##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



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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 |  | August 3, 2002
|                               |  |               

OR

|  |  |                                                          
|- |  | ---------------------------------------------------------
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
|  |  | SECURITIES EXCHANGE ACT OF 1934                          

For the transition period from ________________ to ________________

|                       |  |        
|---------------------- |  | -------
|Commission file number |  | 0-19526
|                       |  |        

Goodys Family Clothing, Inc.




(Exact name of registrant as specified in its charter)


|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Tennessee                                                      |  | 62-0793974                             
|                                                              
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification Number)
|                                                               |  |                                        
|400 Goodys Lane,        Knoxville, Tennessee                  |  | 37922                                  
|                                                              
|(Address of principal executive offices)                       |  | (Zip Code)                             

(865) 966-2000




(Registrants telephone number, including area code)




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(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 o

APPLICABLE ONLY TO CORPORATE ISSUERS:



Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.
Common Stock, no par value,32,555,533 shares outstanding as of August 21, 2002.



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TABLE OF CONTENTS



|                                      |                                                                                                   |                                                      |  |  |  |  |  | 
|------------------------------------- | ------------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART 1  FINANCIAL INFORMATION       
|                                      | Item 1   Condensed Consolidated Financial Statements                                            
|                                      |                                                                                                   | Consolidated Statements of Operations (Unaudited)   
|                                      |                                                                                                   | Consolidated Balance Sheets                         
|                                      |                                                                                                   | Consolidated Statements of Cash Flows (Unaudited)   
|                                      |                                                                                                   | Notes to Condensed Consolidated Financial Statements
|                                      |                                                                                                   | INDEPENDENT ACCOUNTANTS REVIEW REPORT              
|                                      | Item 2.    Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                      | Item 3  Quantitative and Qualitative Disclosures about Market Risk                              
|PART II  OTHER INFORMATION          
|                                      | Item 1  Legal Proceedings                                                                       
|                                      | Item 2.   Changes in Securities and Use of Proceeds                                             
|                                      | Item 3.    Defaults Upon Senior Securities                                                      
|                                      | Item 4.    Submission of Matters to a Vote of Security Holders                                  
|                                      | Item 5.    Other Information                                                                    
|                                      | Item 6.    Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                           
|Severance Agreement - William Kegley 
|Dedicated Service Agreement - Landair
|Accountants' Awareness Letter        
|906 Certification - CEO              
|906 Certification - CFO              



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##### Table of Contents



Goodys Family Clothing, Inc.
Index to Form 10-Q
August 3, 2002

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

2



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##### Table of Contents






PART 1  FINANCIAL INFORMATION




Item 1   Condensed Consolidated Financial Statements

Goodys Family Clothing, Inc. and Subsidiaries




Consolidated Statements of Operations (Unaudited)


(In thousands, except per share amounts)


|                                             |                                      |   |             |        |             |   |           |         |           |   |         |         |  |   |         |         |  
|-------------------------------------------- | ------------------------------------ | - | ----------- | ------ | ----------- | - | --------- | ------- | --------- | - | ------- | ------- |  | - | ------- | ------- | -
|                                             |                                      |   | Thirteen    |        | Twenty-six 
|                                             |                                      |   | Weeks Ended |        | Weeks Ended
|                                             |                                      |   |             |        |            
|                                             |                                      |   | August 3,   |        | August 4,   |   | August 3, |         | August 4,
|                                             |                                      |   | 2002        |        | 2001        |   | 2002      |         | 2001     
|                                             |                                      |   |             |        |             |   |           |         |          
|Sales                                        |                                      | $ | 284,046     |        |             | $ | 286,858   |         |           | $ | 567,549 |         |  | $ | 550,120 |        
|Cost of sales and occupancy expenses         |                                      |   | 205,155     |        |             |   | 223,007   |         |           |   | 404,201 |         |  |   | 414,812 |        
|                                             |                                      |   |             |        |             |   |           |         |           |   |         |         |  |   |         |        
|                                             | Gross profit                         |   |             | 78,891 |             |   |           | 63,851  |           |   |         | 163,348 |  |   |         | 135,308 |  
|Selling, general and administrative expenses |                                      |   | 77,026      |        |             |   | 81,619    |         |           |   | 152,672 |         |  |   | 156,170 |        
|                                             |                                      |   |             |        |             |   |           |         |           |   |         |         |  |   |         |        
|                                             | Earnings (loss) from operations      |   |             | 1,865  |             |   |           | (17,768 | )         |   |         | 10,676  |  |   |         | (20,862 | )
|Interest expense                             |                                      |   | 4           |        |             |   | 37        |         |           |   | 5       |         |  |   | 104     |        
|Investment income                            |                                      |   | 153         |        |             |   | 116       |         |           |   | 257     |         |  |   | 495     |        
|                                             |                                      |   |             |        |             |   |           |         |           |   |         |         |  |   |         |        
|                                             | Earnings (loss) before income taxes  |   |             | 2,014  |             |   |           | (17,689 | )         |   |         | 10,928  |  |   |         | (20,471 | )
|                                             | Provision (benefit) for income taxes |   |             | 755    |             |   |           | (6,634  | )         |   |         | 4,098   |  |   |         | (7,677  | )
|                                             |                                      |   |             |        |             |   |           |         |           |   |         |         |  |   |         |        
|Net earnings (loss)                          |                                      | $ | 1,259       |        |             | $ | (11,055   | )       |           | $ | 6,830   |         |  | $ | (12,794 | )      
|                                             |                                      |   |             |        |             |   |           |         |           |   |         |         |  |   |         |        
|                                             |                                      |   |             |        |             |   |           |         |           |   |         |         |  |   |         |        
|Earnings (loss) per common share:            |                                      |   |             |        |             |   |           |         |           |   |         |         |  |   |         |        
|                                             | Basic                                |   | $           | 0.04   |             |   | $         | (0.34   | )         |   | $       | 0.21    |  |   | $       | (0.39   | )
|                                             |                                      |   |             |        |             |   |           |         |           |   |         |         |  |   |         |        
|                                             | Diluted                              |   | $           | 0.04   |             |   | $         | (0.34   | )         |   | $       | 0.21    |  |   | $       | (0.39   | )
|                                             |                                      |   |             |        |             |   |           |         |           |   |         |         |  |   |         |        
|                                             |                                      |   |             |        |             |   |           |         |           |   |         |         |  |   |         |        
|Weighted average common shares outstanding:  |                                      |   |             |        |             |   |           |         |           |   |         |         |  |   |         |        
|                                             | Basic                                |   |             | 32,527 |             |   |           | 32,443  |           |   |         | 32,495  |  |   |         | 32,432  |  
|                                             |                                      |   |             |        |             |   |           |         |           |   |         |         |  |   |         |        
|                                             | Diluted                              |   |             | 33,398 |             |   |           | 32,443  |           |   |         | 33,235  |  |   |         | 32,432  |  
|                                             |                                      |   |             |        |             |   |           |         |           |   |         |         |  |   |         |        

