# FORM 10-Q

SECURITIES AND EXCHANGE
COMMISSION

Washington, DC 20549

(Mark One)

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

For the quarterly period ended July 30, 2005

OR

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

For the transition period from ___________________ to _____________________

Commission file number   00019774

United Retail Group, Inc. (Exact name of registrant as specified in its charter)

| |                                                               |                                     
| | ------------------------------------------------------------- | ------------------------------------
| | Delaware                                                      | 51-0303670                          
| | (State or other jurisdictionof incorporation or organization) | (I.R.S. employer identification no.)

365 West Passaic Street, Rochelle Park, New Jersey 07662(Address of principal executive offices) (Zip Code)

(201) 845-0880Registrant's telephone number, including area code

_______________________________________________________________

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

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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 (the Exchange Act) during the preceding 12
months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

YES ___X___     NO _______

Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). (The
registrant will become an accelerated filer in fiscal 2006.)

YES _______     NO ___X____

Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

YES _______     NO ___X____

# APPLICABLE ONLY TO
ISSUERS INVOLVED IN BANKRUPTCYPROCEEDINGS DURING THE
PRECEDING FIVE YEARS:

Indicate by check mark whether the
registrant has filed all documents and reports required to be filed by Section 12, 13 or
15(d) of the Exchange Act subsequent to the distribution of securities under a plan
confirmed by a court.

YES _______     NO _______

# APPLICABLE ONLY TO
CORPORATE ISSUERS:

Indicate the number of shares
outstanding of each of the registrants classes of common stock, as of the latest
practicable date.

As of July 30, 2005, there were
outstanding 12,977,004 units, each consisting of one share of the registrants common
stock, $.001 par value per share, and one attached stock purchase right. The units are
referred to herein as shares.

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

UNITED RETAIL GROUP, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(dollars in thousands)

|                                                                                       | ASSETS               | July 30,2005(Unaudited) | January 29,2005 | July 31,2004(Unaudited)
|-------------------------------------------------------------------------------------- | -------------------- | ----------------------- | --------------- | -----------------------
|Current Assets:                                                                        |                      |                         |                 |                        
|Cash and cash equivalents                                                              |                      | $33,086                 | $12,596         | $18,366                
|Accounts receivable                                                                    |                      | 1,847                   | 1,504           | 1,199                  
|Inventory                                                                              |                      | 42,298                  | 49,503          | 48,549                 
|Prepaid rents                                                                          |                      | 4,619                   | 4,599           | 4,704                  
|Restricted cash                                                                        |                      | 320                     | 742             | -                      
|Other prepaid expenses                                                                 |                      | 1,794                   | 1,712           | 1,900                  
|Total current assets                                                                   |                      | 83,964                  | 70,656          | 74,718                 
|                                                                                       |                      |                         |                 |                        
|Property and equipment, net                                                            |                      | 72,125                  | 79,026          | 85,033                 
|Deferred compensation plan assets                                                      |                      | 3,957                   | 3,473           | 3,962                  
|Deferred charges and other intangible assets, net of                                   |                      |                         |                 |                        
|accumulated amortization of $485, $453 and $421                                        |                      | 587                     | 741             | 462                    
|Other assets                                                                           |                      | 1,294                   | 1,312           | 1,498                  
|Total Assets                                                                           |                      | $161,927                | $155,208        | $165,673               
|                                                                                       |                      |                         |                
|                                                                                       | LIABILITIES          |                         |                 |                        
|Current liabilities:                                                                   |                      |                         |                 |                        
|Current portion of distribution center financing                                       |                      | $723                    | $693            | $664                   
|Current portion of capital leases                                                      |                      | 1,810                   | 1,873           | 2,018                  
|Current portion of revolver                                                            |                      | -                       | 100             | -                      
|Accounts payable and other                                                             |                      | 19,523                  | 18,336          | 22,708                 
|Disbursement accounts                                                                  |                      | 9,423                   | 9,066           | 8,992                  
|Accrued expenses                                                                       |                      | 26,584                  | 24,252          | 21,143                 
|Total current liabilities                                                              |                      | 58,063                  | 54,320          | 55,525                 
|                                                                                       |                      |                         |                 |                        
|Long-term distribution center financing                                                |                      | 2,263                   | 2,633           | 2,987                  
|Long-term capital leases                                                               |                      | 803                     | 1,735           | 2,661                  
|Deferred lease incentives                                                              |                      | 11,733                  | 12,908          | 13,669                 
|Deferred compensation plan liabilities                                                 |                      | 3,957                   | 4,853           | 4,519                  
|Other long-term liabilities                                                            |                      | 7,826                   | 8,710           | 10,708                 
|Total liabilities                                                                      |                      | 84,645                  | 85,159          | 90,069                 
|                                                                                       | STOCKHOLDERS' EQUITY |                         |                 |                        
|Preferred stock, $.001 par value; authorized                                           |                      |                         |                 |                        
|1,000,000 shares; none issued                                                          |                      |                         |                 |                        
|Series A junior participating preferred stock                                          |                      |                         |                 |                        
|$.001 par value; authorized 150,000 shares; none issued                                |                      |                         |                 |                        
|Common stock, $.001 par value; authorized                                              |                      |                         |                
|30,000,000 shares; issued 14,287,900 shares   14,249,800 shares, and 14,248,200 shares |                      | 14                      | 14              | 14                     
|Additional paid-in capital                                                             |                      | 85,027                  | 84,856          | 84,853                 
|Deferred compensation obligation (279,870 shares)                                      |                      | 1,353                   | -               | -                      
|Accumulated deficit                                                                    |                      | (1,436)                 | (6,494)         | (936)                  
|Treasury stock (1,310,896 shares, 1,590,766 shares      1,590,766 shares) at cost      |                      | (7,676)                 | (8,327)         | (8,327)                
|Total stockholders' equity                                                             |                      | 77,282                  | 70,049          | 75,604                 
|Total liabilities and stockholders' equity                                             |                      | $161,927                | $155,208        | $165,673               

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

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UNITED RETAIL GROUP, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(dollars in thousands, except per share amounts)(Unaudited)

|                                          | Thirteen Weeks Ended | Twenty-Six Weeks Ended |            |           
|----------------------------------------- | -------------------- | ---------------------- | ---------- | ----------
|
|Net sales                                 | $114,702             | $101,269               | $221,233   | $198,788  
|                                          |                      |                        |            |           
|Cost of goods sold, including             |                      |                        |            |           
|buying and occupancy costs                | 83,999               | 80,519                 | 164,839    | 157,246   
|                                          |                      |                        |            |           
|Gross profit                              | 30,703               | 20,750                 | 56,394     | 41,542    
|                                          |                      |                        |            |           
|General, administrative and               |                      |                        |            |           
|store operating expenses                  | 26,069               | 23,496                 | 50,896     | 47,386    
|                                          |                      |                        |            |           
|Operating income (loss)                   | 4,634                | (2,746)                | 5,498      | (5,844)   
|                                          |                      |                        |            |           
|Interest income                           | 144                  | 1,193                  | 199        | 1,207     
|Interest expense                          | (127)                | (190)                  | (346)      | (420)     
|                                          |                      |                        |            |           
|Income (loss) before income taxes         | 4,651                | (1,743)                | 5,351      | (5,057)   
|                                          |                      |                        |            |           
|Provision for (benefit from) income taxes | 597                  | (184)                  | 293        | (135)     
|                                          |                      |                        |            |           
|Net income (loss)                         | $4,054               | ($1,559)               | $5,058     | ($4,922)  
|                                          |                      |                        |            |           
|Net income (loss) per share               |                      |                        |            |           
|Basic                                     | $0.32                | ($0.12)                | $0.40      | ($0.38)   
|Diluted                                   | $0.31                | ($0.12)                | $0.39      | ($0.38)   
|                                          |                      |                        |            |           
|Weighted average number of                |                      |                        |            |           
|shares outstanding                        |                      |                        |            |           
|Basic                                     | 12,784,318           | 12,742,459             | 12,723,254 | 12,839,882
|Common stock equivalents                  |                      |                        |            |           
|(stock options)                           | 285,332              | -                      | 236,261    | 0         
|Diluted                                   | 13,069,650           | 12,742,459             | 12,959,515 | 12,839,882

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

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UNITED RETAIL GROUP, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(dollars in thousands)(Unaudited)

|                                                        | Twenty-Six Weeks Ended |         
|------------------------------------------------------- | ---------------------- | --------
|
|Cash Flows From Operating Activities:                   |                        |         
|Net income (loss)                                       | $5,058                 | ($4,922)
|Adjustments to reconcile net income (loss) to           |                        |         
|net cash provided by operating activities:              |                        |         
|Depreciation and amortization of property and equipment | 6,771                  | 7,253   
|Amortization of deferred charges and other              |                        |         
|intangible assets                                       | 48                     | 251     
|Loss on disposal of assets                              | 177                    | 41      
|Deferred compensation                                   | 624                    | (94)    
|Deferred lease assumption revenue amortization          | -                      | (2)     
|Internal Revenue Service settlement related to warrants | -                      | 1,157   
|Changes in operating assets and liabilities:            |                        |         
|Accounts receivable                                     | (343)                  | 590     
|Income taxes                                            | 464                    | 32      
|Inventory                                               | 7,205                  | 505     
|Accounts payable and accrued expenses                   | 3,402                  | 1,973   
|Prepaid expenses                                        | 320                    | 266     
|Deferred lease incentives                               | (1,175)                | (1,324) 
|Other assets and liabilities                            | (892)                  | 521     
|Net Cash Provided by Operating Activities               | 21,659                 | 6,247   
|                                                        |                        |         
|Investing Activities:                                   |                        |         
|Capital expenditures                                    | (262)                  | (624)   
|Deferred payment for property and equipment             | -                      | 127     
|                                                        |                        |         
|Net Cash Used in Investing Activities                   | (262)                  | (497)   
|                                                        |                        |         
|Financing Activities:                                   |                        |         
|Repayments of long-term debt                            | (339)                  | (310)   
|Payments on capital lease obligations                   | (996)                  | (1,053) 
|Increase (decrease) in disbursement accounts            | 357                    | (442)   
|Repayments under line-of-credit agreement               | (100)                  | -       
|Proceeds from exercise of stock options                 | 171                    | -       
|                                                        |                        |         
|Net Cash Used in Financing Activities                   | (907)                  | (1,805) 
|                                                        |                        |         
|Net increase in cash and cash equivalents               | 20,490                 | 3,945   
|Cash and cash equivalents, beginning of period          | 12,596                 | 14,421  
|Cash and cash equivalents, end of period                | $33,086                | $18,366 

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

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UNITED RETAIL GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

# 1.   Basis of Presentation

The consolidated financial statements
include the accounts of United Retail Group, Inc. and its subsidiaries (the
Company). All significant intercompany balances and transactions have been
eliminated.

The consolidated financial statements
as of and for the thirteen and twenty-six weeks ended July 30, 2005 and July 31, 2004 are
unaudited and are presented pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, the consolidated financial statements are condensed and
do not include all disclosures required by generally accepted accounting principles for a
full set of financial statements and should be read in conjunction with the financial
statement disclosures contained in the Companys 2004 Annual Report and 2004 Form
10-K. In the opinion of management, the accompanying condensed consolidated financial
statements reflect all adjustments necessary to present fairly the financial position and
results of operations and cash flows for the interim periods, but are not necessarily
indicative of the results of operations for a full fiscal year.

Beginning in fiscal 2005, the cost of
shipping and handling internet orders has been reclassified from general, administrative
and store operating expenses to cost of goods sold. This change was made to provide more
clarity for trends in general, administrative and store operating expenses. Prior periods
have been reclassified to conform with the current presentation.

# 2.   Net Earnings / (Loss)
Per Share

Basic per share data has been
computed based on the weighted average number of shares of common stock outstanding.
Diluted per share data includes the weighted average effect of dilutive options on the
weighted average shares outstanding. The computation of earnings per diluted share
excludes options whose exercise prices were greater than the average market price of the
common shares for the thirteen and twenty-six weeks ended July 30, 2005. The computation
of (loss) per share for the thirteen and twenty-six weeks ended July 31, 2004 excludes
options to purchase shares of common stock as inclusion of such shares would be
anti-dilutive.

