<PAGE>
                                                UNITED STATES
                                     SECURITIES AND EXCHANGE COMMISSION
                                           Washington, D.C.  20549

                                                  FORM 10-K
(Mark One)

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE         
     SECURITIES EXCHANGE ACT OF 1934    [FEE REQUIRED]  

       For the fiscal year ended December 31, 1995

                                                     OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE     
       SECURITIES EXCHANGE ACT OF 1934    [NO FEE REQUIRED]  

For the transition period from              to             

                                       Commission file number 0-14938

                  STANLEY FURNITURE COMPANY, INC.           
         (Exact name of Registrant as specified in its Charter)

          Delaware                            54-1272589      
(State or other jurisdiction of             (I.R.S. Employer
incorporation or organization)           Identification Number)

     Route 57, Stanleytown, Virginia                 24168  
(Address of principal executive offices)          (Zip Code)

Registrant's telephone number, including area code:  (540) 627-2000
Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:

                                   Common Stock, par value $.02 per share
                                              (Title of Class)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K.[ ]

Aggregate market value of the voting stock held by non-affiliates of the
registrant based on the closing price on January 26, 1996:  $15,337,245

Indicate the number of shares outstanding of each of the Registrant's classes
of common stock as of January 26, 1996:

Common Stock, par value $.02 per share               4,726,578    
       (Class of Common Stock)                    Number of Shares

Documents incorporated by reference:  Portions of the Registrant's Proxy
Statement for its Annual Meeting of Shareholders scheduled for April 25, 1996
are incorporated by reference into Part III.

<PAGE>
                                              TABLE OF CONTENTS


Part I                                                       Page


      Item 1      Business.............................        3
      Item 2      Properties...........................        8
      Item 3      Legal Proceedings....................        8
      Item 4      Submission of Matters to a Vote
                    of Security Holders................        8

Part II


      Item 5      Market for Registrant's Common Equity
                    and Related Stockholder Matters....       11
      Item 6      Selected Financial Data..............       12
      Item 7      Management's Discussion and Analysis
                    of Financial Condition and Results 
                    of Operations......................       14
      Item 8      Financial Statements and
                    Supplementary Data.................       17
      Item 9      Changes in and Disagreements with
                    Accountants on Accounting and 
                    Financial Disclosure...............       17

Part III

      Items 10 through 13..............................       17

Part IV

      Item 14     Exhibits, Financial Statement 
                    Schedule and Reports on Form 8-K...       17

      Signatures.......................................       23

      Index to Financial Statements and Schedule.......      F-1
<PAGE>
<PAGE>      
                                 Stanley Furniture Company, Inc.

                                                   PART I

Item 1.     Business

General

     Stanley Furniture Company, Inc. ("Stanley" or the "Company")
is a leading designer and manufacturer of furniture exclusively
targeted at the upper-medium price range of the residential market. 
The Company is ranked among the top 25 furniture manufacturers in
North America, based on sales, according to Furniture Today, a
trade publication.  During 1994, the Company expanded it's product
line offerings to include upholstered furniture.  See "Products and
Styles".

     The original predecessor of the Company was founded in 1924. 
The Company was incorporated in Delaware in 1984 and was acquired
by Stanley Holding Corporation, a Delaware corporation, in a
leveraged buy out in January 1989.

     In November 1992, the Company completed a comprehensive
financial restructuring.  As a result, the Company was the sole
surviving corporation and the only outstanding class of the
Company's capital stock was common stock.

     In July 1993, the Company completed a public offering of
1,725,000 shares of its common stock at $8.50 per share.  The net
proceeds of $13.1 million were used to reduce debt. Approximately
61% of the Company's common stock was owned by the ML - Lee
Acquisition Fund, L.P., certain affiliates of the Thomas H. Lee
Company, and management after the public offering.

     In connection with the financial restructuring, the Company
closed its Waynesboro, Virginia facility in 1992 to eliminate
excess capacity, and initiated the sale of the Norman's of
Salisbury fabric division ("Norman's").  In June 1994, the Company
ceased operations at Norman's.

Strategy

     The Company's marketing strategy is to penetrate all available
distribution channels compatible with its price niche and to be a
single-source provider by offering a broad range of product lines
and styles.  Product lines include bedroom, dining room, youth,
occasional and upholstered furniture.  The Company's product
styling mix reflects current consumer preferences and covers all
major design categories within its price niche.  The Company's
operating strategy is to provide superior quality, quick delivery,
style and value.  The Company believes its strategy of penetrating
all available distribution channels compatible with its price niche
provides it with flexibility to adapt to market changes.

     The Company believes its operating strategy provides its
customers with a competitive advantage.  In order to respond to
demand for shorter lead times and improved quality, the Company's
manufacturing process focuses on producing smaller, more frequent
and cost effective production runs.  As a result, the Company
achieved its goal of shipping customer orders within three weeks on
average during 1995, with average finished goods inventory turns of
5.2 times.  In addition, management believes this operating
strategy has helped to improve product quality.  Quick delivery and
high quality reduce the retailer's inventory investment while
minimizing the retailer's re-delivery costs and price markdowns. 
The Company uses the marketing theme, "We Just Look Expensive,"
because it believes that the design, quality, and style of its
furniture compare favorably with more premium-priced products.

Products and Style

     The Company's broad range of product lines and styles provide
retailers a single source for the purchase of upper-medium priced
furniture.  The range of product lines and number of designs for
wood products currently marketed by the Company is set forth in the
following table.


                                                  Number of Designs

   Bedroom                                                32
   Dining room                                            28
   Youth bedroom                                          19
   Occasional:
      Living room tables                                  24
      Wall systems                                        13
      Home Office                                          3


     The Company's product styling mix reflects current consumer
preferences and covers all major design categories within its
upper-medium price niche including European traditional,
contemporary, transitional, 18th century, country and nostalgia
designs.

     Upholstered furniture products were initially introduced in
the Fall of 1994, and consist mainly of stationary sofas, sleepers,
love seats and chairs.  The Company expanded its upholstered
products in 1995 and now offers a variety of frame and fabric
selections.


<PAGE>

Marketing and Sales

     The Company has developed a diverse and extensive nationwide
customer base which the Company believes provides it with
flexibility to adapt to market changes.  The Company sells its
furniture products through approximately 60 independent sales
representatives to independent furniture retailers; national
accounts such as Sears and J.C. Penney; national and regional chain
stores such as Homestead House, Huffman-Koos, Robb & Stucky, R C
Willey and Rhodes; and major department stores such as Federated
Department Stores.  Products are also distributed internationally
with approximately 7% of the Company's sales from international
customers.  The Company currently has approximately 3,600 active
customers.

     In marketing its products to independent retailers, the
Company utilizes a promotional incentive sales program, the
"Stanley Preferred Retailer".  This program is designed to
encourage the independent retailer to commit retail floor space to
the Company's products.  The program is designed to be flexible and
is adapted into the marketing plans of retailers by accommodating
geographic, style and promotional preferences.  To participate, a
retailer must commit a specified amount of floor space to the
Company's products and achieve a specified sales volume.

     The general marketing practice followed in the furniture
industry is to exhibit products at international and regional
furniture markets.  In the Spring and Fall of each year, an eight-
day furniture market is held in High Point, North Carolina, which
is regarded by the industry as the international market, attracting
buyers from the United States and abroad.  The Company maintains
showroom space at the High Point market and in the San Francisco
regional market.

     No single customer accounted for more than 10% of the
Company's sales in 1995.  No material part of the Company's
business is dependent upon a single customer, the loss of which
would have a material effect on the business of the Company.  The
loss of several of the Company's major customers could have a
material impact on the business of the Company.  There are no
significant seasonal aspects to the Company's business.

Product Design and Development

     The Company's marketing personnel begin the design process by
identifying marketing needs to be fulfilled and conceptualizing
product ideas, generally consisting of a group of related furniture
pieces.  A variety of sketches are produced, usually by Company
designers, from which prototype furniture pieces are prepared in
consultation with marketing personnel, selected dealers and sales
representatives.  The Company's engineering department then
processes the prototype in preparation for actual full-scale
production.  Consistent with industry practice, the Company designs
and develops new product groups each year, replacing discontinued
items or collections.

Manufacturing

     The Company's manufacturing operations complement its
marketing strategy by emphasizing superior quality and quick
delivery.  The Company's manufacturing process produces smaller,
more frequent and cost effective runs by identifying and
eliminating manufacturing bottlenecks and waste, employing
statistical process control, establishing cellular manufacturing
and improving relationships with suppliers.  In addition, a key
element of the Company's manufacturing process is to involve all
Company personnel, from hourly associates to management, in the
improvement of the manufacturing process by encouraging and
responding to suggested methods to improve quality and to reduce
manufacturing lead times.

     The Company operates manufacturing facilities in North
Carolina and Virginia consisting of an aggregate of approximately 
3 million square feet. The Company considers its present equipment
to be generally modern, adequate and well maintained.

Raw Materials

     The principal materials used by the Company in manufacturing
its products include lumber, veneers, plywood, particle board,
hardware, glue, finishing materials, glass products, laminates,
fabrics, metals; and frames, filling and cushioning materials for
upholstered products.  The Company uses a variety of species of
lumber, including cherry, oak, ash, poplar, pine, maple, and
mahogany.  The Company's five largest suppliers accounted for
approximately 22% of its purchases in 1995.  The Company believes
that its sources of supply for these materials are adequate and
that it is not dependent on any one supplier.  The furniture
industry has experienced increased prices for lumber during the
past several years, which is the most significant raw material used
by the Company, although there was a moderation in lumber price
increases during 1995.  While the industry has historically
increased prices to reflect such increased costs, there can be no
assurance that, if raw material prices increase, market and
competitive pressures will permit the Company or its competitors to
increase the prices for their products.

