<PAGE>
   As filed with the Securities and Exchange Commission on July 13, 1999
_____________________________________________________________________________


                          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 May 29, 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 July 6, 1999:  7,036,981




<PAGE>
                            STROUDS, INC.



                               INDEX



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

     ITEM 1.     FINANCIAL STATEMENTS:

                 Condensed Balance Sheets as of May 29, 1999
                    (Unaudited) and February 27, 1999                   3

                 Condensed Statements of Operations for the Thirteen
                    Weeks Ended May 29, 1999 and May 30, 1998
                    (Unaudited)                                         4

                 Condensed Statements of Cash Flows for the Thirteen
                    Weeks Ended May 29, 1999 and May 30, 1998
                    (Unaudited)                                         5

                 Notes to Condensed Financial Statements                6

     ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS                   10

     ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                 MARKET RISK                                           15


PART II.    OTHER INFORMATION

     ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K                      16

                 SIGNATURES                                            17

















                                    Page 2
<PAGE>
PART I.     FINANCIAL INFORMATION
---------------------------------
ITEM 1.     FINANCIAL STATEMENTS

                            STROUDS, INC.
                       CONDENSED BALANCE SHEETS
                                                          MAY 29,  FEBRUARY 27,
(in thousands, except share data)                          1999        1999
---------------------------------                        --------    --------
ASSETS                                                  (Unaudited)
Current assets:
   Cash                                                  $    592    $    269
   Accounts receivable                                      2,162       1,763
   Inventory                                               67,281      60,832
   Other                                                    1,382       3,993
                                                         --------    --------
      Total current assets                                 71,417      66,857
Property and equipment - at cost, net of accumulated
   depreciation and amortization                           20,738      21,354
Excess of cost over net assets acquired, net of
   accumulated amortization                                 7,208       7,273
Other assets                                                  927         959
                                                         --------    --------
      Total assets                                       $100,290    $ 96,443
                                                         ========    ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current maturities of long-term debt                  $    588    $    624
   Accounts payable                                        18,568      15,565
   Accrued expenses                                        12,138      15,726
   Restructuring reserves                                   4,283       4,330
                                                         --------    --------
      Total current liabilities                            35,577      36,245
Long-term debt                                             34,468      26,887
Other non-current liabilities                               3,200       3,194
                                                         --------    --------
      Total liabilities                                    73,245      66,326
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
      May 29, 1999, 7,036,981; and February 27, 1999,
      8,624,131 shares                                          1           1
   Treasury stock at cost; May 29, 1999, 1,800,000 shares  (1,890)         --
   Additional paid-in capital                              39,146      39,146
   Accumulated deficit                                    (10,212)     (9,030)
                                                         --------    --------
       Total stockholders' equity                          27,045      30,117
                                                         --------    --------
       Total liabilities and stockholders' equity        $100,290    $ 96,443
                                                         ========    ========
See accompanying notes to condensed financial statements.

                                    Page 3

<PAGE>

                            STROUDS, INC.
                  CONDENSED STATEMENTS OF OPERATIONS
                   (in thousands, except per share data)
                              (Unaudited)



                                                           13 WEEKS ENDED
                                                       ----------------------
                                                        MAY 29,      MAY 30,
                                                         1999         1998
                                                       ---------    ---------

Net sales                                              $ 53,605     $ 55,015
Costs and expenses:
   Cost of sales, buying and occupancy                   38,878       40,337
   Selling and administrative expenses                   15,190       14,507
   Amortization of excess of cost over
      net assets acquired                                    65           65
                                                       ---------    ---------
                                                         54,133       54,909
                                                       ---------    ---------

      Operating (loss) income                              (528)         106


Other income                                                 30           60
Interest expense, net                                      (684)        (762)
                                                       ---------    ---------

      Net loss                                         $ (1,182)    $   (596)
                                                       =========    =========


Basic and Diluted:
      Net loss per share                               $  (0.15)    $  (0.07)
                                                       =========    =========
      Weighted average shares outstanding                 7,735        8,579
                                                       =========    =========

See accompanying notes to condensed financial statements.