Options to purchase shares of common
stock which were not included in the computation of diluted per share data were as
follows:

|                                 | Thirteen Weeks Ended | Twenty-Six Weeks Ended |              |             
|-------------------------------- | -------------------- | ---------------------- | ------------ | ------------
|
|Options                          | 765,475              | 1,927,772              | 1,068,475    | 1,927,772   
|Range of option prices per share | $7.16-$15.13         | $1.80-$15.13           | $6.31-$15.13 | $1.80-$15.13

The Company uses the intrinsic value
method to account for stock-based compensation in accordance with Accounting Principles
Board Opinion No. 25, Accounting For Stock Issued To Employees (Opinion No.
25) and has adopted the disclosure provisions of Statement of Financial Accounting
Standards (SFAS) No. 123, Accounting For Stock-Based Compensation. Under
Opinion No. 25, compensation expense, if any, is measured as the excess of the market
price of the stock over the exercise price on the measurement date. In accordance with
Opinion No. 25, compensation expense was recorded ratably over the five-year vesting
period of the options.

The following table illustrates the
effect on net earnings (loss) and earnings (loss) per share if the Company had applied the
fair value recognition provisions of SFAS No. 123, Accounting For Stock-Based
Compensation to stock-based employee compensation:

|                                   | Thirteen Weeks Ended | Twenty-Six Weeks Ended |        |         
|---------------------------------- | -------------------- | ---------------------- | ------ | --------
|
|Reported net earnings (loss)       | $4,054               | ($1,559)               | $5,058 | ($4,992)
|Deduct: Total stock-based          |                      |                        |        |         
|employee compensation              |                      |                        |        |         
|expense determined under fair      |                      |                        |        |         
|value based method for all         |                      |                        |        |         
|awards, net of related tax effects | (103)                | (42)                   | (209)  | (117)   
|                                   |                      |                        |        |         
|Pro forma net earnings (loss)      | $3,951               | ($1,601)               | $4,849 | ($5,109)
|                                   |                      |                        |        |         
|Earnings (loss) per share:         |                      |                        |        |         
|Basic - as reported                | $0.32                | ($0.12)                | $0.40  | ($0.38) 
|Basic - pro forma                  | $0.31                | ($0.13)                | $0.38  | ($0.40) 
|                                   |                      |                        |       
|Diluted - as reported              | $0.31                | ($0.12)                | $0.39  | ($0.38) 
|Diluted - pro forma                | $0.30                | ($0.13)                | $0.37  | ($0.40) 

# 3.   Financing Arrangements

In 1994, the Company executed a
fifteen-year $8.0 million loan bearing interest at 8.64%. Interest and principal are
payable in equal monthly installments beginning May 1994. The loan is collateralized by a
mortgage on the national distribution center owned by the Company in Troy, Ohio.

The Company and certain of its
subsidiaries, (collectively, the Companies) are parties to a Financing
Agreement, dated August 15, 1997 (the Financing Agreement), with The CIT
Group/Business Credit, Inc.(CIT). The Financing Agreement was amended in
December 2003 to increase the revolving line of credit from $40 million to $50 million and
to extend the maturity date from August 15, 2005 to August 15, 2008. The revolving line of
credit is used by the Companies to support trade letters of credit and standby letters of
credit and to finance loans which could be used for working capital and general corporate
purposes.

The Companies are required to
maintain unused at all times combined asset availability of at least $5 million. Except
for the maintenance of a minimum availability of $5 million and a limit on capital
expenditures, the Financing Agreement does not contain any significant financial
covenants.

The Financing Agreement also includes
certain restrictive covenants that impose limitations (subject to certain exceptions) on
the Companies with respect to, among other things, making certain investments, declaring
or paying dividends, making loans, engaging in certain transactions with affiliates, or
consolidating, merging or making acquisitions outside the ordinary course of business.

In the event a loan is made to one of
the Companies, interest is payable monthly based on a 360-day year at the Chase Manhattan
Bank prime rate plus incremental percentages ranging from 0.00% to 0.75% or the LIBOR rate
plus incremental percentages ranging from 1.75% to 2.50% as determined by the average
excess availability each month per the Financing Agreement on a per annum basis. The
borrower can select either the prime rate or the LIBOR rate as the basis for determining
the interest rate. Payments of revolving loans are not required until termination of the
agreement unless either 1) the outstanding balance of revolving loans and outstanding
letters of credit exceeds the availability under the agreement, in which case the excess
would be payable upon demand from CIT or 2) the Company is in default under the Financing
Agreement.

The line of credit is collateralized
by a security interest in i) inventory and its proceeds ii) bank credit card receivables
and iii) the balance on deposit from time to time in a bank account that has been pledged
to the lenders.

At July 30, 2005, the borrowing
capacity of the Companies under the Financing Agreement with CIT, after satisfying the $5
million minimum availability requirement, was $4.2 million, trade letters of credit for
the account of the Companies were outstanding in the amount of $23.9 million, standby
letters of credit were outstanding in the amount of $6.1 million and no loan from CIT was
outstanding. The Companys balance sheet cash and cash equivalents of $33.1 million
were unrestricted.

In January 2002, the Company executed
a five-year $8.2 million sale and lease back agreement for certain fixtures in new and
remodeled stores. The lease bears an interest rate of 7.0% per annum. The Company was
required to pay sales tax as part of the agreement. The agreement provides for equal
monthly rent payments beginning February 2002 and gives the Company the option of buying
back the fixtures at the end of the term for a nominal price.

In January 2002 through January 2003,
the Company executed a series of three-year capital lease agreements for call center
systems at the Companys national distribution center in Troy, Ohio, bearing interest
at rates between 6.09% and 6.64% per annum aggregating approximately $1.4 million. The
Company has exercised its option of buying the systems that have reached the end of their
term for a nominal price and intends on exercising the same option on the remaining
systems at the end of their term.

# 4.   Income Taxes

In March 2005, the Company received
$0.3 million to settle state income tax refund claims which was recorded as a benefit
during the first fiscal quarter of 2005.

In November 2003, the Company agreed
in principle with the Internal Revenue Service (IRS) on a settlement and the
closure of its examination of the Companys tax returns for the years through 1996.

In November 2003, the Company also
agreed in principle with the IRS on the settlement of a matter related to tax refund
claims the Company had filed for research credits and for deductions attributable to
certain bank financing transactions during 1989 to 1992. In April 2004, the Company
received payment from the IRS in the amount of $2.5 million which was initially deferred
on the balance sheet. The Company subsequently received final clearance from the IRS
regarding this amount. Consequently, the Company recognized the benefit of the refund
claims, including the related interest thereon, during the second fiscal quarter of 2004.
$1.1 million was recorded as an increase to additional paid-in capital as it related to
stock warrant deductions, $1.2 million of interest income was recorded in the
Companys results of operations and $0.2 million in federal tax benefit was recorded
related to research credits. An additional payment of $0.3 million was received in August
2004 in connection with further claims, of which $0.1 million of interest income was
recorded in the Companys third quarter results of operations and $0.2 million in
federal tax benefit was recorded related to research credits.

The Company recorded a $7.3 million
non-cash charge to establish a valuation allowance for its net deferred tax assets and net
operating loss carryforwards in the fourth quarter of fiscal 2002. The valuation allowance
was calculated in accordance with the provisions of SFAS No. 109, Accounting for
Income Taxes (SFAS No. 109), which places significant importance on the
Companys cumulative operating results in the most recent three-year period when
assessing the need for a valuation allowance. The Companys cumulative loss in the
three-year period ended February 1, 2003, which included the net loss reported in the
fourth quarter of fiscal 2002, was sufficient to require a full valuation allowance under
the provisions of SFAS No. 109.

The Company recorded an increase
(decrease) to the valuation allowances of $12.6 million, $4.3 million and ($1.3 million)
in fiscal 2003, fiscal 2004 and the twenty-six week period ended July 30, 2005,
respectively. The Company intends to maintain a valuation allowance for its net deferred
tax assets and net operating loss carryforwards until sufficient positive evidence exists
to support its reversal.

# 5.   Stock Appreciation
Rights Plan

Commencing in May 2000 and annually
thereafter, each nonmanagement Director received an award under the Companys Stock
Appreciation Rights Plan that provides for a payment by the Company when the Director
exercises the stock option granted to him contemporaneously under the Companys Stock
Option Plans. The payment for options granted prior to June 2005 will be an amount
equivalent to the after tax equity in the option that is being exercised, that is, the
excess of the then current market price of the shares issued over the sum of 1) the
exercise price of the corresponding option plus 2) any personal income tax withholding on
the gain arising from the exercise. The payment for options granted in June 2005 will be
an amount equivalent to twice the above calculation. No such payments have been made to
date.

# 6.   Stockholders
Equity

In the second quarter of fiscal 2005,
the Company amended its Supplemental Retirement Savings Plan (the SRSP) and,
as a result, the market value of Company stock held in the SRSP on the date of the
amendment was reclassified to deferred compensation obligation in stockholders equity from deferred compensation plan
liabilities on the balance sheet. Additionally, the cost of those shares were reclassified from treasury stock and netted against the deferred compensation obligation.

# 7.   Supplemental Cash
Flow Information

Net cash flow from operating
activities reflects cash payments for interest and income taxes as follows (dollars in
thousands):

|                                  | Thirteen Weeks Ended | Twenty-Six Weeks Ended |        |         
|--------------------------------- | -------------------- | ---------------------- | ------ | --------
|
|Cash interest paid                | $136                 | $222                   | $361   | $429    
|Cash interest received            | ($142)               | ($1,193)               | ($197) | ($1,207)
|                                  |                      |                        |        |         
|Net cash interest (received) paid | ($6)                 | ($971)                 | $164   | ($778)  
|                                  |                      |                        |        |         
|Income taxes paid (refunded)      | $96                  | $1,339                 | ($172) | $1,324  

Non-cash financing activities include
the acquisition of 279,870 shares of Company common stock within the deferred compensation
plan in the second quarter of fiscal 2004 which cost $651,000 and is reflected as a
reduction in equity in the balance sheet.

Fiscal 2004 included interest income
of $1,168,000 related to an Internal Revenue Service settlement.

# 8.   Contingencies

The Company is involved in legal
actions and claims arising in the ordinary course of business. Management believes that
such litigation and claims, net of reserves, will not have a material adverse effect on
the Companys financial position, annual results of operations or cash flows. Legal
fees are typically expensed as incurred.

In addition, on May 1, 2003, a suit
in California Superior Court, Los Angeles County, styled Erik Stanford vs. United
Retail Incorporated was served on the Company by a former store manager in California.
On March 3, 2004, an amended complaint was served that added another plaintiff. The suit
was purportedly a class action on behalf of certain current and former associates in
California in the previous four years.

The plaintiffs in the Stanford
case asserted federal and state wage and hour claims and related claims against the
Company.

The Stanford case was settled
at a cost of $1.8 million prior to the filing of this Report. In anticipation of the
settlement, compensation of store managers employed by the Company in California had been
converted from salaries to hourly wages in January 2005.

Prior to fiscal 2005, the Company
recorded accruals of $2.3 million for the anticipated cost of the settlement in the
Stanford case. $0.5 million of the previous accruals was reversed and taken into
income in the second quarter of fiscal 2005 when the actual amount of settlement costs was
determinable.

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

EXECUTIVE SUMMARY

Introduction

The Executive Summary section of
Managements Discussion and Analysis of Financial Condition and Results of Operations
provides a high level summary of the more detailed information elsewhere in this Report,
an overview to put this information in context and a plan to return the Company to
sustained profitability year after year. This section is also an introduction to the
discussion and analysis that follows. Accordingly, it necessarily omits details that
appear elsewhere in this Report. It should not be relied upon separately from the balance
of this Report.