Backlog

     The Company schedules production of its various groups based
upon actual or anticipated orders.  The Company, and the furniture
industry, generally honor cancellation of orders prior to shipment,
although cancellations generally decrease as demand increases.  The
Company's backlog of unshipped orders was $21.5 million, $17.4
million, and $26.6 million at December 31, 1995, 1994 and 1993,
respectively.  The Company's manufacturing process is intended to
reduce backlog and to fill orders through manufacturing rather than
inventory.  Therefore, management believes that the size of its
backlog is not necessarily indicative of its operations.

Competition

     The furniture market is highly competitive and includes a
large number of foreign and domestic manufacturers.  The markets in
which the Company competes include a large number of relatively
small manufacturers; however, certain competitors of the Company
have greater sales volumes and greater financial resources than the
Company.  While competition occurs principally in the areas of
style, quality, service, design and price, the Company believes
that its operating strategy, its long-standing relationships with
its customers, its consistent support of existing product lines
over time and its management experience are competitive advantages.

Associates

     At December 31, 1995, the Company employed approximately 2,700
associates.  None of the Company's associates are represented by a
labor union.  The Company considers its relations with its
associates to be good.

Patents and Trademarks

     The trade names of the Company represent many years of
continued business, and the Company believes such names are well
recognized and associated with quality in the furniture industry.
The Company owns a number of patents, trademarks, and licenses,
none of which are considered to be material to the Company.

Environmental Regulation

     The Company is regulated under several federal, state and
local environmental laws and regulations concerning air emissions,
water discharges and management of solid and hazardous waste.
Management believes that the Company is in material compliance with
applicable federal, state and local environmental regulations. 
Compliance with these regulations has not in the past had any
material effect on the Company's earnings, capital expenditures or
competitive position; however, the effect of such compliance in the
future cannot be determined.

     Regulations issued in December 1995 under the Clean Air Act
Amendments of 1990 may require the Company to reformulate certain
furniture finishes or institute process changes to reduce emissions
of hazardous volatile organic compounds.  The furniture industry
and its suppliers are attempting to develop water-based and other
forms of compliant finishing materials to replace commonly-used
organic-based finishes which are a major source of regulated
emissions.  The Company cannot at this time estimate the impact of
these new standards on the Company's operations and future capital
expenditure requirements, or the cost of compliance.

Item 2.    Properties

     Set forth below is certain information with respect to the
Company's principal properties.  The Company believes that all
these properties are well maintained and in good condition.  The
Company believes its manufacturing facilities are being efficiently
utilized and that it could increase production at its facilities if
required by customer demand.  Each facility is focused on specific
product lines to optimize efficiency.  The Company estimates that
its facilities are presently operating at approximately 85% of
capacity, principally on a one-shift basis.  All Company plants are
equipped with automatic sprinkler systems and modern fire
protection equipment, which management believes are adequate.  All
facilities set forth below are active and operational, except as
noted.

                                     Approximate    Owned        Lease
                                    Facility Size     or       Expiration
        Location      Primary Use   (Square Feet)   Leased        Date   

     Stanleytown, VA  Manufacturing   1,660,000     Owned(1) 
                      Corporate
                      Headquarters       61,000             
     West End, NC     Manufacturing     470,000     Owned(1)
     West End, NC     Lumber Yard                   Leased     May 31, 2007
     Lexington, NC    Manufacturing     635,000     Owned   
     Robbinsville, NC Manufacturing     540,000     Owned   
     Salisbury, NC    Idle              109,000     Leased(2)  April 30, 2000



(1)  These facilities were leased through June 1995 at which time the Company
     purchased these facilities.  See Note 2 of the Notes to Financial      
     Statements.
(2)  This facility was subleased through August 1995 and is currently idle. 
     This was the principal facility of Norman's.  The Company has the right
     to purchase the property at any time at its fair market value.

     The Company also leases and maintains approximately 60,000
square feet (8,000 square feet is subleased) of showroom space in
High Point, North Carolina and 7,000 square feet of showroom space
in San Francisco, California.

Item 3.    Legal Proceedings

     None.

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

     None.

<PAGE>

           Executive Officers of the Registrant

     The executive officers of the Company are:
                                                                  
          Name               Age             Position
        
Albert L. Prillaman           50       Chairman, President,       
                                       Chief Executive Officer    
                                       and Director
      
C. William Cubberley, Jr.     55       Senior Vice President-     
                                       Sales and Marketing

Douglas I. Payne              38       Vice President of Finance, 
                                       Treasurer and Secretary

Bobby I. Hodges               58       Senior Vice President-     
                                       Manufacturing

William A. Sibbick            39       Vice President-Product     
                                       Development and            
                                       Merchandising

Joe G. Bost                   49       Vice President-Upholstery


     Albert L. Prillaman has been a Director of the Company since
March 1986, President and Chief Executive Officer of the Company
since December 1985 and Chairman of the Board of Directors since
September 1988.  Prior thereto, Mr. Prillaman had served as a Vice
President of the Company and President of the Stanley Furniture
division of the Company's predecessor since 1983, and in various
executive and other capacities with predecessors of the Stanley
Furniture division of the Company since 1969.

     C. William Cubberley, Jr. has been Senior Vice President-Sales
and Marketing of the Company since April 1995.  He has been a Vice
President of the Company since December 1990 and Senior Vice
President-Sales and Marketing of the Stanley Furniture division
since October 1988.  Mr. Cubberley was Senior Vice President-Sales
of the Stanley Furniture division from January 1986 to
October 1988, when he became Senior Vice President - Sales and
Marketing of the Stanley Furniture division.

     Douglas I. Payne has been Vice President of Finance and
Treasurer of the Company since September 1993, was Vice President-
Treasurer of the Company from December 1989 to September 1993, was
Treasurer of the Company from June 1986 to December 1989 and was
Assistant Treasurer of the Company from August 1985 to June 1986. 
Mr. Payne has been Secretary of the Company since September 1988.

<PAGE>

     Bobby I. Hodges has been Senior Vice President-Manufacturing
of the Company since April 1995.  He has been a Vice President
since June 1993.  He was Senior Vice President-Manufacturing of the
Stanley Furniture division from January 1986 until June 1993.  He
was Vice President-Manufacturing of the Stanley Furniture division
from December 1983 until January 1986.  Prior to that time, Mr.
Hodges was employed by the Company in various positions related to
manufacturing management.

     William A. Sibbick has been Vice President-Product Development
and Merchandising since April 1995.  He was Vice President -
Product Development from June 1993 until April 1995.  He was Vice
President-Senior Product Manager of the Stanley Furniture division
from January 1992 until June 1993.  Prior to that time, he had been
Vice President-Product Manager since his employment in March 1989.

     Joe G. Bost has been Vice President-Upholstery since April
1995.  He was President of Norman's of Salisbury since his
employment in January 1993 until April 1995.  Prior to joining
the Company, Mr. Bost was Senior Vice-President of Sales, Marketing,
Administration and Manufacturing of Hickorycraft, Inc., a manufacturer of
upholstery and occasional tables, a position he held since 1987.




                                                              <PAGE>
<PAGE>  
                                                 PART II

Item 5.     Market for Registrant's Common Equity and Related     
            Shareholders Matters

     The Company's common stock is traded on the National
Association of Securities Dealers Automated Quotation (NASDAQ)
National Market under the symbol STLY.  The table below sets forth
the high and low sales prices per share as reported by the NASDAQ
National Market.

                                                 High      Low 

1995

First Quarter..........................           9 1/2     7
Second Quarter.........................           8 3/8     7
Third Quarter..........................           8 3/4     7
Fourth Quarter.........................           9         7 3/4


1994

First Quarter..........................          16        13
Second Quarter.........................          15        11    
Third Quarter..........................          12 1/2     9    
Fourth Quarter.........................          10 3/4     9 3/4

     The quotations reflect interdealer prices, without retail
mark-up, mark-down or commissions and may not necessarily represent
actual transactions.  As of January 26, 1996, there were
approximately 1,500 beneficial shareholders.  The Company has not
paid any cash dividends and is prohibited from doing so under its
bank credit facility.






                                                        
      <PAGE>
<PAGE>
Item 6.     Selected Financial Data

     The selected financial data for the five years in the period
ended December 31, 1995 are derived from the Company's financial
statements, which have been audited by Coopers & Lybrand L.L.P. 
The selected financial data should be read in conjunction with the
Financial Statements including the Notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of
Operations contained elsewhere herein.

