FORM 10-Q
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549
(Mark one)
     [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the quarterly period ended July 30, 2005

                                        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  1-7288

                           THE BOMBAY COMPANY, INC.
              (Exact name of registrant as specified in its charter)


                               Delaware             75-1475223

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

  550 Bailey Avenue, Fort Worth, Texas              76107
(Address of principal executive offices)          (Zip Code)

                            (817) 347-8200
         (Registrant's telephone number, including area code)

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

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

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

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).     Yes       X        No ______

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


          Class           Number of shares outstanding at August 27, 2005
Common stock, $1 par value                  36,322,923



                                   Page 1 of 24






<PAGE>2

                    THE BOMBAY COMPANY, INC. AND SUBSIDIARIES

                                    Form 10-Q

                           Quarter Ended July 30, 2005



                                TABLE OF CONTENTS


                          PART I - FINANCIAL INFORMATION

Item                                                                Page No.

1.Financial Statements ..........................................      3-11

2.Management's Discussion and Analysis of Financial
   Condition and Results of Operations ..........................      12-20

3.Quantitative and Qualitative Disclosures About Market Risk ....       21

4.Controls and Procedures .......................................       21



                           PART II - OTHER INFORMATION


4.Submission of Matters to a Vote of Security Holders ...........       22

6.Exhibits ......................................................       23

 Signatures......................................................       24


















                                            2



<PAGE>3


<TABLE>

                                          THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
                                            Consolidated Statements of Operations
                                          (In thousands, except per share amounts)
                                                         (Unaudited)

<CAPTION>
                                                          Three Months Ended               Six Months Ended
                                                    July 30,            July 31,       July 30,      July 31,
                                                      2005                2004           2005          2004
                                                                       (restated)                   (restated)

<S>                                                 <C>                  <C>           <C>           <C>
Net revenue.........................                $128,047             $122,479      $250,158      $246,060

Costs and expenses:
        Costs of sales, buying and
            store occupancy costs..........          102,448               95,080       197,701       188,702
        Selling, general and administrative           38,977               37,549        79,036        76,869
        expenses...........................
        Gain on sale of assets.............             (560)                  --         (560)            --
         Operating loss....................                                            (26,019)
                                                     (12,818)             (10,150)                    (19,511)

Other income (expense):
        Interest income....................                9                   19            17            39
        Interest expense...................             (527)                  (6)         (847)           (4)

Loss before income taxes...........                  (13,336)             (10,137)      (26,849)      (19,476)
Benefit for income taxes............                  (3,965)              (3,805)       (9,478)       (7,401)

        Net loss...........................         $ (9,371)            $ (6,332)     $(17,371)    $ (12,075)

Basic and diluted loss per share....                   $(.26)               $(.18)        $(.48)        $(.34)

Average common shares outstanding...                  36,220               35,670        36,080        35,550


<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
                                              3
<PAGE>4




<TABLE>


                                             THE BOMBAY COMPANY, INC. AND SUBSIDIARIES

                                                    Consolidated Balance Sheets
                                                       (Dollars in thousands)
                                                            (Unaudited)
<CAPTION>
                                                             July 30,              January 29,            July 31,
                                                               2005                   2005                   2004
                                                                                                          (restated)
<S>                                                            <C>                  <C>                     <C>
ASSETS
Current assets:
   Cash and cash equivalents.............                      $ 10,488              $ 9,168                $ 10,034
   Inventories...........................                       166,865              144,702                 136,620
   Other current assets..................                        35,201               27,022                  30,342
       Total current assets..............                       212,554              180,892                 176,996

Property and equipment, net..............                        94,994               92,012                  78,429
Goodwill, less amortization..............                           423                  423                     423
Other assets.............................                        10,237               10,846                   5,783
       Total assets......................                      $318,208             $284,173                $261,631

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Bank borrowings.......................                      $ 55,511                $  --                 $ 2,200
   Accounts payable and accrued expenses.                        40,213               48,997                  36,899
   Accrued payroll and bonuses...........                         4,823                5,660                   4,074
   Gift certificates redeemable..........                         7,867                8,312                   6,430
   Accrued insurance.....................                         4,435                4,081                   4,195
       Total current liabilities.........                       112,849               67,050                  53,798

Accrued rent and other noncurrent liabilities                    39,146               35,192                  27,545
Stockholders' equity:
   Preferred stock, $1 par value,
       1,000,000 shares authorized.......                           --                    --                      --
   Common stock, $1 par value, 50,000,000
       shares authorized, 38,149,646 shares issued              38,150                38,150                  38,150
   Additional paid-in capital............                       79,880                79,700                  79,778
   Retained earnings.....................                       56,364                73,737                  73,867
   Accumulated other comprehensive income                        1,042                   944                     142
   Common shares in treasury, at cost, 1,826,968;
      2,259,261 and 2,362,866 shares, respectively              (7,498)               (9,268)                 (9,693)
   Deferred compensation.................                       (1,725)               (1,332)                 (1,956)
       Total stockholders' equity........                      166,213               181,931                 180,288
Total liabilities and stockholders' equity                    $318,208              $284,173                $261,631

<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

                                       4
<PAGE> 5

<TABLE>



                                             THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
                                               Consolidated Statements of Cash Flows
                                                       (Dollars in thousands)
                                                            (Unaudited)

<CAPTION>
                                                               Six Months Ended
                                                             July 30,      July 31,
                                                               2005           2004
                                                                           (restated)
<S>                                                          <C>           <C>
Cash flows from operating activities:
   Net loss..........................................        $(17,371)     $ (12,075)
   Adjustments to reconcile net loss
      to net cash used in operating activities:

         Depreciation and amortization...............           9,183          8,841
         Restricted stock expense....................             595            414
         Gain on sale of assets (see Note 3).........            (560)            --
         Deferred taxes and other....................          (1,934)           (12)
   Change in assets and liabilities (excluding effect
   of sale of assets):
        Increase in other assets.....................          (7,231)        (5,546)
        (Increase) decrease in inventories...........         (22,039)         2,327
        Decrease in current liabilities..............         (10,098)        (2,986)
        Increase in noncurrent liabilities                        654            513
   Landlord construction allowances..................           4,606          4,320
   Net cash used in operating activities.............         (44,195)        (4,204)
Cash flows from investing activities:
   Purchases of poperty and equipment................         (11,279)       (14,282)
   Proceeds from sale of assets (see Note 3)                      575             --
   Proceeds from sales of property and equipment                    3             26
   Net cash used in investing activities.............         (10,701)       (14,256)
Cash flows from financing activities:
   Net bank borrowings...............................          55,511          2,200
   Sale of stock to employee benefit plans...........             141            215
   Proceeds from the exercise of employee stock options           669            514
   Net cash provided by financing activities.........          56,321          2,929
Effect of exchange rate change on cash and cash equivalents      (105)           (54)
Net increase (decrease) in cash and cash equivalents..          1,320        (15,585)
Cash and cash equivalents at beginning of period......          9,168         25,619
Cash and cash equivalents at end of period............        $10,488        $10,034
Supplemental disclosure of cash flow information:
     Interest paid....................................           $786        $    --
     Income taxes paid................................            243          1,454
     Non-cash investing and financing activities:
        Issuance of restricted stock, net of cancellations        989          1,518
        Distribution of director fees.................             60              -
        Capitalization of construction period rent....            342            603

