SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549


                                    FORM 10-Q

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

For the quarterly period ended August 31, 1997.

                                       OR

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

For the transition period from                          to            .
                                     

                          Commission file number 0-4465

                            Sirco International Corp.
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             (Exact Name of Registrant as Specified in Its Charter)


          New York                                      13-2511270
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  (State or Other Jurisdiction                      (I.R.S. Employer
  of Incorporation or Organization)                 Identification No.)


  24 Richmond Hill Avenue, Stamford Connecticut            06901
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       (Address of Principal Executive Offices)          (Zip Code)


Registrant's Telephone Number, Including Area Code            203-359-4100
                                                              ------------ 


--------------------------------------------------------------------------------
(Former  Name,  Former  Address and Former  Fiscal Year,  if Changed  Since Last
Report)


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

         Indicate the number of shares  outstanding of each of the  registrant's
classes of common stock, as of the latest practicable date:  3,875,400 shares of
Common Stock, par value $.10 per share, as of October 13, 1997.
<PAGE>
                          PART 1. FINANCIAL INFORMATION

Item 1.  Financial Statements
<TABLE>
<CAPTION>
                             Sirco International Corp. and Subsidiaries
                                Condensed Consolidated Balance Sheets

                                                                   August 31, 1997    Nov. 30, 1996
                                                                   ---------------   --------------
                                                                    (Unaudited)         (See note)
<S>                                                                <C>               <C>
Assets
Current assets:
    Cash and cash equivalents ................................     $    399,429      $    390,043
    Accounts receivable ......................................        4,349,840         2,825,764
    Inventories ..............................................        6,983,964         4,406,066
    Prepaid expenses .........................................          575,490           256,134
    Other current assets .....................................            7,276           123,245
                                                                   ------------      ------------
Total current assets .........................................       12,315,999         8,001,252
                                                                   ------------      ------------

Property and equipment at cost ...............................        1,729,651         1,867,167
Less accumulated depreciation ................................          904,466           979,457
                                                                   ------------      ------------
Net property and equipment ...................................          825,185           887,710
                                                                   ------------      ------------

Other assets .................................................          231,881           147,402
Investment in and advances to subsidiary .....................          519,352           540,497
                                                                   ------------      ------------
Total assets .................................................     $ 13,892,417      $  9,576,861
                                                                   ============      ============

Liabilities and stockholders' equity Current liabilities:
    Loans payable to financial institutions ..................     $  5,748,665      $  1,071,000
    Short-term loans payable - other .........................           13,961           529,821
    Current maturities of long-term debt .....................            7,002             6,735
    Accounts payable .........................................        2,874,206         2,919,511
    Accrued expenses .........................................        1,307,686         1,920,897
                                                                   ------------      ------------
Total current liabilities ....................................        9,951,520         6,447,964
                                                                   ------------      ------------

Long-term debt, less current maturities ......................          332,921           348,401
                                                                   ------------      ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                             Sirco International Corp. and Subsidiaries
                                Condensed Consolidated Balance Sheets
                                            (continued)

                                                                   August 31, 1997    Nov. 30, 1996
                                                                   ---------------   --------------
                                                                    (Unaudited)         (See note)
<S>                                                                <C>               <C>

Stockholders' equity:
    Common stock, $.10 par value; 10,000,000 shares authorized,
    3,795,400 issued (1997), 1,315,200 issued (1996) .........          379,540           131,520
    (1996 unadjusted for two-for-one stock split)
    Preferred stock, $.10 par value; 1,000,000 authorized
    none issued
    Capital in excess of par value ...........................        6,171,673         4,267,534
    Retained earnings (deficit) ..............................       (2,299,056)       (1,019,367)
    Treasury stock at cost ...................................          (27,500)          (27,500)
    Accumulated foreign translation adjustment ...............         (616,681)         (571,691)
                                                                   ------------      ------------
Total stockholders' equity ...................................        3,607,976         2,780,496
                                                                   ------------      ------------
Total liabilities and stockholders' equity ...................     $ 13,892,417      $  9,576,861
                                                                   ============      ============

                   See notes to the condensed consolidated financial statements.