                                   Stanley Furniture Company, Inc.
                                      Selected Financial Data
                            (In thousands, except per share data)
<TABLE>
                                   1995     1994     1993     1992     1991
<S>                             <C>      <C>      <C>      <C>      <C>
Operating Results:

Net sales...................... $174,179 $184,342 $167,091 $166,501 $144,169
Cost of sales:
  From products sold...........  137,621  148,453  134,972  132,984  121,027
  Business interruption
    insurance (1)..............                     (5,036)                 
      Gross profit.............   36,558   35,889   37,155   33,517   23,142 
Selling, general and admin-
  istrative expenses...........   26,454   26,483   25,976   25,117   22,877 
Unusual items, net(2)..........     (136)
Restructuring charge
  (credit)(3)..................                              (2,078)  14,051 
  
    Operating income (loss)....   10,240    9,406   11,179   10,478 (13,786) 
Other expense, net.............      433      444    1,346      686   1,252 
 
Gain on insurance settlement (4)           (2,379)  (2,186)
Interest expense...............    3,534    2,969    3,048    7,058    8,581 

  Income (loss) from continu-
    ing operations before
    income taxes...............    6,273    8,372    8,971    2,734  (23,619)

Income tax provision (benefit).    2,384    3,256    3,691    1,053   (9,088)

  Income (loss) from continu-
    ing operations(5).......... $  3,889 $  5,116 $  5,280 $  1,681 $(14,531)

Income from continuing
  operations per common share(5)$    .82 $   1.08 $   1.39 $    .56         
     
Weighted average number of 
  shares (6) (7)...............    4,727    4,725    3,792    2,996

Financial Position:

Inventories.................... $ 40,167 $ 39,905 $ 37,684 $ 33,343 $ 34,355 

Working capital................   42,422   42,912   40,833   34,650   25,396 

Total assets...................  134,551  124,519  124,859  114,302  113,724 

Long-term debt.................   40,417   33,395   32,022   46,543   41,221 

Subordinated notes payable to
  majority stockholder (6).....                                       20,000 

Mandatorily redeemable pre-
  ferred stock (6).............                                       12,662 

Preferred stock (6)............                                       15,023
Common stockholders' equity
  (6) (7) (8)..................   54,739   50,830   47,204   29,959  (18,748)

</TABLE>
<PAGE>
     Selected Financial Data (continued)

(1)   In 1993, the Company recorded $5.0 million of business interruption
insurance replacing the gross profit on lost sales due to the fire which
occurred in February 1993 at its Stanleytown, Virginia facility.  See Note 8
of the Notes to Financial Statements.

(2)   In 1995, the Company recognized a pretax credit of $1.1 million after
it was released from a lease obligation at its previously closed Waynesboro,
Virginia manufacturing facility.  Also included is a pretax charge for a
severance accrual.  See Note 4 of the Notes to Financial Statements.

(3)   In 1991, the Company recorded pretax charges of $14.1 million in
anticipation of the closing of the Waynesboro, Virginia facility to eliminate
excess capacity and the transfer of certain product lines to other
manufacturing facilities.  Operating income for 1992 includes a restructuring
credit of $2.1 million from lower than anticipated costs of closing the
Waynesboro facility.

(4)   In 1994, the Company recorded a pretax gain of $2.4 million as part of
the final insurance settlement.  Also, in 1993 a $2.2 million pretax gain was
recorded since proceeds exceeded the book value of leasehold improvements and
equipment destroyed in the fire.  See Note 8 of the Notes to Financial
Statements.

(5)   Income from continuing operations before insurance related gains was
$3.7 million (77 cents per share) in 1994 and $4.3 million (90 cents per
share) on a proforma basis in 1993.

(6)   In 1992, the Company completed a financial restructuring which resulted
in the exchange of certain long-term debt and preferred stock for common
stock.

(7)   In July 1993, the Company completed a public offering of 1,725,000
shares of common stock at $8.50 per share.  The net proceeds of $13.1 million
were used to reduce debt.

(8)   No dividends have been paid on common stock during any of the years
presented.







                                                              <PAGE>
<PAGE>
Item 7.     Management's Discussion and Analysis of Financial     
            Condition and Results of Operations

     The following discussion should be read in conjunction with
the Selected Financial Data and the Financial Statements and Notes
thereto contained elsewhere herein.

Results of Operations

1995 Compared to 1994
         Net sales decreased $10.2 million, or 5.5%, from 1994 levels
due principally to lower unit volume, partially offset by the
additional volume from the upholstered products and higher average
selling prices.

         Gross profit margin increased to 21.0% from 19.5% in 1994. 
The higher gross profit margin was due principally to increased
prices, a moderation in lumber cost increases, a more favorable
product mix and the favorable impact from the purchase of the
previously leased manufacturing facilities discussed in Note 2 of
the Notes to Financial Statements.  The increase in gross profit
was slightly offset by an increased overhead absorption rate
resulting from lower output levels in 1995.

         Selling, general and administrative expenses were
approximately the same for both years.  However, as a percentage of
net sales these expenses increased to 15.2% in 1995 from 14.4% in
1994.  The higher percentage was due principally to lower net sales
and increased selling cost associated with new products.

         During the second quarter of 1995, the Company was released
from a lease obligation at its previously closed Waynesboro,
Virginia manufacturing facility.  Accordingly, the Company
recognized a pretax credit of $1.1 million related to the reversal
of an accrual set up in 1991 for the closing of the facility. 
Unusual items also included a pretax charge for severance resulting
from the resignation of the Company's Chief Operating Officer.

         As a result of the above, operating income increased to $10.2 
million, or 5.9%, of net sales from $9.4 million, or 5.1%, of net
sales in 1994.  The Company estimates that upholstery operations
reduced operating income by approximately $1.0 million for both
1995 and 1994.

         Interest expense for 1995 increased due principally to higher
debt levels, resulting from the purchase of two previously leased
manufacturing facilities in June 1995 and also due to slightly
higher interest rates.





 <PAGE>     
      The Company's effective tax rate in 1995 decreased to 38.0%
from 38.9% in 1994.  The lower tax rate in 1995 is principally due
to an increase in non-taxable income and increased benefits from
export sales.

1994 Compared to 1993
     Net sales increased $17.3 million, or 10.3%, from 1993 levels
due principally to higher average selling prices and higher unit
volume.  Lower unit volume in the 1993 period was due principally
to the disruption in production caused by the 1993 fire at the
Stanleytown, Virginia facility.

     Gross profit margin decreased to 19.5% from 22.2% in 1993. 
The higher gross profit percentage for 1993 was due principally to
the recognition of $5.0 million of business interruption insurance
without the related sales revenue.  This $5.0 million represented
the estimated settlement proceeds for gross profits lost and other
direct costs related to lost sales from the Stanleytown fire.  

     Selling, general and administrative expenses as a percentage
of net sales was 14.4% and 15.5% for 1994 and 1993, respectively. 
The lower percentage was due principally to an increase in net
sales and containment of cost.

     As a result of the above, operating income for 1994 decreased
to $9.4 million, or 5.1%, of net sales from $11.2 million, or 6.7%,
of net sales in 1993.  Operating income was reduced by upholstery
startup costs of approximately $1.0 million, in 1994.

     In 1994, the Company reached a final insurance settlement on
the 1993 fire and recorded a pretax gain of $2.4 million.

     Interest expense approximated the 1993 period due principally
to lower average debt levels, which was offset by higher interest
rates.

     The Company's effective income tax rate decreased to 38.9%
from 41.1% in 1993.  The higher 1993 rate was due principally to
the effect of the 1% federal statutory rate increase on the prior
years' deferred tax balances.

Financial Condition, Liquidity and Capital Resources

     During August 1995, the Company amended its $25.0 million
revolving credit facility which extended its maturity date to
August 1998.  The interest rate under the facility was reduced to
prime (8.5% on December 31, 1995) or, at the Company's option,
equal to reserve adjusted LIBOR plus 1.0% per annum.  In June 1995,
the Company issued a $10.0 million 7.57% senior note due 2005 in a
private placement of debt and the proceeds were used to purchase
two previously leased manufacturing facilities.  In February 1994,
the Company completed the private placement of $30.0 million of
7.28% senior notes due 2004.  The proceeds from the senior notes
were used to repay an existing term note and a portion of the
revolving credit facility.
  
     Long-term debt outstanding at December 31, 1995 was $40.4
million.  Aggregate maturities of long-term debt for the next five
years are as follows:  1996 - $650,000; 1997 - $878,000; 1998 -
$6.0 million; 1999 - $5.1 million; 2000 - $5.2 million.  As of
December 31, 1995, approximately $21.9 million of additional
borrowings were available under the revolving credit facility.  The
Company believes that its financial resources are adequate to
support its capital needs and debt service requirements.

     During 1995, cash generated from operations of $6.6 million
was used to reduce borrowings under the revolving credit facility
and to fund capital expenditures in the normal course of business. 
The increase in cash generated from operations was due principally
to lower tax payments of $1.0 million compared to $4.5 million in
1994.  Tax payments were higher in 1994 principally due to the
timing of installment payments for 1993, resulting from the
utilization of net operating losses carried forward from 1992. 
Also, refunds attributed to 1994 reduced tax payments for 1995. 
Cash generated from operations, also increased as a result of less
cash paid to suppliers and employees due to reduced production
levels.  During 1994, cash provided by operations of $4.1 million
and net borrowings of $1.2 million were used to fund capital
expenditures.  Cash generated from operations in 1993 of $6.5
million was used to fund capital expenditures and to reduce
borrowings under the senior credit facility.

     Operating cash flows in both 1994 and 1993 include proceeds of
$4.6 and $23.2 million, respectively, received from insurance in
connection with the fire.  Cash paid to suppliers in 1994 and 1993
included costs of $2.7 million and $25.2 million, respectively,
incurred in connection with the fire.  Excluding the effect of the
fire, cash was required in the 1994 period to support higher
accounts receivable requirements reflecting higher sales levels,
higher payments to suppliers and employees as a result of higher
production levels and higher tax payments as discussed above. 
These higher payments in the 1994 period were partially offset by
lower interest payments due principally to lower debt levels. 
Excluding the cash flow impact from the fire, cash provided by
operating activities improved $12.1 million in 1993 principally
from higher customer receipts, lower payments for the restructuring
program and lower interest payments.

