<PAGE>
   As filed with the Securities and Exchange Commission on January 11, 2000
_____________________________________________________________________________

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


                        -------------------
                             FORM 10-Q
                        -------------------


[ X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934
For the period ended November 27, 1999

                                OR

[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________


Commission File Number 0-24904


                            STROUDS, INC.
        (Exact name of registrant as specified in its charter)


           DELAWARE                                     95-4107241
(State or other jurisdiction of                      (I.R.S. Employer
 incorporation or organization)                     Identification No.)


                      780 SOUTH NOGALES STREET
                     CITY OF INDUSTRY, CA  91748
              (Address of principle executive offices)


                           (626) 912-2866
         (Registrant's telephone number, including area code)



     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
                                                    ----    ----

Number of shares of common stock outstanding at December 31, 1999:  7,080,500

<PAGE>



                            STROUDS, INC.



                               INDEX



                                                                    Page No.
                                                                    --------
PART I.     FINANCIAL INFORMATION

     ITEM 1.     FINANCIAL STATEMENTS:

                 Condensed Balance Sheets as of November 27, 1999
                    (Unaudited) and February 27, 1999                   3

                 Condensed Statements of Operations for the
                    Thirteen and Thirty-Nine Weeks Ended November 27,
                    1999 and November 28, 1998 (Unaudited)              4

                 Condensed Statements of Cash Flows for the
                    Thirty-Nine Weeks Ended November 27, 1999
                    and November 28, 1998 (Unaudited)                   5

                 Notes to Condensed Financial Statements                6

     ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS                    12

     ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                 MARKET RISK                                            18


PART II.    OTHER INFORMATION

     ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K                       19

                 SIGNATURES                                             20











                                    Page 2
<PAGE>
PART I.     FINANCIAL INFORMATION
---------------------------------

ITEM 1.     FINANCIAL STATEMENTS

                            STROUDS, INC.
                       CONDENSED BALANCE SHEETS
                                                     NOVEMBER 27, FEBRUARY 27,
(in thousands, except share data)                        1999        1999
---------------------------------                      --------    --------
ASSETS                                                (Unaudited)
Current assets:
   Cash                                                $    316    $    269
   Accounts receivable                                    3,400       1,763
   Inventory                                             66,699      60,632
   Other                                                  3,865       3,993
                                                       --------    --------
      Total current assets                               74,280      66,657
Property and equipment - at cost, net of accumulated
   depreciation and amortization                         19,232      21,354
Excess of cost over net assets acquired, net of
   accumulated amortization                               7,079       7,273
Other assets                                              1,033         959
                                                       --------    --------
      Total assets                                     $101,624    $ 96,243
                                                       ========    ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current maturities of long-term debt                $    612    $    624
   Accounts payable                                      17,468      15,565
   Accrued expenses                                      16,551      16,027
   Restructuring reserve                                   --         3,829
                                                       --------    --------
      Total current liabilities                          34,631      36,045
Long-term debt                                           36,495      26,887
Other non-current liabilities                             3,108       3,194
                                                       --------    --------
      Total liabilities                                  74,234      66,126
Stockholders' equity:
   Preferred stock, $0.0001 par value; authorized
      750,000 shares; no shares issued or outstanding      --           --
   Preferred stock, Series B, $0.0001 par value;
      authorized 250,000 shares; no shares issued or
      outstanding                                          --           --
   Common stock, $0.0001 par value; authorized
      25,000,000 shares; issued and outstanding
      November 27, 1999, 7,080,500 shares; and
      February 27, 1999, 8,624,131 shares                     1           1
   Treasury stock at cost; November 27, 1999,
      1,800,000 shares                                   (1,890)        --
   Additional paid-in capital                            39,212      39,146
   Accumulated deficit                                   (9,933)     (9,030)
                                                       --------    --------
       Net stockholders' equity                          27,390      30,117
                                                       --------    --------
       Total liabilities and stockholders' equity      $101,624    $ 96,243
                                                       ========    ========
See accompanying notes to condensed financial statements.

                                    Page 3

<PAGE>
                                       STROUDS, INC.
                            CONDENSED STATEMENTS OF OPERATIONS
                           (in thousands, except per share data)
                                        (Unaudited)
<TABLE>
<CAPTION>
                                              13 WEEKS ENDED          39 WEEKS ENDED
                                         -----------------------   -----------------------
                                         November 27, November 28, November 27, November 28,
                                            1999         1998        1999         1998
                                          ---------    ---------   ---------    ---------
<S>                                       <C>          <C>         <C>          <C>
Net sales                                 $ 57,192     $ 59,162    $164,196     $168,367
Costs and expenses:
   Cost of sales, buying and occupancy      40,143       41,751     116,755      121,278
   Selling and administrative expenses      15,928       16,150      45,972       45,235
   Amortization of excess of cost over
      net assets acquired                       65           65         194          194
                                          ---------    ---------   ---------    ---------
                                            56,136       57,966     162,921      166,707
                                          ---------    ---------   ---------    ---------