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

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##### Table of Contents



Goodys Family Clothing, Inc. and Subsidiaries




Consolidated Balance Sheets


(Dollars in thousands)


|                                       |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |             |        |         |         | 
|-------------------------------------- | -------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | ------------------------------------------ | ------------------------- | ------ | ----------- | ------- | ----------- | ------ | --------- | ------- | ----------- | ------ | ------- | ------- | 
|                                       |                                                                                                          |                                                                                     |                                            |                           |        | August 3,   |         | February 2, |        | August 4,
|                                       |                                                                                                          |                                                                                     |                                            |                           |        | 2002        |         | 2002        |        | 2001     
|                                       |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |          
|                                       |                                                                                                          |                                                                                     |                                            |                           |        | (Unaudited) |         |             |        |           |         | (Unaudited)
|ASSETS                                 |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|Current Assets                         |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|                                       | Cash and cash equivalents                                                                                |                                                                                     | $                                          | 67,938                    |        |             | $       | 53,806      |        |           | $       | 32,917      |       
|                                       | Inventories                                                                                              |                                                                                     |                                            | 210,422                   |        |             |         | 179,971     |        |           |         | 234,458     |       
|                                       | Accounts receivable and other current assets                                                             |                                                                                     |                                            | 14,002                    |        |             |         | 24,831      |        |           |         | 29,255      |       
|                                       |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|                                       |                                                                                                          |                                                                                     |                                            | Total current assets      |        |             | 292,362 |             |        |           | 258,608 |             |        |         | 296,630 | 
|Property and equipment, net            |                                                                                                          |                                                                                     | 119,078                                    |                           |        |             | 128,041 |             |        |           | 137,251 |            
|Other assets                           |                                                                                                          |                                                                                     | 9,442                                      |                           |        |             | 9,585   |             |        |           | 10,719  |            
|                                       |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|                                       |                                                                                                          |                                                                                     |                                            | Total assets              |        | $           | 420,882 |             |        | $         | 396,234 |             |        | $       | 444,600 | 
|                                       |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|                                       |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|LIABILITIES AND SHAREHOLDERS EQUITY   |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|Current Liabilities                    |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|                                       | Accounts payable                                                                                         |                                                                                     | $                                          | 134,408                   |        |             | $       | 115,063     |        |           | $       | 148,890     |       
|                                       | Accrued expenses                                                                                         |                                                                                     |                                            | 56,319                    |        |             |         | 58,301      |        |           |         | 60,630      |       
|                                       |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|                                       |                                                                                                          |                                                                                     |                                            | Total current liabilities |        |             | 190,727 |             |        |           | 173,364 |             |        |         | 209,520 | 
|Other long-term liabilities            |                                                                                                          |                                                                                     | 6,054                                      |                           |        |             | 6,077   |             |        |           | 7,298   |            
|Deferred income taxes                  |                                                                                                          |                                                                                     | 13,714                                     |                           |        |             | 14,077  |             |        |           | 18,293  |            
|                                       |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|                                       |                                                                                                          |                                                                                     |                                            | Total liabilities         |        |             | 210,495 |             |        |           | 193,518 |             |        |         | 235,111 | 
|                                       |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|                                       |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|Commitments and Contingencies (Note 5) |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|                                       |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|Shareholders Equity                   |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|                                       | Preferred stock, par value $1.00 per share;
Authorized - 2,000,000 shares; issued and outstanding  none |                                                                                     |                                            |                           |        |             |         |             |        |           |         |             |       
|                                       | Class B Common stock, no par value;
Authorized - 50,000,000 shares; issued and outstanding  none        |                                                                                     |                                            |                           |        |             |         |             |        |           |         |             |       
|                                       | Common stock, no par value;                                                                              |                                                                                     |                                            |                           |        |             |         |             |        |           |         |             |       
|                                       |                                                                                                          | Authorized - 50,000,000 shares;                                                     |                                            |                           |        |             |         |             |        |           |         |             |        |        
|                                       |                                                                                                          | Issued and outstanding  32,555,533, 32,451,130
and 32,449,930 shares, respectively |                                            |                           | 22,245 |             |         |             | 21,720 |           |         |             | 21,714 |        
|                                       | Paid-in capital                                                                                          |                                                                                     |                                            | 10,510                    |        |             |         | 10,194      |        |           |         | 9,576       |       
|                                       | Retained earnings                                                                                        |                                                                                     |                                            | 177,632                   |        |             |         | 170,802     |        |           |         | 178,199     |       
|                                       |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|                                       |                                                                                                          |                                                                                     | Total shareholders equity                 |                           |        | 210,387     |         |             |        | 202,716   |         |             |        | 209,489 |        
|                                       |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            
|                                       |                                                                                                          |                                                                                     | Total liabilities and shareholders equity |                           | $      | 420,882     |         |             | $      | 396,234   |         |             | $      | 444,600 |        
|                                       |                                                                                                          |                                                                                     |                                            |                           |        |             |         |             |        |           |         |            