<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

                                     5
<PAGE>6

                   THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements
                                  (Unaudited)



(1)    Basis of Presentation

  In  the  opinion  of  the Company, the  accompanying  unaudited  consolidated
financial statements, which  include  the  accounts of The Bombay Company, Inc.
and  its wholly-owned subsidiaries (the "Company"  or  "Bombay"),  contain  all
adjustments  (consisting  of  only  normal  recurring adjustments) necessary to
present fairly the financial position as of July  30,  2005  and July 31, 2004,
the  results  of operations for the three and six months then ended,  and  cash
flows for the six  months  then  ended  in  accordance  with generally accepted
accounting principles and the rules of the Securities and  Exchange Commission.
The results of operations for the three and six month periods  ended  July  30,
2005  and  July  31,  2004  are not necessarily indicative of the results to be
expected  for the full fiscal  year.   The  consolidated  financial  statements
should  be  read  in  conjunction  with  the  financial  statement  disclosures
contained in the Company's Fiscal 2004 Annual Report on Form 10-K.

(2)    Restatement of Previously Issued Financial Statements

    During the  fourth  quarter of Fiscal 2004, the Company began an evaluation
of its lease accounting practices  and  determined  that  it was appropriate to
restate previously issued financial statements.  Historically,  the Company has
recognized store lease expense on a straight-line basis beginning  on  the date
that  the  store  opened.   This generally had the effect of excluding the pre-
opening store build out, fixturing  and  merchandise  stocking  periods  during
which the Company typically had no rent payments.  Based upon the evaluation of
its  lease  accounting  practices,  the Company adopted an accounting policy to
capitalize rent during the construction period and recognize straight-line rent
expense  upon  the store becoming substantially  complete  and  ready  for  its
intended use, which  results  in  recording rent expense during the merchandise
stocking periods.

    Additionally,  in  prior  periods,   proceeds  from  landlord  construction
allowances  were  reflected  as  a  component  of  cash  flows  from  investing
activities  in  the  Consolidated  Statements of Cash  Flows.   The  historical
Consolidated Statement of Cash Flows for the six months ended July 31, 2004 has
been restated to reflect such proceeds  as  a  component  of  cash  flows  from
operating activities.

    The effects of these restatements were as follows (in thousands):

<TABLE>
<CAPTION>
                                              July 31, 2004
                                        As       Impact of       As
                                     Reported   Restatement   Restated
<S>                                  <C>         <C>          <C>
CONSOLIDATED BALANCE SHEET
Property and equipment, net          $73,640      $4,789      $78,429
Other assets..............             5,561         222        5,783
Total assets..............           256,620       5,011      261,631
Accrued rent and other
   long term liabilities..            22,163       5,382       27,545
Retained earnings.........            74,238        (371)      73,867
Total stockholders' equity           180,659        (371)     180,288
Total liabilities and
   stockholders' equity...           256,620       5,011      261,631
</TABLE>

                                      6
<PAGE>7

<TABLE>
                            THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
                           Notes to Consolidated Financial Statements

                                        (Unaudited)
<CAPTION>

                                Fiscal Quarter Ended July 31, 2004
                                As       Impact of         As
                              Reported   Restatement    Restated
<S>                          <C>           <C>         <C>

CONSOLIDATED STATEMENT
   OF OPERATIONS
Cost of sales, buying and
   store occupancy costs..    $95,074       $  6       $95,080
Loss before income taxes..   (10,131)         (6)      (10,137)
Benefit for income taxes..    (3,803)         (2)       (3,805)
Net loss..................    (6,328)         (4)       (6,332)
Basic loss per share......     $(.18)         --         $(.18)
Diluted loss per share....     $(.18)         --         $(.18)
<CAPTION>
                                  Six Months Ended July 31, 2004
                                As       Impact of         As
                              Reported   Restatement    Restated
<S>                          <C>          <C>          <C>
CONSOLIDATED STATEMENT
   OF OPERATIONS
Cost of sales, buying and
   store occupancy costs..   $188,700      $  2        $188,702
Loss before income taxes..   (19,474)        (2)        (19,476)
Benefit for income taxes..    (7,400)        (1)         (7,401)
Net loss..................   (12,074)        (1)        (12,075)
Basic loss per share......     $(.34)        --           $(.34)
Diluted loss per share....     $(.34)        --           $(.34)


CONSOLIDATED STATEMENT
   OF CASH FLOWS
Net cash used in
   operating activities...   $(8,524)     $ 4,320       $(4,204)
Net cash used in
   investing activities...    (9,936)      (4,320)      (14,256)
</TABLE>


(3)    Sale of Bailey Street Trading Company

  On  May  27, 2005, the Company completed the sale of a substantial portion of
the assets of  Bailey  Street Trading Company ("Bailey Street"), a wholly-owned
subsidiary involved in the  wholesale  distribution  of  a  proprietary line of
accent furniture, to Bailey Street Holding Company, a newly formed corporation,
independent of Bombay.  Under the terms of the agreement, Bombay  received $4.7
million  in  cash  in  return for $1.1 million in accounts receivable and  $2.3
million  in  inventories  as  well  as  intellectual  property,  equipment  and
facilities associated with  the  operations. Bailey Street Holding Company also
assumed certain normal operating liabilities  associated  with  the operations.
The  purchase price is subject to minor adjustments and the agreement  requires
Bombay to provide certain

                                7
<PAGE>8

                   THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements
                                  (Unaudited)

transition  services  for  up  to  one  year.   Bombay  is  in  the  process of
liquidating, through its retail and Internet channels, approximately $2 million
of inventory not included in the sale.  This transaction may result in  a  one-
time,  non-cash  charge  of  approximately $1.2 to $1.4 million relating to the
costs of exiting the leased distribution  center  utilized  by  Bailey  Street.
Total revenues of Bailey Street for the six months ended July 30, 2005 and July
31, 2004 were $6.9 million and $7.6 million, respectively.