      Operating income                       1,056        1,196       1,275        1,660


Other income                                    61           63         242          188
Interest expense, net                         (869)        (753)     (2,420)      (2,304)
                                          ---------    ---------   ---------    ---------

      Net income (loss)                   $    248     $    506    $   (903)    $   (456)
                                          =========    =========   =========    =========


Earnings Per Share:
Basic:
      Net income (loss) per share         $   0.04     $   0.06    $  (0.12)    $  (0.05)
                                          =========    =========   =========    =========
      Weighted average shares outstanding    7,080        8,600       7,290        8,591
                                          =========    =========   =========    =========

Diluted:
      Net income (loss) per share         $   0.03     $   0.06    $  (0.12)    $  (0.05)
                                          =========    =========   =========    =========
      Weighted average shares outstanding    7,316        8,813       7,290        8,591
                                           =========    =========  =========    =========

See accompanying notes to condensed financial statements.


</TABLE>



                                    Page 4


<PAGE>

                            STROUDS, INC.
                  CONDENSED STATEMENTS OF CASH FLOWS
                            (in thousands)
                              (Unaudited)
                                                          39 WEEKS ENDED
                                                      ---------------------
                                                     November 27, November 28,
                                                         1999        1998
                                                       ---------   ---------
Cash flows from operating activities:
   Net loss                                            $   (903)   $   (456)
   Adjustments to reconcile net loss to net cash
      used in operating activities:
         Depreciation and amortization of property
            and equipment                                 3,939       3,493
         Amortization of excess of cost over net
            assets acquired                                 194         194
         Increase in assets:
            Accounts receivable                          (1,637)       (919)
            Merchandise inventory                        (6,067)     (2,377)
         Increase in accounts payable and
            accrued expenses                              1,823       3,389
         Decrease in restructuring reserve               (3,367)     (6,409)
         Other                                              (32)        994
                                                       ---------   ---------
            Net cash used in operating activities        (6,050)     (2,091)
                                                       ---------   ---------

Cash flows from investing activities:
   Capital expenditures                                  (2,279)     (3,841)
                                                       ---------   ---------
            Net cash used in investing activities        (2,279)     (3,841)
                                                       ---------   ---------

Cash flows from financing activities:
   Net borrowings under long-term debt                    9,596       2,000
   Increase in overdraft                                    604       4,252
   Repurchase of common stock                            (1,890)        ---
   Other equity transactions                                 66          32
                                                       ---------   ---------
            Net cash provided by financing activities     8,376       6,284
                                                       ---------   ---------

            Net increase in cash                             47         352
Cash at beginning of period                                 269         518
                                                       ---------   ---------
Cash at end of period                                  $    316    $    870
                                                       =========   =========


Supplemental disclosure of cash flow information:
   Cash paid during the year for:
      Interest                                         $  2,235    $  2,301

See accompanying notes to condensed financial statements.


                                    Page 5

<PAGE>
                            STROUDS, INC.
                 NOTES TO CONDENSED FINANCIAL STATEMENTS
                             (Unaudited)


(1)     INTERIM FINANCIAL STATEMENTS

The accompanying Condensed Balance Sheet as of November 27, 1999 and the
related Condensed Statements of Operations for the 13 and 39 weeks ended
November 27, 1999 and November 28, 1998 and Condensed Statements of Cash Flows
for the 39 weeks ended November 27, 1999 and November 28, 1998 are unaudited.
The unaudited operating results reflect all adjustments (consisting only of
normal recurring adjustments) which are, in the opinion of management,
necessary for a fair presentation of the financial position and operating
results for the interim periods.  Information pertaining to the year ended
February 27, 1999 is derived from the audited financial statements included in
the Company's 1998 Annual Report on Form 10-K/A.  This information should be
read in conjunction with the financial statements and notes thereto, together
with management's discussion and analysis of financial condition and results
of operations, contained in the Company's 1998 Annual Report filed with the
Securities and Exchange Commission on Form 10-K/A.  The results of operations
for the 13 and 39 weeks ended November 27, 1999 may not be indicative of the
results to be expected for the entire fiscal year.


(2)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Advertising Costs

Advertising production costs are expensed the first time an advertisement is
run.  Media (TV and print) placement costs are expensed in the month the
advertising appears.

Income Taxes

Provision for income taxes are based upon the estimated effective tax rate for
the entire fiscal year.  The effective rate is subject to ongoing review and
evaluation by management.

Segment Information

Effective March 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information" ("SFAS No. 131").  SFAS No. 131 establishes standards for public
business enterprises to report information about operating segments in annual
financial statements and interim financial statements and selected information
in the notes thereto.  Operating segments, as defined, are components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision makers in deciding how to
allocate resources in assessing performance.  The Company operates in two
business segments, superstores and outlet stores.  See note 6.