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

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##### Table of Contents



Goodys Family Clothing, Inc. and Subsidiaries




Consolidated Statements of Cash Flows (Unaudited)


(In thousands)


|                                                                                                     |                                   |                                             |                            |                                                 |        |                        |         |           |        |         |         |  
|---------------------------------------------------------------------------------------------------- | --------------------------------- | ------------------------------------------- | -------------------------- | ----------------------------------------------- | ------ | ---------------------- | ------- | --------- | ------ | ------- | ------- | -
|                                                                                                     |                                   |                                             |                            |                                                 |        | Twenty-six Weeks Ended
|                                                                                                     |                                   |                                             |                            |                                                 |        |                       
|                                                                                                     |                                   |                                             |                            |                                                 |        | August 3,              |         | August 4,
|                                                                                                     |                                   |                                             |                            |                                                 |        | 2002                   |         | 2001     
|                                                                                                     |                                   |                                             |                            |                                                 |        |                        |         |          
|Cash Flows from Operating Activities                                                                 |                                   |                                             |                            |                                                 |        |                        |         |          
|Net earnings (loss)                                                                                  |                                   | $                                           | 6,830                      |                                                 |        | $                      | (12,794 | )        
|Adjustments to reconcile net earnings (loss) to net cash
provided by (used in) operating activities: |                                   |                                             |                            |                                                 |        |                        |         |          
|                                                                                                     |                                   | Depreciation and amortization               |                            |                                                 | 11,472 |                        |         |           | 11,853 |        
|                                                                                                     |                                   | Net loss on asset disposals and write downs |                            |                                                 | 793    |                        |         |           | 74     |        
|                                                                                                     |                                   | Changes in assets and liabilities:          |                            |                                                 |        |                        |         |           |        |        
|                                                                                                     |                                   |                                             | Inventories                |                                                 |        | (30,451                | )       |           |        | (26,738 | )      
|                                                                                                     |                                   |                                             | Accounts payable           |                                                 |        | 19,345                 |         |           |        | 19,033  |        
|                                                                                                     |                                   |                                             | Income taxes               |                                                 |        | 14,120                 |         |           |        | (11,422 | )      
|                                                                                                     |                                   |                                             | Other assets & liabilities |                                                 |        | (5,306                 | )       |           |        | 700     |        
|                                                                                                     |                                   |                                             |                            |                                                 |        |                        |         |          
|                                                                                                     |                                   |                                             |                            | Cash provided by (used in) operating activities |        |                        | 16,803  |           |        |         | (19,294 | )
|                                                                                                     |                                   |                                             |                            |                                                 |        |                        |         |          
|Cash Flows from Investing Activities                                                                 |                                   |                                             |                            |                                                 |        |                        |         |          
|Acquisitions of property and equipment                                                               |                                   |                                             | (3,212                     | )                                               |        |                        | (10,683 | )        
|Proceeds from sale of property and equipment                                                         |                                   |                                             | 15                         |                                                 |        |                        | 9       |          
|                                                                                                     |                                   |                                             |                            |                                                 |        |                        |         |          
|                                                                                                     |                                   |                                             |                            | Cash used in investing activities               |        |                        | (3,197  | )         |        |         | (10,674 | )
|                                                                                                     |                                   |                                             |                            |                                                 |        |                        |         |          
|Cash Flows from Financing Activities                                                                 |                                   |                                             |                            |                                                 |        |                        |         |          
|Exercise of stock options                                                                            |                                   |                                             | 526                        |                                                 |        |                        | 135     |          
|                                                                                                     |                                   |                                             |                            |                                                 |        |                        |         |          
|                                                                                                     |                                   |                                             |                            | Cash provided by financing activities           |        |                        | 526     |           |        |         | 135     |  
|                                                                                                     |                                   |                                             |                            |                                                 |        |                        |         |          
|                                                                                                     |                                   |                                             |                            |                                                 |        |                        |         |          
|Net increase (decrease) in cash and cash equivalents                                                 |                                   |                                             | 14,132                     |                                                 |        |                        | (29,833 | )        
|Cash and cash equivalents, beginning of period                                                       |                                   |                                             | 53,806                     |                                                 |        |                        | 62,750  |          
|                                                                                                     |                                   |                                             |                            |                                                 |        |                        |         |          
|Cash and cash equivalents, end of period                                                             |                                   | $                                           | 67,938                     |                                                 |        | $                      | 32,917  |          
|                                                                                                     |                                   |                                             |                            |                                                 |        |                        |         |          
|                                                                                                     |                                   |                                             |                            |                                                 |        |                        |         |          
|Supplemental Disclosures:                                                                            |                                   |                                             |                            |                                                 |        |                        |         |          
|                                                                                                     | Net income tax (refunds) payments |                                             | $                          | (9,202                                          | )      |                        | $       | 4,351     |       
|                                                                                                     | Interest payments                 |                                             |                            | 2                                               |        |                        |         | 68        |       

