funds.



                                    Page 10
<PAGE>




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

Forward-Looking Statements

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

Overview

     The Right Start,  Inc. sells  developmental,  educational and care products
for infants and children  through retail stores ("Retail Store  Operations") and
holds a majority  ownership  in  RightStart.com,  which sells a similar  type of
product to a broader age group on the Internet and through a mail order catalog.
To facilitate the analysis of our historical  results,  each of the two distinct
operations is discussed separately below.

Retail Store Operations

     At July 29, 2000,  The Right Start,  Inc.  operated 53 retail  stores in 16
states  throughout  the United States.  The stores'  product mix includes a wide
variety of items to meet the needs of  infants,  small  children  and their care
givers,  all presented within a store designed to provide a safe,  baby-friendly
environment for the shopping ease of new parents.

The following  table sets forth the unaudited  statement of operations  data for
Retail Store Operations:
<TABLE>
<CAPTION>
                                                        Thirteen weeks ended
                                           ----------------------------------------------
                                              July 29, 2000            July 31, 1999
                                           -----------------------   --------------------
<S>                                        <C>              <C>      <C>           <C>
Retail net sales                           $    10,757,000  100.0%   $  9,464,000  100.0%
Cost of goods sold                               5,420,000   50.4%      4,681,000   49.5%
Operating expense                                4,200,000   39.0%      3,541,000   37.4%
Non-cash compensation                                9,000    0.1%      1,770,000   18.7%
Marketing and advertising expenses                 296,000    2.8%        213,000    2.3%
General and administrative expenses                954,000    8.9%        935,000    9.9%
Pre-opening costs                                   45,000    0.4%         75,000    0.8%
Store closing expense                              341,000    3.2%        151,000    1.6%
Depreciation and amortization expense              509,000    4.7%        381,000    4.0%
                                                ----------             ----------
     Operating loss                             (1,017,000)  -9.5%     (2,283,000) -24.1%
Interest expense                                   316,000    2.9%        112,000    1.2%
                                                ----------             ----------
     Loss before provision for income taxes     (1,333,000) -12.4%     (2,395,000) -25.3%
Provision for income taxes                          19,000    0.2%         20,000    0.2%
                                                ----------             ----------
     Net loss                              $    (1,352,000) -12.6%   $ (2,415,000) -25.5%
                                                ==========             ==========
</TABLE>

                                    Page 11
<PAGE>



Thirteen weeks ended July 29, 2000 compared with July 31, 1999

     Net Sales. Retail net sales consist of gross product sales to customers net
of returns.  Retail net sales  increased by $1.3  million,  or 13.7%,  from $9.5
million for the  thirteen  weeks  ended July 31,  1999 to $10.8  million for the
thirteen weeks ended July 29, 2000. The net sales growth reflects an increase in
the store base from 43 stores to 53 stores, offset somewhat by a 2.5% decline in
same-store  sales.  The same store sales decline is due to some  cannibalization
from the  Company's  Internet  subsidiary  as well as increased  competition  at
certain store locations.


     Cost of goods sold.  Cost of goods sold  consists  primarily of the cost of
products sold, inbound freight costs and inventory shrinkage costs. Retail gross
margin  declined  slightly  to 49.6% from 50.5% in the prior year  period.  This
decline is due in part to a slight  shift in sales mix and  greater  promotional
efforts.

     Operating  expense.  Retail operating expense consists of store operational
expenses,  retail  personnel  costs,  and costs related to the  distribution and
warehousing of our retail merchandise. Retail operating expense was $4.2 million
for the  current  period as  compared  to $3.5  million for the same period last
year. The $.7 million or 18.6% increase  primarily  reflects the addition of ten
new store  locations  as well as costs  related to increased  retail  management
staff and related costs.

     Non-cash  compensation.  During the second  quarter  of 1999,  the  Company
recorded  $1.8  million of non-cash  compensation  expense  associated  with the
vesting of  performance  options that had been granted to executive  officers of
the  Company.  This  expense  results  from  the  increase  in the  price of the
Company's  common  stock  from the date of grant of the  options  to the date on
which  vesting  occurred.  The current year reflects  $9,000  related to certain
non-employee director grants.

     Marketing and advertising expense. Retail marketing and advertising expense
generally  consists of print advertising in national and regional  publications,
as well as  promotional  mailings to our  customers.  Marketing and  advertising
expense increased from $0.2 million for the thirteen-week  period ended July 31,
1999 to $0.3  million  for the same  period  this  year.  This  growth  reflects
increased  utilization of promotional mailings to our customer database, as well
as expenses incurred to increase brand awareness in our regional markets.

     General and  administrative  expense.  General and  administrative  expense
consists primarily of the costs related to management, financial, merchandising,
inventory,   professional   service  fees  and  other   administrative   support
attributable  to Retail Store  Operations.  General and  administrative  expense
remained relatively unchanged for the thirteen-week period.