                                    Page 6

<PAGE>
                            STROUDS, INC.
                 NOTES TO CONDENSED FINANCIAL STATEMENTS
                             (Unaudited)


(2)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair Value of Financial Instruments

SFAS No. 107, "Disclosures About Fair Value of Financial Instruments,"
requires disclosure of the fair value of certain financial instruments.  Cash
and cash equivalents, accounts receivable, accounts payable and accrued
expenses are reflected in the financial statements at carrying value which
approximates fair value due to the short-term nature of these instruments.
The carrying value of the Company's borrowings approximates the fair value
based on the current rates available to the Company for similar instruments.

Store Closure Reserves

Management of the Company periodically determines the need to close certain
underperforming stores.  At the time such a decision is made, a store closure
reserve is provided for representing lease termination costs, severance, tear
down costs and other items.  As of November 27, 1999, the reserve balance was
approximately $2,000,000.  The Company anticipates all of these costs to be
incurred within the next twelve to twenty four months.  The reserve includes
estimated future lease termination costs, tear down and asset transfer costs
and employee separation and termination costs.  The Company is continuing to
evaluate its store closure reserve and make periodic adjustments as necessary.

Reclassifications

Certain reclassifications have been made to the February 27, 1999 and November
28, 1998 amounts to conform to the November 27, 1999 presentation.


(3)     PROPERTY AND EQUIPMENT

Property and equipment is summarized as follows:
                                                     NOVEMBER 27, FEBRUARY 27,
(in thousands)                                           1999         1999
--------------                                         ---------    ---------
Furniture, fixtures and equipment                      $ 44,783     $ 44,351
Leasehold improvements                                    8,536        8,205
                                                       ---------    ---------
                                                         53,319       52,556
Accumulated depreciation and amortization               (34,087)     (31,202)
                                                       ---------    ---------
                                                       $ 19,232     $ 21,354
                                                       =========    =========




                                    Page 7

<PAGE>
                            STROUDS, INC.
                 NOTES TO CONDENSED FINANCIAL STATEMENTS
                             (Unaudited)


(4)     RESTRUCTURING

The Company initiated a comprehensive restructuring and cost reduction plan
(the "Restructuring Plan"), resulting in pretax restructuring and asset
impairment charges of $16,250,000 in fiscal 1996 ($3.2 million related to
write-downs of merchandise inventory was included in cost of sales).  The
write-down of merchandise inventory was based on management's estimate of
markdowns necessary to liquidate underperforming merchandise categories.  In
determining the restructuring charge for impairment, the Company evaluated the
fair market value of the impaired assets based on historical experience of the
liquidation value of such assets.  The Restructuring Plan is designed to
improve the operating performance of the Company through the closure or
disposition of certain underperforming stores, elimination of underperforming
merchandise categories and implementation of cost reduction measures,
including workforce reductions, to more closely align the Company's cost
structure with future expected revenues.  The Restructuring Plan included the
closure of 9 stores which were to be closed by not renewing leases upon
expiration and negotiating settlements with landlords for stores with
unexpired leases at dates of anticipated closure.  As of February 27, 1999,
the Company had closed 7 stores related to its restructuring efforts.

In June 1999, the Company closed 1 store in the Washington, D.C. market.  The
estimated lease termination expenses are included in the store closure reserve
(see Note 2).  In November 1999, the Company executed a Lease Surrender and
Termination Agreement (the "Agreement") to close a store in the Chicago
market.  In accordance with the Agreement, the store will closed in February
2000.  All costs associated with the Agreement and estimated additional costs
associated with closing the are included in the store closure reserve at
November 27, 1999.  For the quarter ended November 27, 1999, no changes have
been made to the estimated Restructuring Plan costs and no additional charges
were recorded to operations.  As of November 27, 1999, the Company
substantially completed the Restructuring Plan and the only remaining actions
are the dispositions of the aforementioned stores.  As a result, the remaining
liability has been reclassified to a store closure reserve.  The store closure
reserve is reviewed periodically by management and adjusted as necessary based
upon management's store operations plans.

During the first three quarters of fiscal 1999, cash used related to the
Restructuring Plan totaled $668,000, related primarily to lease termination
costs, workforce reductions and consulting and advisory fees associated with
the Company's restructuring and cost reduction efforts.