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

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##### Table of Contents



Goodys Family Clothing, Inc. and Subsidiaries




Notes to Condensed Consolidated Financial Statements


(Unaudited)


(1) Basis of presentation

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

(2) Credit arrangements

In May 2001, the Company entered into a five-year $130,000,000 syndicated
revolving loan and security agreement that provides for cash borrowings for
general corporate purposes, including a $95,000,000 sub-facility for the
issuance of letters of credit. Borrowings under this credit facility are
limited by collateral formulas, based principally upon the Companys eligible
inventories. The credit facility is secured primarily by the Companys
inventories, receivables and cash and cash equivalents. If availability (as
calculated pursuant to the credit facility) falls below $25,000,000, the
Company would be required, for a period of time, to comply with a financial
covenant requiring it to maintain minimum levels of tangible net worth based on
formulas. The credit facility also contains certain discretionary provisions
that enable the lender to reduce availability. The credit facility bears
interest at LIBOR plus an applicable margin or the prime rate. At August 3,
2002, the Company had no borrowings and $47,739,000 in letters of credit
outstanding under the facility.

(3) Recent accounting pronouncements

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

In June 2002, the FASB issued Statement of Financial Accounting Standards No.
146 (SFAS 146), Accounting for Costs Associated with Exit or Disposal
Activities. SFAS 146 supersedes Emerging Issues Task Force Issue No. 94-3.
SFAS 146 requires that the liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred, not at the date
of an entitys commitment to an exit or disposal plan. The provisions of SFAS
146 are effective for exit or disposal activities initiated after December 31,
2002. The Company does not anticipate that the adoption of SFAS 146 will have a
material impact on its consolidated financial position, results of operations
or cash flows.

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##### Table of Contents



Goodys Family Clothing, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements   continued


(Unaudited)


(4) Restructuring Accrual

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

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

(5) Contingencies

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

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

(6) Reclassifications

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

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##### Table of Contents






INDEPENDENT ACCOUNTANTS REVIEW REPORT

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

We have reviewed the accompanying consolidated balance sheets of Goodys Family
Clothing, Inc. and Subsidiaries as of August 3, 2002 and August 4, 2001 and the
related consolidated statements of operations and cash flows for the thirteen
and twenty-six week periods then ended. These financial statements are the
responsibility of the Companys management.