(4)    Stock-Based Compensation

  The  Company  accounts  for  its  stock-based  compensation  plans  under the
intrinsic value method.  Accordingly, no compensation expense related to grants
of  stock  options has been recognized, as all options granted under the  plans
had an exercise  price  not  less than the market price of the Company's common
stock  on  the  date  of  grant. Compensation  expense  related  to  grants  of
restricted stock is based upon  the quoted market price of the Company's common
stock at the measurement date, amortized  to  expense  over the vesting period.
The following table illustrates the effect on net loss and loss per share as if
the Company had applied the fair value recognition provisions  of  Statement of
Financial   Accounting   Standards   No.   123,   "Accounting  for  Stock-Based
Compensation" ("SFAS 123"), to stock-based compensation  (in  thousands, except
per share amounts):

<TABLE>
<CAPTION>
                                            Three Months Ended          Six Months Ended
                                            July 30,   July 31,      July 30,     July 31,
                                             2005       2004          2005         2004
                                                      (restated)                 (restated)
<S>                                         <C>        <C>          <C>           <C>

Net loss, as reported ....                  $(9,371)   $(6,332)     $(17,371)     $(12,075)
Stock-based compensation expense
  determined under SFAS 123, net of tax        (382)      (535)         (721)         (884)
Net loss, pro forma............             $(9,753)   $(6,867)     $(18,092)     $(12,959)

Basic and diluted loss
   per share, as reported......               $(.26)     $(.18)        $(.48)        $(.34)
Basic and diluted loss
   per share, pro forma........               $(.27)     $(.19)        $(.50)        $(.36)
</TABLE>

  During  the  first  and  second quarters of Fiscal 2005, the Company  awarded
restricted stock grants aggregating  213,038  shares  to  key  employees.   The
respective  shares  will become vested in designated increments contingent upon
continued employment  of  the respective recipient based upon specified vesting
periods  of  at least 12 months  and  not  more  than  48  months,  subject  to
acceleration in  the  event  that the Company achieves an earnings threshold of
$.50  per  share,  adjusted for stock  splits,  if  any,  at  which  time  such
restricted  shares  shall   become   100%  vested.   Deferred  compensation  of
$1,145,000 was recorded in conjunction  with  the  grants, and will be expensed
over the respective vesting periods.  During the second quarter of Fiscal 2005,
26,000  shares  of  unvested  restricted  stock  were cancelled  following  the
departure  of  an  executive.  In conjunction with the  cancellation,  deferred
compensation of $156,000 and $58,000 previously expensed was reversed.

                                       8
<PAGE>9




                   THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
              Notes to Consolidated Financial Statements (cont'd)
                                  (Unaudited)


(5)    Comprehensive Loss

  Comprehensive loss  for the three and six months ended July 30, 2005 and July
31, 2004 was as follows (in thousands):

<TABLE>
<CAPTION>
                                      Three Months Ended            Six Months Ended
                                    July 30,     July 31,        July 30,        July 31,
                                     2005         2004            2005            2004
                                               (restated)                     (restated)
<S>                                 <C>           <C>           <C>            <C>
Net loss.........................   $(9,371)      $(6,332)      $(17,371)      $(12,075)
Foreign currency translation
   Adjustments...................       248           403             98             20
Comprehensive loss...............   $(9,123)      $(5,929)      $(17,273)      $(12,055)
</TABLE>


(6)    Interim Tax Provision

   The  seasonality  of the  business  is  such  that  the  Company  expects  a
substantial portion of  losses incurred during the first six months of the year
to be offset by profits during  the  second  half  of the year.  As a result, a
small change in the Company's estimated ordinary income  during the second half
of the year could give rise to a significant change in the  effective tax rate.
Therefore, the Company has calculated the effective tax rate  for  the discrete
six month period ended July 30, 2005 which resulted in a 35.3% rate for the six
months  and  a  29.7%  rate  for  the three months ended July 30, 2005.  During
Fiscal 2004, amounts were calculated  based  upon an estimated annual effective
tax rate.


                                       9



<PAGE>10

                   THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
              Notes to Consolidated Financial Statements (cont'd)
                                  (Unaudited)


(7)    Earnings/Loss per Share

  Basic earnings (loss) per share are based upon the weighted average number of
shares  outstanding.  Diluted earnings (loss) per  share  are  based  upon  the
weighted  average  number  of  shares outstanding plus the shares that would be
outstanding assuming exercise of  dilutive  stock  options  and distribution of
deferred director compensation.

  The  computation  for  basic  and  diluted loss per share is as  follows  (in
thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                Three Months Ended      Six Months Ended
                                                July 30,    July 31,   July 30,  July 31,
                                                 2005        2004       2005      2004
                                                          (restated)           (restated)
<S>                                             <C>        <C>       <C>         <C>
Numerator:
  Net loss...................................   $(9,371)   $(6,332)  $(17,371)   $(12,075)
Denominator for basic and diluted
   loss per share:
   Average common shares outstanding.........    36,220     35,670     36,080      35,550

Basic and diluted loss per share.............   $  (.26)    $ (.18)   $  (.48)   $   (.34)
</TABLE>

  During the three and six month periods ended July 30, 2005 and July 31, 2004,
the Company reported a net loss.  Accordingly,  common  stock equivalents would
be  anti-dilutive  during  these  periods and, thus, are not  included  in  the
computation  of  diluted loss per share.   The  following  table  presents  the
potentially dilutive  securities  outstanding at each of the periods then ended
(in thousands):

<TABLE>
<CAPTION>
                                             July 30,  July 31,
                                              2005      2004
<S>                                          <C>        <C>
Stock options.............................   3,240      3,329
Deferred director.........................      67         34
                                             3,307      3,363
</TABLE>


(8)    Amendment to Shareholders' Rights Plan

  Effective May 26, 2005, the Company  amended  its  shareholders'  rights plan
("Rights Agreement") to (i) extend the final expiration of the Rights Agreement
to  June  1, 2015, (ii) change the exercise price of each Right (as defined  in
the Rights  Agreement)  from  $50.00  to $35.00, (iii) modify the definition of
"Acquiring Person" to increase from 15%  to  20% the beneficial ownership level
that any person or group of persons may acquire  before  triggering the Rights,
(iv) add a provision establishing a three-year independent  director evaluation
committee ("TIDE Committee"), and (v) clarify that the board  of  directors  of
the  Company may, in good faith, determine that a disposition of Company common
stock,  by  a  person inadvertently exceeding the permitted threshold, has been
made as promptly  as  practicable  and  would  preclude  such person from being
deemed an "Acquiring Person".

                                       10
<PAGE>11

                    THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
              Notes to Consolidated Financial Statements (cont'd)
                                   (Unaudited)


  The  TIDE  Committee  will  consist of independent members of  the  board  of
directors of the Company and will  review  and evaluate the Rights Agreement to
consider whether it continues to be in the best  interests  of the Company, its
stockholders and any other relevant constituencies of the Company  (i) at least
every three years and (ii) sooner if an acquisition proposal is made  that  the
TIDE  Committee  believes  would make such a review and evaluation appropriate.
Following each such review, the TIDE Committee will communicate its conclusions
to the board of directors, including  any  recommendation  as  to  whether  the
Rights  Agreement  should  be  modified  or the Rights should be redeemed.  The
Company's governance and nominations committee  of  the board of directors will
serve  as  the TIDE Committee as long as its members satisfy  the  independence
requirement.


(9)        New Accounting Pronouncements

  In December  2004,  the Financial Accounting Standards Board issued Statement
of Financial Accounting  Standards No. 123 (Revised 2004) ("SFAS 123R"), Share-
Based Payment.  SFAS 123R establishes standards for accounting for transactions
in which an entity exchanges its equity instruments for goods or services.  The
primary focus of SFAS 123R  is  on  employee  services  obtained in share-based
payment  transactions.   SFAS  123R requires that all share-based  payments  to
employees  be recognized in the financial  statements  based  upon  their  fair
values.  The  cost  will be recognized over the period during which an employee
is required to provide  services  in  exchange  for the award.  The standard is
effective for our financial statements beginning  in Fiscal 2006, at which time
we  will  adopt  its  provisions.   We  are  in  the process  of  planning  our
implementation  and  evaluating  the  impact of adoption  on  our  consolidated
financial position and results of operations.