                                    Page 8

<PAGE>
                            STROUDS, INC.
                 NOTES TO CONDENSED FINANCIAL STATEMENTS
                             (Unaudited)


(4)     RESTRUCTURING (Continued)

The following table summarizes the original Restructuring Plan charge:
(in thousands)
---------------------------------------
Occupancy, lease termination and other
   costs related to store closures              $   7,375
Asset write-down                                    4,015
Merchandise inventory reserves                      3,200
Employee severance and related costs                1,660
                                                ---------
                                                $  16,250
                                                =========

The asset write-downs have been recorded as a permanent reduction in the cost
basis of the related assets.  The merchandise inventory write-down has been
recorded as a reserve against inventories and the lease termination and
employee severance costs have been recorded the restructuring reserve.  The
following table summarizes the Restructuring Plan activity:
<TABLE>
<CAPTION>
                      Occupancy, lease   Asset write-down;
                      termination and       merchandise
                       subsidy costs         inventory,
                      associated with    leasehold improve-      Employee
                       the closure or     ments, furniture     severance and
                       disposition of       and fixtures       other related
(in thousands)             stores           and equipment          costs       Total
-------------------   ----------------   ------------------   -------------   -------
<S>                       <C>                 <C>                 <C>         <C>
1996 Provision,
   March 1, 1997          $ 7,375             $ 7,215             $ 1,660     $16,250
Fiscal 1997 payments        2,176               1,444               1,262       4,882
                          --------            --------            --------    --------
Reserve balance,
   February 28, 1998        5,199               5,771                 398      11,368
Fiscal 1998 payments          703               6,238                  97       7,038
Adjustment **                (667)                667                  --          --
                          --------            --------            --------    --------
Reserve balance,
   February 27, 1999        3,829                 200                 301       4,330
Fiscal 1999 payments
   through
   November 27, 1999          642               1,053                 107       1,802
Adjustment **              (1,173)              1,353                (180)         --
                          --------            --------            --------    --------
Reserve balance,
   May 29, 1999           $ 2,014             $   500             $    14     $ 2,528
                          ========            ========            ========    ========
<?Table>
                                    Page 9

<PAGE>
                            STROUDS, INC.
                 NOTES TO CONDENSED FINANCIAL STATEMENTS
                             (Unaudited)


(4)     RESTRUCTURING (Continued)

**  The adjustments made to the reserve result from a periodic reassessment of
the Company's position with respect to its outstanding retail store leases.
The reductions in the reserve have been reflected in the statement of
operations during the period in which the adjustments were recorded.

The remaining balance of the restructuring reserve was transferred to the
store closure reserves in conjunction with the Company's substantial
completion of the Restructuring Plan at November 27, 1999.

Also, during fiscal 1998 and during the second quarter of fiscal 1999, the
Company recorded increases to its merchandise inventory reserves related to
the retail stores included in the Restructuring Plan of $780,000 and
$1,353,000, respectively.  These charges were recorded in cost of sales during
the respective periods.

The total revenue and operating losses related to the 9 stores identified in
the Restructuring Plan is summarized as follows:

                       February 27,    February 28,     March 1,
(in thousands)            1999            1998           1997
--------------         -----------     -----------     ---------
Revenues                 $ 9,283          $12,995        $15,232
                       ===========     ===========     =========
Operating Loss           $ 3,038          $ 4,658       $ 5,026
                       ===========     ===========     =========


(5)     LONG-TERM DEBT

At November 27, 1999, the Company had outstanding borrowings of $35,891,000
under its $50,000,000 revolving credit agreement (the "Credit Facility").  The
Company's Credit Facility contains various restrictions on the payment of cash
dividends, incurrence of additional indebtedness, acquisitions, investments,
loans, merger or consolidation and disposition of assets.  The covenants also
require the Company to meet a minimum net worth requirement at anytime the
borrowing availability is less than $5,000,000.  The Company was in compliance
with the covenants at November 27, 1999.

Included in the Credit Facility is a $7,000,000 letter of credit sub-facility.
As of November 27, 1999, the Company had outstanding letters of credit
amounting to $779,000 for purchase commitments to foreign suppliers under this
sub-facility.




                                    Page 10
<PAGE>
                            STROUDS, INC.
                 NOTES TO CONDENSED FINANCIAL STATEMENTS
                             (Unaudited)


(5)     LONG-TERM DEBT (Continued)

On September 11, 1998, the Company entered into an Interest Rate Swap
Agreement (the "Agreement") with a financial institution.  The Agreement was
entered into for the purpose of converting a portion of its borrowing to a
long-term fixed base rate of interest.  The Company converted $10,000,000 to a
weighted average fixed base interest rate of 6.0% plus 2.5% until this
Agreement expires on March 1, 2001.  The Company has accounted for this hybrid
derivative instrument at fair value.  As of November 27, 1999, the fair value
of the agreement was $8,300 and is recorded as a component of other assets on
the accompanying balance sheet.



(6)     SEGMENT INFORMATION

In accordance with the requirements of SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information,"  the Company's reportable
business segments and respective accounting policies, policies of the segments
are the same as those described in note 2.  Management evaluates segment
performance based primarily on net sales and earnings (losses) from
operations.  Interest income and expense is evaluated on an aggregate basis
and not allocated to the Company's business segments.