Products and Purchasing

The Company is a leading specialty
retailer of womens fashions featuring its proprietary AVENUE® brand. Its product
line features AVENUE® brand large size (14 or larger) womens wearing apparel,
AVENUE BODY® brand large size womens undergarments and lingerie and
CLOUDWALKERS® brand womens footwear, as well as AVENUE® brand accessories
and gifts.

Most of the Companys products
are made for the Company by contract manufacturing abroad.

Customer Base

The Company serves the mass market in
the United States and targets fashion conscious women between 25 and 55 years of age who
wear large size apparel. Management believes that the number of women in this age range
who wear large size apparel has increased in recent years.

Merchandising and
Marketing

Design is an important aspect of the
Companys products. Many AVENUE® and AVENUE BODY® products are custom
designed. The Company emphasizes a contemporary brand image and consistency of merchandise
quality and fit.

The Company has used direct mail,
print media advertising, credit card statement inserts, in-store signage, and e-mail
messages in its marketing activities.

Channel of Distribution

The Companys channel of
distribution is retail stores using its AVENUE® trade name. At July 30, 2005, it
leased 508 stores. See, Stores. The Company also operates a website at
www.avenue.com that sells a selection of the merchandise that is also on sale in the
stores (referred to as Shop @ Home operations).

Increased Competition

The womens retail apparel and
shoe industries are highly competitive. Operating results of businesses in these
industries, especially businesses that emphasize fashionable merchandise, can vary
materially from year to year. The Companys competition includes other specialty
retailers, mass merchants, department stores, discount stores, mail order companies,
television shopping channels and Internet websites. Management believes that total sales
of large size womens apparel from these sources of supply increased in recent years.

Deflationary Price Trend
in Apparel Industry

The Consumer Price Index published by
the U.S. Dept. of Labor, Bureau of Labor Statistics city average for womens and
girls apparel (the CPI) declined 5.0% in fiscal 2001, 1.9% in fiscal
2002, 1.8% in fiscal 2003 and 0.6% in fiscal 2004, comparing January 31st each
year with that date in the previous year. During the 10 years ended January 31, 2005, the
CPI declined 14.6%. There is no assurance that this deflationary trend will not continue.

Company Sales Fluctuations

Sales figures and merchandise margins
are central to the Companys long term profitability. The Company conducts a weekly
interdisciplinary review of sales and merchandise margins and prepares budgets for two
six-month seasons each year, the Fall season, which ends on the Saturday closest to
January 31st each year, for example, on January 29, 2005, and the Spring
season, which ends six months earlier, for example, on July 31, 2004. Management uses
comparable store sales (for stores open at least 12 months at the time) as an analytical
tool.

Seasonal store sales data follow with
sales improvements versus the previous comparable period in bold type:

|                               | 2001   | 2002   | 2003   | 2004   | 2005   |        |        |        |       
|------------------------------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------
|
|Total store sales($millions)*  | $208.8 | $206.7 | $225.1 | $198.7 | $203.5 | $187.7 | $196.0 | $196.9 | $215.6
|                               |        |        |        |        |        |        |        |        |       
|Sales peraverage store($000's) | $393   | $373   | $406   | $356   | $371   | $344   | $368   | $372   | $422  
|                               |        |        |        |        |        |        |        |        |       
|Averagenumber ofstores         | 532    | 554    | 555    | 558    | 548    | 545    | 532    | 529    | 511   
|                               |        |        |        |        |        |        |        |        |       
|Comparablestore sales**        | -3.4%  | -2.1%  | +3.2%  | -5.3%  | -9.3%  | -4.2%  | -2.2%  | +6.8%  | +12.8%

__________*Excluding sales on the Internet and, until
March 2003, through a catalog. **A store that is relocated within
the same shopping center or mall is considered comparable. However, if the store is
relocated elsewhere, it is considered a new store and not comparable. A store that is
expanded or contracted is still comparable, i.e., the sales from the remodeled store are
considered comparable. Stores that are closed are not considered comparable. The
comparable store sales calculation is not adjusted for changes in the store sales return
reserve.

Seasonal Operating Results

The declines in sales per average
store from the Fall 2002 season through the Spring 2004 season adversely affected
operating results.

The Company had net income of $0.4
million in fiscal 2001 and incurred net losses of $23.1 million in fiscal 2002, $19.1
million in fiscal 2003 and $10.5 million in fiscal 2004. The Company had operating income
of $0.6 million in fiscal 2001 and incurred operating losses of $22.8 million in fiscal
2002, $18.8 million in fiscal 2003 and $13.0 million in fiscal 2004. Excluding a one-time
goodwill write-off, the operating loss in fiscal 2002 was $17.2 million. Operating income
(loss) included loss from Shop @ Home operations before unallocated corporate expenses and
net interest income (expense) of $6.9 million in fiscal 2001 and $5.9 million in fiscal
2002. As a result of the suspension of the catalog early in fiscal 2003, the Company had
only one reportable segment for fiscal 2003 and fiscal 2004.

Product Repositioning Plan

In the womens retail specialty
apparel industry, sales, especially in businesses that emphasize fashionable merchandise,
can vary significantly over time. Sales are volatile because of shifts in consumer
spending patterns, consumer preferences and overall economic conditions; the impact of
competition; variations in weather patterns; fluctuations in consumer acceptance of
products; changes in the ability to develop new merchandise; differences in promotional
strategies; and movements in consumer confidence levels. These variables caused the
Companys sales per average store to fluctuate in the past, declining from the Fall
2002 season through the Spring 2004 season and increasing in the Fall 2004 season and
Spring 2005 season. Thus, recent sales performance is not necessarily indicative of future
sales performance. As a result, management believes that long-term sales projections
within a defined narrow range are not reliable.

The Company incurred net losses in
fiscal 2002, fiscal 2003 and fiscal 2004. The Company seeks to absorb normal cost
inflation and return to sustained profitability year after year through a goal of
increased sales per average store with higher merchandise margins. This financial goal was
translated into an integrated operational plan early in fiscal 2003 that was designed to
reposition the Companys product offering. (This plan has four principal components:
(i) to improve the design of the Companys merchandise and thereby differentiate it
from competitors merchandise, (ii) to market more items together as coordinated
outfits rather than separately as individual garments, (iii) to put more emphasis on
fashionable merchandise and less on basic items, and (iv) to raise the level of
merchandise presentation in the store to make shopping easier and to encourage outfit
buying.) This plan relies primarily on the Companys intellectual capital. Only small
amounts of additional financial capital are required to execute the plan. See,
Capital Expenditures. The infrastructure to support implementation of the plan
is already in place.

This section constitutes
forward-looking information under the Private Securities Litigation Reform Act (the
Reform Act), which is subject to the variables, uncertainties and other risk
factors referred to under the caption Future Results.

Decline in Annual Store
Count

Store counts averaged 557 stores, 546
stores and 531 stores, respectively, for fiscal 2002, 2003 and 2004. In the first half of
fiscal 2005, the average number of stores was 511 and the average number of stores is
expected to decline further in the second half of fiscal 2005 as a result of the
Companys normal lease maintenance program.

The annual capital expenditure
budgets after fiscal 2005 will provide for new store construction and other infrastructure
development priorities. Prioritization will be based, among other things, on overall
profitability and the availability of suitable locations at rents and on terms that fit
the Companys financial model for new store construction. This paragraph constitutes
forward-looking information under the Reform Act, which is subject to the variables,
uncertainties and other risk factors referred to under the caption Future
Results.

Liquidity

United Retail Group, Inc. and certain
of its subsidiaries (collectively, the Companies) are parties to a Financing
Agreement, dated August 15, 1997, as amended (the Financing Agreement), with
The CIT Group/Business Credit, Inc. (CIT). The Financing Agreement provides
credit on a revolving basis.

The Company plans to use the
Financing Agreement for its immediate and future working capital needs. Management
believes that the borrowing capacity under the Financing Agreement, together with cash on
hand and current and anticipated cash flow from operations, will be adequate to meet the
Companys working capital and capital expenditure requirements for at least the next
12 months.

This section constitutes
forward-looking information under the Reform Act and is subject to the variables,
uncertainties and other risk factors referred to under the caption Future
Results.

DISCUSSION AND ANALYSIS

(The two following sections provide
details about the material line items in the Companys statements of operations.)

Second Quarter Fiscal
2005 Versus Second Quarter Fiscal 2004

Net sales for the second quarter of
fiscal 2005 increased 13.3% from the second quarter of fiscal 2004, to $114.7 million from
$101.3 million.

The sources of net sales growth were
as follows:

|Amount        | Attributable to                         
|------------- | ----------------------------------------
|$14.2 million | 14.7% increase in comparable store sales
|0.5 million   | new stores                              
|(3.0) million | closed stores                           
|1.7 million   | other                                   
|$13.4 million | Total                                   

Compared to the second quarter of
fiscal 2004, units sold per average store increased 20.0%, average price per unit sold
decreased 2.8% and transactions per average store increased 25.0%.

There was better customer acceptance
of woven tops, knit tops, denim and woven bottoms, among the apparel categories, and
accessories, all of which collectively increased net sales by $12.8 million in comparison
to the second quarter of fiscal 2004.

The average number of stores
decreased from 532 in the second quarter of the previous year to 510 in the second quarter
of fiscal 2005. The average number of stores is expected to continue to decrease as a
result of the Companys normal lease maintenance program. See, Stores.

Gross profit increased to $30.7
million in the second quarter of fiscal 2005 from $20.8 million in the second quarter of
fiscal 2004, increasing as a percentage of net sales to 26.8% from 20.5%. This percentage
increase resulted primarily because as a percentage of net sales (i) buying and occupancy
costs declined (350 basis points) and (ii) merchandise margins increased (290 basis
points). Buying and occupancy costs declined in percentage terms principally because
average store sales increased. Higher merchandise margins were the result of lower cost of
goods sold. Gross profit levels in the future will be subject to the variables,
uncertainties and other risk factors referred to under the caption Future
Results. The dollar amount of buying and occupancy costs in the future will be
affected by the expected decrease in the average number of stores. See,
Stores.

The cost of shipping and handling
Shop @ Home orders was included in general, administrative and store operating expenses in
the previous fiscal year but has been reclassified as cost of goods sold and reflected in
the gross profit line in the financial statements contained in this Report. This change
was made to provide more transparency for trends in general, administrative and store
operating expenses. Prior periods have been reclassified to conform with the current
presentation.

General, administrative and store
operating expenses increased to $26.1 million in the second quarter of fiscal 2005 from
$23.5 million in the second quarter of fiscal 2004. However, expenses decreased as a
percentage of net sales to 22.7% from 23.2% principally because as a percentage of net
sales there was a decline in store payroll (140 basis points), partially offset by costs
under the Companys Incentive Compensation Plan (130 basis points), which is
described in an exhibit to this Report, in the second quarter of fiscal 2005. In addition
to general cost inflation, the Company expects consulting and professional fees and
Finance Department payroll to increase because additional resources will be required to
support new regulatory compliance including, among other things, the Companys
becoming an accelerated filer with the SEC after fiscal 2005. Also, although the number of
associates employed in stores is expected to decrease as a result of routine store
closings, possible increases in minimum wages may put pressure on the wage rates paid to
the remaining store associates.

The Company had operating income of
$4.6 million in the second quarter of fiscal 2005 and incurred an operating loss of $2.7
million in the second quarter of the previous year.

The Company had a provision for
income taxes of $0.6 million in the second quarter of fiscal 2005 compared with a benefit
from income taxes of $0.2 million in the second quarter of fiscal 2004.

There is a valuation allowance
provided for the Companys net operating loss (NOL) carryforwards and
other net deferred tax assets. In the second quarter of fiscal 2005, the Companys
tax valuation allowance decreased by $1.8 million.

The Company had net income of $4.1
million in the second quarter of fiscal 2005 and incurred a net loss of $1.6 million in
the second quarter of fiscal 2004.

See, Critical Accounting
Policies for a discussion of estimates made by management in preparing financial
statements in accordance with generally accepted accounting principles.

First Half Fiscal 2005
Versus First Half Fiscal 2004

Net sales for the first half of
fiscal 2005 increased 11.3% from the first half of fiscal 2004, to $221.2 million from
$198.8 million.