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

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

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

/s/Deloitte & Touche LLP
Atlanta, Georgia
August 20, 2002

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##### Table of Contents






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

Forward-looking Statements

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

Results of Operations

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

|                                             |  |             |       |             |  |           |       |           |  |  |       |   |  |  |       |   
|-------------------------------------------- |  | ----------- | ----- | ----------- |  | --------- | ----- | --------- |  |  | ----- | - |  |  | ----- | --
|                                             |  | Thirteen    |       | Twenty-six 
|                                             |  | Weeks Ended |       | Weeks Ended
|                                             |  |             |       |            
|                                             |  | August 3,   |       | August 4,   |  | August 3, |       | August 4,
|                                             |  | 2002        |       | 2001        |  | 2002      |       | 2001     
|                                             |  |             |       |             |  |           |       |          
|Sales                                        |  |             | 100.0 | %           |  |           | 100.0 | %         |  |  | 100.0 | % |  |  | 100.0 | % 
|Cost of sales and occupancy expenses         |  |             | 72.2  |             |  |           | 77.7  |           |  |  | 71.2  |   |  |  | 75.4  |   
|                                             |  |             |       |             |  |           |       |           |  |  |       |   |  |  |       |   
|Gross profit                                 |  |             | 27.8  |             |  |           | 22.3  |           |  |  | 28.8  |   |  |  | 24.6  |   
|Selling, general and administrative expenses |  |             | 27.1  |             |  |           | 28.5  |           |  |  | 26.9  |   |  |  | 28.4  |   
|                                             |  |             |       |             |  |           |       |           |  |  |       |   |  |  |       |   
|Earnings (loss) from operations              |  |             | 0.7   |             |  |           | (6.2  | )         |  |  | 1.9   |   |  |  | (3.8  | ) 
|Interest expense                             |  |             |      |             |  |           |      |           |  |  |      |   |  |  |      |   
|Investment income                            |  |             |      |             |  |           |      |           |  |  |      |   |  |  | 0.1   |   
|                                             |  |             |       |             |  |           |       |           |  |  |       |   |  |  |       |   
|Earnings (loss) before income taxes          |  |             | 0.7   |             |  |           | (6.2  | )         |  |  | 1.9   |   |  |  | (3.7  | ) 
|Provision (benefit) for income taxes         |  |             | 0.3   |             |  |           | (2.3  | )         |  |  | 0.7   |   |  |  | (1.4  | ) 
|                                             |  |             |       |             |  |           |       |           |  |  |       |   |  |  |       |   
|Net earnings (loss)                          |  |             | 0.4   | %           |  |           | (3.9  | )%        |  |  | 1.2   | % |  |  | (2.3  | )%
|                                             |  |             |       |             |  |           |       |           |  |  |       |   |  |  |       |   

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Thirteen Weeks Ended August 3, 2002 Compared with Thirteen Weeks Ended August 4, 2001

OverviewDuring the second quarter of fiscal 2002, the Company opened one new
store, relocated or remodeled two stores and closed three stores, bringing the
total number of stores in operation at August 3, 2002 to 330, compared with 326
at August 4, 2001. During the corresponding period of the previous fiscal year,
the Company opened nine new stores, relocated or remodeled five stores and
closed one store. Net earnings for the second quarter of fiscal 2002 were
$1,259,000 or 0.4% of sales, compared with net loss of $11,055,000, or (3.9%)
of sales, for the second quarter of fiscal 2001.

SalesSales for the second quarter of fiscal 2002 were $284,046,000, a 1.0%
decrease from the $286,858,000 in sales for the second quarter of fiscal 2001.
This decrease of $2,812,000 consisted of a $8,656,000 decrease in comparable
store sales offset by a $5,844,000 increase in additional sales from new and
transition stores. Comparable store sales for the second quarter of fiscal 2002
decreased 3.1% compared with the corresponding period of the previous fiscal
year. The Company believes that the decline in its comparable store sales was
due in part to the following: (i) the cool weather at the beginning of the
quarter that negatively effected sales, (ii) inventory levels that were
lower than plan throughout the quarter and with the corresponding
period of the previous fiscal year, allowing the Company to reduce the level of
promotional pricing throughout the quarter (particularly during the month of
July) as compared to last year, offset by (iii) a very positive impact on sales
for the month of July 2002 from the sales tax holidays in five states within
the Companys markets during the last two days of fiscal July 2002.

Gross profitGross profit for the second quarter of fiscal 2002 was
$78,891,000, or 27.8% of sales, a $15,040,000 increase from the $63,851,000 in
gross profit, or 22.3% of sales, generated for the second quarter of fiscal
2001. The 5.5% increase in gross profit as a percent of sales in the second
quarter of fiscal 2002 compared with the second quarter of fiscal 2001 resulted
from (i) a 5.9% increase in margins from merchandise sales resulting from the
Companys efforts to be less promotionally priced during the quarter, as noted
above, partially offset by (ii) a 0.4% increase in occupancy costs which were
not leveraged due to a shortfall in comparable store sales and higher occupancy
costs for new and relocated stores. The Company was able to maintain higher
margins, particularly on end of season product, when compared to last year
because of tight controls on inventory levels.

Selling, general and administrative expensesSelling, general and
administrative expenses for the second quarter of fiscal 2002 were $77,026,000,
or 27.1% of sales, a decrease of $4,593,000 from $81,619,000, or 28.5% of
sales, for the second quarter of fiscal 2001. Selling, general and
administrative expenses decreased by 1.4%, as a percent of sales, for the
second quarter of fiscal 2002 compared with the second quarter of fiscal 2001
and is comprised of a 0.9% decrease in payroll expenses and a 0.5% net decrease
in all other selling, general and administrative expenses. The decrease in
payroll expenses was largely a product of the Companys
restructuring efforts that
commenced in the first quarter of fiscal 2002.

Interest expenseInterest expense for the second quarter of fiscal 2002
decreased by $33,000 compared with the second quarter of fiscal 2001. The
Company had no borrowings under its credit facility during the first half of
fiscal 2002 or fiscal 2001.