  In May 2005, the Financial Accounting  Standards  Board  issued  Statement of
Financial   Accounting   Standards   No.  154,  Accounting  Changes  and  Error
Corrections.  Among other things, SFAS  154 requires that a voluntary change in
accounting principle be applied retrospectively with all prior period financial
statements  presented  on  the  new  accounting   principle,   unless   it   is
impracticable  to do so.  SFAS 154 also provides that (i) a change in method of
depreciating or  amortizing a long-lived nonfinancial asset be accounted for as
a  change  in estimate  (prospectively)  that  was  effected  by  a  change  in
accounting principle,  and  (ii)  correction  of  errors  in  previously issued
financial  statements  should  be  termed  a  "restatement".   The standard  is
effective for accounting changes and correction of errors made in  fiscal years
beginning  after  December  15,  2005.  The Company will adopt the standard  in
Fiscal 2006, as applicable.



                                      11



<PAGE>12

                   THE BOMBAY COMPANY, INC. AND SUBSIDIARIES


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

of Operations

Special Note Regarding Forward-Looking Statements

  Certain  statements in this Form  10-Q  under  "Management's  Discussion  and
Analysis of Financial Condition and Results of Operations" constitute "forward-
looking statements"  within  the  meaning  of the Private Securities Litigation
Reform Act of 1995.  Such forward-looking statements  involve known and unknown
risks,  uncertainties  and other factors which may cause  the  actual  results,
performance or achievements  of  The  Bombay Company, Inc. and its wholly-owned
subsidiaries (the "Company" or "Bombay")  to  be  materially different from any
future  results,  performance  or achievements expressed  or  implied  by  such
forward-looking statements.  Such factors include, among others, the following:
general  economic  and  financial  market   conditions  which  affect  consumer
confidence in the spending environment for home-related purchases; competition;
seasonality;  success of operating initiatives;  new  product  development  and
introduction schedules;  uninterrupted  flow  of  product;  acceptance  of  new
product  offerings;  inherent  safety  of  product  offerings;  advertising and
promotional   efforts;   adverse  publicity;  expansion  of  the  store  chain;
availability, locations and  terms  of  sites for store development; ability to
renew leases on an economic basis; changes  in business strategy or development
plans including risks associated with the strategy  to  move  stores  off-mall;
availability  and terms of borrowings or capital for operating purposes;  labor
and employee benefit  costs;  ability to obtain insurance at a reasonable cost;
rising fuel and energy costs, availability  and  their impact on the operations
of the business as well as impact on consumer spending; reliance on technology;
security of the technological infrastructure; changes  in  government  or trade
regulations including duties on imports from China and the possibility that the
scope  of  such  duties  will be expanded to encompass additional countries  or
product categories; risks  associated with international business; fluctuations
in foreign currency exchange  rates; terrorism; war or threat of war; potential
travel or import/export restrictions  due  to  communicable  diseases; regional
weather  conditions;  natural  disasters;  labor  relations and human  resource
practices; hiring and retention of adequate and qualified  personnel  and other
risks  and uncertainties contained in the Company's 2004 Annual Report on  Form
10-K and other SEC filings as they occur.  The Company undertakes no obligation
to revise  the forward-looking statements contained herein to reflect events or
circumstances  after  the  date  hereof  as a result of new information, future
events or otherwise.


General

   The Company designs, sources and markets  a  unique line of fashionable home
accessories, wall d{e'}cor and furniture through  495  retail  locations  in 42
states  in  the  United States and nine Canadian provinces, specialty catalogs,
the Internet and international licensing arrangements.  Throughout this report,
the terms "our", "we",  "us",  "Bombay"  and  "Company"  refer  to  The  Bombay
Company, Inc. including its subsidiaries.

  In  addition to our primary retail Bombay operations, during 2001 we expanded
our product  offering  to  include  BombayKIDS, a line of children's furniture,
textile and accessories, which is currently  being  offered  in  56  BombayKIDS
store  locations  as  well  as through catalog and Internet channels.    Bombay
also has international licensing  agreements under which a total of 15 licensed
international  stores are operating  in  the  Middle  East  and  the  Caribbean
("International").   On  May  27,  2005, we completed the sale of a substantial
portion of the assets of Bailey Street  Trading  Company  ("Bailey  Street"), a
wholly-owned subsidiary involved in the wholesale distribution of a proprietary
line of accent furniture, to a newly formed corporation, independent of Bombay.


                                       12

<PAGE>13

The  sale  included  the  subsidiary's  trade  receivables,  a  portion  of the
inventory,  and  the intangibles associated with the operations.  The remaining
inventory is being  liquidated  through  the  Company's  other retail channels,
including its Bombay retail locations, outlets, and over the Internet.

  The largest percentage of Bombay's sales and operating income  is realized in
the  fiscal quarter that includes December (Christmas season).  Merchandise  is
manufactured  to  our  specifications  through  a worldwide network of contract
manufacturers.  The impact of inflation on operating  results  is typically not
significant because the majority of our products are proprietary.   We  attempt
to  alleviate  inflationary  pressures by adjusting selling prices (subject  to
competitive conditions), improving  designs  and finding alternative production
sources in lower cost countries.

  Same store sales comparisons are calculated  based  upon  revenue from stores
opened  for more than 12 months.  Stores converted from the regular  format  to
the large  format  and  stores  relocated  from  mall to off-mall locations are
classified as new and are excluded from same store  sales  until they have been
opened  for  12  months.   Stores  relocated  within a mall and whose  size  is
significantly changed are treated as new stores  and are excluded from the same
store sales calculation until opened for a full year.  Remodeled  stores remain
in the computation of same store sales.

  Cost  of  sales  includes  all costs associated with the purchase of  product
including,  but not limited to,  vendor  cost,  inbound  transportation  costs,
duties, commission,  inspections,  quality  control,  warehousing  and outbound
transportation  costs.   Buying costs include costs associated with our  buying
department, consisting primarily  of  salaries, travel, product development and
product sample costs.  Store occupancy  costs  include costs such as rent, real
estate taxes, common area maintenance charges, utilities  and  depreciation and
amortization of leasehold improvements and other fixed assets relating  to  our
retail locations.


Restatement of Previously Issued Financial Statements

  During the fourth quarter of Fiscal 2004, we began an evaluation of our lease
accounting  practices  and  determined  that  it  was  appropriate  to  restate
previously issued financial statements.  Historically, we have recognized store
lease  expense  on  a  straight-line basis beginning on the date that the store
opened.  This generally had the effect of excluding the pre-opening store build
out,  fixturing and merchandise  stocking  periods  during  which  the  Company
typically  had  no  rent  payments.   Based  upon  our  evaluation of our lease
accounting practices, we have adopted an accounting policy  to  capitalize rent
during  the  construction period and recognize straight-line rent expense  upon
the store becoming substantially complete and ready for its intended use, which
results in us recording rent expense during the merchandise stocking periods.