                                    Page 4
<PAGE>
                            STROUDS, INC.
                  CONDENSED STATEMENTS OF CASH FLOWS
                            (in thousands)
                              (Unaudited)
                                                           13 WEEKS ENDED
                                                       ----------------------
                                                        MAY 29,      MAY 30,
                                                         1999         1998
                                                       ---------    ---------
Cash flows from operating activities:
   Net loss                                            $ (1,182)    $   (596)
   Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities:
         Depreciation and amortization of property
            and equipment                                 1,285        1,178
         Amortization of excess of cost over net
            assets acquired                                  65           65
         (Increase) decrease in:
            Accounts receivable                            (399)      (1,413)
            Inventory                                    (6,449)         892
         Increase (decrease) in:
            Accounts payable and accrued expenses          (739)       1,394
            Restructuring reserve                           (47)      (1,709)
         Other                                            2,649          311
                                                       ---------    ---------
            Net cash (used in) provided by operating
               activities                                (4,817)         122
                                                       ---------    ---------

Cash flows from investing activities:
   Capital expenditures                                    (669)      (1,317)
                                                       ---------    ---------
            Net cash used in investing activities          (669)      (1,317)
                                                       ---------    ---------

Cash flows from financing activities:
   Net borrowings under long-term debt                    7,545           78
   Increase in overdraft                                    154        1,669
   Repurchase of stock                                   (1,890)         ---
                                                       ---------    ---------
            Net cash provided by financing activities     5,809        1,747
                                                       ---------    ---------

            Net increase in cash                            323          552
Cash at beginning of period                                 269          518
                                                       ---------    ---------
Cash at end of period                                  $    592     $  1,070
                                                       =========    =========
Supplemental disclosure of cash flow information:
   Cash paid during the year for:
      Interest                                         $    587     $    592
                                                       =========    =========
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 May 29, 1999 and the related
Condensed Statements of Operations and Condensed Statements of Cash Flows for
the 13 weeks ended May 29, 1999 and May 30, 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.  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.  The results of operations for the 13 weeks
ended May 29, 1999 may not be indicative of the results to be expected for the
entire fiscal year.


(2)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Income Taxes

The provision for income taxes is 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 selected information in the notes thereto.  The
Company operates in two business segments, superstores and outlet stores.  See
note 6.

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.

                                    Page 6

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


(2)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Reclassifications

Certain reclassifications have been made to the May 30, 1998 amounts to
conform to the May 29, 1999 presentation.


(3)     PROPERTY AND EQUIPMENT

Property and equipment is summarized as follows:
                                                        May 29,   February 27,
(in thousands)                                           1999         1999
--------------                                         ---------    ---------
Furniture, fixtures and equipment                      $ 44,897     $ 44,352
Leasehold improvements                                    8,328        8,204
                                                       ---------    ---------
                                                         53,225       52,556
Accumulated depreciation and amortization               (32,487)     (31,202)
                                                       ---------    ---------
                                                       $ 20,738     $ 21,354
                                                       =========    =========


(4)     RESTRUCTURING

The Company initiated a comprehensive restructuring and cost reduction plan
(the "Restructuring Plan"), resulting in pretax charges of $16,250,000 in
fiscal 1996.  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 in which the lease had not expired.  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
Company plans to close 1 more store related to its Restructuring Plan.  As of
May 29, 1999, no changes have been made to the estimated Restructuring Plan
costs and no additional charges were recorded to operations.  During the first
quarter of fiscal 1999, cash used related to the Restructuring Plan totaled
$47,000, relating primarily to workforce reductions and consulting and
advisory fees associated with the Company's restructuring and cost reduction
efforts.

                                    Page 7
<PAGE>
                            STROUDS, INC.
                 NOTES TO CONDENSED FINANCIAL STATEMENTS
                             (Unaudited)


(4)     RESTRUCTURING (Continued)

The following table summarizes the Restructuring Plan charges and payments or
asset write-downs:
<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 payment
   and asset write-
   downs                    2,176               1,444               1,262       4,882
                          --------            --------            --------    --------
Reserve balance,
   February 28, 1998        5,199               5,771                 398      11,368

Fiscal 1998 payment
   and asset write-
   downs                      703               6,238                  97       7,038
Reclassifications            (667)                667                  --          --
                          --------            --------            --------    --------
Reserve balance,
   February 27, 1999        3,829                 200                 301       4,330

Fiscal 1999 payment
   and asset write-
   downs through
   May 29, 1999                --                  --                  47          47
                          --------            --------            --------    --------
Reserve balance,
   May 29, 1999           $ 3,829             $   200             $   254     $ 4,283
                          ========            ========            ========    ========
</TABLE>
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

                                    Page 8
<PAGE>
                            STROUDS, INC.
                 NOTES TO CONDENSED FINANCIAL STATEMENTS
                             (Unaudited)


(5)     LONG-TERM DEBT

At May 29, 1999, the Company had outstanding borrowings of $33,600,000 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 May 29, 1999.