     Pre-opening  costs.  Pre-opening  costs consist  primarily of non-recurring
marketing,  advertising,  and other expenses related to the opening of new store
locations.  Pre-opening  costs  decreased  $30,000  from $75,000 in the thirteen
weeks ended July 31, 1999 to $45,000 for the current year.  The decrease was due
to the opening  costs  related to two stores  reflected  in the  current  period
versus three stores in the prior period.

     Store closing  expense.  Store closing  expense  consists  primarily of the
write-off  of  non-recoverable  assets and costs  incurred  in closing the store
locations.  In the current  period there were two store  closures for a total of
$341,000.  In the prior  year,  one store  location  was  closed  for a total of
$151,000.  There  are no  other  planned  store  closings  contemplated  for the
remainder of Fiscal 2000.

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

     Interest expense.  Interest expense increased from $112,000 in the thirteen
weeks  ended July 31,  1999 to  $316,000  for the same  period  this  year.  The
increase  reflects  an increase in our  outstanding  borrowings  for the current
period over the prior period and higher interest rates in general.

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

                                    Page 12
<PAGE>
The following  table sets forth the unaudited  statement of operations  data for
Retail Store Operations:
<TABLE>
<CAPTION>
                                                      Twenty-six weeks ended
                                           ---------------------------------------------
                                               July 29,2000            July 31, 1999
                                           ---------------------    --------------------
<S>                                        <C>            <C>       <C>           <C>
Retail net sales                           $ 21,086,000   100.0%    $ 18,499,000  100.0%
Cost of goods sold                           10,481,000    49.7%      9,082,000    49.1%
Operating expense                             8,233,000    39.0%      6,933,000    37.5%
Non-cash compensation                            19,000     0.1%      1,770,000     9.6%
Marketing and advertising expenses              545,000     2.6%        356,000     1.9%
General and administrative expenses           1,910,000     9.1%      1,702,000     9.2%
Pre-opening costs                               201,000     1.0%        137,000     0.7%
Store closing expense                           341,000     1.6%        151,000     0.8%
Depreciation and amortization expense         1,049,000     5.0%        725,000     3.9%
                                             ----------               ----------
     Operating loss                          (1,693,000)   -8.0%      (2,357,000) -12.7%
Interest expense                                557,000     2.6%        197,000     1.1%
                                             ----------               ----------
     Loss before provision for income taxes  (2,250,000)  -10.7%      (2,554,000) -13.8%
Provision for income taxes                       39,000     0.2%         29,000     0.2%
                                             ----------               ----------
     Net loss                              $ (2,289,000)  -10.9%    $ (2,583,000) -14.0%
                                             ==========               ==========
</TABLE>


Twenty-six weeks ended July 29, 2000 compared with July 31, 1999

     Net Sales. Retail net sales consist of gross product sales to customers net
of returns.  Retail net sales  increased by $2.6 million,  or 14.0%,  from $18.5
million for the  twenty-six  weeks ended July 31, 1999 to $21.1  million for the
twenty-six  weeks ended July 29, 2000. The net sales growth reflects an increase
in the store base from 43 stores to 53 stores; offset somewhat by a 2.2% decline
in same-store sales. The same store sales decline is due to some cannibalization
from the  Company's  Internet  subsidiary  as well as increased  competition  at
certain store locations.

     Cost of goods sold.  Cost of goods sold  consists  primarily of the cost of
products sold, inbound freight costs and inventory shrinkage costs. Retail gross
margin  decreased to 50.3% for the current  period from 50.9% for the prior year
period, due primarily to a shift in sales mix and greater promotional efforts.

     Operating  expense.  Retail operating expense consists of store operational
expenses,  retail  personnel  costs,  and costs related to the  distribution and
warehousing of our retail merchandise. Retail operating expense was $8.2 million
for the  current  period as  compared  to $6.9  million for the same period last
year. The $1.3 million or 18.8% increase  primarily reflects the addition of ten
new store  locations  as well as costs  related to increased  retail  management
staff and related costs.

     Marketing and advertising expense. Retail marketing and advertising expense
generally  consists of print advertising in national and regional  publications,
as well as  promotional  mailings to our  customers.  Marketing and  advertising
expense  increased from $0.4 million for the  twenty-six  week period ended July
31, 1999 to $0.5  million for the same  period this year.  This growth  reflects
increased  utilization of promotional mailings to our customer database, as well
as expenses incurred to increase brand awareness in our regional markets.

     General and  administrative  expense.  General and  administrative  expense
consists primarily of the costs related to management, financial, merchandising,
inventory,   professional   service  fees  and  other   administrative   support
attributable  to Retail Store  Operations.  General and  administrative  expense
increased 12.2% to $1.9 million for the current period from $1.7 million for the
comparable  period last year.  The  increase is due  primarily to an increase in
staffing and related costs.

     Pre-opening  costs.  Pre-opening  costs consist  primarily of non-recurring
marketing,  advertising,  and other expenses related to the opening of new store
locations.  Pre-opening  costs increased $64,000 from $137,000 in the twenty-six
weeks ended July 31, 1999 to $201,000 for the current year. The increase was due
to the three stores opened during the fiscal period and opening costs related to
five stores opened at the end of the prior year versus four stores opened in the
prior period and costs related to two stores opened in the prior year.