Segment information is summarized as follows:

                             13 WEEKS ENDED              39 WEEKS ENDED
                         -----------------------     -----------------------
                         November 27, November 28,   November 27, November 28,
IN THOUSANDS                1999         1998            1999         1998
-----------------------  -----------   ----------    -----------   -----------
Net sales:
   Superstores           $   47,103    $   49,729    $  136,229    $  141,319
   Outlet stores             10,089         9,433        27,967        27,048
                          ----------    ----------    ----------    ----------
                         $   57,192    $   59,162    $  164,196    $  168,367
                          ==========    ==========    ==========    ==========
Operating income:
   Superstores           $      863    $    1,103    $      964    $    1,366
   Outlet stores                193            93           311           294
                          ----------    ----------    ----------    ----------
                         $    1,056    $    1,196    $    1,275    $    1,660
                          ==========    ==========    ==========    ==========







                                    Page 11

<PAGE>
                            STROUDS, INC.
                 NOTES TO CONDENSED FINANCIAL STATEMENTS
                             (Unaudited)


(6)     SEGMENT INFORMATION (Continued)

                                   November 27, February 27,
IN THOUSANDS                           1999        1999
-------------------------------    -----------  -----------
Total assets:
   Superstores                     $   70,215   $   65,515
   Outlet stores                        8,730        7,330
   Other (1)                           22,679       23,398
                                    ----------   ----------
                                   $  101,624   $   96,243
                                    ==========   ==========
-----------------------------------------------------------------------------
(1)  Other includes corporate and distribution center property, equipment and
assets which are not attributed to a business segment.



ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS


OVERVIEW

The following sets forth certain factors that have affected the Company's
results of operations in recent periods, and management believes will continue
to affect the Company in the future.  The Company defines its fiscal year as
the period in which most of the business activity occurs (e.g., the year ended
February 27, 1999 is referred to as fiscal 1998).

Restructuring

The Company initiated a comprehensive restructuring and cost reduction plan
(the "Restructuring Plan"), resulting in pretax restructuring and asset
impairment charges of $16,250,000 in fiscal 1996 ($3.2 million related to
write-downs of merchandise inventory was included in cost of sales).  The
write-down of merchandise inventory was based on management's estimate of
markdowns necessary to liquidate underperforming merchandise categories.  In
determining the restructuring charge for impairment, the Company evaluated the
fair market value of the impaired assets based on historical experience of the
liquidation value of such assets.  The Restructuring Plan is designed to
improve the operating performance of the Company through the closure or
disposition of certain underperforming stores, elimination of underperforming
merchandise categories and implementation of cost reduction measures,
including workforce reductions, to more closely align the Company's cost
structure with future expected revenues.  The Restructuring Plan included the
closure of 9 stores which were to be closed by not renewing leases upon
expiration and negotiating settlements with landlords for stores with


                                    Page 12

<PAGE>
unexpired leases at dates of anticipated closure.  As of February 27, 1999,
the Company had closed 7 stores related to its restructuring efforts.

In June 1999, the Company closed 1 store in the Washington, D.C. market and is
currently negotiating the lease termination.  The estimated lease termination
costs are included in the store closure reserve (see Note 2).  In November
1999, the Company executed a Lease Surrender and Termination Agreement (the
"Agreement") to close the final store in the Chicago market.  In accordance
with the Agreement, the store will closed in February 2000.  All costs
associated with the Agreement and estimated additional costs associated with
closing are included in the store closure reserve at November 27, 1999.  As of
November 27, 1999, no changes have been made to the estimated Restructuring
Plan costs and no additional charges were recorded to operations.  During the
first three quarters of fiscal 1999, cash used related to the Restructuring
Plan totaled $668,000, related primarily to lease termination costs, workforce
reductions and consulting and advisory fees associated with the Company's
restructuring and cost reduction efforts.  The Company has effectively
completed its Restructuring Plan as of November 27, 1999.


RESULTS OF OPERATIONS

13 Weeks Ended November 27, 1999 Compared to the 13 Weeks Ended November 28,
1998
-----------------------------------------------------------------------------

Net sales for the 13 weeks ended November 27, 1999 decreased $2.0 million, or
3.3%, to $57.2 million versus $59.2 million in the same period last year.
Comparable store sales decreased $2.0 million, or 3.5%, for the period.  Sales
from new stores and expanded or replacement stores increased by $2.3 million.
Sales were reduced by $2.3 million due to 3 store closures.

Net sales for superstores for the 13 weeks ended November 27, 1999 decreased
$2.6 million, or 5.2%, to $47.1 million versus $49.7 million in the same
period last year.  Comparable superstore sales decreased $2.1 million, or
4.5%, for the period.  Outlet store net sales for the 13 weeks ended November
27, 1999 increased $0.7 million, or 7.0%, to $10.1 million versus $9.4 million
in the same period last year.  Comparable outlet store sales increased $0.1
million, or 1.5%, for the period.