  Additionally,   in   prior  periods,  we  reflected  proceeds  from  landlord
construction allowances as a separately identified component of cash flows from
investing activities in  the  Consolidated  Statements  of Cash Flows.  We have
restated our historical Consolidated Statement of Cash Flows for the six months
ended July 31, 2004 to reflect such proceeds as a component  of cash flows from
operating activities.

   The  restatement  includes  adjustments to cost of sales, buying  and  store
occupancy costs, income (loss) before  income  taxes,  provision  (benefit) for
income  taxes,  net income (loss) and earnings (loss) per share. These  changes
increased net loss  and  loss per share by $4,000 and $.00 per diluted share in
the second quarter of Fiscal 2004, and increased net loss and loss per share by
$1,000 and $.00 per diluted  share  in the six months ended July 31, 2004.  The
restatement relating to the reflection  of  proceeds from landlord construction
allowances as a component of cash flows from operating activities decreased our

                                       13

<PAGE>14

net  cash  used in operating activities and increased  our  net  cash  used  in
investing activities  in  the  six  months ended July 31, 2004 by $4.3 million.
For information with respect to the restatement  adjustments, see Note 2 to the
accompanying consolidated financial statements.  This  Management's  Discussion
and Analysis gives effect to these restatements.


Executive Summary

   We  focus  on  several  key metrics in managing and evaluating our operating
performance and financial condition including the following:  same store sales,
sales  and gross margins by merchandise  categories,  operating  margins  as  a
percentage  of  revenues,  earnings  per share, cash flow, return on assets and
inventory  turn.   We  are  currently executing  a  multiphase  turnaround,  as
previously discussed in our Annual Report on Form 10-K, intended to improve our
operating performance.

      During the second quarter  of  Fiscal  2005,  we  made  some  of the most
important  changes Bombay has made in its turnaround.  We had previously  begun
to address structural  issues  relating  to Bombay's real estate positioning by
migrating many of our stores from mall to  off-mall  locations  and making them
larger.  We also introduced BombayKIDS to help attract a new, younger  customer
to  the  stores  and  to  have  a  more  significant  presence  in our off-mall
locations.   We  also  invested  in  our  logistics  network,  adding  one  new
distribution  center  in  the  Midwest  during  Fiscal  2003 and relocating our
Northeast  distribution  center  in  fall  of Fiscal 2004.  During  the  second
quarter of Fiscal 2005 we opened a new, larger  distribution  center to service
our Canadian operations.  Most significantly, this quarter saw the introduction
of a new and much improved merchandise assortment and shopping  experience.  We
believe both are critical to driving future profitability of the  Company.  The
cost of executing this change was higher than we had anticipated but  essential
to  ensuring  Bombay's  future  success.   With  respect  to four key corporate
initiatives that we have identified for the current year, our  progress  was as
follows:

    * Return to positive same store sales - This quarter saw positive same
      store  sales  of  1%  which  represented  an  improvement  over the first
      quarter.   We  began the quarter with a well designed plan to  clear  our
      spring assortment,  bring  in  our  new  and upgraded fall assortment and
      shift to a lifestyle presentation intended to inspire the customer with a
      variety  of  complete  room  settings  displayed  in  our  stores.    Our
      commitment  to  achieving  this  goal  by  mid-July   resulted   in   our
      aggressively  promoting  product  that  no  longer  had  a  place  in the
      assortment,  overall  or  in a particular store, which adversely impacted
      sales.  While we sold through  the  number  of units, it was sometimes at
      the expense of the selling price.  We believe  that  the  trend  for  the
      third  quarter  should  improve over the second quarter with the improved
      quality of the inventory, our new in-store presentation and the increased
      marketing support designed  to drive positive same store sales during the
      second half of the year.

    * Develop sustainable growth  in margin rate - The cost of introducing
      in excess of one third new stock keeping units ("SKUs") to our assortment
      as well as transitioning our assortment  and  store presentation resulted
      in  higher  markdowns than anticipated.   We estimate  that  we  recorded
      approximately  $7  million  in  incremental markdowns for items that fell
      into one or more of the following categories:

         1) items being discontinued as  a  result  of reducing the overall SKU
         count and upgrading the assortment;
         2) floor models that were featured in a particular store that would no
         longer be presented on the selling floor in  the  future under the new
         presentation standards; and
         3)  spring merchandise that we exited more aggressively  to  meet  the
         mid-July date for the introduction of new fall product.

                                       14

<PAGE>15

      We view  these  markdowns  as  necessary to reposition the assortment and
      position the Company for future  profitability.  Going forward, we expect
      to  see  improving margin trends as  we  have  upgraded  our  merchandise
      assortment  providing  a  broader  range of price points and quality.  We
      also expect investments in logistics  and  real  estate infrastructure to
      have a positive impact on margins.

    * Ensure profitability - We have developed a two-pronged  strategy for
      enhancing profitability.  Our first strategy is to keep our corporate and
      store  four-wall  selling, general and administrative expenses controlled
      at levels in line with  sales  levels.   Our focus has been on efficiency
      and "right-sizing" the organization for our new real estate and operating
      strategies.   For the second quarter, our corporate  office  general  and
      administrative expenses were below last year.  We intend to maintain this
      running rate on  corporate  expenses  while  continuing  to  aggressively
      manage our store four-wall expenses.

      Our  second  strategy  to  ensure profitability is to slow our new  store
      growth in Fiscal 2005 to allow  management  to  focus on existing stores.
      We will continue to strategically migrate stores  from  mall  to off-mall
      and  continue  to  close unprofitable stores as the opportunities  arise.
      Currently we project  that we will end Fiscal 2005 with 497 to 502 stores
      versus our previously planned range of 505 to 510 stores.

    * Continue to invest  for  the future - We have spent much of the past
      two  years  investing  in our infrastructure  in  order  to  address  the
      structural issues of our  business.   In  order to reduce store occupancy
      costs, we have been migrating mall-based stores  to off-mall locations as
      leases expire and suitable locations become available.  During the second
      quarter  of  Fiscal  2005,  we  opened 3 core Bombay stores  in  off-mall
      locations and closed 4 mall-based  stores,  bringing  the  total off-mall
      count  to  152  stores or 39% of the total Bombay locations.  During  the
      first half of the  year,  four-wall  operating  margins  for the off-mall
      stores  were  approximately  700 basis points higher than the  mall-based
      stores primarily as a result of  the  lower  occupancy  costs.  While the
      magnitude of the difference decreases as we enter the holiday season when
      sales volumes are higher, we believe that the reduction in fixed costs is
      key  to  reducing  losses  in  the first three quarters of the  year  and
      improving overall profitably.

      We completed a merchandise strategy  project,  designed  to identify near
      and   mid-term  improvement  opportunities  for  the  current  core   and
      BombayKIDS  formats,  which  may  include changes to our category mix and
      changes  to the allocation of store  space  between  categories.  We  are
      encouraged  by  the  findings  and  are in the process of integrating the
      results into our assortment plans for  the  upcoming  Fiscal  2006 spring
      merchandise  season.   While  this  study was intended to drive long-term
      profitability, we expect to be able to  begin impacting sales and profits
      as early as January 2006.