Included in the Credit Facility is a $7,000,000 letter of credit sub-facility.
As of May 29, 1999, the Company had outstanding letters of credit amounting to
$763,000 for purchase commitments to foreign suppliers under this sub-
facility.


(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 revenue 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:

                                      May 29,     May 30,
IN THOUSANDS                           1999        1998
-------------------------------    -----------  -----------
Net revenue:
   Superstores                     $   44,690   $   46,090
   Outlet stores                        8,915        8,925
                                    ----------   ----------
                                   $   53,605   $   55,015
                                    ==========   ==========
Operating income (loss):
   Superstores                     $     (545)  $      (37)
   Outlet stores                           17          143
                                    ----------   ----------
                                   $     (528)  $      106
                                    ==========   ==========




                                    Page 9

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


(6)     SEGMENT INFORMATION (Continued)

Segment information is summarized as follows:

                                      May 29,   February 27,
IN THOUSANDS                           1999        1998
-------------------------------    -----------  -----------
Total assets:
   Superstores                     $   71,895   $   65,715
   Outlet stores                        8,137        7,330
   Other (1)                           20,258       23,398
                                    ----------   ----------
                                   $  100,290   $   96,443
                                    ==========   ==========
-----------------------------------------------------------------------------
(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
ending 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 charges of $16.3 million in
fiscal 1996.  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 in which the lease had not expired.  As
of February 27, 1999, the Company had closed 7 stores related to its
restructuring efforts.


                                    Page 10

<PAGE>
In June 1999, the Company closed 1 store in the Washington, D.C. market.  The
Company plans to close 1 more store related to its Restructuring Plan.  As of
May 29, 1999, no additional changes have been made to the estimated
Restructuring Plan costs and no charges were recorded to operations.


RESULTS OF OPERATIONS

13 Weeks Ended May 29, 1999 Compared to the 13 Weeks Ended May 30, 1998
-----------------------------------------------------------------------

Net sales for the thirteen weeks ended May 29, 1999 decreased $1.4 million, or
2.6%, to $53.6 million versus $55.0 million in the same period last year.
Comparable store sales decreased $0.2 million, or 0.4%, for the period.  Sales
from new stores and expanded or replacement stores increased by $1.2 million.
Sales were reduced by $2.4 million due to 2 store closures.

Net sales for superstores for the thirteen weeks ended May 29, 1999 decreased
$1.4 million, or 3.0%, to $44.7 million versus $46.1 million in the same
period last year.  Comparable superstore sales were flat for the period.
Outlet store net sales for the thirteen weeks ended May 29, 1999  and May 30,
1998 were $8.9 million.  Comparable outlet store sales decreased $0.2 million,
or 2.8%, for the period.

Management believes that the decrease in superstore sales is attributable to
operating 2 less superstores, 47 superstores at May 29, 1999 versus 49
superstores at May 30, 1998.  Approximately 10% of the comparable stores were
affected by new competitive openings for the first quarter of 1999 compared to
approximately 17% for the same period last year.

Cost of sales, buying and occupancy for the 13 weeks ended May 29, 1999 were
$38.9 million versus $40.3 million for the same period a year ago, a $1.4
million decrease.  This dollar decrease was attributable, primarily, to the
decline in sales volume resulting from operating fewer stores versus last
year.  As a percent of net sales, cost of sales, buying and occupancy
decreased to 72.6% from 73.3% for the same period a year ago.  The improved
gross margin points were primarily due to a lower level of markdown volume
versus the prior year and the favorable impact of lower distribution costs.

Selling and administrative expenses for the 13 weeks ended May 29, 1999
increased $0.7 million to $15.2 million versus $14.5 million for the same
period in fiscal 1998 and increased as a percentage of net sales from 26.4% to
28.4%.  The increase was primarily due to increased labor staffing, higher
credit card fees due to increased consumer credit card usage and the
installation of a new display program in the stores.

As a result of the factors noted above, the Company had an operating loss for
the 13 weeks ended May 29, 1999 of $0.5 million versus an operating income of
$0.1 million for the same period a year ago, a $0.6 million decrease.




                                    Page 11

<PAGE>
The operating loss for superstores for the 13 weeks ended May 29, 1999 was
$0.5 million versus no operating income for the same period a year ago.  There
was no operating income for the outlet stores for the 13 weeks ended May 29,
1999 versus an operating income of $0.1 million for the same period a year
ago.  The decreases in operating profit for the segments were a result of the
various factors discussed above.