     Depreciation  and  amortization.   Depreciation  and  amortization  expense
increased  $0.3 million from $0.7 million in the prior period to $1.0 million in
the current period.  The increase was due to additional assets placed in service
related to new store openings.

     Interest   expense.   Interest  expense  increased  from  $197,000  in  the
twenty-six  weeks ended July 31, 1999 to $557,000 for the same period this year.
The increase reflects an increase in our outstanding  borrowings for the current
period over the prior period and higher interest rates.

                                    Page 13
<PAGE>

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



RightStart.com Operations

     RightStart.com  was formed in April 1999 to engage in  electronic  commerce
over  the  Internet.  As  part  of the  initial  capitalization,  RightStart.com
acquired its catalog operations from The Right Start, Inc.

     Online sales are presented on a gross basis, which is after product returns
but before promotional discounts.

     The online stores were  launched on June 29, 1999.  As a result,  the first
half of Fiscal 2000 ("Fiscal 2000") is comprised of 26 weeks of online store and
catalog  operations from January 30, 2000 through July 29, 2000.  RightStart.com
acquired the catalog  operations from The Right Start, Inc. in April 1999 but we
have  included the  operating  results as if the business had been acquired with
the beginning of The Right  Start's  fiscal year.  Therefore,  the first half of
Fiscal 1999 ("Fiscal 1999") is comprised of 26 weeks of catalog  operations from
January 31, 1999 through  July 31, 1999 and 32 days of online  store  operations
from June 29, 1999 to July 31, 1999.

     The following  table sets forth the unaudited  statement of operations data
for the periods indicated for RightStart.com:
<TABLE>
<CAPTION>


                                                              Thirteen weeks ended
                                                   ---------------------------------------------
                                                       July 29, 2000            July 31, 1999
                                                   --------------------     --------------------

<S>                                                <C>              <C>     <C>            <C>
Catalog net sales                                  $    277,000     7.0%    $   869,000    69.2%
Online store sales before promotional discounts       3,915,000    99.4%        265,000    21.1%
Shipping and handling revenues                          144,000     3.7%        161,000    12.8%
                                                   ------------             -----------
     Total sales                                      4,336,000   110.1%      1,295,000   103.1%
Promotional discounts related to online store sales     399,000    10.1%         39,000     3.1%
                                                   ------------             -----------
     Net sales                                        3,937,000   100.0%      1,256,000   100.0%

Cost of goods sold - merchandise                      2,284,000    58.0%        525,000    41.8%
Cost of goods sold - shipping and handling              921,000    23.4%        264,000    21.0%
Operating expense                                     1,078,000    27.4%        767,000    61.1%
Non-cash compensation                                    42,000     1.1%           -
Marketing and advertising expenses                    1,455,000    37.0%           -
General and administrative expenses                     854,000    21.7%         31,000     2.5%
Depreciation and amortization expense                   273,000     6.9%         18,000     1.4%
                                                   ------------             -----------
     Operating loss                                  (2,970,000)  -75.4%       (349,000)  -27.8%
Minority interest in consolidated subsidiary loss     1,033,000    26.2%         17,000     1.4%
Interest expense                                        208,000     5.3%           -
Write off of initial public offering costs              102,000     2.6%           -
                                                   ------------             -----------
     Loss before provision for income taxes          (2,247,000)  -57.1%       (332,000)  -26.4%
Provision for income taxes                               -                         -
                                                   ------------             -----------
     Net loss                                      $ (2,247,000)  -57.1%    $  (332,000)  -26.4%
                                                   ============             ===========
</TABLE>

                                    Page 14
<PAGE>



Thirteen weeks ended July 29, 2000 compared with July 31, 1999

     Sales.  Total sales consist of gross product sales to customers and are net
of  product  returns;  net sales  are net of  promotional  discounts.  Net sales
increased by $2.7  million,  or 213.5%,  to $3.9 million for the thirteen  weeks
ended July 29,  2000 from $1.3  million for the  comparable  period of the prior
year. This growth in net sales was  attributable to an increase in online sales,
partially offset by a decline in catalog sales. Online store net sales were $3.5
million in the second  quarter of the current year,  compared to $0.2 million in
the  same  quarter  of the  prior  year.  Online  store  net  sales  are  net of
promotional discounts of $0.4 million for the current quarter, compared to $0.04
million in the same quarter of the prior year.  Catalog net sales decreased $0.6
million, or 68.1%, to $0.3 million for the second quarter of this year from $0.9
million in the comparable  period of the prior year. The majority of the decline
in catalog net sales was attributable to a reduction in catalog  circulation and
a shift of a portion of the Direct-to-customer  business from the catalog to the
online stores.