      We completed the move to a new distribution  center  and  head  office in
      Canada, which replaced the previous undersized facility.

      Maturing our BombayKIDS business is important to future earnings  growth.
      One  aspect  of profitability is achieving critical mass in total and  by
      market.   During  the  second  quarter  of  Fiscal  2005,  we  added  one
      BombayKIDS  store,  bringing the total to 56 at July 30, 2005.  We expect
      to add 3 to 4 more BombayKIDS  stores  this  year, taking our total store
      count to 59 to 60 stores by the end of the year,  with  the  belief  that
      this business will be a profit contributor in years to come.

                                       15

<PAGE>16


Results of Operations

Quarters Ended July 30, 2005 and July 31, 2004

      Net revenue increased 5% to $128.0 million for the quarter ended July 30,
2005 from $122.5 million for the quarter ended July 31, 2004.  The increase was
a  result  of  same  store sales increases of 1% for the quarter in addition to
sales from new stores,  which  contributed  approximately  $17.3 million in net
sales, more than offsetting sales from stores closed during the past 12 months,
which  contributed  $10.3  million  during  the  second quarter of  last  year.
Revenues during the quarter included sales of significant  amounts of clearance
merchandise  to make room for the introduction of in excess of  one  third  new
product SKUs,  resulting  in  a fresh assortment with better quality.  Revenues
from non-store activity, including  Internet,  mail  order,  International  and
Bailey  Street, accounted for 7% of the sales in the second quarter compared to
9% in the comparable period of last year.

  The following  table outlines the sales mix by product category for the three
month periods ended July 30, 2005 and July 31, 2004:

<TABLE>
<CAPTION>
                                   Three Months Ended
                                 July 30,      July 31,
                                   2005          2004
<S>                               <C>           <C>
Sales mix:
   Large furniture..........       30%           32%
   Occasional furniture.....       18            19
   Wall decor...............       16            13
   Accessories..............       36            36
                                  100%          100%
</TABLE>

        On a geographical  basis, same store sales results had little variation
among regions.  Increases in wall d{e'}cor were the result of both clearance of
old product as well as customer  acceptance of some of the new introductions in
this category.  The average ticket  remained  virtually  unchanged  during  the
second quarter while the number of total transactions, including those from new
stores, increased 5%.

    Cost of sales, including buying and occupancy costs, was $102.4 million for
the second  fiscal  quarter  compared to $95.1 million for the same period last
year.  As a percentage of revenue,  cost  of  sales  increased to 80.0% for the
quarter compared to 77.6% for the prior year period.  Gross margin declined 260
basis points, 240 of which was due to product margins,  related  to the cost of
clearing  through  product  to remerchandise stores and upgrade the assortment.
Higher distribution costs accounted  for  the remainder of the decline in gross
margin.  Buying and occupancy costs increased $0.9 million, to $28.3 million in
the current quarter from $27.3 million in the  second  quarter  of Fiscal 2004,
due  to  the  higher  store count.  However, as a percentage of revenue,  costs
decreased 20 basis points,  to 22.1% of revenue compared to 22.3% in the second
quarter of Fiscal 2004, due to  improvements  realized with the move from mall-
based  to off-mall stores.  While costs increased  4%,  retail  square  footage
increased almost 8%, with occupancy costs per square foot decreasing 5% for the
comparable trailing twelve month periods.

  Selling,  general and administrative expenses increased $1.4 million to $39.0
million, or 30.4%  of  revenue, compared to $37.5 million, or 30.7% of revenue,
for the comparable period  of  the prior year.  Store four-wall costs increased
$2.5 million due primarily to higher  store  payroll and payroll related costs,
which grew by $1.9 million, as a result of an  increase in the number of stores

                                       16

<PAGE>17

as well as incremental hours required to prepare  for  and  execute the new in-
store merchandise presentation.  As a percentage of revenues,  store  four-wall
costs increased 130 basis points as the modest increase in same store sales did
not  offset  rate  and  hour  increases,  and  the  impact  of new stores had a
deleveraging  impact on store level costs.  Marketing and visual  merchandising
costs increased  $0.6  million,  or  20  basis  points  compared  to last year.
Corporate  general  and  administrative expenses decreased $1.4 million or  150
basis points during the quarter  compared  to last year.  Current year expenses
included  an  increase  in  professional  fees  of  $0.3  million  incurred  in
connection  with a merchandise strategy study and  higher  audit  fees.   These
additional costs  were more than offset by lower insurance costs and other cost
savings as the Company  continues  to  focus  on expense control. The remaining
$0.3 million decrease relates to lower costs in  the  Internet  and  mail order
business due to the lower sales volumes.

  For  the  quarter  ended  July  30,  2005,  interest expense was $527,000 and
interest income was $9,000, compared to solely  interest  income  of $19,000 in
the  second  quarter  of  Fiscal  2004.   During  Fiscal 2005, the Company  has
accelerated the seasonal inventory build up to an earlier timeframe, to support
the  new merchandise and presentation, resulting in  lower  cash  balances  and
earlier  borrowings,  causing  the  shift to interest expense and a decrease in
interest income.

  For the quarter ended July 30, 2005,  income tax benefit was $4.0 million, or
29.7% of loss before income taxes, based  upon  calculation of the discrete tax
rate  for  the six months ended July 30, 2005.   Income  tax  benefit  for  the
quarter ended  July  31,  2004 was $3.8 million, or 37.5% of loss before income
taxes, based upon the estimated annual effective tax rate for Fiscal 2004.  The
significant decline in the  effective  tax rate for the current period from the
prior year is related to the seasonality  of the business as well as the impact
on the second quarter resulting from use of  the  discrete  period  method  for
estimating taxes for the six months.


Six Months Ended July 30, 2005 and July 31, 2004

  Net  revenue  was  $250.2  million  for  the  six  months ended July 30, 2005
compared to $246.1 million for the six months ended July  31, 2004, an increase
of 2%.  Same store sales declines of 2% for the year-to-date period were offset
by  sales  from new stores, net of closings.  Stores opened for  less  than  12
months generated  sales  of  $34.1  million  during the first half of the year,
offsetting  $20.3 million in sales during the prior  year-to-date  period  from
stores closed  during  the  past 12 months.   Revenues from non-store activity,
including Internet, mail order,  International and Bailey Street, accounted for
7% of sales for the year-to-date period compared to 9% last year.

  The following table outlines the  sales  mix  by product category for the six
month periods ended July 30, 2005 and July 31, 2004:

<TABLE>
<CAPTION>

                                   Six Months Ended
                                 July 30,      July 31,
                                   2005          2004
<S>                               <C>           <C>
Sales mix:
   Large furniture..........       31%           33%
   Occasional furniture.....       19            19
   Wall decor...............       16            13
   Accessories..............       34            35
                                  100%          100%

</TABLE>

                                       17

<PAGE>18


  Increases in wall d{e'}cor were the result of both  clearance  of old product
as  well  as  customer  acceptance  of  some  of the new introductions in  this
category.  The average ticket increased 1% from $84 in the prior year to $85 in
the  current  period,  while  the number of total transactions  also  increased
approximately 1%.  On a geographical  basis,  all  regions of the United States
reported  same  store sales declines within a relatively  tight  range  in  the
single-digits, with only Canada reporting modest positive same store sales.