The sources of net sales growth were
as follows:

|Amount        | Attributable to                         
|------------- | ----------------------------------------
|$24.4 million | 12.8% increase in comparable store sales
|1.0 million   | new stores                              
|(5.8) million | closed stores                           
|2.8 million   | other                                   
|$22.4 million | Total                                   

Compared to the first half of fiscal 2004,
units sold per average store increased 20.3%, average price per unit sold decreased 4.9%
and transactions per average store increased 23.8%.

There was better customer acceptance
of woven tops, denim, sweaters, knit tops and swimwear, among the apparel categories, and
of accessories, all of which collectively increased net sales by $21.0 million in
comparison to the first half of fiscal 2004.

The average number of stores
decreased from 532 in the first half of the previous year to 511 in the first half of
fiscal 2005.

Gross profit increased to $56.4
million in the first half of fiscal 2005 from $41.5 million in the first half of fiscal
2004, increasing as a percentage of net sales to 25.5% from 20.9%. This percentage
increase resulted principally because as a percentage of net sales (i) buying and
occupancy costs declined (300 basis points) and (ii) merchandise margins increased (180
basis points). Buying and occupancy costs declined in percentage terms principally because
average store sales increased. Higher merchandise margins were the result of lower cost of
goods sold.

General, administrative and store
operating expenses increased to $50.9 million in the first half of fiscal 2005 from $47.4
million in the first half of fiscal 2004. However, expenses decreased as a percentage of
net sales to 23.0% from 23.8% principally because as a percentage of net sales there was a
decline in store payroll (130 basis points), partially offset by costs under the
Companys Incentive Compensation Plan (80 basis points) in the first half of fiscal
2005.

The Company had operating income of
$5.5 million in the first half of fiscal 2005 and incurred an operating loss of $5.8
million in the first half of the previous year.

Interest income was $0.2 million in
the first half of fiscal 2005. In the first half of fiscal 2004, interest income was $1.2
million and related to an IRS settlement.

The Company had a provision for
income taxes of $0.3 million for the first half of fiscal 2005 compared with a benefit
from income taxes of $0.1 million for the first half of fiscal 2004.

The Company had net income of $5.1
million in the first half of fiscal 2005 and incurred a net loss of $4.9 million in the
first half of fiscal 2004.

August Sales

Net sales for August 2005 increased 6.9% from August 2004 to $25.8 million from $24.1 million.  Comparable store
sales for the month increased 8.5%.  Average number of stores decreased from 530 to 508.

Increased Competition

The womens retail apparel and
shoe industries are highly competitive. Operating results of businesses in these
industries, especially businesses that emphasize fashionable merchandise, can vary
materially from year to year. The Companys competition includes other specialty
retailers, mass merchants, department stores, discount stores, mail order companies,
television shopping channels and Internet websites. Management believes that total sales
of large size womens apparel from these sources of supply increased in recent years.

Product Repositioning Plan

In the womens retail specialty
apparel industry, sales, especially in businesses that emphasize fashionable merchandise,
can vary significantly over time. Sales are volatile because of shifts in consumer
spending patterns, consumer preferences and overall economic conditions; the impact of
competition; variations in weather patterns; fluctuations in consumer acceptance of
products; changes in the ability to develop new merchandise; differences in promotional
strategies; and movements in consumer confidence levels. These variables caused the
Companys sales per average store to fluctuate in the past, declining from the Fall
2002 season through the Spring 2004 season and increasing in the Fall 2004 season and
Spring 2005 season. Thus, recent sales performance is not necessarily indicative of future
sales performance. As a result, management believes that long-term sales projections that
fall within a defined narrow range are not reliable.

The Company incurred net losses in
fiscal 2002, fiscal 2003 and fiscal 2004. The Company seeks to absorb normal cost
inflation and return to sustained profitability year after year through a goal of
increased sales per average store with higher merchandise margins. This financial goal was
translated into an integrated operational plan early in fiscal 2003 that was designed to
reposition the Companys product offering. (This plan has four principal components:
(i) to improve the design of the Companys merchandise and thereby differentiate it
from competitors merchandise, (ii) to market more items together as coordinated
outfits rather than separately as individual garments, (iii) to put more emphasis on
fashionable merchandise and less on basic items, and (iv) to raise the level of
merchandise presentation in the store to make shopping easier and to encourage outfit
buying.) This plan relies primarily on the Companys intellectual capital. Only small
amounts of additional financial capital are required to execute the plan. The
infrastructure to support implementation of the plan is already in place. See,
Capital Expenditures.

This section constitutes
forward-looking information under the Reform Act, which is subject to the variables,
uncertainties and other risk factors referred to under the caption Future
Results.

Liquidity and Capital
Resources

This section provides details about
the Companys sources of liquidity.

Cash Flow

Net cash provided by operating
activities increased to $21.7 million in the first half of fiscal 2005 from $6.2 million
in the first half of the previous year, principally as a result of net income ($5.1
million) in the first half of fiscal 2005 compared with a net loss ($4.9 million) in the
first half of fiscal 2004 and a greater decrease in inventory in the first half of fiscal
2005 ($7.2 million) than in the first half of fiscal 2004 ($0.5 million) partially offset
by proceeds from an IRS settlement ($1.2 million) that occurred in the first half of
fiscal 2004.

Balance Sheet Sources of
Liquidity

The Companys cash and cash
equivalents increased to $33.1 million at July 30, 2005 from $18.4 million at July 31,
2004 and $12.6 million at January 29, 2005.

Inventories decreased to $42.3
million at July 30, 2005 from $48.5 million at July 31, 2004 and $49.5 million at January 29,
2005. Inventory per selling square foot excluding Shop @ Home inventories decreased 10.7%
from July 31, 2004 to July 30, 2005 principally because the Company exceeded its sales
plan for the second quarter of fiscal 2005. (See, Critical Accounting Policies
 Inventory for a discussion of estimates made by management in stating
inventories in financial statements prepared in accordance with generally accepted
accounting principles.)

Property and equipment, net decreased
to $72.1 million at July 30, 2005 from $85.0 million at July 31, 2004 and $79.0 million at
January 29, 2005, principally from depreciation. The Company expects property and
equipment, net to decrease further during the remainder of fiscal 2005, principally from
depreciation.

Other Liquidity Sources

Purchases of merchandise directly
imported by the Company are made in U.S. dollars and generally financed by trade letters
of credit.

The Financing Agreement line of
credit is $50 million for the Companies combined, subject to availability of credit as
described in the following paragraphs. The line of credit may be used on a revolving basis
by any of the Companies to support trade letters of credit and standby letters of credit
and to finance loans. At July 30, 2005, trade letters of credit for the account of the
Companies and supported by CIT were outstanding in the amount of $23.9 million and standby
letters of credit were outstanding in the amount of $6.1 million. Standby letters of
credit were used principally in connection with insurance policies issued to the Company.

Subject to the following paragraph,
the availability of credit (within the aggregate $50 million line of credit) to any of the
Companies at any time is the excess of its borrowing base over the aggregate outstanding
amount of its letters of credit and its revolving loans, if any. The borrowing base, as to
any of the Companies is (i) the sum of (x) a percentage of the book value of its eligible
inventory (both on hand and unfilled purchase orders financed with letters of credit),
ranging from 65% to 75% depending on the time of year, (y) the balance from time to time
in an account in its name that has been pledged to the lenders (a Pledged
Account) and (z) 85% of certain receivables from credit card companies less (ii)
reserves for rent for 140 stores located in certain states whose laws restrict
creditors rights and for liens other than permitted liens and, at CITs option,
a reserve for sales taxes collected but not yet paid.

The provisions of the preceding
paragraph to the contrary notwithstanding, the Companies are required to maintain unused
at all times combined availability of at least $5 million. Except for the maintenance of a
minimum availability of $5 million and a limit on capital expenditures, the Financing
Agreement does not contain any significant financial covenants.

The combined borrowing capacity of
the Companies is cyclical due to the seasonality of the retail industry. At July 30, 2005,
the combined borrowing capacity of the Companies, after satisfying the $5 million minimum
availability requirement, was $4.2 million; the Pledged Account had a zero balance; no
loan was outstanding; and the Companies balance sheet cash and cash equivalents of
$33.1 million were unrestricted.

The line of credit is collateralized
by a security interest in (i) inventory and its proceeds, (ii) receivables from credit
card companies and (iii) the balance, if any, from time to time in the Pledged Account.
Further, the Company has agreed with CIT to have its subsidiary, Avenue Giftcards, Inc.
(which issues AVENUE® giftcards), maintain a minimum level of high-grade liquid
investments. These investments amounted to $0.3 million at July 30, 2005 and were
classified as restricted cash on the balance sheet. The amount of these investments will
fluctuate each quarter in relation to the volume of net issuances of AVENUE® giftcards
and merchandise credits during the previous six months. (The volume of net issuances is
seasonal.)

The Financing Agreement includes
certain restrictive covenants that impose limitations (subject to certain exceptions) on
the Companies with respect to making certain investments, declaring or paying dividends,
making loans, engaging in certain transactions with affiliates, or consolidating, merging
or making acquisitions outside the ordinary course of business.

The Company has drawn on the
revolving loan facility under the Financing Agreement from time to time to meet its peak
working capital requirements. Interest is payable monthly based on a 360-day year either
at the prime rate plus an incremental percentage up to 0.75% per annum or at the LIBOR
rate plus an incremental percentage ranging from 1.75% to 2.50% per annum. The borrower
can select either the prime rate or the LIBOR rate as the basis for determining the
interest rate. In either case, the incremental percentage is determined by the average
excess availability. Payment of revolving loans is not required until termination of the
agreement unless either (1) the outstanding balance of revolving loans and outstanding
letters of credit exceeds the combined borrowing capacity of the Companies, in which case
the excess would be payable upon demand from CIT or (2) a default under the Financing
Agreement arises.

Short-term trade credit represents a
significant source of financing for merchandise purchases other than merchandise directly
imported by the Company. Trade credit arises from the willingness of the Companys
vendors of these products to grant extended payment terms for inventory purchases and is
generally financed either by the vendor or a third-party factor. The availability of trade
credit depends on the Companys having other sources of liquidity, as well. In
particular, credit authorizations by trade creditors focus on the amount of the
Companys cash and cash equivalents and its borrowing capacity under the Financing
Agreement.

Capital Expenditures

This section and the one that follows
provide details about certain uses of cash by the Company.

Capital expenditures decreased to
$0.3 million in the first half of fiscal 2005 from $0.6 million in the first half of the
previous fiscal year and are budgeted at approximately $3.0 million for fiscal 2005 as a
whole. This paragraph constitutes forward-looking information under the Reform Act and is
subject to the variables, uncertainties and other risk factors referred to under the
caption Future Results.

Principal Contractual
Obligations and Certain Other Commercial Commitments

During the second quarter of fiscal
2005, there was no material change outside the ordinary course of the Companys
business in the principal contractual obligations of the Company, taken as a whole,
compared with the second quarter of fiscal 2004.

# Governmental Restraints
On Imports from China

In past years, a material portion of
the apparel sold by the Company was imported from China, either directly by the Company or
by the Companys domestic vendors. The United States Committee for Implementation of
Textile Agreements has imposed restraint levels for exports to the United States that
leave China before January 1, 2006, including several categories of apparel. Exports of
each specified product category will continue to be admitted into the United States in the
ordinary course until the restraint level for that category is reached, after which
further exports will be embargoed and wont be cleared until after January 2006. The
Company does not expect that a material amount of its current on-order inventory will be
embargoed for an extended period. However, there is no assurance that (i) the Company and
its domestic vendors will be able to find elsewhere replacements for suppliers in China
that may be temporarily cut off by embargoes, (ii) the cost of using alternative sources
of supply elsewhere will not be higher than the cost of using suppliers in China, (iii)
delays in deliveries from countries other than China will not occur or (iv) deliveries of
orders placed with suppliers in China in the future will not be embargoed for an extended
period. Further, there is no assurance that similar restraint levels will not be imposed
during the next several years on additional product categories offered for sale by the
Company.