Note:The balance  sheet at November  30, 1996 has been  derived from the audited
     financial  statements at that date but does not include all the information
     and footnotes required by generally accepted accounting principles.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                   Sirco International Corp. and Subsidiaries
                                Condensed Consolidated Statements of Operations
                                                  (Unaudited)


                                             For The Nine Months Ended           For The Three Months Ended
                                          ------------------------------      ------------------------------ 
                                          Aug. 31, 1997     Aug. 31, 1996     Aug. 31, 1997      Aug. 31, 1996
                                          -------------     -------------     -------------      -------------
<S>                                       <C>               <C>               <C>               <C>
Net Sales ...........................     $ 12,112,360      $ 21,894,376      $ 5,936,534       $ 7,678,165  
Cost of goods sold ..................        9,756,035        16,275,046        4,813,371         5,916,856
                                          ------------      ------------      ------------      ------------
Gross profit ........................        2,356,325         5,619,330        1,123,163         1,761,309  
                                                                                                    
Selling, warehouse, general and
     administrative expenses ........        3,590,880         4,508,019        1,360,511         1,523,249   
                                          ------------      ------------      ------------      ------------
                                            (1,234,555)       (1,111,311         (237,348)          238,060
                                             
Other (income) expense:
Interest expense.....................          378,828           598,067          136,352           212,526       
Interest income......................          (47,775)          (44,094)         (16,029)          (12,612)        
Miscellaneous income, net ...........         (280,919)         (218,279)        (106,600)         (119,932)  
                                          ------------      ------------      ------------      ------------
Net income (loss) before income taxes       (1,279,689)          775,587         (251,071)          158,078
Provision for income taxes...........            --              258,964            --               85,208  
                                          ------------      ------------      ------------      ------------
Net income (loss) ...................     $ (1,279,689)     $    516,623      $   (251,071)     $    72,780    
                                          ============      ============      ============      ============ 
                                                                                         
Net income (loss) per share of
     common stock: ..................     $      (0.43)     $       0.20      $      (0.07)     $      0.03                      
                                          ============      ============      ============      ============

Shares used in computing earnings
     (loss) per common and comon
     equivalent shares * ............        2,985,061         2,570,672         3,361,107         2,619,400
                                          ============      ============      ============      ============

</TABLE>
* Restated to give effect to 2-for-1 stock split in 1997.
<PAGE>
<TABLE>
<CAPTION>
                        Sirco International Corp. and Subsidiaries
                     Condensed Consolidated Statements of Cash Flows
                                       (Unaudited)

                                                           For the Nine Months Ended
                                                        August 31,1997   August 31, 1996
                                                        --------------   ---------------
<S>                                                     <C>               <C>
Cash flows from operating activities: ..............     ($1,279,689)     $   516,623
Net income (loss)
Adjustments to  reconcile  net income  (loss)
    to net cash  provided by (used in)
    operating activities:
     Depreciation and amortization .................          78,523           63,060
     Provision for losses in accounts receivable ...          54,033           17,172
     Loss in sale of property and equipment ........           7,104             (313)
     Changes in operating assets and liabilities:
      Accounts receivable ..........................      (1,597,555)        (665,127)
      Inventories ..................................      (2,587,150)         986,561
      Prepaid expenses .............................        (319,780)        (246,832)
      Other current assets .........................         115,969          137,104
      Other assets .................................         (84,616)          46,393
      Accounts payable and accrued expenses ........        (648,561)         375,887
                                                         -----------      -----------
Net cash (used in) provided by operating activities:      (6,261,722)       1,230,528
                                                         -----------      -----------

Cash flows from investing activities:
Purchase of property and equipment .................         (36,277)         (65,517)
Proceeds from sale of property and equipment .......           3,655            3,000
Cash in flow from agreement to sell subsidiary .....          21,145             --
                                                         -----------      -----------
Net cash used in investing activities ..............         (11,477)         (62,517)
                                                         -----------      -----------

Cash flows from financing activities:
Increase (decrease) in loans payable to
    financial institutions and short-term
    loans payable-other ............................       4,162,212         (927,996)
Proceeds from exercise of stock options ............         195,567          250,000
Proceeds from private equity placement .............         609,000             --
Proceeds from exercise of stock warrants ...........       1,347,592
Repayment of long-term debt ........................          (8,537)        (222,862)
                                                         -----------      -----------
Net cash provided by (used in) financing activities        6,305,834         (900,858)
                                                         -----------      -----------

Effect of exchange rate changes on cash ............         (23,249)             244
                                                         -----------      -----------
Increase in cash and cash equivalents ..............           9,386          267,397
Cash and cash equivalents at beginning of period ...         390,043          176,241
                                                         -----------      -----------

Cash and cash equivalents at the end of period .....     $   399,429      $   443,638
                                                         ===========      ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                        Sirco International Corp. and Subsidiaries
                     Condensed Consolidated Statements of Cash Flows
                                       (Unaudited)

                                                           For the Nine Months Ended
                                                        August 31,1997   August 31, 1996
                                                        --------------   ---------------
<S>                                                     <C>               <C>

Supplemental disclosures of cash flow information
Cash paid during the period for:
    Interest .......................................     $   369,194      $   530,219
    Income taxes ...................................     $   300,015      $      --
</TABLE>
              See notes to the condensed consolidated financial statements.
 