     Shipping and handling  revenues.  Catalog customers have traditionally been
charged  a fee to cover the cost of  shipping  and  handling.  The  Company  has
historically  offset  the fees and  expenses  and  reported  the net  number  in
operating expense. When we entered the online business, we decided to offer free
shipping and handling for standard ground shipping.  Customers desiring upgraded
shipping were charged a fee  approximating  the additional  cost. These revenues
along with shipping and handling  expenses were reported as operating expense in
the same  manner  in which the  Company  handled  the  catalog.  New  accounting
guidance (issued May 18, 2000) requires that shipping and handling  revenues and
expenses be accounted for as revenues and cost of sales. In May 2000 we modified
our free shipping  policy so that free shipping  applies only to orders  greater
than $30.  Shipping  and  handling  revenues  were  $0.14  million in the second
quarter  compared to $0.16 million in the  comparable  period of the prior year.
The decrease is due to lower catalog sales offset by the fees received on online
store sales under $30.

     Cost of goods sold-  Merchandise.  Cost of goods sold consists primarily of
the cost of products sold, inbound freight costs and inventory  shrinkage costs.
Merchandise gross margin decreased to 39.8% this quarter from 52.1% in the prior
year due  primarily  to  increased  online store sales which carry a lower gross
margin  than  catalog  sales.  Merchandise  gross  margin on  catalog  net sales
decreased  to 52.0% in the second  quarter of this year,  from 53.9% in the same
quarter of the prior year,  due to a less  favorable  product  mix.  Merchandise
gross margin on online store net sales  increased to 38.8% in the second quarter
of this year from 36.7% in the same quarter of the prior year. Merchandise gross
margin on online  store net sales was lower  than  merchandise  gross  margin on
catalog net sales in the  current  quarter  due to the  promotional  discounting
offered to customers of the online stores as well as a different mix of products
offered in the online stores.

     Cost of goods sold- Shipping and handling.  Shipping and handling  expenses
include amounts paid to our third party distribution service, returns processing
costs,  shipping  supplies and actual shipping  charges.  These expenses for the
second  quarter of the current  year were $0.9  million or 23.4% of net sales as
compared to $0.3  million or 21.0% of net sales in the same quarter of the prior
year.  The  increase in shipping and  handling is directly  attributable  to the
increase in sales from the new online stores and the mix of products offered.

     Operating  expenses.  Operating  expenses consist  primarily of credit card
processing  fees,  expenses  related to  catalog  production  and  distribution,
customer  service,  as well  as  related  personnel  costs.  Operating  expenses
increased  by $0.3  million to $1.1  million or 27.4% of net sales in the second
quarter of this year from $0.8  million or 61.1% of net sales in the same period
of last year.  Operating  expenses  related to the online store  increased  $0.5
million to $0.7 million this quarter from $0.2 million in the prior year period,
due to  increased  online  sales.  Operating  expenses  related  to the  catalog
decreased  $77,000 to  $360,000  this  quarter  from  $437,000 in the prior year
period, due to reduced circulation and sales.

     Marketing  and  advertising  expense.  Marketing  and  advertising  expense
consists of magazines, direct mail, e-mail and on-line solicitations,  including
all  production  and  distribution,  incurred in connection  with  promoting our
online  store  which  amounted  to $1.5  million or 41.4% of online  store sales
during the current quarter.  There was no comparable  activity in the prior year
period.

     General and administrative  expenses.  General and administrative  expenses
consist  primarily  of the costs  related to website  hosting  and  maintenance,
management and support personnel,  direct fees paid to The Right Start, Inc. for
accounting,  payroll,  and  administrative  support  services under a management
services agreement, professional service fees and office lease expenses. General
and administrative expenses increased $0.87 million to $0.9 million this quarter
from $0.03  million  in the prior year  period.  As a  percentage  of net sales,
general and administrative  expenses increased to 21.7% in the second quarter of
this year from 2.5% in the comparable prior year period. Current quarter general
and  administrative  expenses included direct fees paid to The Right Start, Inc.
of $84,000.

     Depreciation Expense.  Depreciation expense increased $255,000 from $18,000
in the prior period to $273,000 in the current  quarter.  This  increase was due
primarily to web site hardware and software additions that are being depreciated
over a three year period.

     Non-cash  compensation  expense.  Non-cash  compensation expense relates to
stock  options  granted  at  exercise  prices  below the  deemed  fair  value of
RightStart.com  common  stock.  A non-cash  compensation  expense of $42,000 was
recorded in the second  quarter of the current  year.  No non-cash  compensation
expense was reported in the prior year period.

                                    Page 15
<PAGE>

     Provision  for income  taxes.  The tax  provision  has been  computed as if
RightStart.com  had operated as a separate entity for all periods  presented.  A
tax benefit has not been recorded for any period  presented due to uncertainties
surrounding the timing of realizing any benefits in future years.

     Minority interest in consolidated subsidiary.  Minority interest represents
minority  shareholders'  portion of RightStart.com losses for the thirteen weeks
ended July 29, 2000. The allocation of the loss to the minority  interest in the
current  quarter  was $1.0  million  as  compared  to  $17,000 in the prior year
period.