Investment incomeInvestment income for the second quarter of fiscal 2002
increased by $37,000 compared with the second quarter of fiscal 2001 primarily
as a result of an increase in invested funds.

Income taxesThe provision for income taxes for the second quarter of fiscal
2002 was $755,000, for an effective tax rate of 37.5% of earnings before income
taxes, compared with a benefit for income taxes of $6,634,000, for an effective
tax rate of 37.5% of loss before income taxes, for the second quarter of fiscal
2001.

Twenty-Six Weeks Ended August 3, 2002 Compared with Twenty-Six Weeks Ended August 4, 2001

OverviewDuring the twenty-six weeks ended August 3, 2002, the Company opened
two new stores, relocated or remodeled three stores and closed four stores,
bringing the total number of stores in operation at August 3, 2002 to 330,
compared with 326 at August 4, 2001. During the corresponding period of the
previous fiscal year, the Company opened 10 new stores, relocated or remodeled
8 stores and closed 1 store. Net earnings for the twenty-six weeks ended August
3, 2002 were $6,830,000, or 1.2% as a percent of sales, compared with net loss
of $12,794,000, or (2.3%) as a percent of sales, for the twenty-six weeks ended
August 4, 2001.

SalesSales for the twenty-six weeks ended August 3, 2002 were $567,549,000, a
3.2% increase from the $550,120,000 in sales for the corresponding period of
the previous fiscal year. This increase of $17,429,000 consisted of an increase
of $19,671,000 in additional sales from new and transition stores offset by a
$2,242,000 decrease in comparable store sales.

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Comparable store sales for the twenty-six weeks ended August 3, 2002 decreased
0.4% compared with the corresponding period of the previous fiscal year. The
Company believes that the net decrease in its comparable store sales was due in
part to the following: (i) the cool weather at the beginning of the second
quarter that negatively affected sales and (ii) inventory levels that were
lower than planned and lower than the corresponding period of the
previous fiscal year, allowing the Company to reduce the level of promotional
pricing throughout the quarter (particularly during the month of July) when
compared to last year, offset by (iii) strong first quarter sales resulting
from early warm weather conditions, (iv) customer acceptance of the Companys
merchandise offerings, and (v) a very positive impact on sales for the month of
July 2002 from the sales tax holidays in five states within the
Companys markets during
the last two days of fiscal July 2002.

Gross profitGross profit for the twenty-six weeks ended August 3, 2002 was
$163,348,000, or 28.8% of sales, a $28,040,000 increase from the $135,308,000
in gross profit, or 24.6% of sales, generated for the corresponding period of
the previous fiscal year. The 4.2% increase in gross profit as a percent of
sales for the twenty-six weeks ended August 3, 2002 compared with the
twenty-six weeks ended August 4, 2001 resulted from (i) a 4.5% increase in
margins from merchandise sales resulting from customer acceptance of the
Companys merchandise offerings, combined with efforts to be less promotionally
priced made possible by tight controls of inventory levels, partially offset by
(ii) a 0.3% increase in occupancy costs which were not leveraged due to a
shortfall in comparable store sales and higher occupancy costs for new and
relocated stores. The Company, on average, operated on approximately 18.5% less
inventory per square foot when compared to the same period last year.

Selling, general and administrative expensesSelling, general and
administrative expenses for the twenty-six weeks ended August 3, 2002 were
$152,672,000, or 26.9% of sales, a decrease of $3,498,000 from $156,170,000, or
28.4% of sales, for the corresponding period of the previous fiscal year.
Selling, general and administrative expenses decreased by 1.5%, as a percent of
sales, for the twenty-six weeks ended August 3, 2002 compared with the
corresponding period of the previous fiscal year and is comprised of (i) a 0.8%
decrease in payroll expenses, (ii) a 0.3% decrease in advertising expenses, and
(iii) a 0.4% net decrease in all other selling, general and administrative
expenses. The decrease in payroll expenses was a product of the Companys
restructuring efforts that commenced in the first quarter of fiscal
2002.

Interest expenseInterest expense for the twenty-six weeks ended August 3,
2002 decreased by $99,000 compared with the corresponding period of the
previous fiscal year. The Company had no borrowings under its credit facility
during the first half of fiscal 2002 or fiscal 2001.

Investment incomeInvestment income for the twenty-six weeks ended August 3,
2002 decreased by $238,000 compared with the corresponding period of the
previous fiscal year principally as a result of a decrease in interest rates.

Income taxesThe provision for income taxes for the twenty-six weeks ended
August 3, 2002 was $4,098,000, for an effective tax rate of 37.5% of earnings
before income taxes, compared with a benefit for income taxes of $7,677,000,
for an effective tax rate of 37.5% of loss before income taxes, for the
corresponding period of the previous fiscal year.