<PAGE>
                            SIRCO INTERNATIONAL CORP.

        Notes To Condensed Consolidated Financial Statements (Unaudited)


Note 1-Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included. Operating results for the nine month period ended August 31, 1997
are not necessarily  indicative of the results that may be expected for the year
ended  November 30, 1997.  For further  information,  refer to the  consolidated
financial  statements  and footnotes  thereto  included in the Company's  Annual
Report on Form 10-K for the year ended November 30, 1996.


Note 2-Financing Arrangements

On December  17,  1996,  the  Company's  factoring  agreement  with  Rosenthal &
Rosenthal Inc. was terminated and replaced with a financing agreement with Coast
Business  Credit,  a division of Southern  Pacific  Thrift and Loan  Association
("Coast"),  that provides for revolving loans and letter of credit  financing in
the  amount  of the  lesser  of  $7,000,000  or the sum of (a)  80% of  eligible
accounts  receivable (as defined) and (b) 50% of eligible inventory (as defined)
up to a  maximum  inventory  loan of  $3,000,000  less 50% of  letter  of credit
financing outstanding. The amount of the facility available for letter of credit
financing  is limited to  $2,500,000.  The loan bears  interest  at 2% above the
prime rate,  matures on December 17, 1998,  and is  guaranteed  by the Company's
Chairman and Chief Executive  Officer.  The Company has granted Coast a security
interest in substantially all of the Company's assets.  The agreement with Coast
contains various restrictive covenants, including among others, a restriction on
the  payment  or  declaration  of  any  cash  dividends,  a  restriction  on the
acquisition  of any assets  other than in the  ordinary  course of  business  in
excess  of  $100,000,  restrictions  related  to  mergers,  borrowing  and  debt
guarantees, and a $100,000 annual limitation on the acquisition or retirement of
the Company's common and preferred stock,  which acquisitions or retirements are
limited to transactions  with employees,  directors and consultants  pursuant to
the terms of employment,  consulting or other stock restriction  agreements with
such  persons.  The  agreement  also  requires the Company to maintain a minimum
tangible net worth of $1,400,000.  As of August 31, 1997, the Company owed Coast
approximately  $5,749,000  and had  outstanding  letters of credit  amounting to
approximately $537,000. At August 31, 1997, the prime rate was 8.50%.

In January 1997, the Company's Canadian subsidiary, Sirco International (Canada)
Ltd. ("Sirco Canada"), was advised by its bank, National Bank of Canada, that it
would no longer  provide  Sirco  Canada a  revolving  line of  credit  but would
continue to provide the real property mortgage loan on Sirco Canada's office and
warehouse  facility.  The mortgage  loan is payable in monthly  installments  of
approximately  $3,500,  including interest at 10.25%,  with a balloon payment of
approximately  $325,000  in the year 2000.  At August 31,  1997,  the  principal
amount of the mortgage loan was approximately $340,000.
<PAGE>
In March 1995, the Company entered into an agreement with Yashiro Company,  Inc.
("Yashiro"),  pursuant to which  Yashiro  agreed to issue or cause to be issued,
until March 20, 1997,  unsecured trade letters of credit in an aggregate  amount
of up to the  lesser of  $1,200,000  or 35% of the book  value of the  Company's
inventory.  On August 28,1996, the agreement was amended to, among other things,
reduce the  aggregate  amount of letters of credit to be issued to the lesser of
$1,000,000 or 35% of the book value of the Company's inventory.  Yashiro charged
the Company a handling fee of 3% for each letter of credit that was opened.  All
amounts  borrowed from Yashiro under the agreement  were due and payable on June
30, 1997. Interest was payable to Yashiro monthly at 2% above the prime rate. On
June  20,1997,  the Company  repaid the entire  obligation  to Yashiro under the
Letter of Credit Agreement.
<PAGE>
Item 2.  Management's Analysis and Discussion of Financial Condition and Results
         of Operations


The following discussion and analysis contains  forward-looking  statements that
involve  risks and  uncertainties.  The  Company's  actual  results  may  differ
materially from the results discussed in the forward-looking statements. Factors
that might cause such a difference include,  among others,  general economic and
business  conditions;  industry trends; the loss of major customers;  changes in
demand for the Company's product;  the timing of orders received from customers;
dependence on foreign sources of supply;  the loss of licenses;  availability of
management;  availability,  terms and  deployment  of capital;  and the seasonal
nature of the Company's business.