     Write  off  of  initial  public   offering  costs.  On  January  18,  2000,
RightStart.com  filed a registration  statement with the Securities and Exchange
Commission  with  respect  to an  offering  of its common  stock.  Costs of $0.8
million,  incurred in connection with the offering,  including audit fees, legal
fees,  various  filing  fees  and  printer  costs,  were  deferred  pending  the
completion of the offering.  On May 19, 2000,  RightStart.com  filed to withdraw
this registration  statement because of adverse market conditions,  and expensed
the deferred costs in the first quarter. In addition,  the Company expensed $0.1
million of related legal costs in the current quarter.  The following table sets
forth the unaudited  statement of operations data for the periods  indicated for
RightStart.com:
<TABLE>
<CAPTION>


                                                             Twenty-six weeks ended
                                                   ---------------------------------------------
                                                      July 29,2000             July 31, 1999
                                                   ---------------------    --------------------
<S>                                                <C>             <C>      <C>            <C>
Catalog net sales                                  $    901,000    10.1%    $ 2,555,000    77.6%
Online store sales before promotional discounts       8,648,000    97.2%        265,000     8.0%
Shipping and handling revenues                          332,000     3.7%        512,000    15.5%
                                                   ------------             -----------
     Total sales                                      9,881,000   111.0%      3,332,000   101.2%
Promotional discounts related to online store sales     982,000    11.0%         39,000     1.2%
                                                   ------------             -----------
     Net sales                                        8,899,000   100.0%      3,293,000   100.0%
Cost of goods sold - merchandise                      5,063,000    56.9%      1,239,000    37.6%
Cost of goods sold - shipping and handling            2,096,000    23.6%        573,000    17.4%
Operating expense                                     2,399,000    27.0%      1,475,000    44.8%
Non-cash compensation                                    84,000     0.9%           -
Marketing and advertising expenses                    5,416,000    60.9%           -
General and administrative expenses                   1,763,000    19.8%        153,000     4.6%
Depreciation and amortization expense                   505,000     5.7%         23,000     0.7%
                                                   ------------             -----------
     Operating loss                                  (8,427,000)  -94.7%       (170,000)   -5.2%
Minority Interest in consolidated subsidiary loss     3,512,000    39.5%         17,000     0.5%
Interest expense                                        208,000     2.3%           -
Write off of initial public offering costs              874,000     9.8%           -
                                                   ------------             -----------
     Loss before provision for income taxes          (5,997,000)  -67.4%       (153,000)   -4.6%
Provision for income taxes                               -                         -
                                                   ------------             -----------
     Net loss                                      $ (5,997,000)  -67.4%    $  (153,000)   -4.6%
                                                   ============             ===========
</TABLE>



Twenty-six weeks ended July 29, 2000 compared with July 31, 1999

     Sales.  Total sales consist of gross product sales to customers and are net
of  product  returns;  net sales  are net of  promotional  discounts.  Net sales
increased by $5.6 million,  or 170.2%,  to $8.9 million for the twenty-six weeks
ended July 29,  2000 from $3.3  million for the  comparable  period of the prior
year. This growth in net sales was  attributable to an increase in online sales,
partially offset by a decline in catalog sales. Online store net sales were $7.7
million in the current  period,  compared to $0.2  million in the same period of
the prior year. Online store net sales are net of promotional  discounts of $1.0
million  for the  current  period  compared to $39,000 in the same period of the
prior year. Catalog net sales decreased $1.7 million,  or 64.7%, to $0.9 million
for current period from $2.6 million in the comparable period of the prior year.
The majority of the decline in catalog net sales was attributable to a reduction
in  catalog  circulation  and a shift  of a  portion  of the  Direct-to-customer
business from the catalog to the online stores.

     Shipping and handling  revenues.  Catalog customers have traditionally been
charged  a fee to cover the cost of  shipping  and  handling.  The  Company  has
historically  offset  the fees and  expenses  and  reported  the net  number  in
operating expense. When we entered the online business, we decided to offer free
shipping and handling for standard ground shipping.  Customers desiring upgraded
shipping were charged a fee  approximating  the additional  cost. These revenues
along with shipping and handling  expenses were reported as operating expense in
the same  manner  in which the  Company  handled  the  catalog.  New  accounting
guidance (issued May 18, 2000) requires that shipping and handling  revenues and
expenses be accounted for as revenues and cost of sales. In May 2000 we modified
our free shipping  policy so that free shipping  applies only to orders  greater


                                    Page 16
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than $30. Shipping and handling revenues were $.3 million in the current quarter
versus $.5 in the prior year period.  The decrease is due to lower catalog sales
offset by fees received from online sales under $30.

     Cost of goods sold - Merchandise.  Cost of goods sold consists primarily of
the cost of products sold, inbound freight costs and inventory  shrinkage costs.
Merchandise  gross margin decreased to 40.9% in the current period from 55.4% in
the comparable period of the prior year. Merchandise gross margin on catalog net
sales decreased to 53.8% this period from 57.1% in the prior year period, due to
a less favorable product mix. Merchandise gross margin on online store net sales
increased to 39.4% this  period,  compared to 36.7% in the prior year period due
to lower promotional  discounts in the current period.  Merchandise gross margin
on online store net sales was lower than merchandise gross margin on catalog net
sales in the  current  period  due to the  promotional  discounting  offered  to
customers of the online stores as well as a different mix of products offered in
the online stores.