     Net cash used by investing activities was $14.7 million in
1995 compared to $5.2 million and $4.3 million in 1994 and 1993,
respectively.  As noted above, proceeds of $10.0 million from the
senior note and additional borrowings from the revolving credit
facility were used to purchase $10.5 million of previously leased
manufacturing facilities.  Expenditures in the 1994 period include
the purchase of equipment and other capital expenditures for the
new upholstery operation of approximately $727,000.  Except for
fire related expenditures in 1993, which were reimbursed by
insurance, and the manufacturing facilities purchased in 1995,
expenditures in each year were primarily for plant and equipment,
and other assets in the normal course of business.

     Net cash provided by financing activities was $8.1 million in
1995 compared to net cash provided by financing activities of $1.2
million in 1994 and cash used by financing activities of $2.7
million in 1993.  Cash provided by financing activities in the 1994
period was used to fund capital expenditures.  In 1993, cash
provided by the public offering ($13.1 million) and from operations
enabled the Company to redeem $3.1 million of outstanding senior
subordinated debentures and to reduce borrowings under the senior
credit facility by $12.8 million.

Discontinued Operations

     Beginning in 1991, the Norman's of Salisbury fabric division
("Norman's") was reflected as a discontinued operation.  In 1994,
the Company ceased operations at Norman's and liquidated the
division resulting in a $2.8 million ($4.5 million pretax)
additional loss provision.

Item 8.   Financial Statements and Supplementary Data

     The financial statements and schedule listed in Items 14(a)(1)
and (a)(2) hereof are incorporated herein by reference and are
filed as part of this report.

Item 9.   Changes in and Disagreements with Accountants on 
          Accounting and Financial Disclosure

          None.

                                                  PART III

     In accordance with general instruction G(3) of Form 10-K, the
information called for by items 10, 11, 12, and 13 of Part III is
incorporated by reference to the registrant's definitive Proxy
Statement for its Annual Meeting of Shareholders scheduled for
April 25, 1996, except for information concerning the executive
officers of the registrant which is included in Part I of this
report under the caption "Executive Officers of the Registrant."

                                                   PART IV

Item 14.  Exhibits, Financial Statement Schedule and Reports on   
          Form 8-K

(a)  Documents filed as a part of this Report:
<PAGE>
(1)  The following financial statements are included in this      
     report on Form 10-K:

     Report of Independent Accountants

     Balance Sheets - as of December 31, 1995 and 1994

     Statements of Income - for each of the three years in the    
     period ended December 31, 1995

     Statements of Changes in Stockholders' Equity for each of the 
     three years in the period ended December 31, 1995

     Statements of Cash Flows - for each of the three years in the 
     period ended December 31, 1995

     Notes to Financial Statements

(2)  Financial Statement Schedule:

     Schedule II - Valuation of Qualifying Accounts - for each    
     of the three years in the period ended December 31, 1995

(b)  The following reports on Form 8-K were filed by the Registrant 
     during the last quarter of the period covered by this report:

     None.

(c)      Exhibits:

 2.1     Agreement and Plan of Merger dated as of July 24, 1992 by 
         and among the Registrant, Stanley Holding Corporation,   
         Stanley Acquisition Corporation, the ML-Lee Acquisition  
         Fund (Retirement Accounts) II, L.P., and the persons     
         listed on Schedules I and II thereto (incorporated by    
         reference to Exhibit 2.1 to the Registrant's Registration 
         Statement on Form S-4 No. 33-50050).

 3.1     The Certificate of Incorporation of the Registrant       
         (incorporated by reference to Exhibit 3.1 to the         
         Registrant's Registration Statement on Form S-1, No. 33- 
         7300).

 3.2     The By-laws of the Registrant (incorporated by reference 
         to Exhibit 3.2 to the Registrant's Registration Statement 
         on Form S-1, No. 33-7300).

 3.3     Amendment adopted March 21, 1988 to the By-laws of the   
         Registrant (incorporated by reference to Exhibit 3.3 to  
         the Registrant's Form 10-K (Commission File No. 0-14938) 
         for the year ended December 31, 1987).

<PAGE>

 3.4     Amendments adopted February 8, 1993 to the By-laws of the 
         Registrant (incorporated by reference to Exhibit 3.4 to  
         the Registrant's Registration Statement on Form S-1 No.  
         33-57432).

 3.5     Certificate of Stock Designation dated May 1, 1991 of the 
         Registrant as modified by an Amendment to Certificate of 
         Designation dated May 31, 1991 (incorporated by reference 
         to Exhibit 3.6 to the Registrant's Form 10-K for the year 
         ended December 31, 1991).

 3.6     Certificate of Merger dated as of November 9, 1992       
         (incorporated by reference to Exhibit 3.6 to the         
         Registrant's Statement on Form S-1 No. 33-57432).

 3.7     Certificate of Amendment dated June 30, 1993.            
         (incorporated by reference to Exhibit 3.7 to the         
         Registrant's Form 10-K for the year ended December 31,   
         1994).

 4.1     The Certificate of Incorporation and By-laws of the      
         Registrant as currently in effect incorporated by        
         reference as  Exhibits 3.1 through 3.7  (incorporated  by 
         reference to Exhibit 4.2 to the Registrant's Registration 
         Statement on Form S-1 No. 33-57432).

 4.2     Registration Rights Agreement dated as of November 9,    
         1992 by and among the Registrant, ML-Lee Acquisition Fund, 
         L.P., ML - Lee Acquisition Fund II, L.P., ML-Lee         
         Acquisition Fund (Retirement Accounts) II, L.P., Lee     
         Stockholders (as defined therein) and Management         
         Stockholders (as defined therein) (incorporated by       
         reference to Exhibit 4.3 to the Registrant's Statement on 
         Form S-1 No. 33-57432).

 4.3     Form of Indenture (including the Form of the Debenture)  
         (incorporated by reference to Exhibit 4 to the           
         Registrant's Registration Statement on Form S-1, No. 33- 
         12746).

 4.4      First Supplemental Indenture dated as of January 17, 1989 
         (incorporated by reference to Exhibit 4.2 to the         
         Registrant's Form 10-K for the year ended December 31,   
         1988).

 4.5     Second Supplemental Indenture dated as of November 9,    
         1992 (incorporated by reference to Exhibit 4.5 to the    
         Registrant's Form 10-K for the year ended December 31,   
         1993).

<PAGE>


 4.6     Note Agreement dated February 15, 1994 between the       
         Registrant and the Prudential Insurance Company of       
         America. (incorporated by reference to Exhibit 4.6 to the 
         Registrant's Form 10-K for the year ended December 31,   
         1993).

     Pursuant to Regulation S-K, Item 601(b)(4)(iii), instruments
evidencing long term debt less than 10% of the Registrant's total
assets have been omitted and will be furnished to the Securities
and Exchange Commission upon request.

10.1     Employment Agreement made as of January 1, 1991 between  
         Albert L. Prillaman and the Company (incorporated by               
                                
         reference to Exhibit 10.1 to the Registrant's Form 10-K  
         for the year ended December 31, 1991).(2)

10.2     Lease dated February 23, 1987 between SIC Corporation and 
         Southern Furniture Exposition Building, Inc. d/b/a       
         Southern Furniture Market Center (incorporated by        
         reference to Exhibit 10.10 to the Registrant's Form 10-K 
         for the year ended December 31, 1987).

10.3     Lease dated June 30, 1987 between A. Allan McDonald,     
         Virginia  Cary McDonald, C. R. McDonald, Dorothy V.      
         McDonald, and Lillian S. McDonald, as lessor, and SIC, as 
         lessee (incorporated by reference to Exhibit 10.14 to the 
         Registrant's Form 10-K for the year ended December 31,   
         1987).

10.4     The Stanley Retirement Plan, as restated effective       
         January 1, 1989, adopted April 20, 1995.(1)(2)

10.5     Amendment No. 1, the Stanley Retirement Plan, effective  
         December 31, 1995, adopted December 15, 1995.(1)(2)

10.6     Supplemental Retirement Plan of Stanley Furniture        
         Company, Inc. as restated effective January 1, 1993.     
         (incorporated by reference to Exhibit 10.8 to the        
         Registrant's Form 10-K for the year ended December 31,   
         1993).(2)

10.7     First Amendment to Supplemental Retirement Plan of       
         Stanley Furniture Company, Inc., effective December 31,  
         1995, adopted December 15, 1995.(1)(2)





                                      
(1) Filed herewith
(2) Management contract or compensatory plan

<PAGE>

10.8     Stanley Interiors Corporation Deferred Compensation      
         Capital Enhancement Plan effective January 1, 1986       
         (incorporated by reference to Exhibit 10.12 to the       
         Registrant's Registration Statement on Form S-1, No. 33- 
         7300).(2)

10.9     Stanley 401(k) Retirement Savings Plan, as amended and restated    
         effective January 1, 1996.(1)(2)

10.10    Management Agreement with Thomas H. Lee Company entered  
         into September 29, 1988 by and among the Registrant, as  
         successor to Interiors  Acquisition  Corporation, Stanley 
         Holding Corporation, Stanley Acquisition Corporation and 
         Thomas H. Lee Company (incorporated by reference to      
         Exhibit (c)(9) to the  Registrant's  Rule 13e-3          
         Transaction Statement filed October 14, 1988).