Three  and Nine Months Ended August 31, 1997 vs. August 31, 1996

Net sales for the three and nine  months  ended  August 31,  1997  decreased  by
approximately   $1,742,000  and  $9,782,000,   respectively,   to  approximately
$5,937,000  for the  three  months  ended  August  31,  1997  and  approximately
$12,112,000  for  the  nine  months  ended  August  31,  1997,  as  compared  to
approximately  $7,678,000  and  $21,894,000,   respectively,  reported  for  the
comparable  periods  in  1996.  Net  sales  for the  Company's  U.S.  operations
decreased by approximately $646,000 and $6,318,000 for the three and nine months
ended August 31, 1997. This decrease in net sales is attributable to the loss by
the Company in fiscal 1996 of the license from FILA Sport S.P.A.  ("FILA")  (see
below).  The sale of FILA product  accounted for  approximately  $2,445,000  and
$8,179,000  for the three and nine months ended August 31, 1996. The Company had
no sales of FILA product in fiscal 1997.  Net sales for the  Company's  Canadian
subsidiary  decreased by $1,096,000 and $3,464,000 for the three and nine months
ended August 31, 1997.  This decrease in net sales is primarily  attributable to
the loss by Sirco  Canada in fiscal 1996 of the license  from Airway  Industries
Inc.  ("Airway") to sell  "Atlantic"  luggage (see below).  For the three months
ended August 31, 1997,  Sirco Canada had no sales of Airway  product as compared
to approximately $1,165,000 in fiscal 1996. For the nine months ended August 31,
1997, Sirco Canada sold approximately  $514,000 (partially in liquidation of its
remaining inventories) of Airway product as compared to approximately $4,036,000
during the same period in fiscal 1996. The Company's  gross profit for the three
and nine months ended August 31, 1997  decreased by  approximately  $638,000 and
$3,263,000,   respectively,   to   approximately   $1,123,000  and   $2,356,000,
respectively,  from  approximately  $1,761,000  and  $5,619,000  reported in the
period fiscal periods. The gross profit percentage for the three and nine months
ended August 31, 1997 decreased to approximately 18.9% and 19.5%,  respectively,
from  approximately  22.9% and 25.7%  reported  in the prior  fiscal  year.  The
decrease in gross profit  percentage is primarily  attributable to the lack of a
sufficiently  large  revenue base over which to spread fixed costs and change in
product  mix  to  a  lower  percentage  of  sales  of  licensed   products  that
traditionally have a higher gross profit margin than the Company's other product
lines.

After extensive negotiations in February 1996, the Company and FILA entered into
an agreement  pursuant to which the Company ceased  shipping  products under the
FILA  license  on June 30,  1996,  subject  to certain  rights  with  respect to
remaining inventory. The Company sold approximately $2,445,000 and $8,179,000 of
FILA   product  in  the  three  and  nine  months  ended  August  31,  1996  and
approximately  $8,584,000  of FILA product in fiscal 1996.  The loss of the FILA
trademark had an adverse  impact on the Company's  results of operations for the
three and nine months ended  August 31, 1997 and will have an adverse  impact on
the Company's  results of operations for the fiscal quarter ending  November 30,
1997. While the Company  originally  expected that a significant  portion of the
<PAGE>
net sales of FILA product  would be replaced by sales of Perry Ellis and Hedgren
product,  sales of such  products to the  Company's  retail  customers  has been
significantly lower than anticipated. The Company started shipping product under
these  licenses in the fourth  quarter of fiscal 1996 and has recorded net sales
of approximately  $2,430,000  since the inception of these licenses.  Future net
sales will be negatively  impacted if sales from these  licenses or increases in
sales  under other  existing  licenses  do not grow to the sales  volume  levels
obtained by FILA product.
 