Pending Litigation

The Company is involved in legal
actions and claims arising in the ordinary course of business. Management believes that
such litigation and claims, net of reserves, will not have a material adverse effect on
the Companys financial position, annual results of operations or cash flows.

In addition, on May 1, 2003, a suit
in California Superior Court, Los Angeles County, styled Erik Stanford vs. United
Retail Incorporated was served on the Company by a former store manager in California.
On March 3, 2004, an amended complaint was served that added another plaintiff. The suit
was purportedly a class action on behalf of certain current and former associates in
California in the previous four years.

The plaintiffs in the Stanford
case asserted federal and state wage and hour claims and related claims against the
Company.

The Stanford case was settled
at a cost of $1.8 million prior to the filing of this Report. In anticipation of the
settlement, compensation of store managers employed by the Company in California had been
converted from salaries to hourly wages in January 2005.

Prior to fiscal 2005, the Company
recorded accruals of $2.3 million for the anticipated cost of the settlement in the
Stanford case. $0.5 million of the previous accruals was reversed and taken into
income in the second quarter of fiscal 2005 when the actual amount of settlement costs was
determinable.

Meeting Cash Requirements

The Companys cash requirements
include: (i) anticipated working capital needs, including seasonal inventory financing,
(ii) financing activities, including payments due on its principal contractual
obligations, (iii) investing activities, including costs for building stores and replacing
fixtures where appropriate and (iv) settlement costs for the Stanford wage and hour
class action.

During the first half of fiscal 2005,
the Company funded net cash used in investing activities, repayments of long-term debt and
payments on capital lease obligations from net cash provided by operating activities. The
Companys historical sources of liquidity have been the availability of credit under
the Financing Agreement on a revolving basis and short-term trade credit, as well as its
cash on hand and net cash provided by operating activities.

The Company plans to use the
Financing Agreement for its immediate and future working capital needs. Management
believes that the borrowing capacity under the Financing Agreement, together with cash on
hand and current and anticipated cash flow from operations, will be adequate to meet the
Companys working capital and capital expenditure requirements, including the
payments to be made under the settlement of the Stanford case, for at least the
next 12 months.

This section constitutes
forward-looking information under the Reform Act and is subject to the variables,
uncertainties and other risk factors referred to under the caption Future
Results.

Critical Accounting
Policies

Introduction

This section discusses the
Companys critical accounting policies.

Financial statements prepared by
companies in accordance with generally accepted accounting principles are affected by the
policies followed by management in preparing them. Some accounting policies require
difficult, subjective or complex judgments by corporate management, often as a result of
the need to make estimates about the effect of matters that are inherently uncertain.
Among the most important accounting policies of the Company that involve such management
judgments are (i) the use of the retail method of accounting for inventory, (ii) the use
of estimates of incurred but not reported claims for uninsured damages for personal
injuries and workers compensation benefits and for benefits under the Companys
self-insured medical, dental and prescription plans for its associates, as well as future
development costs of reported claims (collectively, IBNR Claims) and (iii)
determining whether to continue the valuation allowance for the Companys net
deferred tax assets, including NOLs.

Inventory

In accordance with generally accepted
accounting principles, inventories are stated at the lower of cost or market. The Company
utilizes the retail method, under which a cost-to-price relationship is developed on the
basis of original cost as compared to initial retail selling price. The valuation of
inventories at cost and the resulting margins are calculated by applying this
cost-to-price relationship to the retail value of inventories. Consequently, the use of
the retail inventory method results in valuing inventories at lower of cost or market.

Inherent in the retail inventory
method are management estimates on current and future selling value of the inventory.
These estimates, which are described in the following paragraphs, can significantly impact
the ending inventory valuation at cost, as well as resulting margins. In the womens
retail specialty apparel industry, sales, especially in businesses that emphasize
fashionable merchandise, can vary significantly over time. Sales are volatile because of
shifts in consumer spending patterns, consumer preferences and overall economic
conditions; the impact of increased competition; variations in weather patterns;
fluctuations in consumer acceptance of products; changes in the ability to develop new
merchandise; differences in promotional strategies; and movements in consumer confidence
levels. The necessity for management estimates based on these variables, coupled with the
fact that the retail inventory method is an averaging process, can produce inventory
valuations at any point in time that are inexact.

Permanent markdowns, when taken,
reduce both the price and cost components of inventory on hand, which maintains the
established cost-to-price relationship. Deferred markdowns can result in an overstatement
of inventories under the lower of cost or market principle. Accordingly, at the end of
each six-month season, management conducts a thorough review of inventory on hand. Based
on managements business judgment, the Company may reduce further the carrying value
of inventories by recording a markdown reserve. Markdown reserves are established for
inventory categories with sales performance below expectations and/or unsold quantities in
excess of expectations.

At the end of each season, management
estimates what quantities of current merchandise are in excess of the amounts saleable at
historical margin rates. A markdown reserve is established to reduce the carrying value of
excess current merchandise to estimated net realizable value. Also, a markdown reserve is
established by management to reduce the carrying value of obsolete categories of
merchandise to their estimated net realizable value.

The markdown reserve was $1.3 million
at July 30, 2005 and $1.8 million at July 31, 2004.

Markdown reserves fluctuate,
principally because the market environment is dynamic for the reasons set forth above.
However, a consistent methodology for markdown reserves is one of the Companys
important accounting objectives.

Recording a reserve reduces the
inventory on the Companys balance sheet and is charged to the Companys cost of
sales. If inventories, net of reserves, were overestimated at the end of a period, assets
and income for that period would be overstated and margins for the beginning of the next
period would be lower. (The opposite would be true if inventories were underestimated.)

Management believes that the
inventories shown on the balance sheets included in the financial statements contained in
this Report were properly stated in all material respects.

Incurred But Not Reported
Claims For Personal Injuries and Medical Benefits

The Company records a liability for
IBNR Claims, which is based on (i) the number and size of outstanding claims, (ii) a
comparison between the dates paid claims were incurred and the dates they were paid, (iii)
an analysis of the amounts previously paid, (iv) projections of inflation in medical costs
and (v) advice from time to time from its insurance broker. The Company has insurance
policies with coverage for auto, general liability and workers compensation claims
but it remains liable for a self-insured retention of $0.1 million for each auto claim and
$0.3 million for each general liability and workers compensation claim. The Company
is self-insured for its medical, dental and prescription plans for associates. The Company
has stop loss insurance coverage for employee medical claims over $0.2 million each. Also,
there is an aggregate limit which, at January 29, 2005, was $6.8 million based on the
number of associates participating at that time. The estimates underlying the liability
for IBNR Claims are matters of judgment on which insurance experts may differ.

If the outcome of claims made with
respect to a fiscal period were to exceed the recorded IBNR liability for that period, the
liabilities on the balance sheet would have been understated and income would have been
overstated for the period in question. (The opposite would be true if the subsequent
outcome were less than the recorded IBNR liability.)

To estimate its casualty (auto,
general liability and workers compensation) IBNR, the Company uses policy year (July
1) maturation factors based on the Companys history of claim development (the high
and low year factors are excluded in arriving at an average).

The Company estimates its health
claims IBNR by (i) dividing the run-off amounts (claims paid after a policy
expired without being renewed) by claims paid during the last policy year (December 31)
and (ii) applying the resulting percentage to the trailing 12 months of paid claims at the
time of the calculation.

As the use of different estimates
would change the IBNR liability recorded materially, a consistent approach to estimating
liability for IBNR Claims is one of the Companys important accounting objectives.

Management believes that the
liabilities for IBNR Claims reflected in all the balance sheets included in the financial
statements contained in this Report were fairly stated in all material respects, subject
to the uncertainties of litigation and the risk of different than anticipated inflation in
medical costs. (The changes in the liabilities for IBNR Claims that would have resulted
from the use of industry factors rather than the Companys experience in preparing
estimates is discussed in the Companys Annual Report on Form 10-K for the year ended
January 29, 2005.)

Tax Valuation Allowance

In fiscal 2002, the Company first
recorded a charge to establish a valuation allowance for its NOL carryforwards and other
net deferred tax. At July 30, 2005, the accumulated tax valuation allowance was $22.9
million.

The Company intends to maintain a
valuation allowance for its net deferred tax assets until management determines that
sufficient positive evidence regarding operating results exists to support reversal of the
allowance remaining at that time. A reversal of the tax valuation allowance would improve
the Companys net income/loss for the period in which the reversal occurred.
Accordingly, whether to continue a tax valuation allowance is one of the Companys
important accounting matters.

Private Label Credit
Cards Issued By The Bank

The Company and World Financial
Network National Bank (the Bank) are parties to a Private Label Credit Card
Program Agreement, dated January 27, 1998 (as amended, the Credit Card Program
Agreement).

Under the Credit Card Program
Agreement, the Bank issues credit cards to eligible Company customers who apply to the
Bank. Net credit sales volume with the Bank increased to $34.9 million in the second
quarter of fiscal 2005 from $31.1 million in the second quarter of fiscal 2004. Customers
must meet standards for creditworthiness set by the Bank with the approval of the Company,
provided, however, that the Bank shall take any actions required to prevent unsafe and
unsound banking practices. The credit cards issued by the Bank are co-branded with both
the Companys AVENUE service mark and the Banks name. The credit cards are used
only for merchandise and services offered by the Company. Credit card holders remit
payments to the Bank, generally by mailing personal checks. The Bank also handles all
statement processing, payment processing, cardholder customer service and collections from
delinquent cardholders.

In accordance with generally accepted
accounting principles, the Company does not include the receivable asset created under the
Credit Card Program Agreement in the Companys accounts receivable on its balance
sheets because the Company has no interest in the customer accounts or receivables. In
this connection, it should be noted that the Credit Card Program Agreement states that (i)
the Bank is the sole and exclusive owner of all customer accounts, (ii) the Company has no
interest in the customer accounts and (iii) the Bank is the creditor in respect of
receivables (defined in the Credit Card Program Agreement as amounts owed with respect to
retail purchases, finance charges, deferred finance charges, other fees and charges for
sales tax). Also, depending on the circumstances, the Company might not purchase the
accounts from the Bank upon the expiration of the contractual term.

The Credit Card Program Agreement is
currently scheduled to expire on February 28, 2007. The Company shall then have the right
to purchase the customer accounts from the Bank for a price equal to the receivables.
Also, the Bank shall then have the right to sell the customer accounts to the Company at
that price if the Company commences a private label credit card program either on its own
or through another issuer of credit cards. When the Credit Card Program Agreement is about
to expire without being renewed, the Company is likely to submit requests for proposals to
other banks that issue private label credit cards to retailers customers and to use
the banks proposals to evaluate a continuation of the private label credit card
program. There is no assurance, however, that other banks would make proposals to continue
the program on terms satisfactory to the Company or that the Company could finance a
program on its own without involving a bank.

Receivables as defined in the Credit
Card Program Agreement at the close of the last billing cycle in the second quarter
increased to $77.6 million in fiscal 2005 from $72.9 million in fiscal 2004.

The credit card program premium (or,
potentially, discount) reflected in general, administrative and store operating expenses
is an amount equal to royalties paid to the Company by the Bank minus costs charged by the
Bank. Costs are based on the volume of credit card program processing activities performed
by the Bank.

General, administrative and store
operating expenses were offset in part by premiums received from the Bank. Premiums
increased to $1.8 million in the second quarter of fiscal 2005 from $1.4 million in the
second quarter of fiscal 2004, principally because of higher consumer finance fees and
lower net write-offs of bad debt.

Royalties are based on program
revenues minus receivables written off by the Bank and the cost of funds for the program.
For up to the first $85 million of receivables, cost of funds means the one-year Constant
Maturities Treasury (CMT) rate plus 25 basis points to be reset every three
months (the published CMT rate was 3.77% per annum at July 30, 2005). However, the CMT
rate shall not be more than 6.75% per annum and not be less than 5.00% per annum for the
purpose of this calculation. (The Banks receivables for the program were less than
$85 million at July 30, 2005 but, if they grew larger than that amount, the cost of funds
for the excess would be based primarily on the cost of borrowing of a trust for the
purpose of securitizing receivables.)