Management believes that the decrease in superstore sales is attributable to
the fact that there was one less superstore than last year and there were no
intense promotional sales campaign in the current year designed to eliminate
underperforming merchandise categories as identified in the Company's
Restructuring Plan.  Unseasonably warm weather in many of our markets,
especially California, also adversely effected sales.  Approximately 26% of
the comparable stores were affected by new competitive openings for the third
quarter of 1999 compared to approximately 6% for the same period last year.

Cost of sales, buying and occupancy for the 13 weeks ended November 27, 1999
were $40.1 million versus $41.8 million for the same period a year ago, a $1.7
million decrease.  This dollar decrease was attributable, primarily, to the
decline in sales volume versus last year.  As a percent of net sales, cost of


                                    Page 13

<PAGE>
sales, buying and occupancy decreased to 70.2% from 70.6% for the same period
a year ago.  The improved gross margin points were primarily the result of the
Company's intensive restructuring program which resulted in better inventory
management and fewer markdowns and sales of inventory in underperforming
merchandise categories.

Selling and administrative expenses for the 13 weeks ended November 27, 1999
decreased $0.3 million to $15.9 million versus $16.2 million for the same
period in fiscal 1998 and increased as a percentage of net sales from 27.3% to
27.9%.  The dollar decrease was primarily due to less advertising expenditures
due to a change in the advertising media mix.

As a result of the factors noted above, the Company had operating income for
the 13 weeks ended November 27, 1999 of $1.1 million versus $1.2 million for
the same period a year ago, a $0.1 million decrease.

The operating income for superstores for the 13 weeks ended November 27, 1999
was $0.9 million versus $1.1 million for the same period a year ago.  The
operating income for the outlet stores for the 13 weeks ended November 27,
1999 was $0.2 million versus $0.1 million for the same period a year ago.  The
net decrease in operating profit for the segments were the result of the
various factors discussed above.

Interest expense, net, increased $0.1 million to $0.9 million for the 13 weeks
ended November 27, 1999 versus $0.8 million for the same period in fiscal
1998.  The increase was primarily the result of slightly higher average
borrowings this year.

The Company recorded no income tax expense associated with its income for the
13 week period ended November 27, 1999 or income tax benefit associated with
its loss for the 13 week period ended November 28, 1998 due to the uncertainty
of the Company's future taxable earnings.  The estimated effective tax rate is
subject to continuing evaluation and modification by management.


39 Weeks Ended November 27, 1999 Compared to the 39 Weeks Ended November 28,
1998
-----------------------------------------------------------------------------

Net sales for the 39 weeks ended November 27, 1999 decreased $4.2 million, or
2.5%, to $164.2 million versus $168.4 million in the same period last year.
Comparable store sales decreased $2.8 million, or 1.7%, for the same period.
Sales from new stores and expanded or replacement stores increased by $4.9
million.  Sales were reduced by $6.3 million due to 5 store closures.

Net sales for superstores for the 39 weeks ended November 27, 1999 decreased
$5.1 million, or 3.6%, to $136.2 million versus $141.3 million in the same
period last year.  Comparable superstore sales decreased $3.0 million, or
2.2%, for the period.  Outlet store net sales for the 39 weeks ended November
27, 1999 increased $0.9 million, or 3.3%, to $28.0 million versus $27.1
million in the same period last year.  Comparable outlet store sales increased
$0.2 million, or 0.6%, for the period.



                                    Page 14

<PAGE>
Management believes that the decrease in superstore sales is attributable to
the fact that there were no intense promotional sales campaigns in the current
year designed for inventory liquidation this year as there were last year for
the closure of two superstores and to eliminate underperforming merchandise
categories as identified in the Company's Restructuring Plan.  The increase in
outlet store sales was due to a heavier promotional calendar compared to the
same period last year.  Approximately 18% of the comparable stores were
affected by new competitive openings for the first three quarters of 1999
compared to approximately 12% for the same period last year.

Cost of sales, buying and occupancy for the 39 weeks ended November 27, 1999
were $116.8 million versus $121.3 million for the same period a year ago, a
$4.5 million decrease.  This dollar decrease was attributable, primarily, to
the decline in sales volume versus last year.  As a percent of net sales, cost
of sales, buying and occupancy decreased to 71.1% from 72.0% for the same
period a year ago.  The improved gross margin points were primarily the result
of the Company's intensive restructuring program which resulted in better
inventory management and fewer markdowns and sales of inventory in
underperforming merchandise categories.

Selling and administrative expenses for the 39 weeks ended November 27, 1999
increased $0.8 million to $46.0 million versus $45.2 million for the same
period in fiscal 1998 and increased as a percentage of net sales from 26.9% to
28.0%.  The increase was primarily due to increased labor staffing and higher
credit card fees due to increased consumer credit card usage.

The Company had operating income for the 39 weeks ended November 27, 1999 of
$1.3 million versus $1.7 million for the same period a year ago, a $0.4
million decrease, as a result of the factors noted above.