     Cost of goods sold- Shipping and handling.  Shipping and handling  expenses
include amounts paid to our third party distribution service, returns processing
costs,  shipping  supplies and actual shipping  charges.  These expenses for the
current  period  were $2.1  million  or 23.6% of net sales as  compared  to $0.6
million or 17.4% of net sales in the prior year period. The increase in shipping
and handling expenses is directly attributable to the increase in sales from the
new online stores and the mix of products offered.

     Operating  expenses.  Operating  expenses consist  primarily of credit card
processing  fees,  expenses  related to  catalog  production  and  distribution,
customer  service,  as well  as  related  personnel  costs.  Operating  expenses
increased  by $0.9  million to $2.4 million or 27.0% of net sales in the current
period  from  $1.5  million  or 44.8% of net  sales in the  prior  year  period.
Operating  expenses  related to the online store  increased $1.4 million to $1.6
million this period from $0.2 million in the prior year period, due to increased
online sales.  Operating  expenses related to the catalog decreased $0.3 million
to $0.8 million  this period from $1.1 million in the prior year period,  due to
reduced circulation and sales.

     Marketing  and  advertising  expense.  Marketing  and  advertising  expense
consists of radio,  television,  magazines,  newspaper,  direct mail, e-mail and
on-line  solicitations,  including all production and distribution,  incurred in
connection  with  promoting  our online store which  amounted to $5.4 million or
70.7% of online store sales during the current  period.  There was no comparable
activity in the prior year period.

     General and administrative  expenses.  General and administrative  expenses
consist  primarily  of the costs  related to website  hosting  and  maintenance,
management and support personnel,  direct fees paid to The Right Start, Inc. for
accounting,  payroll,  and  administrative  support  services under a management
services agreement, professional service fees and office lease expenses. General
and  administrative  expenses  increased  $1.6  million  to $1.8  million in the
current  period from $0.2 million in the prior year period.  As a percentage  of
net sales, general and administrative expenses increased to 19.8% in the current
period from 4.6% in the comparable prior year period. Current period general and
administrative  expenses  included direct fees paid to The Right Start,  Inc. of
$0.2 million.

     Depreciation Expense.  Depreciation expense increased $482,000 from $23,000
in the prior  period to $505,000 in the current  period.  This  increase was due
primarily to web site hardware and software additions that are being depreciated
over a three year period.

     Non-cash  compensation  expense.  Non-cash  compensation expense relates to
stock  options  granted  at  exercise  prices  below the  deemed  fair  value of
RightStart.com  common  stock.  A non-cash  compensation  expense of $84,000 was
recorded in the current period. No non-cash compensation expense was reported in
the prior year period.

     Provision  for income  taxes.  The tax  provision  has been  computed as if
RightStart.com had operated as a separate entity for all periods presented. As a
result of net losses, no benefit for income taxes was recorded for either fiscal
period.  A tax benefit has not been  recorded  for any period  presented  due to
uncertainties surrounding the timing of realizing any benefits in future years.

     Minority interest in consolidated subsidiary.  Minority interest represents
minority shareholders' portion of RightStart.com losses for the twenty-six weeks
ended July 29, 2000. The allocation of the loss to the minority  interest in the
current period was $3.5 million as compared to $17,000 in the prior year period.

     Write  off  of  initial  public   offering  costs.  On  January  18,  2000,
RightStart.com  filed a registration  statement with the Securities and Exchange
Commission  with  respect  to an  offering  of its common  stock.  Costs of $0.8
million,  incurred in connection with the offering,  including audit fees, legal
fees,  various  filing  fees  and  printer  costs,  were  deferred  pending  the
completion of the offering.  On May 19, 2000,  RightStart.com  filed to withdraw
this registration statement because of adverse market conditions.  In accordance
with the current accounting  guidance,  the Company expensed the $0.8 million of
deferred  costs and an  additional  $0.1  million of related  legal costs in the
current twenty-six week period.

                                    Page 17
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     Net  deferred  tax asset.  The Company has a net deferred tax asset of $1.4
million.  Management  expects  that the Company  will  generate  $4.0 million of
taxable  income within the next 15 years to utilize a minimum of $1.4 million of
the net  deferred  tax asset.  The taxable  income will be  generated  through a
combination of improved  operating results and tax planning  strategies.  Rather
than lose the tax  benefit,  the Company  could  implement  certain tax planning
strategies  including the sale of certain of the Company's operations or some of
its investment in RightStart.com.  Based on the expected operating  improvements
combined  with tax  planning  strategies  in  place,  management  believes  that
adequate  taxable  income will be  generated  over the next 15 years in which to
utilize  the  portion  of the net  operating  loss  carryforwards  not  reserved
against.