   Cost of sales,  including buying and occupancy costs, was $197.7 million, or
79.0% of revenue, for  the six months compared to $188.7 million, or 76.7%, for
the same period last year.  Gross margin decreased 170 basis points as a result
of discounts related to  clearing  product  to remerchandise stores and upgrade
the assortment.  Buying and occupancy costs were  60  basis  points higher than
last year, at 22.8% of revenue, compared to 22.2% in the first  half  of Fiscal
2004.   Buying  and  occupancy  costs  increased 4% while retail square footage
increased almost 8% due to store openings and the migration to larger, off-mall
locations.

  Selling, general and administrative expenses  increased $2.2 million to $79.0
million compared to $76.9 million for the comparable  period of the prior year.
As a percentage of revenue, selling, general and administrative  expenses  were
31.6% for the six months ended July 30, 2005 and 31.2% for the six months ended
July  31, 2004.  Store four-wall costs increased $4.2 million related primarily
to a $3.3 million increase in store payroll and payroll related costs due to an
increase   in  store  count  and  increased  hours  usage  in  connection  with
remerchandising  the  stores  in  July  2005. As a percentage of revenue, store
four-wall costs increased 140 basis points as same store sales declines results
led to deleveraging fixed costs at the store level. Direct-to-customer selling,
general and administrative expenses decreased  $0.7  million as a result of the
lower volume.  Marketing and visual merchandising costs  increased $0.1 million
compared  to  last  year,  but  declined 10 basis points due to  the  increased
volume. Corporate general and administrative  expenses  decreased $1.4 million,
or 60 basis points.  Insurance and taxes were $1.4 million  lower,  principally
related  to  lower  medical  insurance costs, while payroll and payroll related
costs decreased $0.5 million due  to  cost  saving measures taken over the past
year.  Lower bank fees, lower depreciation of  corporate  assets  and generally
tight controls over other expenses accounted for the remainder of the reduction
versus  last  year.    These  declines were partially offset by a $1.3  million
increase in professional fees in connection with the merchandise strategy study
during the first half of the year and higher audit costs due to the Fiscal 2004
restatement and Sarbanes-Oxley compliance costs.

  For the year-to-date period, interest income was $17,000 and interest expense
was $847,000, compared to income  of  $39,000 and expense of $4,000 through the
second quarter of Fiscal 2004.  During Fiscal 2005, the Company has accelerated
the seasonal inventory build up to an earlier  timeframe  to  support  the  new
merchandise  and  presentation,  resulting  in lower cash balances, earlier and
higher borrowings, causing the increase in interest  expense  and a decrease in
interest income.

  For the six months ended July 30, 2005, income tax benefit was  $9.5 million,
or  35.3%  of loss before income taxes, based upon calculation of the  discrete
tax rate for  the  six months ended July 30, 2005.   Income tax benefit for the
six months ended July 31, 2004 was $7.4 million, or 38.0% of loss before income
taxes, based upon the estimated annual effective tax rate for Fiscal 2004.  The
significant decline  in  the effective tax rate for the current period from the
prior year is related to the  seasonality of the business as well as use of the
discrete period method for estimating taxes.


                                       18



<PAGE>19


Liquidity and Capital Resources

  From a liquidity and capital  expenditure  standpoint,  our  strategy  is  to
generally  utilize  our  credit  facility  to  finance  seasonal borrowings and
working capital required by store growth while we generally  utilize  cash flow
from  operations  and  our  balance  sheet  to  finance  our  long-term capital
programs.   The operating losses for Fiscal 2004 and the first half  of  Fiscal
2005 resulted  in  a  decline in our cash balance.  As a result, in late Fiscal
2004,  we  reassessed  our  liquidity  and  capital  program  and  investigated
alternatives to fund the  continued  migration  of stores from mall to off-mall
and the growth of the BombayKIDS stores.  As previously  disclosed,  we planned
to dispose of certain assets that are either non-operating assets or are not an
integral  component  of  our  core  operations  in order to supplement our cash
position.   On May 27, 2005, the sale of a portion  of  the  assets  of  Bailey
Street was completed,  generating  $4.7  million  of  cash.   Approximately  $2
million  of  Bailey Street inventory that was not included in the sale has been
or is expected  to be liquidated at an aggregate profit through Bombay's retail
locations, its outlets  and  over  the  Internet.   We  also  plan to sell non-
operating assets, including a Company-owned building occupied by  a third party
and parcels of land adjacent to our Company headquarters, in order  to  further
supplement  our available capital during the third quarter of Fiscal 2005.   We
believe that  the  proceeds  from  the  completed  sale of assets of our Bailey
Street operations and the planned sale of land and building,  combined with our
expected  cash  flows  from  operations,  will be adequate to fund our  capital
expenditure program for the balance of Fiscal 2005.

  We have a secured, revolving credit agreement  with a group of banks, with an
aggregate  commitment  of  up  to $125 million for working  capital,  inventory
financing and letter of credit purposes.   The  available  commitment under the
facility is limited to a borrowing base generally comprised  of 75% of eligible
inventory and 85% of receivables, as defined in the credit agreement  and  with
seasonal  and  reserve  adjustments.  At July 30, 2005, the bank commitment was
$86.1 million. The Company  had  $55.5  million  outstanding  in  the  form  of
borrowings and another $9.0 million in letters of credit, with $21.6 million of
excess  availability  as  of  the  end  of  the fiscal quarter.  The Company is
required to maintain minimum availability equal to the lesser of $10 million or
7.5% of the borrowing base, or $6.5 million at  July  30,  2005,  at all times.
The  aggregate  commitment under the facility can be increased to $175  million
prior to September 17, 2007.  The credit facility expires September 15, 2009.

  The Company's credit  agreement  provides for increased advance rates against
eligible inventory during the pre-holiday peak periods, which historically have
occurred in October and November.    As  a  result of the accelerated timing of
the seasonal inventory build during Fiscal 2005,  the timing of the increase in
advance rates provided for by the facility is not aligned  with  the  inventory
flow.   We  are currently in discussion with the banks to modify the timing  of
the seasonal  adjustment  period  as well as to increase the availability under
the  borrowing  base calculation through  the  inclusion  of  portions  of  the
inventory in transit  from  vendors  in  accordance  with  terms  of the credit
agreement.

  At  July  30,  2005, inventory levels were $166.9 million compared to  $136.6
million at July 31,  2004.   During  Fiscal  2005,  we have increased inventory
levels  and  accelerated the seasonal inventory build to  support  new  product
introductions  and  store  presentation.   The  increases  are  expected  to be
temporary  and  represent  a  shift in timing rather than a permanent inventory
build up.  We expect to be able  to  manage our liquidity during this temporary
inventory build period within the credit facility.