Interest expense net, decreased $0.1 million to $0.7 million for the 13 weeks
ended May 29, 1999 versus $0.8 million for the same period in fiscal 1998.
The decrease was primarily the result of lower average borrowings and the
related cost of borrowing this year.

The Company recorded no income tax benefit associated with its losses for the
13 week periods ended May 29, 1999 and May 30, 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
funds and its credit facilities.  At May 29, 1999, the Company's working
capital was $35.8 million, while advances from its Credit Facility were $33.6
million.  The Company had $12.4 million available for borrowings under its
Credit Facility as determined by the Company's eligible "borrowing base" at
May 29, 1999.

Cash used in operating activities for the 13 weeks ended May 29, 1999 was $4.8
million.  During the 13 week period ended May 29, 1999, inventory increased
$6.4 million.  In the first quarter 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 $0.1
million.

Net cash used in investing activities for the 13 weeks ended May 29, 1999 was
$0.7 million.  These funds were primarily used for capital expenditures for
improvements to the Company's management information systems development and
existing store refurbishments.

Cash provided by financing activities for the 13 weeks ended May 29, 1999 was
$5.8 million.  The Company had net borrowings of $7.5 million primarily to
fund expansion, 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 $4.3 million and will be related
primarily to new store development, existing store expansions and
refurbishments and improvements to its management information systems.


                                    Page 12

<PAGE>
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 has conducted a comprehensive review of its computer systems to
identify those systems that could be affected by the "Year 2000" (or "Y2K")
issue and has developed an implementation plan to resolve the issue.  The Year
2000 problem is the result of computer programs being written using two digits
rather than four to define the applicable year.  The Year 2000 issue is
believed to affect virtually all companies and organizations, including the
Company.  Any of the Company's programs that have time-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000.  This
could result 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
point-of-sale transactions, generally use third-party applications, with
proprietary additions to fit unique business requirements.  Failure in these
key areas could impact 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 have been 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 have been completed and were
installed in every retail store in the first quarter of fiscal 1999.  The
Company anticipates spending approximately $0.2 million in fiscal 1999 for
additional upgrades to these systems.  A compliant third-party provider for
payroll has been tested and is awaiting implementation in September 1999.
Voice communications have been upgraded to compatible systems in the first
quarter of fiscal 1999.  Data communications, credit card and check processing
and non-critical software packages are currently being completed to assure Y2K
compatibility by the third quarter of fiscal 1999.  Based upon the compliance
levels of the critical software and hardware currently installed or being
installed, the Company expects to be fully compliant well in advance of the


                                    Page 13

<PAGE>
potential for business impact from the Y2K transition.  Nonetheless, a formal
reassessment based upon integrated simulation of all Company systems will be
undertaken in the second quarter of fiscal 1999 to verify readiness.  If the
modifications and conversions to the Company's computer systems are not
completed in a timely manner, the Year 2000 problem may have a material impact
on the operations of the Company.  Such material impacts could require 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.

Y2K compliance of the Company's key vendors has been assessed through
individual surveys completed in fiscal 1998, and will be tested in the first
quarter of fiscal 1999 with electronic data interchange transmission of
Y2K-specific order and financial information.  An assessment of potential
problem relationships will be reviewed in the second quarter of fiscal 1999
for further follow-up activity.  The Company expects to deal with any
remaining "at-risk" systems or supplier issues and develop appropriate
contingency plans in the third quarter of fiscal 1999.  These contingency
plans may include such actions as making alternate supplier arrangements,
rescheduling deliveries, or utilizing alternate methods of operation during
this critical period.

Notwithstanding that the Company has been proceeding 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
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.











                                    Page 14

<PAGE>
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 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 (8.0% and 7.4% at May 29, 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, except for an embedded interest-rate swap instrument that is
clearly and closely related to the host long-term debt agreement.  The Company
believes that the existence of this derivative instrument does not pose a
material risk to the Company's financial position or results of operations.
All of the Company's revenues 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 15

<PAGE>
PART II.    OTHER INFORMATION
-----------------------------
ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

a)     Exhibits:

     The exhibits on the accompanying Index to Exhibits are filed as part of,
or incorporated by reference into, this report.

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


   27            Financial Data Schedule



b)  Reports on Form 8-K:

    No reports on Form 8-K were filed by the Company during the quarter ended
    May 29, 1999.
































                                    Page 16

<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:  July 8, 1998





                                    STROUDS, INC.
                                    (Registrant)







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







                                    /s/ Gary A. Van Wagner
                                    ------------------------
                                    Gary A. Van Wagner
                                    Corporate Controller
                                    (Principal Accounting Officer)










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