# Fiscal 2006 Accruals for
Unvested Employee Stock Options

The Financial Accounting Standards
Board issued SFAS No. 123R, Share-Based Payment (SFAS No. 123R),
which replaces SFAS No. 123 Accounting for Stock-Based Compensation and
supersedes APB Opinion No. 25. SFAS No. 123R requires all share-based payments to
employees, including grants of employee stock options, to be measured at their fair values
at the date of grant and recognized as expense over the service period, which is generally
the vesting period. SFAS No. 123R is effective for the first fiscal year beginning after
June 15, 2005, which, for the Company, will be fiscal 2006.

The adoption of SFAS No. 123R may
have a significant impact on the Companys results of operations. The impact of
adopting SFAS No. 123R cannot be accurately estimated at this time, as it will depend,
among other things, on the market value and the amount of share-based awards granted in
future periods.

Stores

The Companys channel of
distribution is retail stores using its AVENUE® trade name. The Company leased 508
stores at July 30, 2005.

Store counts averaged 557 stores, 546
stores and 531 stores, respectively, for fiscal 2002, 2003 and 2004. In the first half of
fiscal 2005, the average number of stores was 511 and the average number of stores is
expected to decline further in the second half of fiscal 2005 as a result of the
Companys normal lease maintenance program. This paragraph includes forward-looking
information under the Reform Act, which is subject to the variables, uncertainties and
other risk factors referred to under the caption Future Results.

The annual capital expenditure
budgets after fiscal 2005 will provide for new store construction and other infrastructure
development priorities. Prioritization will be based, among other things, on overall
profitability and the availability of suitable locations at rents and on terms that fit
the Companys financial model for new store construction. This paragraph constitutes
forward-looking information under the Reform Act, which is subject to the variables,
uncertainties and other risk factors referred to under the caption Future
Results.

Retail selling space was
approximately 2.2 million square feet at July 30, 2005 and 2.3 million square feet at July
31, 2004.

Depreciation and amortization of
property and equipment relate principally to assets in stores and declined to $3.4 million
in the second quarter of fiscal 2005 from $3.6 million in the second quarter of the
previous year. Further declines in depreciation and amortization accruals are expected for
the remainder of fiscal 2005.

Shop @ Home Operations

The Company has an Internet site
(www.avenue.com) that sells a selection of the merchandise that is also for sale in the
Companys stores. The Company ships its avenue.com orders from its national
distribution center in Troy, Ohio.

Stock Repurchases

The Company did not repurchase shares
of its own stock in the first half of fiscal 2005 and has no plans at present to
repurchase shares of its own stock.

# Supplemental Retirement
Savings Plan

With respect to the deferred
compensation obligations of the Companys Supplemental Retirement Savings Plan (the
SRSP), the liability was marked to market and this liability adjustment flowed
through the statement of operations as either an increase or a decrease in compensation
expense. With respect to the SRSP assets, marketable securities were also marked to market
except shares of Company stock, which were recorded permanently at cost. This asset
adjustment also flowed through the statement of operations. The liability adjustment and
the asset adjustment were not necessarily equal in amount because of the disparate
treatment of Company stock. In the second quarter of fiscal 2005, the market price of
Company stock rose and compensation expense was increased $0.5 million as a result of the
foregoing accounting treatment with respect to SRSP liabilities and assets.

In the second quarter of fiscal 2005,
the Company amended the SRSP and, as a result, the market value of Company stock held in
the SRSP on the date of the amendment was reclassified to stockholders equity from
deferred compensation plan liabilities on the balance sheet. Consequently, future
movements in the market price of the Companys stock will no longer affect accruals
for compensation expense.

Corporate Acquisition
Reviews

The Company from time to time
conducts due diligence reviews of businesses that are either for sale as a
going concern or are in liquidation. The Company would consider making a bid on a suitable
corporate acquisition at an opportune price if adequate financing at acceptable rates were
available.

Future Results

The Company cautions that any
forward-looking statements (as such term is defined in the Reform Act) contained in this
Report or otherwise made by management of the Company involve risks and uncertainties and
are subject to change based on various important factors, many of which may be beyond the
Companys control. Accordingly, the Companys future performance and financial
results may differ materially from those expressed or implied in any such forward-looking
statements.

The Company historically experienced
fluctuations in customer response to its merchandise assortments. Future success depends
on the Companys ability to consistently anticipate, assess and react to the changing
demands of its customer base. As a private label merchandiser, the Company assumes certain
risks, including long product lead times and high initial purchase commitments, that
amplify the consequences of any miscalculation that it might make in anticipating fashion
trends or interpreting them for customers. There is no assurance that the Company will be
able to identify and offer merchandise that appeals to its customer base or that the
introduction of new merchandise will be profitable.

Future success also depends upon the
Companys ability to effectively define, evolve and promote its brand. In order to
achieve and maintain significant brand name recognition, it may become necessary to
increase investments in the development of the brand through various means, including
customer research, advertising, direct mail marketing and Internet marketing. There is no
assurance that, if such funding becomes necessary, it will be available.

The following additional factors,
among others, could also affect the Companys actual results and could cause actual
results to differ materially from those expressed or implied in any forward-looking
statements included in this Report or otherwise made by management: threats of terrorism;
war risk; shifts in consumer spending patterns, overall economic conditions; the impact of
increased competition; variations in weather patterns; uncertainties relating to execution
of the Companys product repositioning strategy; store lease expirations; risks
associated with the financial performance of the World Financial Network National Bank
private label credit card program; increases in interest rates; the ability to retain,
hire and train key personnel; risks associated with the ability of the Companys
manufacturers to deliver products in a timely manner; governmental restrictions on the
volume of imports of apparel from China; political instability and other risks associated
with foreign sources of production and increases in fuel costs.

As a result of the variables, risks
and uncertainties referred to in this section, the projections made elsewhere in this
Report may not be reliable. The Company assumes no obligation to update any
forward-looking statement contained in this Report.

# Stockholder Rights Plan

Any action by the Companys
stockholders with respect to any proposed merger or business combination with another
corporation shall be taken by a majority of the votes cast at a meeting at which a quorum
is present except as may be otherwise prescribed by the General Corporation Law of
Delaware (the GCL) at the time. However, the Companys stockholder rights
plan (filed with the Commission as the exhibit to the Companys Registration
Statement on Form 8-A, dated September 15, 1999) and certain provisions of the By-Laws
(filed with the Commission as Exhibit No. 3 to the Companys Annual Report on Form
10-K for the year ended January 31, 2004) impose restrictions on mergers and business
combinations in addition to the requirements of the GCL. These rights and By-Law
provisions may make it more difficult for a third party to acquire the Company even if
doing so would allow the stockholders to receive a premium over the prevailing market
price of the Common Stock. These rights and By-Law provisions are intended to encourage
potential acquirers to negotiate and allow the Board of Directors the opportunity to
consider alternative proposals in the interest of maximizing stockholder value. However,
these rights and provisions may also discourage acquisition proposals or delay or prevent
a change in control, which could negatively affect the price of the Common Stock.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company does not hold or issue
financial instruments for trading purposes.

Management of the Company believes that
its exposure to interest rate and market risk associated with financial instruments is not
material. See, however, in Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations (i) the eighth paragraph under the
caption Other Liquidity Sources regarding the variable interest rate payable
on revolving loans to the Companies and (ii) the final paragraph under the caption
Private Label Credit Cards Issued By The Bank for a discussion of the cost of
funds associated with the credit cards that are co-branded with the Companys AVENUE
service mark and the name of the issuer of the cards, World Financial Network National
Bank. The Company has no material exposure to foreign currency exchange rate risk.

ITEM 4.   CONTROLS AND PROCEDURES.

Internal Control Over
Financial Reporting

There were no significant changes
made in the second quarter of fiscal 2005 in the Companys internal control over
financial reporting (as defined in Exchange Act Rule 13a-15(f)) that materially affected
or are reasonably likely to materially affect internal control over financial reporting.

The Company will perform the first
assessment of its internal control over financial reporting in accordance with Section 404
of the Sarbanes-Oxley Act of 2002 in connection with the filing of its Annual Report on
Form 10-K for fiscal 2005. There can be no assurance that material weaknesses in internal
control over financial reporting will not be identified when this assessment is performed.

Disclosure Controls

The Company performed its quarterly
evaluation, in which the CEO and CFO participated, of the effectiveness of its disclosure
controls and procedures (as defined by Exchange Act Rule 13a-15(e), Disclosure
Controls) with respect to information required to be disclosed by the Company
(Disclosures) in filings with the Commission. The CEO and CFO each concluded
that the Disclosure Controls were effective as of July 30, 2005 in providing reasonable
assurance that Disclosures were (i) recorded, accumulated, processed, summarized and
communicated to him on a timely basis and (ii) reported within the time periods specified
in the Commissions rules and forms.

---

# PART II  OTHER
INFORMATION

ITEM 1.   LITIGATION.

The subsection in Part I, Item 2.
Managements Discussion and Analysis of Financial Condition and Results of
Operations,  captioned Pending Litigation is incorporated herein by
reference.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS.

The Company did not repurchase shares
of its own stock in the second quarter of fiscal 2005 and has no plans at present to
repurchase shares of its own stock.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

1. The 13th Annual Meeting of Stockholders (the "Meeting") was held on June 27, 2005.

1. The Meeting reelected all eight incumbent directors of the Company to serve until the 14th Annual
         Meeting of Stockholders and their successors are elected, by the following vote:

|Name                  | For        | Withhold Authorityto Vote
|--------------------- | ---------- | -------------------------
|Joseph A. Alutto      | 12,117,947 | 74,332                   
|Raphael Benaroya      | 12,131,997 | 60,282                   
|Joseph Ciechanover    | 12,117,947 | 74,332                   
|Michael Goldstein     | 12,090,347 | 101,932                  
|Ilan Kaufthal         | 12,166,637 | 25,642                   
|Vincent P. Langone    | 12,166,887 | 25,392                   
|George R. Remeta      | 12,139,537 | 52,742                   
|Richard W. Rubenstein | 11,983,519 | 208,760                  

1. Integrity Brands Fund IIS, LLC ("Integrity Brands") notified the Company that it might place four
         candidates in nomination at the 2005 Annual Meeting of Stockholders.  The nominees of Integrity Brands
         would have run against the slate of eight incumbents that the Nominating Committee recommended and the
         Board of Directors approved.  However, the potential contest was resolved and the Company exchanged
         letters, dated April 28, 2005, on the subject with John C. Pound, Managing Member of Integrity Brands.
         In his letter to the Company, Mr. Pound gave notice that Integrity Brands had withdrawn its candidates
         for election to the Company's Board at the 2005 Annual Meeting of Stockholders. 

         The Company accrued legal and consulting fees and disbursements of approximately $0.9 million in the
         first quarter of fiscal 2005 to prepare for the possibility of a contested election of Directors at the
         2005 Annual Meeting of Stockholders. 

         The Company's Board of Directors, through the Nominating Committee of the Board, will undertake a search
         for two additional Board members who meet the criteria contained in the Nominating Committee Charter and
         have expertise relevant to multi-channel specialty retail.  The Company will seek to add these
         candidates to the Board at or prior to the 2006 Annual Meeting of Stockholders.  Mr. Pound has been
         invited to attend a meeting of the Nominating Committee to discuss the search process.  Further
         information about the search for two additional Board members and the invitation to Mr. Pound to attend
         a meeting of the Nominating Committee is contained in the letter, dated April 28, 2005, from the Company
         to Mr. Pound, which is an exhibit to this Report.

---

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

(1)    
          The following exhibits are filed herewith:

|Number | Description                                                                                                                                                                                                                                                                                                                      
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31     | Certifications pursuant to Section 302                                                                                                                                                                                                                                                                                           
|99     | Letter, dated April 28, 2005, from Raphael Benaroya to John
                                             Pound is incorporated by reference to Exhibit No. 99.2 to the
                                             Corporation's Current Report on Form 8-K filed on April 29,
                                             2005

(2)    
          Certifications pursuant to Section 906 are furnished as Exhibit 32 hereto.