10.11    Employment Agreement made as of January 1, 1991 between  
         William Cubberley, Jr. and the Registrant (incorporated by 
         reference to Exhibit 10.42 to the Registrant's Form 10-K 
         for the year ended December 31, 1991).(2)

10.12    Split Dollar Insurance Agreement dated as of March 21,   
         1991 between Albert L. Prillaman and the Registrant      
         (incorporated by reference to Exhibit 10.43 to the       
         Registrant's Form 10-K for the year ended December 31,   
         1991).(2)

10.13    Second Amended and Restated Revolving Credit Facility and 
         Term Loan Agreement dated  February 15, 1994 (the "Second 
         Amended and Restated Credit Facility") between the       
         Registrant, National Canada Finance Corp., and the       
         National Bank of Canada.

10.14    First Amendment to Second Amended and Restated Credit    
         Facility dated as of August 21, 1995.(1)

10.15    1992 Stock Option Plan (incorporated by reference to     
         Registrant's Registration Statement on Form S-8, No. 33- 
         58396).(2)

10.16    1994 Stock Option Plan. (incorporated by reference to    
         Exhibit 10.18 to the Registrant's Form 10-K for the year 
         ended December 31, 1994).(2) 




                     
(1) Filed herewith
(2) Management contract or compensatory plan

<PAGE>

10.17    1994 Executive Loan Plan. (incorporated by reference to  
         Exhibit 10.19 to the Registrant's Form 10-K for the year 
         ended December 31, 1994).(2)

10.18    Loan and Stock Purchase Agreement dated as of December 2, 
         1994 by Albert L. Prillaman. (incorporated by reference to 
         Exhibit 10.20 to the Registrant's Form 10-K for the year 
         ended December 31, 1994).(2)

   11    Schedule of Computation of Earnings Per Share.(1)

   21    Listing of Subsidiaries:

         Charter Stanley Foreign Sales Corporation, a United      
         States Virgin Islands Corporation.

   23    Consent of Coopers & Lybrand L.L.P.(1)

   27    Financial Data Schedule.(1)



























                     
(1) Filed herewith
(2) Management contract or compensatory plan

<PAGE>


                                                 SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

                                       STANLEY FURNITURE COMPANY, INC.

February 14, 1996             By:  /s/ Albert L. Prillaman     
                                   Albert L. Prillaman
                                   President, Chief Executive
                                   Officer, and Chairman of the   
                                   Board

     Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.

     Signature                   Title                 Date

/s/ Albert L. Prillaman     President, Chief    February 14, 1996
(Albert L. Prillaman)       Executive Officer,
                            Chairman of the
                            Board, and Director
                            (Principal Executive
                            Officer)

/s/ Douglas I. Payne        Vice President of   February 14, 1996
(Douglas I. Payne)          Finance, Treasurer
                            and Secretary
                            (Principal Financial
                            and Accounting
                            Officer)

/s/ David V. Harkins        Director            February 14, 1996
(David V. Harkins)


/s/ C. Hunter Boll          Director            February 14, 1996
(C. Hunter Boll)


/s/ Edward J. Mack          Director            February 14, 1996
(Edward J. Mack)




<PAGE>

         
                                       STANLEY FURNITURE COMPANY, INC.
                                         ANNUAL REPORT ON FORM 10-K
                                 INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
                                    FOR THE YEAR ENDED DECEMBER 31, 1995



Financial Statements                                        Page

Report of Independent Accountants.........................  F- 2

Balance Sheets as of December 31, 1995 and 1994...........  F- 3

Statements of Income for each of the three years
  in the period ended December 31, 1995...................  F- 4

Statements of Changes in Stockholders' Equity for each
  of the three years in the period ended 
  December 31, 1995......................................   F- 5

Statements of Cash Flows for each of the three years
  in the period ended December 31, 1995...................  F- 6

Notes to Financial Statements.............................  F- 7
  

Financial Statement Schedule

Schedule II - Valuation and Qualifying Accounts for 
  each of the three years in the period ended 
  December 31, 1995.......................................  S- 1




















                                                     F-1

<PAGE>


To The Board of Directors and Shareholders Of
Stanley Furniture Company, Inc.


We have audited the financial statements and financial statement
schedule of Stanley Furniture Company, Inc. listed in the index on
page F-1.  These financial statements and financial statement
schedule are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.  An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Stanley
Furniture Company, Inc. as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for each of the three
years in the period ended December 31, 1995 in conformity with
generally accepted accounting principles.  In addition, in our
opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as
a whole, presents fairly, in all material respects, the information
required to be included therein.

As discussed in Note 7 of the Notes to Financial Statements,
effective as of the beginning of 1993, the Company changed its
method of accounting for postretirement benefits other than
pensions to conform with Statement of Financial Accounting
Standards No. 106.








Richmond, Virginia
January 26, 1996


                                                     F-2

<PAGE>

                                       STANLEY FURNITURE COMPANY, INC.
                                               BALANCE SHEETS
                                      (In thousands, except share data)


                                                            December 31,    

<TABLE>  
                                                        1995            1994 
 
<S>                                                  <C>             <C>
ASSETS

Current assets:
  Cash.............................................  $    298        $    301
  Accounts receivable, less allowances of 
    $1,157 and $933................................    22,732          23,760
  Inventories:
    Finished goods.................................    22,391          20,893
    Work-in-process................................     5,368           5,957
    Raw materials..................................    12,408          13,055


                                                       40,167          39,905

  Prepaid expenses and other 
    current assets.................................       435           1,446


  Deferred income taxes............................     2,420           2,003
    Total current assets...........................    66,052          67,415

Property, plant and equipment, at cost.............    78,399          64,827
  Less accumulated depreciation....................    24,168          20,049
                                                       54,231          44,778
Goodwill, less accumulated amortization
  of $2,352 and $2,016.............................    11,088          11,424
Other assets.......................................     3,180             902
                                                     $134,551        $124,519

LIABILITIES 

Current liabilities:
  Current maturities of long-term debt.............  $    650
  Accounts payable.................................    13,637        $ 14,659
  Accrued salaries, wages and benefits.............     6,619           7,119
  Other accrued expenses...........................     2,724           2,725
    Total current liabilities......................    23,630          24,503



Long-term debt, exclusive of current maturities....    40,417          33,395
Deferred income taxes..............................    12,180          11,541
Other long-term liabilities........................     3,585           4,250
  Total liabilities................................    79,812          73,689

STOCKHOLDERS' EQUITY

Common stock, $.02 par value, 10,000,000 
  shares authorized, 4,726,578 and 
  4,726,550 shares issued and outstanding..........        94              94
Capital in excess of par value.....................    64,547          64,527
Deficit............................................    (9,902)       (13,791)
  Total stockholders' equity.......................    54,739          50,830
                                                     $134,551        $124,519
</TABLE>


                                 The accompanying notes are an integral part
                                        of the financial statements.

                                                     F-3

<PAGE>
                                       STANLEY FURNITURE COMPANY, INC.
                                            STATEMENTS OF INCOME
                                    (In thousands, except per share data)

<TABLE>
                                              For the Years Ended
                                                  December 31,          
                                            1995       1994      1993

<S>                                       <C>        <C>       <C>
Net sales...........................      $174,179   $184,342  $167,091
Cost of sales:
  From products sold................       137,621    148,453   134,972
  Business interruption insurance...                             (5,036)    
  
                                           137,621    148,453   129,936

    Gross profit....................        36,558     35,889    37,155

Selling, general and administrative
  expenses..........................        26,454     26,483    25,976
Unusual items, net..................          (136)                     

  Operating income .................        10,240      9,406    11,179

Gain on insurance settlement........                   (2,379)   (2,186)
Other expense, net..................           433        444     1,346 
Interest expense....................         3,534      2,969     3,048

  Income from continuing operations 
    before income taxes.............         6,273      8,372     8,971

Income taxes........................         2,384      3,256     3,691

Income from continuing operations...         3,889      5,116     5,280  

Discontinued operations, including
  provision for operating losses
  of $1,721, net of income taxes....                   (2,758)          
 
    Net income .....................      $  3,889   $  2,358  $  5,280

Earnings (loss) per common share:
  Continuing operations.............      $    .82   $   1.08  $   1.39
  Discontinued operations...........                     (.58)          

    Net income......................      $    .82   $    .50  $   1.39

Weighted average number of shares...         4,727      4,725     3,792     

</TABLE>







                                The accompanying notes are an integral part 
                                        of the financial statements. 

                                                     F-4

<PAGE>

                                      STANLEY FURNITURE COMPANY, INC.
                                STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
          For each of the three years in the period ended December 31, 1995
                                               (In thousands)
<TABLE>

                                                         Adjust-
                                             Capital     ment for  
                                               in        Minimum
                            Common Stock    Excess of    Pension
                          Shares    Amount  Par Value   Liability  Deficit

<S>                       <C>        <C>     <C>        <C>        <C>
Balance at December 31,
  1992.................   2,997      $60     $51,328    $ -0-      $(21,429)

Public offering........   1,725       34      13,053

Adjustment for minimum
  pension liability....                                  (1,122)

Net income.............                                               5,280

  Balance at December 31,
    1993...............   4,722       94      64,381     (1,122)    (16,149)

Exercise of stock
  options..............       5                   66

Adjustment for minimum
  pension liability....                                   1,122

Compensation expense
  related to executive
  loan plan............                           80

Net income.............                                               2,358

  Balance at December 31,
    1994...............   4,727      94       64,527      -0-       (13,791)

Compensation expense 
  related to executive
  loan plan, net.......                           20

Net income.............                                               3,889 

  Balance at December 31,
    1995...............   4,727     $94      $64,547    $ -0-      $ (9,902)

</TABLE>








                                   The accompanying notes are an integral
                                      part of the financial statements.