During  fiscal  1996,  Airway  notified  the Company that it would not renew its
license  agreement with the Company,  pursuant to which Sirco Canada was granted
an exclusive  license to sell in Canada,  luggage and luggage  related  products
under the trade names  "Atlantic" and "Oleg Cassini"  through December 31, 1996.
In November  1996,  the Company  entered into an Asset  Purchase  Agreement with
Airway,  whereby  Airway agreed,  among other things,  to purchase any remaining
Atlantic  inventory  owned by Sirco  Canada on December  31,  1996,  to purchase
certain  fixed  assets  and to enter  into a two year  lease  for a  substantial
portion of the premises owned by Sirco Canada at fair market value.  In November
1996, the Company  restructured  Sirco Canada,  hired a new President to run the
operation and started to market the Company's other licensed products in Canada,
including product  incorporating the licensed "Perry Ellis" and "Hedgren" names,
symbols and logos. Sirco Canada sold approximately $514,000 of Airway product in
the first  quarter of fiscal 1997 prior to the  December  31,  1996  termination
date.  Sirco  Canada sold  approximately  $1,165,000  and  $4,036,000  of Airway
product  for  the  three  and  nine  months  ended  August  31,  1996  and  sold
approximately  $5,782,000 of Airway product in fiscal year 1996. The loss of the
Airway license had an adverse effect on the Company's  results of operations for
the three and nine months ended August 31, 1997 and will have an adverse  effect
on Sirco  Canada's  results of operations for the remainder of fiscal year ended
November 30, 1997 and throughout the fiscal year ending November 30, 1998.

The Company is in  discussions  to terminate its license for Skechers  products,
which products have not generated the sales volume that was anticipated,  and is
pursuing other licenses which it believes will have more rapid acceptance in the
marketplace.

Selling,  warehouse,  and general and administrative  expenses decreased for the
three and nine  months  ended  August 31,  1997 by  approximately  $163,000  and
$917,000,  respectively,  from the comparable  periods in fiscal 1996.  Selling,
warehouse,  and general and  administrative  expenses decreased by approximately
$4,000  and  $379,000  for the three and nine  months  ended  August  31,  1997,
respectively, for the Company's Luggage and Backpack Divisions and approximately
$159,000  and  $538,000  for the three and nine months  ended  August 31,  1997,
respectively,  for the  Company's  Canadian  subsidiary.  For the three and nine
months ended August 31, 1997,  selling expenses expense decreased  approximately
$74,000  and   $595,000,   respectively,   and  warehouse   expenses   decreased
approximately $9,000 and $204,000, respectively. Additionally, for the three and
nine months ended August 31, 1997, general and administrative expenses decreased
approximately  $79,000  and  $117,000,  respectively.  The  decrease  in selling
expense is a direct result of the  reduction in sales of licensed  product while
the reduction in warehouse and general and administrative expense is primarily a
result of the  restructuring of the Company's  Canadian  operation at the end of
fiscal 1996.

Interest  expense for the three and nine months ended August 31, 1997  decreased
by approximately $75,000 and $223,000,  respectively,  from the amounts reported
in the same periods in fiscal 1996 due to lower average borrowings.

Miscellaneous  income for the three months  ended  August 31, 1997  decreased by
approximately $13,000 and increased by approximately $63,000 for the nine months
ended  August 31, 1997 over the amounts  reported in the same  periods in fiscal
1996.  The increase  for the nine months was due to the increase in  commissions
from sales arranged for by the Company for direct shipments from a supplier to a
customer.
<PAGE>
Liquidity and Capital Resources

At August 31, 1997, the Company had cash and cash  equivalents of  approximately
$399,000, and working capital of approximately $2,364,000.

Net cash (used in) provided by  operating  activities  aggregated  approximately
($6,262,000)  and  $1,231,000 in the nine month fiscal  periods ended August 31,
1997 and August 31, 1996, respectively. The increase of approximately $7,492,000
in net cash used in operating  activities  in fiscal 1997, as compared to fiscal
1996,  primarily reflects the net operating loss of $1,280,000 in fiscal 1997 as
compared to net operating income of  approximately  $517,000 in fiscal 1996, and
an  increase  in the use of  cash of  approximately  $2,587,000  for  inventory,
approximately $1,598,000 for accounts receivable, and approximately $733,000 for
accounts  payable and accrued  expenses.  The  increase in  inventory  levels is
primarily due to  accelerating  inventory  purchases due to fourth quarter quota
shortage  constraints and to a lesser extent slower than anticipated demand from
customers in the third  quarter of fiscal 1997.  The increase in use of cash for
accounts  receivable  is primarily  due to the Company no longer  factoring  the
receivables  with a third party,  resulting in a change in the  presentation  of
accounts receivable on the financial statements. The increase in the use of cash
for accounts payable and accrued expenses is primarily due to the efforts of the
Company to stay current with trade vendors in fiscal 1997.