(3)    
          The following documents are also incorporated herein by reference.

The following exhibits to the
Corporations Current Report on Form 8-K filed on September 1, 2005 are incorporated
herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                                                        
|---------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.3*            | Amendment to Supplemental Retirement Savings Plan                                                                                                                                                                                                                  
|10.4*            | Amendment, dated August 29, 2005, to Employment Agreement,
                                             dated as of September 3, 2004, between the Corporation and
                                             Raphael Benaroya ("Benaroya Employment Agreement") 
|10.5*            | Amendment, dated August 29, 2005, to Employment Agreement,
                                             dated as of September 3, 2004, between the Corporation and
                                             George R. Remeta ("Remeta Employment Agreement")   
|10.6*            | Amendment, dated August 29, 2005, to Employment Agreement,
                                             dated as of September 3, 2004, between the Corporation and
                                             Kenneth P. Carroll ("Carroll Employment Agreement")
|10.8*            | Form of Severance Pay Agreements, dated August 26, 2005,
                                             between the Corporation and Terence Puffer and Rose Panicali,
                                             respectively                                      
|10.9*            | Bonus Agreement, dated August 22, 2005, between the Corporation and Rose Panicali                                                                                                                                                                                  

The following exhibits to the
Corporations Current Report on Form 8-K filed on June 29, 2005 are incorporated
herein by reference:

|Number in Filing | Description                                                                                          
|---------------- | -----------------------------------------------------------------------------------------------------
|10.1*            | Supplemental Retirement Savings Plan                                                                 
|10.2*            | Severance Pay Agreement form                                                                         
|10.3*            | Amendment to 2003 Stock Option Plan                                                                  
|10.4*            | Amendment to 2001 Stock Option Plan                                                                  
|10.5*            | Amendment to 1999 Stock Option Plan                                                                  
|10.6*            | Amendment to 1996 Stock Option Plan                                                                  
|10.7*            | Amendment to 1990 Stock Option Plan                                                                  
|10.8*            | Amendment to Stock Option Agreement, dated May 21, 1998, between
the Corporation and Raphael Benaroya
|10.9*            | Amendment to Stock Option Agreement, dated May 21, 1998, between
the Corporation and George R. Remeta
|10.10*           | Amendment to Benaroya Employment Agreement                                                           
|10.11*           | Amendment to Remeta Employment Agreement                                                             
|10.12*           | Amendment to Carroll Employment Agreement                                                            

The following exhibit to the
Corporations Current Report on Form 8-K filed on April 22, 2005 is incorporated
herein by reference:

|Number in Filing | Description                            
|---------------- | ---------------------------------------
|10*              | Restated Stock Appreciation Rights Plan

The following exhibit to the
Corporations Current Report on Form 8-K filed on March 23, 2005 is incorporated
herein by reference:

|Number in Filing | Description                                                                                                                                               
|---------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|10               | Stipulation and Settlement Agreement, dated March 18, 2005,
                                             in Stanford et ano vs. United Retail Incorporated

The following exhibits to the
Corporations Current Report on Form 8-K filed on March 3, 2005 are incorporated
herein by reference:

|Number in Filing | Description                                    
|---------------- | -----------------------------------------------
|10.1*            | 2005 Incentive Compensation Plan Agreement Form
|10.2*            | 2005 Tandem Bonus Plan Agreement               

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended October 30, 2004 is
incorporated herein by reference:

|Number in Filing | Description                    
|---------------- | -------------------------------
|21               | Subsidiaries of the Corporation

The following exhibits to the
Corporations Quarterly Report on Form 10-Q for the period ended July 31, 2004 are
incorporated herein by reference:

|Number in Filing | Description                  
|---------------- | -----------------------------
|10.1*            | Benaroya Employment Agreement
|10.2*            | Remeta Employment Agreement  
|10.3*            | Carroll Employment Agreement 

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended May 1, 2004 is
incorporated herein by reference:

|Number in Filing | Description                                                                                                                
|---------------- | ---------------------------------------------------------------------------------------------------------------------------
|10*              | Bonus agreement, dated May 28, 2004, between the Corporation
                                             and Joann Fielder

The following exhibits to the
Corporations Annual Report on Form 10-K for the year ended January 31, 2004 are
incorporated herein by reference:

|Number in Filing | Description                                                                                                                              
|---------------- | -----------------------------------------------------------------------------------------------------------------------------------------
|3                | Restated By-laws of the Corporation                                                                                                      
|10.2*            | Form of Indemnification Agreement between the Corporation and
                                             each of its Directors         
|14               | Code of Ethics for Principal Executive and Senior Financial
                                             Officers pursuant to Section 406

The following exhibit to the
Corporations Current Report on Form 8-K filed on January 8, 2004 is incorporated
herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                                                                                                                                 
|---------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10               | Amendment, dated December 23, 2003, to Financing Agreement
                                             among the Corporation, United Retail Incorporated,
                                             Cloudwalkers, Inc. and The CIT Group/Business Credit, Inc.,
                                             as Agent and Lender ("CIT")

The 2003 Stock Option Plan set forth
as the appendix to the Corporations proxy statement on Schedule 14A for its 2003
annual meeting of stockholders is incorporated herein by reference.*

The following exhibit to the
Corporations Annual Report on Form 10-K/A for the year ended February 1, 2003 is
incorporated herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                      
|---------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1             | Amendment, dated January 31, 2003, to Financing Agreement
                                             among the Corporation, United Retail Incorporated,
                                             Cloudwalkers, Inc. and CIT

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended August 3, 2002 is
incorporated herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                    
|---------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1             | Amendment, dated August 2, 2002, to Financing Agreement among
                                             the Corporation, United Retail Incorporated, Cloudwalkers,
                                             Inc. and CIT

The following exhibits to the
Corporations Annual Report on Form 10-K for the year ended February 2, 2002 are
incorporated herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                                                                                                                                                                                                                              
|---------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1             | Amendment, dated April 5, 2002, to Private Label Credit Card
                                             Program Agreement, dated January 27, 1998, between the
                                             Corporation, United Retail Incorporated and World Financial
                                             Network National Bank ("Private Label Credit Card Program
                                             Agreement")
|10.2             | Amendment, dated December 29, 1999, to Private Label Credit
                                             Card Program Agreement                                                                                                                                                                                                                                                                                                          
|10.3             | Amendment, dated August 19, 1999, to Private Label Credit
                                             Card Program Agreement                                                                                                                                                                                                                                                                                                            

The following exhibits to the
Corporations Quarterly Report on Form 10-Q for the period ended November 3, 2001 are
incorporated herein by reference:

|Number in Filing | Description                                                                                                                                      
|---------------- | -------------------------------------------------------------------------------------------------------------------------------------------------
|10.4*            | Summary Plan Description for United Retail Group, Inc.
                                             Incentive Compensation Program for Executives
|10.5             | Amendment, dated October 1, 2001, to Private Label Credit
                                             Card Program Agreement                    

The 2001 Stock Option Plan set forth
as an appendix to the Corporations proxy statement on Schedule 14A for its 2001
annual meeting of stockholders is incorporated herein by reference.*

The following exhibit to the
Corporations Registration Statement on Form S-8 (Registration No. 333-44868) is
incorporated herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                     
|---------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10               | Amendment, dated August 21, 2000, to Financing Agreement
                                             among the Corporation, United Retail Incorporated,
                                             Cloudwalkers, Inc. and CIT

The following exhibits to the
Corporations Annual Report on Form 10-K for the year ended January 29, 2000 are
incorporated herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                           
|---------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.2             | Amendment, dated December 28, 1999, to Financing Agreement
                                             among the Corporation, United Retail Incorporated and CIT
                                             ("Financing Agreement")
|10.3             | Amendment, dated January 31, 2000, to Financing Agreement
                                             among the Corporation, United Retail Incorporated,
                                             Cloudwalkers, Inc. and CIT     

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended October 30, 1999 is
incorporated herein by reference:

|Number in Filing | Description                                             
|---------------- | --------------------------------------------------------
|10.1             | Amendment, dated October 6, 1999, to Financing Agreement

The following exhibit to the
Corporations Current Report on Form 8-K, filed September 23, 1999, is incorporated
herein by reference:

|Number in Filing | Description                                                                                                                                     
|---------------- | ------------------------------------------------------------------------------------------------------------------------------------------------
|3                | Certificate of Designation, Preferences and Rights of Series
                                             A Junior Participating Preferred Stock

The stockholders rights plan
filed as the exhibit to the Corporations Registration Statement on Form 8-A, dated
September 15, 1999, is incorporated herein by reference.

The following exhibit to the
Corporations Annual Report on Form 10-K for the year ended January 30, 1999 is
incorporated herein by reference:

|Number in Filing | Description                                            
|---------------- | -------------------------------------------------------
|10.1             | Amendment, dated March 29, 1999, to Financing Agreement

The 1999 Stock Option Plan set forth
as the Appendix to the Corporations proxy statement on Schedule 14A for its 1999
annual meeting of stockholders is incorporated herein by reference.*

The following exhibits to the
Corporations Quarterly Report on Form 10-Q for the period ended May 2, 1998 are
incorporated herein by reference:

|Number in Filing | Description                                                                                                                               
|---------------- | ------------------------------------------------------------------------------------------------------------------------------------------
|10.1*            | 1998 Stock Option Agreement, dated May 21, 1998, between the
                                             Corporation and Raphael Benaroya
|10.2*            | 1998 Stock Option Agreement, dated May 21, 1998, between the
                                             Corporation and George R. Remeta

The following exhibits to the
Corporations Annual Report on Form 10-K for the year ended January 31, 1998 are
incorporated herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                                                                  
|---------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1             | Restated Stockholders' Agreement, dated December 23, 1992,
                                             between the Corporation and certain of its stockholders and
                                             Amendment No. 1, Amendment No. 2 and Amendment No. 3 thereto
|10.2             | Private Label Credit Card Program Agreement                                                                                                                                                                                                                                  
|10.4*            | Restated 1990 Stock Option Plan as of March 6, 1998                                                                                                                                                                                                                          
|10.5*            | Restated 1990 Stock Option Plan as of May 28, 1996                                                                                                                                                                                                                           
|10.6*            | Restated 1996 Stock Option Plan as of March 6, 1998                                                                                                                                                                                                                          

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended November 1, 1997 is
incorporated herein by reference:

|Number in Filing | Description                                                
|---------------- | -----------------------------------------------------------
|10.1             | Amendment, dated September 15, 1997, to Financing Agreement

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended August 2, 1997 is
incorporated herein by reference:

|Number in Filing | Description        
|---------------- | -------------------
|10.1             | Financing Agreement

The following exhibits to the
Corporations Registration Statement on Form S-1 (Registration No. 33-44499), as
amended, are incorporated herein by reference:

|Number in Filing | Description                                                                                                      
|---------------- | -----------------------------------------------------------------------------------------------------------------
|3.1              | Amended and Restated Certificate of Incorporation of the
                                             Corporation
|4.1              | Specimen Certificate for Common Stock of the
                                             Corporation            

__________*A compensatory plan for the benefit
of the Corporations management or a management contract.

1. During the second quarter of fiscal 2005, the Company filed Current Reports on Form 8-K as follows:

| |       |                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)   | on May 6, 2005, to provide information about a change in the Company's independent registered public
                  accounting firm;                                                                                                                                                                                                                                                                                  
| | (ii)  | on May 24, 2005, to furnish summary financial information for the first quarter of fiscal 2005; and                                                                                                                                                                                                                                                                                                                      
| | (iii) | on June 29, 2005, to provide information about (1) amendments to the Company's Supplemental Retirement
                  Savings Plan, (2) novations between the Company and the parties to its Severance Pay
                  Agreements, (3) the issuance of formula stock options and stock appreciation rights to
                  Directors of the Company and (4) amendments to the Company's stock option plans.

---

# 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.

(Registrant)    
          UNITED RETAIL GROUP, INC.