                                                    F-5 

<PAGE>

                                       STANLEY FURNITURE COMPANY, INC.
                                          STATEMENTS OF CASH FLOWS
                                               (In thousands)

<TABLE>
                                                     For the Years Ended
                                                         December 31,       
  
       

                                                 1995       1994       1993 
<S>                                          <C>        <C>        <C>
Cash flows from operating activities:

  Cash received from customers...............$175,189   $183,458   $166,706
  Cash paid to suppliers and employees.......(164,022)  (176,194)  (179,218)
  Interest paid..............................  (3,535)    (2,464)    (3,529)
  Income taxes paid, net.....................  (1,033)    (4,463)      (321) 
  Proceeds received on insurance coverage....              4,625     23,196 

  Operating activities of discontinued
    operations...............................               (867)      (285)

    Net cash provided by operating
      activities.............................   6,599      4,095      6,549 

Cash flows from investing activities:

  Capital expenditures....................... (14,225)    (4,968)    (6,392)
  Proceeds received on insurance coverage....                         2,679 
  Purchase of other assets...................    (467)      (650)      (591)
  Proceeds from sale of assets...............      25        108         91
  Investing activities of discontinued
    operations...............................                357       ( 47)

    Net cash used by investing activities.... (14,667)    (5,153)    (4,260)

Cash flows from financing activities:

  Proceeds from issuance of common stock.....                        13,087 

  Issuance of senior notes...................  10,000    30,000
  Redemption of senior subordinated 
    debentures...............................                        (3,093)
  Repayment of term note.....................            (16,569)    (2,616)
  Repayment of revolving credit 
    facility, net............................  (2,320)   (12,685)   (10,229)
  Proceeds from insurance policy loans.......     385        345        292 

  Other, net.................................                 68       (179)

    Net cash provided (used) by financing
      activities.............................   8,065      1,159     (2,738)

Net (decrease) increase in cash..............      (3)       101       (449)
Cash at beginning of year....................     301        200        649

  Cash at end of year........................$    298   $    301   $    200

</TABLE>


                                 The accompanying notes are an integral part
                                        of the financial statements.

                                                     F-6
<PAGE>
<PAGE>
                                       STANLEY FURNITURE COMPANY, INC.
                                        NOTES TO FINANCIAL STATEMENTS


 1.  Summary of Significant Accounting Policies

Organization and Basis of Presentation
     Stanley Furniture Company, Inc. (the "Company") is a leading
designer and manufacturer of furniture exclusively targeted at the
upper-medium price range of the residential market.

     The Company operates predominantly in one business segment. 
Substantially all revenues result from the sale of home
furnishings, primarily residential furniture products. 
Substantially all of the Company's trade accounts receivable are
due from retailers in this market, which consist of a large number
of entities with a broad geographical dispersion.

Inventories
     Inventories are valued at the lower of cost or market.  Cost
for all inventories is determined using the first-in, first-out
(FIFO) method.

Property, Plant and Equipment
     Depreciation of property, plant and equipment is computed
using the straight-line method based upon the estimated useful
lives of the assets and amounted to $4.5 million, $4.0 million and
$3.7 million for 1995, 1994 and 1993, respectively.  Depreciable
lives are as follows:
                                                      Years
          Buildings................................. 40 to 50
          Machinery and equipment...................  5 to 12
          Leasehold improvements....................  3 to 20
          Furniture, fixtures and office equipment..  3 to 10

     Gains and losses related to dispositions and retirements are
included in income.  Maintenance and repairs are charged to income
as incurred; renewals and betterments are capitalized.

Capitalized Software Cost
     The Company amortizes certain purchased computer software
costs using the straight-line method over the economic lives of the
related products not to exceed five years. Unamortized cost at
December 31, 1995 and 1994 was $473,000 and $39,000, respectively.








                                                     F-7

<PAGE>      
                                 STANLEY FURNITURE COMPANY, INC.
                                  NOTES TO FINANCIAL STATEMENTS (CONTINUED)


 1.  Summary of Significant Accounting Policies (continued)

Goodwill and Long-lived Assets
     Goodwill is being amortized on a straight-line basis over 40
years.  The Company continually evaluates the existence of
impairment of long-lived assets, including goodwill, on the basis
of whether it is fully recoverable from projected, undiscounted net
cash flows.

Income Taxes
     Deferred income taxes are determined based on the difference
between the financial statement and income tax bases of assets and
liabilities using enacted tax rates in effect in the years in which
the differences are expected to reverse.  Deferred tax expense
represents the change in the deferred tax asset/liability balance. 
Income tax credits are reported as a reduction of federal income
tax expense in the year in which the credits are generated.

Fair Value of Financial Instruments
     The fair value of the Company's long-term debt is estimated
using discounted cash flow analysis based on the incremental
borrowing rates currently available to the Company for loans with
similar terms and maturities, and at December 31, 1995, the fair
value approximated the carrying amount.  The fair value of trade
receivables, trade payables and letters of credit approximate the
carrying amount because of the short maturity of these instruments.

Pension Plans
     The Company's funding policy is to contribute to all qualified
plans annually an amount equal to the normal cost and a portion of
the unfunded liability but not to exceed the maximum amount that
can be deducted for federal income tax purposes.

Earnings Per Common Share
     Earnings per common share are based upon the weighted average
number of shares outstanding.  All share and per share data have
been restated to reflect the one-for-two reverse stock split,
effective July 1993.










                                                     F-8

<PAGE>      
                                 STANLEY FURNITURE COMPANY, INC.
                                  NOTES TO FINANCIAL STATEMENTS (CONTINUED)

 1.  Summary of Significant Accounting Policies (continued)

     Supplementary earnings per common share are presented below. 
Income from continuing operations for the 1994 and 1993 periods
reflect a non-recurring gain from insurance proceeds.  The 1993
period reflects the effect of proforma adjustments for the 1993
public offering.  It is assumed that the transaction took effect at
the beginning of the year.  The 1995 and 1994 per share information
is included for comparison purposes.

                                                    1995     1994     1993 
        Continuing operations:
          Before non-recurring gain...........     $  .82   $  .77   $  .90
          Non-recurring gain on insurance.....                 .31      .29
            As reported.......................        .82     1.08     1.19
        Discontinued operations...............                (.58)         
          Net income..........................     $  .82   $  .50   $ 1.19

 2.  Property, Plant and Equipment at December 31 

                                               (in thousands)
                                                      1995       1994

            Land and buildings....................  $33,594    $17,853
            Machinery and equipment...............   43,127     41,059 
            Leasehold improvements................      153      3,986 
            Furniture, fixtures and office 
              equipment...........................    1,387      1,289
            Construction in progress..............      138        640
                                                    $78,399    $64,827

     In June 1995, the Company purchased the manufacturing
facilities at its Stanleytown, Virginia and West End, North
Carolina locations, which it previously leased.  The total purchase
price was $10.5 million for both facilities.  As a result of the
purchase, the Company also reclassified related leasehold
improvements with a net book value of $3.3 million to land and
buildings.

 3.  Long-Term Debt at December 31
                                                        (in thousands)
                                                       1995       1994

     7.28% Senior notes due March 15, 2004.........  $30,000    $30,000
     7.57% Senior note due June 30, 2005...........   10,000           
     Revolving credit facility.....................      914      3,234
     7% Convertible subordinated debentures
       due April 1, 2012...........................      153        161
         Total.....................................   41,067     33,395
     Less current maturities.......................      650           
                                                     $40,417    $33,395



                                                     F-9
<PAGE>
                                       STANLEY FURNITURE COMPANY, INC.
                                  NOTES TO FINANCIAL STATEMENTS (CONTINUED)


3.   Long-term debt at December 31 (continued)

     During August 1995, the Company amended its $25.0 million
revolving credit facility which extended its maturity date to
August 1998.  The interest rate under the facility was reduced to
prime (8.5% on December 31, 1995) or, at the Company's option,
equal to reserve adjusted LIBOR plus 1.0% per annum.  As of
December 31, 1995, approximately $21.9 million of additional
borrowings were available under the revolving credit facility.  In
June 1995, the Company issued a $10.0 million 7.57% senior note due
2005 in a private placement of debt and the proceeds were used to
purchase two plant facilities, as discussed in Note 2.  In February
1994, the Company completed the private placement of $30.0 million
of 7.28% senior notes due in 2004.  The proceeds were used to repay
a term note and a portion of the revolving credit facility.

     The Company utilizes letters of credit to collateralize
certain insurance policies and inventory purchases.  Outstanding
letters of credit at December 31, 1995 and 1994 were $2.2 million
and $1.8 million, respectively.

     The above loan agreements require the Company to maintain
certain financial covenants and prohibit the Company from paying
dividends and acquiring or retiring it's common stock.

     Aggregate maturities of long-term debt for the next five years
are as follows:  1996 - $650,000; 1997 - $878,000; 1998 - $6.0
million; 1999 - $5.1 million; 2000 - $5.2 million.

 4.  Unusual Items

     During the second quarter of 1995, the Company was released
from a lease obligation at its previously closed Waynesboro,
Virginia manufacturing facility.  Accordingly, the Company
recognized a pretax credit of $1.1 million related to the reversal
of an accrual set up in 1991 for the closing of the facility. 
Unusual items also included a pretax charge for severance resulting
from the resignation of the Company's Chief Operating Officer.