Liquidity and Capital Resources

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

     In the first  half of Fiscal  2000,  we used  $6.6  million  in cash in our
operating  activities  compared  to the  $20,000  in cash used in our  operating
activities in the first half of Fiscal 1999. In the current period, we used $1.9
million in cash in investing  activities for fixed asset  additions  compared to
$1.6 million for the same period last year.  The primary source of funds for the
use of cash in  financing  activities  in the  first  half of  Fiscal  2000 were
borrowings   under  the  Parent's  $13  million  credit  facility  (the  "Credit
Facility"),  the sale by RightStart.com  to affiliated  investors of its secured
bridge  notes  and  warrants  which  netted  proceeds  of $3.9  million  and the
remaining proceeds of the sale by RightStart.com to third party investors of its
preferred  stock in Fiscal 1999.  On September  1, 2000,  the Company  issued $2
million  of  senior  subordinated  convertible  pay-in  kind  notes due 2005 and
received  proceeds of $2 million that was used to reduce amounts  outstanding on
the revolving line of the Credit Facility.

     As of July 29, 2000, amounts  outstanding under the Credit Facility consist
of a term loan of $2,700,000  and  $4,343,000  under its revolving  credit line,
both of which  become due and payable in  February  2001.  The Company  plans to
renew or replace the Credit Facility prior to such date.

     At July 29, 2000, the Company had consolidated  negative working capital of
$9,017,000.  The Subsidiary had negative working capital of $5,868,000 and Right
Start,  Inc.  had negative  working  capital,  on an  unconsolidated  basis,  of
$3,149,000.  The Subsidiary has $3,935,000 of Bridge Notes payable to affiliates
that are due on October 18,  2000.  The  Subsidiary  will need to extend the due
date of the Bridge Notes or raise additional  proceeds to repay the notes by the
current due date. In the event the  Subsidiary is unable to do so, it would face
a severe  liquidity  crisis.  In addition,  the note holders have the ability to
foreclose on the assets of the Subsidiary and, as discussed  below,  require the
Subsidiary to issue additional warrants to certain of the note holders.


Retail Store Operations


     During the first half of Fiscal 2000, our primary  sources of liquidity for
Retail Store  Operations were from  borrowings  under the Credit  Facility.  The
Credit Facility consists of a $10.0 million revolving line of credit for working
capital (the "Revolving Line") and a $3.0 million capital  expenditure  facility
(the "Capex  Line"),  subject to reduction  beginning  May 1,2000.  Availability
under the Revolving Line is subject to a defined  borrowing base. As of July 29,
2000  borrowings of $4.3 million were  outstanding  under the Revolving Line and
$2.7 million was  outstanding  under the Capex Line;  $900,000 was  available at
July 29, 2000 under the Revolving Line.  Interest  accrues on the Revolving Line
at prime plus 1.0% and at prime plus 1.5% on the Capex Line.  At July 29,  2000,
the bank's prime rate of interest was 9.5%.  The Credit  Facility  terminates on
February 19, 2001, and on such date, all borrowings  thereunder are  immediately
due  and  payable.   Borrowings   under  the  Credit  Facility  are  secured  by
substantially  all of our assets  (including  our stock in  RightStart.com,  but
excluding  the assets of  RightStart.com).  We expect to either renew or replace
the Credit Facility by January 2001.

     The  Credit  Facility,  as  amended in July  2000,  requires  the  Company,
excluding any contribution from RightStart.com, at all times during Fiscal 2000,
to maintain net worth (defined to include equity,  additional  paid-in  capital,
retained earnings (accumulated deficit) and subordinated debt and to exclude the
operating results of RightStart.com)  ("Net Worth") of $5,900,000 as of July 31,
2000,  $5,700,000 as of August 31, 2000 and returning to  $10,800,000  as of the
end of September 2000 and for the balance of the term. The September increase in
the  required  net worth was based upon the  assumption  that the Company  would
raise approximately $6 million of additional equity in September. It now appears
that the additional capital will take the form of both convertible  subordinated
debt as well as equity. It is the intention of the Company to seek to amend this
covenant once its plans are finalized. At July 29, 2000, Net Worth as defined in
the Credit Agreement was $5,940,000.  The Credit Facility also requires that the
Company's  earnings  before  interest,  taxes,  depreciation,  amortization  and
non-recurring  charges ("EBITDA") be no less than $0 for the twelve months ended
July 29, 2000 and $500,000  for the twelve  months  ending  October 31, 2000 and
February 3, 2001. For the twelve months ended July 29, 2000, EBITDA was $94,000.
In addition,  the Company's  capital  expenditures  are limited to $1,750,000 in
Fiscal 2000. The Company is required to make principal reductions of $100,000 on
the Capex Line per month beginning May 1, 2000. The Company believes that it can
attract additional capital to fund its operations and ongoing expansion and that
it will  be  able to meet  its  financial  covenants  or be able to  amend  such
covenants as appropriate.  On September 1, 2000 the Company issued $2 million in
the aggregate  principal amount of Senior  Subordinated  Convertible Pay-in Kind
Notes, due 2005.