The operating income for superstores for the 39 weeks ended November 27, 1999
was $1.0 million versus $1.4 million for the same period a year ago.  The
decrease in superstores operating profit were a result of the various factors
discussed above.  The operating income for the outlet stores remained the
same, $0.3 million, for the 39 week periods ended November 27, 1999 and
November 28, 1998.

Interest expense, net, increased $0.1 million to $2.4 million for the 39 weeks
ended November 27, 1999 versus $2.3 million for the same period in fiscal
1997.  The increase was primarily the result of slightly higher average
borrowings this year.

The Company recorded no income tax benefit associated with its losses for the
39 week periods ended November 27, 1999 and November 28, 1998 due to the
uncertainty of the Company's future taxable earnings.  The estimated effective
tax rate is subject to continuing evaluation and modification by management.


LIQUIDITY AND CAPITAL RESOURCES

The Company's cash needs are primarily to support its inventory requirements,
store expansion and refurbishment and systems development.  The Company has
historically financed its operations essentially with internally generated


                                    Page 15

<PAGE>
funds and its credit facilities.  At November 27, 1999, the Company's working
capital was $39.6 million, while advances from its Credit Facility were $35.9
million.  The Company had $11.0 million available for borrowings under its
Credit Facility as determined by the Company's eligible "borrowing base" at
November 27, 1999.

Cash used in operating activities for the 39 weeks ended November 27, 1999 was
$6.1 million.  During the 39 week period ended November 27, 1999, inventory
increased $6.1 million.  In the first three quarters of fiscal 1999, the
Company conducted going out of business sales at 2 locations, 1 store closed
in May 1999 and 1 store closed in June 1999.  Cash used in restructuring
payments was $0.7 million.

Net cash used in investing activities for the 39 weeks ended November 27, 1999
was $2.3 million.  These funds were primarily used for capital expenditures
for 1 new superstore in southern California that opened in July 1999, 1 new
outlet in southern California that opened in December 1999, existing store
refurbishments and improvements to the Company's management information
systems development.

Cash provided by financing activities for the 39 weeks ended November 27, 1999
was $8.4 million.  The Company had net borrowings of $9.6 million primarily to
meet working capital needs and to repurchase 1,800,000 shares of its
outstanding Common Stock in a private transaction for total consideration of
$1.9 million.

The Company's capital expenditures for the remainder of fiscal 1999 are
currently expected to be approximately $2.8 million and will be related
primarily to new store development, existing store expansions and
refurbishments and improvements to its management information systems.

The Company plans to open approximately one superstore and five outlet stores
in the remainder of fiscal 1999.  Management believes that funds generated
from operations, its Credit Facility and use of trade credit will be
sufficient to satisfy the Company's working capital requirements and
commitments for capital expenditures through the end of fiscal 1999.


YEAR 2000

The Company conducted a comprehensive review of its computer systems to
identify those systems that could have been affected by the "Year 2000" (or
"Y2K") issue and developed an implementation plan to resolve the issue.  The
Year 2000 problem was the result of computer programs being written using two
digits rather than four to define the applicable year.  The Year 2000 issue
was believed to affect virtually all companies and organizations, including
the Company.  Any of the Company's programs that have time-sensitive software
might have recognized a date using "00" as the year 1900 rather than the year
2000.  This could have resulted in a major system failure or miscalculations.

The Company is reliant on computer-based technology and utilizes a variety of
proprietary and third-party applications. The Company's retail functions, such
as merchandise procurement and distribution, inventory control and


                                    Page 16

<PAGE>
point-of-sale transactions, generally use third-party applications, with
proprietary additions to fit unique business requirements.  Failure in these
key areas could have impacted the Company's ability to transact business in an
efficient manner.  The Company is also dependent on a number of key vendors
using similar technology for ongoing timely and consistent delivery of
merchandise to support retail operations.  A significant disruption in the
flow of key items into stores could also negatively impact results.  To a much
lesser degree, the Company also relies on certain "imbedded processor" systems
for communications, security and other basic process control functions, the
complete failure of which could also impact operations.

In fiscal 1998, the Company spent approximately $1.4 million for the purpose
of installing new merchandise, distribution and financial software.  This
major effort included complete replacement of the previously used mainframe
computer systems and modified third-party software with Y2K-certified hardware
and software in fiscal 1998 as well as upgrading all in-store point-of-sale
computer systems to be Y2K-compliant.  These efforts were substantially
completed with installation and testing of the mainframe systems for
merchandising, accounting, distribution and inventory control prior to the end
of fiscal 1998.  The in-store system upgrades were installed in every retail
store in the first quarter of fiscal 1999.  The Company spent approximately
$0.3 million in fiscal 1999 for additional upgrades to these systems.  A
compliant third-party provider for payroll software was implemented in October
1999.  Voice communications were upgraded to compatible systems in the first
quarter of fiscal 1999.  Data communications, credit card and check processing
and non-critical software packages were tested to assure Y2K compatibility in
the second quarter of fiscal 1999.  The Company successfully completed an
integrated test of all critical internal systems in September 1999.  Based
upon this simulation, all business areas confirmed readiness to transact
business through the Year 2000 transition.  However, if the modifications to
the Company's computer systems had failed in the last hours, the Year 2000
problem could have had a material impact on the operations of the Company.
Such material impacts could have required the Company to manually record
sales, issue purchases orders to suppliers, pay invoices from vendors and
maintain its books and records for a period of time.  Through the first week
of January 2000, the Company has not experienced any problems in regards to
the Year 2000.  All internal Company operations have continued to run as
programmed.