                                                    F-10

<PAGE>
                                       STANLEY FURNITURE COMPANY, INC.
                                  NOTES TO FINANCIAL STATEMENTS (CONTINUED)


 5.  Income Taxes

     The provision for income taxes on income from continuing
operations consists of (in thousands):
<TABLE>
                                               1995     1994     1993
      <S>                                     <C>      <C>      <C>
      Current:
        Federal.........................      $1,750   $2,314   $1,123 
        State...........................         412      669      245
          Total current.................       2,162    2,983    1,368
      Deferred:
        Federal.........................         156      214    1,940 
        State...........................          66       59      383
            Total deferred..............         222      273    2,323

            Income taxes................      $2,384   $3,256   $3,691
</TABLE>
     A reconciliation of the difference between the federal
statutory income tax rate and the effective income tax rate on
income from continuing operations at December 31 follows:

<TABLE>
                                               1995     1994     1993

      <S>                                      <C>      <C>      <C>
      Federal statutory rate..........         35.0%    35.0%    35.0% 
      State taxes, net of federal
        benefit.......................          5.0      5.0      4.6  
      Goodwill........................          1.9      1.4      1.3   
      Life insurance..................         (1.5)    (0.9)    (0.7)
      Tax savings from foreign sales
        corporation...................         (0.8)    (0.4)    (0.4)
      Federal tax rate change.........                            2.8
      Tax credits.....................         (0.2)    (0.8)    (1.3) 
      Other, net......................         (1.4)    (0.4)    (0.2)

        Effective income tax rate.....         38.0%    38.9%    41.1%


</TABLE>














                                                    F-11

<PAGE>
                                       STANLEY FURNITURE COMPANY, INC.
                                  NOTES TO FINANCIAL STATEMENTS (CONTINUED)


 5.  Income Taxes (continued)

     The income tax effects of temporary differences that comprise
deferred tax assets and liabilities at December 31 follow (in
thousands):
<TABLE>
                                                      1995      1994 
      <S>                                           <C>       <C>
      Current deferred tax assets (liabilities):

      Accounts receivable........................    $  379    $  360
      Inventory..................................      (432)     (439)   
      Employee benefits..........................     1,834     1,305     
      Other accrued expenses.....................       639       777     

        Net current deferred tax asset...........    $2,420    $2,003     


      Noncurrent deferred tax (assets) liabilities:

      Inventory..................................   $   500   $   966
      Property, plant and equipment..............    11,552    11,302
      Employee benefits..........................       215      (785)
      Restructuring costs........................       (95)     (183)
      Other......................................         8       241       
  

        Net noncurrent deferred tax liability....   $12,180   $11,541   

</TABLE>
      At December 31, 1994, the Company had alternative minimum tax
credit carryforwards of $519,000 which were utilized in 1995.  The
Company's federal income tax returns have been examined and closed
by the Internal Revenue Service through 1992.

 6.  Stock Options and Loan Plan

     In December 1994, the Company adopted the Stanley Furniture
Company, Inc. 1994 Stock Option Plan (the "1994 Plan").  The 1994
Plan and the Company's 1992 Stock Option Plan provide for the
granting of stock options for up to an aggregate of 700,000 shares
of common stock to certain key employees.  Options granted may be
either nonqualified or qualified stock options and the exercise
price may not be less than 100% of the fair market value of the
Company's common stock on the date the options are granted. 
Granted options vest 20% annually.







                                                    F-12
<PAGE>

                                       STANLEY FURNITURE COMPANY, INC.
                                  NOTES TO FINANCIAL STATEMENTS (CONTINUED)


 6.  Stock Options and Loan Plan (continued)

     At December 31, 1995 and 1994, options to purchase 229,023 and
182,297 shares, respectively, were exercisable and 16,935 were
available for grant at December 31, 1995.  Activity for the two
years ended December 31, 1995 follows:
                                            Number      Option price
                                          of shares       per share   

      Outstanding at December 31, 1993...  668,317    $ 8.50 to $12.86
      Exercised..........................   (5,112)     8.50 to  12.86
      Cancelled.......................... (602,834)    12.86
      Granted............................  609,629     10.00
        Outstanding at December 31, 1994.  670,000      8.50 to  10.00

      Lapsed.............................   (5,327)     8.50 to  10.00
      Cancelled.......................... (156,720)     8.50 to  10.00
      Granted............................  170,000      8.75

        Outstanding at December 31, 1995.  677,953    $ 8.50 to $10.00   

     During 1994, the Company established the Executive Loan Plan. 
Under the Executive Loan Plan, the Company has entered into a
contractual agreement to issue 50,000 shares of common stock to the
Chief Executive Officer at $10 per share (the market price per
share on the date of the agreement) in exchange for a non-recourse
7.6% note receivable payable in five annual installments with the
balance due January 2, 1999.  The Company has also agreed to
forgive interest plus one half of the contractual purchase price
over the next five years, if the Chief Executive Officer remains
employed by the Company.  The contractual agreement under the
Executive Loan Plan with the former Chief Operating Officer was
cancelled in July 1995.  Accordingly, net compensation expense
including interest and income taxes was $98,000 and $160,000 for
1995 and 1994, respectively.

 7.  Employee Benefit Plans

Pension Plans
     The Company maintains a non-contributory defined benefit
pension plan (the "Stanley Retirement Plan"), covering
substantially all employees.  The benefits provided by the plan are
based on an employee's years of service and average compensation. 
Plan assets are invested principally in fixed income and equity
instruments.  The Company also maintains a supplemental retirement
plan covering certain key employees (the "Supplemental Plan").




                                                    F-13

<PAGE>
                                       STANLEY FURNITURE COMPANY, INC.
                                  NOTES TO FINANCIAL STATEMENTS (CONTINUED)


 7.  Employee Benefit Plans (continued)

A Supplemental Plan participant who retires under any provision of
the Stanley Retirement Plan will receive a supplemental retirement
allowance equal to the excess, if any, of an eligible employee's
benefit under the Stanley Retirement Plan in effect on January 1,
1987, over his benefit actually received at retirement.  The
Supplemental Plan is unfunded and benefit payments are made
directly from Company assets.     

     Effective December 31, 1995, the Company amended both the
Stanley Retirement Plan and the Supplemental Plan to cease future
benefit accruals under the plans.  Accordingly, the Company
recognized a pretax loss on curtailment of $31,000.  The following
table sets forth the plans' financial status at December 31 (in
thousands):
<TABLE>
                                           1995                   1994      

                                     Stanley    Supple-    Stanley    Supple-
                                   Retirement   mental    Retirement  mental
                                      Plan       Plan       Plan       Plan 

 <S>                              <C>          <C>       <C>         <C>
 Accumulated benefit obligation:
   Vested........................ $(14,641)    $(897)    $(10,603)   $  (483)
   Nonvested.....................   (1,127)      (97)        (737)       (70)

 Accumulated benefit obligation.. $(15,768)    $(994)    $(11,340)   $  (553)

 
 Projected benefit obligation.... $(15,768)    $(994)    $(13,209)   $(1,016)
 Plan assets at fair value.......   15,842                12,012            
 Plan assets more than 
   (less than) projected benefit
   obligation....................       74      (994)      (1,197)    (1,016)
 Unrecognized (gain) loss........    3,206                  2,400       (284)
 Prior service cost..............                           (112)       659 

   Prepaid (accrued) pension
     costs....................... $  3,280     $(994)    $  1,091    $  (641)

</TABLE>
     Components of net periodic pension cost follow (in thousands):

                                             1995       1994       1993

      Service cost....................      $  774     $  904     $  799  
      Interest cost...................       1,256      1,315      1,333  
      Actual return on assets.........      (1,320)      (109)      (382) 
      Net amortization and deferral...         965       (589)      (444)
      Loss on curtailment.............          31                      
                                            $1,706     $1,521     $1,306




                                                    F-14

<PAGE>
                                       STANLEY FURNITURE COMPANY, INC.
                                  NOTES TO FINANCIAL STATEMENTS (CONTINUED)


 7.  Employee Benefit Plans (continued)

     The assumptions used as of December 31 to determine the plans'
funded status, pension cost and loss on curtailment were:

                                            1995       1994       1993   
      Discount rate for funded status.....  7.67%      9.00%      7.75%
      Discount rate for pension cost......  9.00%      7.75%      8.25%
      Salary progression..................  5.00%      5.00%      4.00%
      Return on assets....................  7.75%      8.00%      8.25%

     A reduction in the discount rate of 0.25% would create an
additional minimum pension liability of $3.9 million and would
result in a charge to stockholders' equity of $2.3 million, net of
deferred taxes.

401(k) Plan
     The Company also maintains the Stanley 401(k) Retirement
Savings Plan ("401(k) Plan") for all of its eligible employees. 
Through December 31, 1995, the plan allowed for contributions by
employees up to 20% of their salaries and also permitted discre-
tionary contributions by the Company, although no discretionary
contributions have been made to the plan by the Company.  In
connection with the curtailment of benefits in the Stanley
Retirement Plan and Supplemental Plan, the Company amended its
401(k) Plan and expects to begin making discretionary matching and
profit sharing contributions in 1996.