                                    Page 18
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     The  Company's  common  stock is listed and  traded on the Nasdaq  National
Market.  The Nasdaq has informed the Company that its consolidated net worth has
fallen  below  the  minimum  Nasdaq  listing   requirement  of  $4  million  and
consequently will be de-listed. The Company has requested that it continue to be
listed and has been  notified  that its request  will be  considered  at an oral
hearing on October 12, 2000.  The primary cause of the  diminished  consolidated
net worth is attributable to losses  sustained by the Company's  majority -owned
subsidiary,  RightStart.com  Inc. The Company expects that a sale,  merger or an
additional equity infusion involving RightStart.com could decrease the Company's
ownership in its  subsidiary  to less than 50%. A  subsidiary  that is less than
majority-owned  would not be included in the consolidated results of its parent.
Additionally,  the  Company is in the process of raising  additional  capital to
fund its expansion  plans. The new capital  together with a  deconsolidation  is
expected   to  result  in   substantially   more  net  worth   than  the  Nasdaq
minimum-listing  requirement.  However,  if the Company is not successful in its
appeal,  it is expected that the Company will be de-listed which could adversely
affect the marketability of its common stock.


RightStart.com


     During the first half of Fiscal 2000,  RightStart.com's  primary sources of
liquidity  were from the issuance of bridge notes and warrants and the remaining
proceeds of the sale to third party  investors of its preferred  stock in Fiscal
1999.  In April 2000,  RightStart.com  sold senior  secured  bridge notes in the
aggregate  principal  amount  $2,275,000  (the  "Bridge  Notes") and warrants to
purchase  113,753  shares of its common  stock at an exercise  price of $6.70 to
affiliates.  The Bridge Notes are secured by substantially  all of the assets of
RightStart.com.  A default on the Bridge  Notes  would  permit  such  holders to
foreclose on the assets of  RightStart.com  and require  RightStart.com,  to the
extent  it has not  already  done  so,  to issue to the  holders  of the  notes,
warrants to purchase an aggregate of 8,740,220shares,  or approximately 48.9% of
the outstanding  common stock of  RightStart.com,  at an exercise price of $0.25
per share.  In June  2000,  RightStart.com  sold to  affiliates  junior  secured
convertible bridge notes ("Convertible Bridge Notes") in the aggregate principal
amount of approximately  $1,660,000 that are convertible at any time into common
stock at $.25 per share.  Both sets of notes are due and  payable on October 18,
2000.

     RightStart.com's   ability  to  satisfy  certain   obligations,   fund  its
operations  and grow its market  share is  dependant  upon its  ability to raise
additional  capital.  On January 18, 2000,  RightStart.com  filed a registration
statement  with the  Securities  and  Exchange  Commission  with  respect  to an
offering of its common stock. On May 19, 2000,  RightStart.com filed to withdraw
this registration statement because of adverse market conditions.  In June 2000,
RightStart.com  hired  the  investment-banking  firm  of  Morgan  Stanley  & Co.
Incorporated  to  assist  in  evaluating  its  financial   alternatives.   These
alternatives  include, but are not limited to selling  RightStart.com or merging
with  another  entity,  completing  a private  equity  transaction,  or severely
reducing its operations and restructuring its obligations,  including the Bridge
Notes and the Convertible Bridge Notes.


Impact of Inflation


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


Seasonality


     Our business is not significantly impacted by seasonal  fluctuations,  when
compared to many other specialty retail and catalog operations. Our products are
for the most  part  need-driven  and the  customer  is often the end user of the
product. We do, however, experience increased sales during the Christmas holiday
season  and  expect  that this  seasonality  may  increase  as  RightStart.com's
business for children  through age twelve  increases  and  constitutes a greater
portion of our financial results.


                                    Page 19
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Other Matters


New Accounting Requirements


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


ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk


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

     See  "Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations -- Liquidity and Capital Resources" above for a discussion
of our debt  obligations,  the  interest  rates of which are linked to the prime
rate. We have not entered into any  derivative  financial  instruments to manage
interest  rate  risk,  currency  risk  or for  speculative  purposes  and we are
currently not evaluating the future use of these instruments.



                                    Page 20
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                                     PART II

                                OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

     The  Company  filed no  Reports  on Form 8-K  during  the first 13 weeks of
Fiscal 2000.


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


Exhibit Number


10.1 Tenth Amendment to Loan and Security Agreement and Waiver, dated as of July
     30, 2000, between Heller Financial, Inc. and the Company.

10.2 Secured Convertible Bridge Note Purchase Agreement among RightStart.com and
     the purchasers named therein as of June 22, 2000.

10.3 First Amendment to Warrants of RightStart.com dated as of July 27, 2000.

10.4 Securities  Purchase  Agreement  between  The  Right  Start,  Inc.  and the
     purchasers  named therein dated as of September 1, 2000 with respect to its
     Senior Subordinated Convertible Pay-in-Kind Notes due 2005.



  27    Financial Data Schedule.







                                    Page 21
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                                   SIGNATURES

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


                                  THE RIGHT START, INC.



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


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




                                    Page 22
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