Net cash used in  investing  activities  aggregated  approximately  $11,500  and
$63,000 in the nine month  fiscal  periods  ended August 31, 1997 and August 31,
1996,  respectively.  The principal  uses of cash from  investing  activities in
fiscal 1997 and fiscal 1996 was for the  purchase of  equipment.  The  principal
source of cash  provided  from  investing  activities  in fiscal  1997,  was the
proceeds of sale of  equipment,  and proceeds of a note  receivable  from a 1992
sale of a subsidiary.

Net cash provided by (used in)  financing  activities  aggregated  approximately
$6,306,000 and ($901,000) in the nine month fiscal periods ended August 31, 1997
and August 31,  1996,  respectively.  In the nine months  ended August 31, 1997,
approximately   $4,162,000  of  net  cash  was  provided  by  short-term   debt,
approximately  $196,000 was provided  from  proceeds  from the exercise of stock
options,  approximately  $1,348,000 was provided from proceeds from the exercise
of stock warrants and $609,000 was provided from a private equity placement.  In
the nine  months  ended  August 31,  1996,  the  Company  used net cash to repay
approximately  $1,151,000 in short and long-term  debt. Also in the 1996 period,
the Company received $250,000 in proceeds from the exercise of stock options.

In March 1995, the Company  entered into an agreement with Yashiro,  pursuant to
which  Yashiro had agreed to issue or cause to be issued,  until March 20, 1997,
unsecured trade letters of credit in an aggregate  amount of up to the lesser of
$1,200,000  or 35% of the book value of the Company's  inventory.  See Note 2 to
Notes to Condensed  Consolidated Financial Statements  (Unaudited).  On June 20,
1997,  the Company  repaid the entire  obligation to Yashiro under the Letter of
Credit Agreement.

On December  17,  1996,  the  Company's  factoring  agreement  with  Rosenthal &
Rosenthal Inc. was terminated and replaced with a financing agreement with Coast
Business  Credit,  a division  of  Southern  Pacific  Thrift & Loan  Association
("Coast").  See Note 2 to Notes to Condensed  Consolidated  Financial Statements
(Unaudited).  As of August 31,  1997,  the Company was  indebted to Coast in the
amount  of  approximately  $5,749,000  and had  outstanding  letters  of  credit
amounting to approximately $537,000.
<PAGE>
In January 1997, Sirco Canada was advised by its bank,  National Bank of Canada,
that it would no longer  provide  Sirco  Canada a  revolving  line of credit but
would  continue to provide the real  property  mortgage  loan on Sirco  Canada's
office and  warehouse  facility.  See Note 2 to Notes to Condensed  Consolidated
Financial  Statements  (Unaudited).  At August 31, 1997, the principal amount of
the mortgage loan was approximately $340,000. The Company is currently using the
Coast line of credit to provide  letter of credit  financing  that was  formerly
provided by National Bank of Canada.

For the period ended August 31, 1997, the Company had  approximately  $36,000 in
capital  expenditures.  The Company  does not plan to make  significant  capital
expenditures in fiscal 1997.

The  Company  believes  that its  existing  cash and cash  equivalent  balances,
present sources of financing and cash flow from operations will be sufficient to
meet the Company's  cash and capital  requirements  for at least the next twelve
months. However, if the depressed levels of sales do not increase or the Company
is unable to improve  its cash  position  by  raising  additional  capital,  the
Company may  experience  temporary cash  shortages,  which could have an adverse
effect on its financial condition or results of operations.
<PAGE>





                            SIRCO INTERNATIONAL CORP.

                            PART II-OTHER INFORMATION

Item 6.           Exhibits and Reports on Form 8-K

                  (a)  Exhibits.
                         None

   27             Financial Data Schedule.

                  (b)  Reports on Form 8-K
                  None.



<PAGE>


                                   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 hereunto duly authorized.


                                                       Sirco International Corp.



October 15, 1997                                   By: /s/ Joel Dupre
----------------                                       -------------- 
Date                                                   Joel Dupre
                                                       Chairman of the Board and
                                                       Chief Executive Officer





October 15, 1997                                   By: /s/Paul Riss
----------------                                       ------------  
Date                                                   Paul Riss
                                                       Chief Financial Officer
                                                       (Principal Financial and
                                                       Accounting Officer)



<PAGE>


                                  EXHIBIT INDEX

       No.                         Description   
       ---                         -----------   

       27                    Financial Data Schedule.