By December 1999, substantially all of the Company's key vendors' electronic
data interchange systems were verified to be Y2K compliant.  Through the first
week of January 2000, the Company has not yet experienced any problems with
Year 2000 orders but has developed a contingency plan for supplier issues.
These contingency plans include such actions as making alternate supplier
arrangements, rescheduling deliveries, or utilizing alternate methods of
operation during this critical period, if required.

Notwithstanding that the Company proceeded diligently with the implementation
of its own compliance program, including aspects thereof directed to
ascertaining Year 2000 compliance by third-parties, there can be
no assurance that the Company's operations will not experience disruptions due
to the failure of third parties (including software, data processing, and
other vendors) with which the Company has commercial relationships to become


                                    Page 17

<PAGE>
fully Year 2000 compliant in a timely manner.  In the worst case, the Company
may experience extensive delays in merchandise shipments from suppliers and
therefore experience high levels of out-of-stock goods in its stores.  Such
out-of stock scenarios could have a material impact on sales and related
profits for an unspecified period of time and accordingly, cause an adverse
change in the Company's stock price to occur.


SEASONALITY AND QUARTERLY RESULTS

The Company's business is subject to seasonal and quarterly fluctuations.
Historically, the Company has realized a higher portion of its net sales and
an even greater proportion of its profits in the months of November, December
and January.  Additionally, the timing of promotional events may affect the
Company's results in different fiscal quarters from period to period.


CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR PROVISIONS" OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements contained in this Management's Discussion and Analysis of
Financial Condition and Results of Operations that are not related to
historical results are forward looking statements.  Actual results may differ
materially from those projected or implied in the forward looking statements.
Further, certain forward looking statements are based upon assumptions of
future events which may not prove to be accurate.  These forward looking
statements involve risks and uncertainties which are more fully described in
Item 1, Part I of the Company's Annual Report on Form 10-K/A for the Fiscal
Year Ended February 27, 1999.



ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's $50 million Credit Facility has interest payable at a rate
equivalent to the Chase Manhattan Bank Rate plus 0.25% per annum or LIBOR plus
2.50% per annum (8.3% and 8.1% at November 27, 1999, respectively).  Changes
in interest rates which dramatically increase the interest rate on the credit
facility would make it more costly to borrow proceeds under that facility and
may impede the Company's growth strategies if management determines that the
costs associated with borrowing funds are too high to implement these
strategies.

The Company does not hold derivative investments and does not earn foreign-
source income.  All of the Company's net sales are realized in dollars and
almost all of the revenues are from customers in the United States.
Therefore, the Company does not believe that it has any significant direct
foreign currency exchange risk.







                                   Page 18

<PAGE>
PART II.    OTHER INFORMATION
-----------------------------

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

a)     Exhibits:

The following exhibits are filed as part of, or incorporated by reference
into, this report.

Exhibit No.      Description
-----------      -----------
   10.1          Fourth Amendment to the Amended and Restated 1994 Equity
                 Participation Plan dated June 30, 1999.
                      Incorporated herein by reference to the Company s
                      Form S-8, Registration No. 333-91515, as filed with
                      the Commission on November 23, 1999.
*  10.2          Employment Agreement between Charles Chinni and Strouds,
                 Inc., dated October 20, 1999.
*  10.3          Employment Agreement between Robert M. Menar and Strouds,
                 Inc., dated August 9, 1999.
*  10.4          Employment Agreement between Harry Brown and Strouds,
                 Inc., dated November 1, 1999.
*  27            Financial Data Schedule
------------------------------

*    Filed herewith


b)  Reports on Form 8-K:

No reports on Form 8-K were filed by the Company during the quarter ended
November 27, 1999.






















                                   Page 19

<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 thereunto duly authorized.





Dated:  January 7, 1999





                                    STROUDS, INC.
                                    (Registrant)







                                    /s/ Charles Chinni
                                    ---------------------
                                    Charles Chinni
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)



                                    /s/ Robert M. Menar
                                    ------------------------
                                    Robert M. Menar
                                    Chief Operating Officer



                                    /s/ Gary A. Van Wagner
                                    ------------------------
                                    Gary A. Van Wagner
                                    Vice President, Chief Financial Officer
                                    (Principal Financial Officer)










                                    Page 20

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