Postretirement Benefits Other Than Pensions
     The Company provides certain health care benefits to eligible
retired employees between the ages of 55 and 65 and provides
certain life insurance benefits to eligible retired employees from
age 55 until death.  Substantially all of the Company's employees
are eligible for these benefits after attaining specified years of
service and age provisions.  Employees who elect benefits at
retirement contribute to the cost of coverage.  The plan is
unfunded.  Prior to 1993, the Company expensed the cost of these
benefits when paid.  Effective January 1, 1993, the Company adopted
SFAS No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions."  Accordingly, the expected cost of retiree
benefits, other than pensions, are charged to expense during the
years the employees render service.







                                                    F-15

<PAGE>
                                       STANLEY FURNITURE COMPANY, INC.
                                  NOTES TO FINANCIAL STATEMENTS (CONTINUED)


 7. Employee Benefit Plans (continued)

     The Company elected to recognize the January 1, 1993,
obligation of $8.1 million through charges to earnings over 20
years.  On March 3, 1993, the Company also adopted plan design
changes which reduced the January 1, 1993, obligation to $2.9
million.  The following table sets forth the plan's financial
status at December 31 (in thousands):
          
                                                      1995         1994 

      Retirees....................................  $(4,875)     $(4,769)
      Fully eligible active plan participants.....     (232)        (333)
      Other active plan participants..............     (714)        (634)
        Total accumulated postretirement
          benefit obligation......................   (5,821)      (5,736)
      Unrecognized net loss.......................    2,752        2,927
      Unrecognized transition obligation..........    2,272        2,406
        Net accrued postretirement benefit cost...   $ (797)     $  (403)

     Components of net periodic postretirement benefit cost were
(in thousands):
                                                    1995       1994      1993

      Service cost................................ $   93     $  74      $ 72
      Interest cost...............................    510       242       239
      Amortization of transition obligation,
        after reduction for plan design changes...    134       359       146
      Amortization and deferral...................    182        21         

                                                   $  919     $ 696      $457

     The weighted average discount rates used in determining the
actuarial present value of the projected benefit obligation were
7.67%, 9.00% and 7.75% for 1995, 1994 and 1993, respectively.  The
rate of increase in future health care benefit cost used in
determining the obligation for 1995 was 12% gradually decreasing to
6% beginning in 2002; for 1994 was 15% gradually decreasing to 7%
beginning in 2005; and, for 1993 was 17% gradually decreasing to
5.75% beginning in 2007.

     Increasing the assumed health care cost trend rate by one
percentage point in each future year would increase the accumulated
postretirement benefit obligation at December 31, 1995 by $307,000
and the aggregate of the service cost and interest cost components
of net periodic postretirement benefit cost for 1995 by $31,000.






                                                    F-16

<PAGE>
                                       STANLEY FURNITURE COMPANY, INC.
                                  NOTES TO FINANCIAL STATEMENTS (CONTINUED)


 7.  Employee Benefit Plans (continued)

Deferred Compensation
     The Company has a deferred compensation plan which permits
certain management employees to defer portions of their
compensation.  The employees earn a fixed rate of interest on the
deferred amounts.  The plan is funded through the purchase of whole
life insurance contracts on the employees, and the Company borrows
against the cash surrender value of these policies to fund any
benefit payments.  The accrued liabilities relating to this plan of
$1.4 million and $1.3 million at December 31, 1995 and 1994,
respectively, are included in accrued salaries, wages and benefits
and other long-term liabilities.  The cash surrender value, net of
policy loans, is included in other assets.

 8.  Insurance Claim Accounting

     In February 1993, a fire at the Stanleytown, Virginia facility
damaged approximately 12% of the Company's total manufacturing
facilities.  The Company's insurance coverage provided for the 
complete  replacement of  the  damaged  building (which was
leased), equipment and inventory, and reimbursement for business
interruption losses.

     The Company recorded business interruption insurance in 1993
based on estimated profits attributed to lost sales since the fire. 
The amount recognized represents the estimated gross profit that
would have been realized on lost sales.  Accordingly, $5.0 million
of estimated income from business interruption insurance is
included in gross profit in 1993.  Also, a $2.2 million pretax gain
was recorded in 1993 since proceeds from insurance exceeded the 
book value of leasehold improvements and equipment destroyed in the
fire.  In 1994, the Company reached a final insurance settlement
and recorded a gain of $2.4 million.

 9.  Discontinued Operations

     Beginning in 1991, Norman's was reflected as a discontinued
operation.  In 1994, the Company ceased operations at Norman's and
liquidated the division resulting in a $2.8 million ($4.5 million
pretax) additional loss provision.  Net sales applicable to
Norman's were $4.1 million and $12.1 million for 1994 and 1993,
respectively.





                                                    F-17

<PAGE>
                                       STANLEY FURNITURE COMPANY, INC.
                                  NOTES TO FINANCIAL STATEMENTS (CONTINUED)

10.  Leases

     The Company leased a substantial portion of its facilities
under operating leases through June 1995, at which time the Company
purchased these facilities, as described in Note 2.  Rental
expenses charged to operations were $1.4 million, $1.9 million and
$2.0 million in 1995, 1994 and 1993, respectively.  The Company
continues to lease two showrooms and certain other equipment. 
Future minimum lease payments, net of subleases, are approximately
as follows:  1996 - $769,000; 1997 - $801,000; 1998 -$534,000; 1999
-$354,000; and thereafter - $12,000.

11.  Related Party Transactions

     Approximately 58% of the Company's common stock is owned by
the ML-Lee Acquisition Fund, L.P. (the "Majority Stockholder") and
certain affiliates of the Thomas H. Lee Company.  The Company has
entered into a management agreement with an affiliate of its
Majority Stockholder.  Fees paid pursuant to this agreement
amounted to $250,000 annually in 1995, 1994 and 1993.

12.  Supplemental Cash Flow Information
<TABLE>
                                          1995      1994      1993
    <S>                                 <C>      <C>        <C>

    Net income......................... $ 3,889   $ 2,358   $ 5,280  
    
    Adjustments to reconcile net income
      to net cash provided by operating 
      activities:
        Depreciation and amortization..   4,919     4,421     4,808
        Other, net.....................     118       249       295
        Loss on disposal of fabric
          division.....................             2,758                   
  
       Changes in assets and 
          liabilities:
          Accounts receivable..........   1,028    (1,011)     (289)
          Inventories..................    (262)   (2,221)   (4,147)
          Prepaid expenses and other
            current assets.............  (1,030)     (892)      374  
          Insurance claim receivable...             2,029    (4,152)
          Operating assets of
            discontinued operations....              (867)     (285)
          Accounts payable.............  (1,022)     (922)    2,082 
          Accrued salaries, wages and 
            benefits...................    (500)      585      (589)
          Other accrued expenses.......     137      (632)      (34)
          Deferred income taxes........     222       189     2,038
        Other assets...................      25        22        57 
        Other long-term liabilities....    (925)   (1,971)    1,111   
   
          Net cash provided by 
            operating activities....... $ 6,599   $ 4,095   $ 6,549 

</TABLE>
                                                    F-18

<PAGE>
                                       STANLEY FURNITURE COMPANY, INC.
                                  NOTES TO FINANCIAL STATEMENTS (CONTINUED)


13.  Quarterly Results of Operations (Unaudited)

     The Company's unaudited quarterly results of operations were
as follows (in thousands, except per share data):

<TABLE>
     Fiscal 1995 Quarters
                                First     Second    Third     Fourth

     <S>                       <C>       <C>       <C>       <C>
     Net sales..............   $44,989   $38,163   $44,706   $46,321

     Gross profit...........     9,101     8,050     9,095    10,312 

     Net income.............       794       719       998     1,378      

     Net income 
       per share............       .17       .15       .21       .29 


     Fiscal 1994 Quarters
 
     Net sales..............   $44,737   $44,101   $43,845   $51,659

     Gross profit...........     8,677     8,544     8,865     9,803 

     Income from continuing
        operations..........     2,386 (a)   957       863       910

     Net income (loss)......      (372)(b)   957       863       910

     Income from continuing
       operations per share.       .49 (a)   .20       .18       .19

     Net income (loss)
       per share............      (.08)(b)   .20       .18       .19



(a) In the first quarter of 1994, the Company reached a final insurance
settlement
and recorded a gain of $1.5 million ($2.4 million pretax) or 31 cents per
share.

(b) In the first quarter of 1994, the Company decided to cease operations at
Norman's and recorded a loss from discontinued operations of $2.8 million
($4.5
million pretax) or 58 cents per share.






                                                                      




                                                    F-19

<PAGE>

                                     STANLEY FURNITURE COMPANY, INC.
                           SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
          For each of the Three Years in the Period Ended December 31, 1995 
    
                                         (In thousands)



</TABLE>
<TABLE>
                                                                            
 
         Column A        Column B     Column C     Column D     Column E    
 
                                      Charged
                         Balance at   (Credited)                 Balance
                         Beginning    to Costs &                at End of
       Descriptions      of Period    Expenses    Deductions     Period     
  

<S>                         <C>          <C>         <C>         <C>
1995
   Doubtful receivables...  $528         $302        $230(a)     $  600
   Discounts, returns,
     and allowances.......   405          152(b)                    557
                            $933         $454        $230        $1,157  

1994
   Doubtful receivables...  $472         $195        $139(a)       $528
   Discounts, returns,
     and allowances.......   355           50 (b)                   405
                            $827         $245        $139          $933


1993
   Doubtful receivables...  $400         $526        $454(a)       $472
   Discounts, returns,
     and allowances.......   463         (108)(b)                   355
                            $863         $418        $454          $827
</TABLE>
               
(a)  Uncollectible receivables written off, net of recoveries.
(b)  Represents net increase (decrease) in required reserve.
























                                                     S-1