  During the first half of Fiscal 2005,  we  opened  16  Bombay  core stores, 5
BombayKIDS  stores and one outlet.  Twenty-nine stores were closed  during  the
period.  As of the end of the second quarter, we had 391 Bombay core stores, 56
BombayKIDS stores  and 48 outlets, for a total of 495 retail locations.  During
the  remainder of Fiscal  2005,  we  plan  to  open  approximately  27  stores,
including  eight BombayKIDS locations, and to close 18 stores.   We plan to end
Fiscal 2005 with 497 to 502 stores.

                                       19

 <PAGE>20

  Our  capital   expenditure   plan  for  Fiscal  2005  is  expected  to  total
approximately $20 to $25 million  for  the  year before construction allowances
from landlords, and includes the cost of opening  45 to 50 stores and continued
investment in information systems.  The capital expenditure  plan also includes
relocation,  completed during the second quarter, to a new distribution  center
which replaced an existing undersized leased facility in Canada.


New Accounting Pronouncements

  In December  2004,  the Financial Accounting Standards Board issued Statement
on Financial Accounting  Standards No. 123 (Revised 2004) ("SFAS 123R"), Share-
Based Payment.  SFAS 123R establishes standards for accounting for transactions
in which an entity exchanges its equity instruments for goods or services.  The
primary focus of SFAS 123R  is  on  employee  services  obtained in share-based
payment  transactions.   SFAS  123R requires that all share-based  payments  to
employees  be recognized in the financial  statements  based  upon  their  fair
values.  The  cost  will be recognized over the period during which an employee
is required to provide  services  in  exchange  for the award.  The standard is
effective for our financial statements beginning  in Fiscal 2006, at which time
we  will  adopt  its  provisions.   We  are  in  the process  of  planning  our
implementation  and  evaluating  the  impact of adoption  on  our  consolidated
financial position and results of operations.

  In May 2005, the Financial Accounting  Standards  Board  issued  Statement of
Financial   Accounting   Standards   No.  154,  Accounting  Changes  and  Error
Corrections.  Among other things, SFAS  154 requires that a voluntary change in
accounting principle be applied retrospectively with all prior period financial
statements  presented  on  the  new  accounting   principle,   unless   it   is
impracticable  to do so.  SFAS 154 also provides that (i) a change in method of
depreciating or  amortizing a long-lived nonfinancial asset be accounted for as
a  change  in estimate  (prospectively)  that  was  effected  by  a  change  in
accounting principle,  and  (ii)  correction  of  errors  in  previously issued
financial  statements  should  be  termed  a  "restatement".   The standard  is
effective for accounting changes and correction of errors made in  fiscal years
beginning  after  December  15,  2005.  The Company will adopt the standard  in
Fiscal 2006, as applicable.


                                       20



<PAGE>21


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

  We are exposed to market risk primarily from fluctuations in interest rates
as they impact our short term borrowings and investments.  At July 30, 2005,
the Company's had borrowings of $55.5 million under its credit facility.  For
the six months ended July 30, 2005, average borrowings under the facility were
$29.6 million.   If interest rates changed by 100 basis points, the Company's
interest expense on the average borrowing balances would change by
approximately $0.1 million for the six month period.


Item 4.  Controls and Procedures

Disclosure Controls and Procedures

  Pursuant to Rule 13a-15(e) under  the  Securities  Exchange  Act  of 1934, as
amended (the "Exchange Act"), an evaluation was performed under the supervision
and  with  the  participation of the Company's management, including the  Chief
Executive Officer  and  Chief  Financial  Officer,  of the effectiveness of the
design and operation of the Company's disclosure controls  and procedures as of
the end of the period covered by this report.  In performing  this  evaluation,
the  Company's  management considered the Company's controls over the selection
and application of its lease accounting policies relating to the classification
of landlord allowances  within  the  consolidated  statements of cash flows and
related remediation efforts implemented in the first  quarter  of  Fiscal 2005.
Based  on  that  evaluation,  the  Company's  management,  including  the Chief
Executive  Officer  and  Chief  Financial Officer, concluded that the Company's
disclosure controls and procedures  were  effective  as  of  July  30,  2005 in
alerting  them  in  a  timely  fashion  to material information relating to the
Company that is required to be included in periodic filings with the Securities
and Exchange Commission.


Changes in Internal Control Over Financial Reporting

  Management is responsible for establishing  and maintaining adequate internal
control over financial reporting (as defined in  Rule 13a-15(f) of the Exchange
Act).

  There have been no significant changes in the Company's internal control over
financial  reporting  during  the  period  covered  by this  report  that  have
materially  affected,  or  are  reasonably  likely  to materially  affect,  the
Company's internal control over financial reporting.




                                        21



<PAGE>22


                   THE BOMBAY COMPANY, INC. AND SUBSIDIARIES

                          PART II - OTHER INFORMATION


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

   (a)The Annual Meeting of Shareholders of the Company was held on June 9,
      2005.

   (b)Directors elected to hold office are listed in the Company's Definitive
      Proxy Statement, filed with the Commission on May 9, 2005 and
      incorporated herein by reference.


Directors elected:         Susan T. Groenteman and Laurie M. Shahon
Continuing directors:      James D. Carreker, Paul J. Raffin,
                           Julie L. Reinganum, Bruce R. Smith and Nigel Travis


   (c)   The following items were subject to a vote of the shareholders.

     (i)   Election of directors:

<TABLE>
<CAPTION>
                   Name                      For         Withheld
<S>               <C>                     <C>           <C>
                  Susan T. Groenteman     28,806,260    4,118,966
                  Laurie M. Shahon        28,552,038    4,373,188
</TABLE>

     (ii)  Approval of the 2005 Non-Employee Director Stock Option Plan:

                      For - 14,760,249
                      Against - 5,375,937
                      Abstain - 121,399


                                       22



<PAGE>23


Item 6.  Exhibits

The Exhibits filed as a part of this report are listed below.

Exhibit No.                                   Description

    10                                  2005 Amended and Restated Non-Employee
                                        Directors' Equity Plan.

   31(a)                                Certification by Chief Executive
                                        Officer Pursuant to Rule 13a-15 and
                                        Rule 15d-15 of The Securities Exchange
                                        Act of 1934, as amended

    31(b)                               Certification by Chief Financial
                                        Officer Pursuant to Rule 13a-15 and
                                        Rule 15d-15 of The Securities Exchange
                                        Act of 1934, as amended

    32                                  Certifications of Registrant Pursuant
                                        to 18 U.S.C. Section 1350, as Adopted
                                        Pursuant to Section 906 of the
                                        Sarbanes-Oxley Act of 2002


                                       23



<PAGE>24


                   THE BOMBAY COMPANY, INC. AND SUBSIDIARIES

                                  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 as both an officer  of the registrant and
as the principal financial officer.


                                        THE BOMBAY COMPANY, INC.
                                        (Registrant)




                                        /S/ JAMES D. CARREKER
   Date:  September 8, 2005             James D. Carreker
                                        Chairman of the Board and
                                        Chief Executive Officer






                                        /S/ ELAINE D. CROWLEY
   Date:  September 8, 2005             Elaine D. Crowley
                                        Senior Vice President, Chief
                                        Financial Officer and Treasurer



                                       24