Date: September 7, 2005

| |                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------
| | By: /s/ GEORGE R. REMETAGeorge R. Remeta
Vice Chairman of the Board and ChiefAdministrative Officer - Authorized Signature
| |                                                                                                                           
| | By: /s/ JON GROSSMANJon GrossmanVice President-Finance and Chief Accounting Officer                                       

---

# EXHIBIT INDEX

(1)    
          The following exhibits are filed herewith:

|Number | Description                                                                                                                                                                                                                                                                                                                      
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31     | Certifications pursuant to Section 302                                                                                                                                                                                                                                                                                           
|99     | Letter, dated April 28, 2005, from Raphael Benaroya to John
                                             Pound is incorporated by reference to Exhibit No. 99.2 to the
                                             Corporation's Current Report on Form 8-K filed on April 29,
                                             2005

(2)    
          Certifications pursuant to Section 906 are furnished as Exhibit 32 hereto.

(3)    
          The following documents are also incorporated herein by reference.

The following exhibits to the
Corporations Current Report on Form 8-K filed on September 1, 2005 are incorporated
herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                                                        
|---------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.3*            | Amendment to Supplemental Retirement Savings Plan                                                                                                                                                                                                                  
|10.4*            | Amendment, dated August 29, 2005, to Employment Agreement,
                                             dated as of September 3, 2004, between the Corporation and
                                             Raphael Benaroya ("Benaroya Employment Agreement") 
|10.5*            | Amendment, dated August 29, 2005, to Employment Agreement,
                                             dated as of September 3, 2004, between the Corporation and
                                             George R. Remeta ("Remeta Employment Agreement")   
|10.6*            | Amendment, dated August 29, 2005, to Employment Agreement,
                                             dated as of September 3, 2004, between the Corporation and
                                             Kenneth P. Carroll ("Carroll Employment Agreement")
|10.8*            | Form of Severance Pay Agreements, dated August 26, 2005,
                                             between the Corporation and Terence Puffer and Rose Panicali,
                                             respectively                                      
|10.9*            | Bonus Agreement, dated August 22, 2005, between the Corporation and Rose Panicali                                                                                                                                                                                  

The following exhibits to the
Corporations Current Report on Form 8-K filed on June 29, 2005 are incorporated
herein by reference:

|Number in Filing | Description                                                                                          
|---------------- | -----------------------------------------------------------------------------------------------------
|10.1*            | Supplemental Retirement Savings Plan                                                                 
|10.2*            | Severance Pay Agreement form                                                                         
|10.3*            | Amendment to 2003 Stock Option Plan                                                                  
|10.4*            | Amendment to 2001 Stock Option Plan                                                                  
|10.5*            | Amendment to 1999 Stock Option Plan                                                                  
|10.6*            | Amendment to 1996 Stock Option Plan                                                                  
|10.7*            | Amendment to 1990 Stock Option Plan                                                                  
|10.8*            | Amendment to Stock Option Agreement, dated May 21, 1998, between
the Corporation and Raphael Benaroya
|10.9*            | Amendment to Stock Option Agreement, dated May 21, 1998, between
the Corporation and George R. Remeta
|10.10*           | Amendment to Benaroya Employment Agreement                                                           
|10.11*           | Amendment to Remeta Employment Agreement                                                             
|10.12*           | Amendment to Carroll Employment Agreement                                                            

The following exhibit to the
Corporations Current Report on Form 8-K filed on April 22, 2005 is incorporated
herein by reference:

|Number in Filing | Description                            
|---------------- | ---------------------------------------
|10*              | Restated Stock Appreciation Rights Plan

The following exhibit to the
Corporations Current Report on Form 8-K filed on March 23, 2005 is incorporated
herein by reference:

|Number in Filing | Description                                                                                                                                               
|---------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|10               | Stipulation and Settlement Agreement, dated March 18, 2005,
                                             in Stanford et ano vs. United Retail Incorporated

The following exhibits to the
Corporations Current Report on Form 8-K filed on March 3, 2005 are incorporated
herein by reference:

|Number in Filing | Description                                    
|---------------- | -----------------------------------------------
|10.1*            | 2005 Incentive Compensation Plan Agreement Form
|10.2*            | 2005 Tandem Bonus Plan Agreement               

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended October 30, 2004 is
incorporated herein by reference:

|Number in Filing | Description                    
|---------------- | -------------------------------
|21               | Subsidiaries of the Corporation

The following exhibits to the
Corporations Quarterly Report on Form 10-Q for the period ended July 31, 2004 are
incorporated herein by reference:

|Number in Filing | Description                  
|---------------- | -----------------------------
|10.1*            | Benaroya Employment Agreement
|10.2*            | Remeta Employment Agreement  
|10.3*            | Carroll Employment Agreement 

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended May 1, 2004 is
incorporated herein by reference:

|Number in Filing | Description                                                                                                                
|---------------- | ---------------------------------------------------------------------------------------------------------------------------
|10*              | Bonus agreement, dated May 28, 2004, between the Corporation
                                             and Joann Fielder

The following exhibits to the
Corporations Annual Report on Form 10-K for the year ended January 31, 2004 are
incorporated herein by reference:

|Number in Filing | Description                                                                                                                              
|---------------- | -----------------------------------------------------------------------------------------------------------------------------------------
|3                | Restated By-laws of the Corporation                                                                                                      
|10.2*            | Form of Indemnification Agreement between the Corporation and
                                             each of its Directors         
|14               | Code of Ethics for Principal Executive and Senior Financial
                                             Officers pursuant to Section 406

The following exhibit to the
Corporations Current Report on Form 8-K filed on January 8, 2004 is incorporated
herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                                                                                                                                 
|---------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10               | Amendment, dated December 23, 2003, to Financing Agreement
                                             among the Corporation, United Retail Incorporated,
                                             Cloudwalkers, Inc. and The CIT Group/Business Credit, Inc.,
                                             as Agent and Lender ("CIT")

The 2003 Stock Option Plan set forth
as the appendix to the Corporations proxy statement on Schedule 14A for its 2003
annual meeting of stockholders is incorporated herein by reference.*

The following exhibit to the
Corporations Annual Report on Form 10-K/A for the year ended February 1, 2003 is
incorporated herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                      
|---------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1             | Amendment, dated January 31, 2003, to Financing Agreement
                                             among the Corporation, United Retail Incorporated,
                                             Cloudwalkers, Inc. and CIT

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended August 3, 2002 is
incorporated herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                    
|---------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1             | Amendment, dated August 2, 2002, to Financing Agreement among
                                             the Corporation, United Retail Incorporated, Cloudwalkers,
                                             Inc. and CIT

The following exhibits to the
Corporations Annual Report on Form 10-K for the year ended February 2, 2002 are
incorporated herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                                                                                                                                                                                                                              
|---------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1             | Amendment, dated April 5, 2002, to Private Label Credit Card
                                             Program Agreement, dated January 27, 1998, between the
                                             Corporation, United Retail Incorporated and World Financial
                                             Network National Bank ("Private Label Credit Card Program
                                             Agreement")
|10.2             | Amendment, dated December 29, 1999, to Private Label Credit
                                             Card Program Agreement                                                                                                                                                                                                                                                                                                          
|10.3             | Amendment, dated August 19, 1999, to Private Label Credit
                                             Card Program Agreement                                                                                                                                                                                                                                                                                                            

The following exhibits to the
Corporations Quarterly Report on Form 10-Q for the period ended November 3, 2001 are
incorporated herein by reference:

|Number in Filing | Description                                                                                                                                      
|---------------- | -------------------------------------------------------------------------------------------------------------------------------------------------
|10.4*            | Summary Plan Description for United Retail Group, Inc.
                                             Incentive Compensation Program for Executives
|10.5             | Amendment, dated October 1, 2001, to Private Label Credit
                                             Card Program Agreement                    

The 2001 Stock Option Plan set forth
as an appendix to the Corporations proxy statement on Schedule 14A for its 2001
annual meeting of stockholders is incorporated herein by reference.*

The following exhibit to the
Corporations Registration Statement on Form S-8 (Registration No. 333-44868) is
incorporated herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                     
|---------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10               | Amendment, dated August 21, 2000, to Financing Agreement
                                             among the Corporation, United Retail Incorporated,
                                             Cloudwalkers, Inc. and CIT

The following exhibits to the
Corporations Annual Report on Form 10-K for the year ended January 29, 2000 are
incorporated herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                           
|---------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.2             | Amendment, dated December 28, 1999, to Financing Agreement
                                             among the Corporation, United Retail Incorporated and CIT
                                             ("Financing Agreement")
|10.3             | Amendment, dated January 31, 2000, to Financing Agreement
                                             among the Corporation, United Retail Incorporated,
                                             Cloudwalkers, Inc. and CIT     

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended October 30, 1999 is
incorporated herein by reference:

|Number in Filing | Description                                             
|---------------- | --------------------------------------------------------
|10.1             | Amendment, dated October 6, 1999, to Financing Agreement

The following exhibit to the
Corporations Current Report on Form 8-K, filed September 23, 1999, is incorporated
herein by reference:

|Number in Filing | Description                                                                                                                                     
|---------------- | ------------------------------------------------------------------------------------------------------------------------------------------------
|3                | Certificate of Designation, Preferences and Rights of Series
                                             A Junior Participating Preferred Stock

The stockholders rights plan
filed as the exhibit to the Corporations Registration Statement on Form 8-A, dated
September 15, 1999, is incorporated herein by reference.

The following exhibit to the
Corporations Annual Report on Form 10-K for the year ended January 30, 1999 is
incorporated herein by reference:

|Number in Filing | Description                                            
|---------------- | -------------------------------------------------------
|10.1             | Amendment, dated March 29, 1999, to Financing Agreement

The 1999 Stock Option Plan set forth
as the Appendix to the Corporations proxy statement on Schedule 14A for its 1999
annual meeting of stockholders is incorporated herein by reference.*

The following exhibits to the
Corporations Quarterly Report on Form 10-Q for the period ended May 2, 1998 are
incorporated herein by reference:

|Number in Filing | Description                                                                                                                               
|---------------- | ------------------------------------------------------------------------------------------------------------------------------------------
|10.1*            | 1998 Stock Option Agreement, dated May 21, 1998, between the
                                             Corporation and Raphael Benaroya
|10.2*            | 1998 Stock Option Agreement, dated May 21, 1998, between the
                                             Corporation and George R. Remeta

The following exhibits to the
Corporations Annual Report on Form 10-K for the year ended January 31, 1998 are
incorporated herein by reference:

|Number in Filing | Description                                                                                                                                                                                                                                                                  
|---------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1             | Restated Stockholders' Agreement, dated December 23, 1992,
                                             between the Corporation and certain of its stockholders and
                                             Amendment No. 1, Amendment No. 2 and Amendment No. 3 thereto
|10.2             | Private Label Credit Card Program Agreement                                                                                                                                                                                                                                  
|10.4*            | Restated 1990 Stock Option Plan as of March 6, 1998                                                                                                                                                                                                                          
|10.5*            | Restated 1990 Stock Option Plan as of May 28, 1996                                                                                                                                                                                                                           
|10.6*            | Restated 1996 Stock Option Plan as of March 6, 1998                                                                                                                                                                                                                          

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended November 1, 1997 is
incorporated herein by reference:

|Number in Filing | Description                                                
|---------------- | -----------------------------------------------------------
|10.1             | Amendment, dated September 15, 1997, to Financing Agreement

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended August 2, 1997 is
incorporated herein by reference:

|Number in Filing | Description        
|---------------- | -------------------
|10.1             | Financing Agreement

The following exhibits to the
Corporations Registration Statement on Form S-1 (Registration No. 33-44499), as
amended, are incorporated herein by reference:

|Number in Filing | Description                                                                                                      
|---------------- | -----------------------------------------------------------------------------------------------------------------
|3.1              | Amended and Restated Certificate of Incorporation of the
                                             Corporation
|4.1              | Specimen Certificate for Common Stock of the
                                             Corporation            

__________*A compensatory plan for the benefit
of the Corporations management or a management contract.