Liquidity and Capital Resources

Financial positionThe Companys primary sources of liquidity are cash flows
from operations, including credit terms from vendors and factors, and
borrowings under its credit facility discussed below. At August 3, 2002, the
Companys working capital was $101,635,000 compared with $87,110,000 at August
4, 2001. At August 3, 2002 compared with August 4, 2001, (i) cash and cash
equivalents increased by $35,021,000, (ii) net property and equipment decreased
by $18,173,000, (iii) inventories decreased by $24,036,000 and (iv) accounts
payable decreased by $14,482,000.

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

At August 3, 2002 and August 4, 2001, the Company had (i) no cash borrowings
under the credit facility and (ii) letters of credit outstanding not yet
reflected in accounts payables of $29,845,000 and $26,903,000, respectively.
There were no
cash borrowings at any time during the twenty-six weeks ended August 3, 2002
and August 4, 2001. Letters of credit

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##### Table of Contents



outstanding averaged $37,035,000 during
the twenty-six weeks ended August 3, 2002 compared with $36,248,000 during the
twenty-six weeks ended August 4, 2001. The highest balance of letters of
credit outstanding during the twenty-six weeks ended August 3, 2002 was
$59,698,000 in April 2002 compared with $49,169,000 in June 2001 during the
twenty-six weeks ended August 4, 2001.

Cash FlowsOperating activities provided cash of $16,803,000 for the
twenty-six weeks ended August 3, 2002 compared with cash used of $19,294,000
in the corresponding period of the previous fiscal year. Cash used for
increases in inventory during the twenty-six weeks ended August 3, 2002 and
August 4, 2001 was $30,451,000 and $26,739,000, respectively. An increase in
accounts payable provided cash of $19,345,000 and $19,034,000 in the
twenty-six weeks ended August 3, 2002 and August 4, 2001, respectively.
Changes in other assets and liabilities used cash of $5,306,000 in the
twenty-six weeks ended August 3, 2002 compared with cash provided of $700,000
in the corresponding period of the previous fiscal year. Depreciation and
amortization expenses were $11,472,000 and $11,853,000 for the twenty-six
weeks ended August 3, 2002 and August 4, 2001,
respectively. During the second quarter of fiscal 2002, the Company
received a refund of approximately $14,000,000 related to net
operating loss carrybacks from fiscal 2001.

Cash flows from investing activities reflected a $3,197,000 and $10,674,000
net use of cash for the twenty-six weeks ended August 3, 2002 and August 4,
2001, respectively. Cash was used primarily to fund capital expenditures for
new, relocated and remodeled stores and for other corporate purposes.

Cash provided by financing activities was $526,000 and $135,000 for the
twenty-six weeks ended August 3, 2002 and August 4, 2001, respectively, from
the issuance of common stock resulting from the exercise of stock options.

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

OutlookThe Company plans to relocate or remodel four stores and close up to
five stores during the remaining two quarters of fiscal 2002. Capital
expenditures for the remainder of fiscal 2002 are expected to be approximately
$8,000,000, primarily related to store improvements, management information
systems and general corporate purposes.

The Companys primary needs for capital resources are for the purchase of store
inventories, capital expenditures and for normal operating purposes. Management
believes that its existing working capital, together with anticipated cash
flows from operations, including credit terms from vendors and factors, and the
borrowings available under the credit facility will be sufficient to meet the
Companys operating and capital expenditure requirements. However, an adverse
outcome of the risks and uncertainties described in the Companys 2001 Annual
Report on Form 10-K under the caption Certain Factors That May Affect Future
Results (such as the Companys failure to recognize increases in comparable
store sales and to successfully execute its business plans and strategies, and
the lack of availability under the credit facility) could have a material
adverse effect on working capital or results of operations.

The Company had previously announced that its business plan called for
comparable store sales to increase approximately 5.0% for the current fiscal
year, with a greater part of the increase coming in the second half of the
year. Though the Company continues to plan a comparable store sales increase
for the second half and for the full fiscal year, it now believes comparable
store sales for the full fiscal year will be less than 5.0%. In addition, with
lower comparable store sales, the Company now expects that its selling, general
and administrative expense rate for fiscal 2002 will decrease from the fiscal
2001 rate by approximately 100 basis points, rather than the 150 basis points
previously announced.




Item 3  Quantitative and Qualitative Disclosures about Market Risk

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

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##### Table of Contents






PART II  OTHER INFORMATION




Item 1  Legal Proceedings- None




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




Item 3.    Defaults Upon Senior Securities- None




Item 4.    Submission of Matters to a Vote of Security Holders

The Company held its Annual Meeting of Shareholders (the Meeting) on June
19, 2002 at which the following items were submitted to a vote of
shareholders:



| | 1. |  | To elect two directors to serve for terms of three years;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | To consider, approve and adopt the Goodys Family Clothing, Inc.
Short Term Incentive Plan;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | 3. |  | To consider, approve and adopt amendments to the Goodys Family
Clothing, Inc. Amended and Restated Discounted Stock Option Plan for
Directors that would extend the term of the plan to July 7, 2013 and
increase the number of shares of Common Stock reserved for issuance
under the plan from an aggregate of 300,000 shares to an aggregate of
500,000 shares of Common Stock; and                                                                                                                                                                                                                                                                                                                   
|
| | 4. |  | To consider, approve and adopt amendments to the Goodys Family
Clothing, Inc. Amended and Restated 1997 Stock Option Plan that would,
among other things, (i) increase the number of shares of Common Stock
reserved for issuance under the plan from an aggregate of 2,000,000
shares to an aggregate of 3,500,000 shares of Common Stock, (ii)
increase the maximum number of shares of Common Stock subject to
options which may be granted to an optionee from 200,000 shares to
500,000 shares of Common Stock in any fiscal year of the Company and
provide that such restriction only applies to Performance Options (as
defined in the plan); and (iii) provide for certain technical
amendments.

At the Meeting, the following persons were elected as directors of the Company
for three-year terms expiring at the 2005 Annual Meeting of Shareholders:

Irwin L. Lowenstein  29,491,058 shares of common stock were voted in favor of
his election; 1,986,372 shares of common stock were withheld and 1,003,800
shares of common stock were not voted. There were no abstentions or broker
non-votes.

Cheryl L. Turnbull  29,491,170 shares of common stock were voted in favor of
her election; 1,986,260 shares of common stock were withheld and 1,003,800
shares of common stock were not voted. There were no abstentions or broker
non-votes.

The other directors of the Company are Samuel J. Furrow, whose term expires at
the 2003 Annual Meeting of Shareholders, and Robert M. Goodfriend and Robert F.
Koppel, whose terms expire at the 2004 Annual Meeting of Shareholders.

At the Meeting, the Goodys Family Clothing, Inc. Short Term Incentive Plan was
approved with 30,289,368 shares of common stock voting in favor, 411,529 shares
of common stock voting against, 776,533 shares of common stock abstaining, and
1,003,800 shares of common stock not voting. There were no broker non-votes.

At the Meeting, the Amendments to the Goodys Family Clothing, Inc. Amended and
Restated Discounted Stock Option Plan for Directors were approved with
22,192,335 shares of common stock voting in favor, 3,842,440 shares of common
stock voting against, 784,590 shares of common stock abstaining, 4,658,065
shares of common stock being broker non-votes, and 1,003,800 shares of common
stock not voting.

At the Meeting, the Amendments to the Goodys Family Clothing, Inc. Amended and
Restated 1997 Stock Option Plan were approved with 22,952,832 shares of common
stock voting in favor, 3,080,028 shares of common stock voting against, 786,510
shares of common stock abstaining, 4,658,060 shares of common stock being
broker non-votes, and 1,003,800 shares of common stock not voting.




Item 5.    Other Information- None

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##### Table of Contents






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

a)
        
        Exhibits -


|      |  |                                                                                                                       
|----- |  | ----------------------------------------------------------------------------------------------------------------------
|15    |  | Accountants Awareness Letter                                                                                         
|10.92 |  | Severance Agreement between the Registrant
and William S. Kegley, Jr. dated June 19, 2002                             
|10.93 |  | Dedicated Service Agreement between the
Registrant and Landair Transport, Inc. dated April 22,
2002.                  
|99.1  |  | Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|99.2  |  | Certification Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002



| | b) |  | Reports on Form 8-K:
| | -- |  | --------------------
|
| |    |  | None                

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##### Table of Contents



GOODYS FAMILY CLOTHING, INC.




SIGNATURES

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

|      |  |                 |  |                                                           
|----- |  | --------------- |  | ----------------------------------------------------------
|      |  |                 |  | GOODYS FAMILY CLOTHING, INC.
                (Registrant)
|      |  |                 |  |                                                           
|      |  |                 |  |                                                           
|Date: |  | August 23, 2002 |  | /s/ Robert M. Goodfriend                                  
|      |  |                 |  |                                                           
|      |  |                 |  | Robert M. Goodfriend                                      
|      |  |                 |  | Chairman of the Board and
Chief Executive Officer         
|      |  |                 |  |                                                           
|      |  |                 |  |                                                           
|Date: |  | August 23, 2002 |  | /s/ Lana Cain Krauter                                     
|      |  |                 |  |                                                           
|      |  |                 |  | Lana Cain Krauter                                         
|      |  |                 |  | President and
Chief Merchandising Officer                 
|      |  |                 |  |                                                           
|      |  |                 |  |                                                           
|Date: |  | August 23, 2002 |  | /s/ Edward R. Carlin                                      
|      |  |                 |  |                                                           
|      |  |                 |  | Edward R. Carlin                                          
|      |  |                 |  | Executive Vice President,                                 
|      |  |                 |  | Chief Financial Officer and Secretary                     
|      |  |                 |  | (Principal Financial Officer)                             
|      |  |                 |  |                                                           
|      |  |                 |  |                                                           
|Date: |  | August 23, 2002 |  | /s/ David G. Peek                                         
|      |  |                 |  |                                                           
|      |  |                 |  | David G. Peek                                             
|      |  |                 |  | Senior Vice President and Chief                           
|      |  |                 |  | Accounting Officer                                        
|      |  |                 |  | (Principal Accounting Officer)                            

15