# 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 August 2, 2003

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)

---

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).

|         |        
|-------- | -------
|YES_____ | NO    X

# APPLICABLE ONLY TO
ISSUERS INVOLVED IN BANKRUPTCY

# PROCEEDINGS 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 August 2, 2003, 12,937,304
units, each consisting of one share of the registrants common stock, $.001 par value
per share, and one attached stock purchase right, were outstanding. The units are referred
to herein as shares.

---

PART I - FINANCIAL INFORMATION

ITEM I - FINANCIAL STATEMENTS

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

|                                                                                                           | ASSETS               | August 2,2003(Unaudited) | February 12003 | August 3,2002(Unaudited)
|---------------------------------------------------------------------------------------------------------- | -------------------- | ------------------------ | -------------- | ------------------------
|Current Assets:                                                                                            |                      |                          |                |                         
|Cash and cash equivalents                                                                                  |                      | $23,867                  | $17,540        | $28,978                 
|Accounts receivable                                                                                        |                      | 1,255                    | 2,994          | 1,721                   
|Inventory                                                                                                  |                      | 44,902                   | 61,569         | 58,148                  
|Prepaid rents                                                                                              |                      | 4,935                    | 4,972          | 4,921                   
|Other prepaid expenses                                                                                     |                      | 2,395                    | 2,290          | 2,986                   
|Total current assets                                                                                       |                      | 77,354                   | 89,365         | 96,754                  
|                                                                                                           |                      |                          |                |                         
|Property and equipment, net                                                                                |                      | 82,950                   | 87,720         | 89,397                  
|Deferred charges and other intangible assets,   net of accumulated amortization of $357, $325   and $2,793 |                      | 525                      | 557            | 6,200                   
|Deferred income taxes                                                                                      |                      | -                        | -              | 1,839                   
|Other assets                                                                                               |                      | 1,477                    | 1,667          | 1,986                   
|Total Assets                                                                                               |                      | $162,306                 | $179,309       | $196,176                
|                                                                                                           |                      |                          |               
|                                                                                                           | LIABILITIES          |                          |                |                         
|Current liabilities:                                                                                       |                      |                          |                |                         
|Short-term distribution center financing                                                                   |                      | $771                     | $1,220         | $1,491                  
|Short-term capital leases                                                                                  |                      | 2,032                    | 1,963          | 1,803                   
|Accounts payable and other                                                                                 |                      | 21,686                   | 26,596         | 19,450                  
|Disbursement accounts                                                                                      |                      | 8,014                    | 11,922         | 12,044                  
|Accrued expenses                                                                                           |                      | 23,657                   | 22,023         | 23,386                  
|Deferred income taxes                                                                                      |                      | -                        | -              | 138                     
|Total current liabilities                                                                                  |                      | 56,160                   | 63,724         | 58,312                  
|                                                                                                           |                      |                          |                |                         
|Long-term distribution center financing                                                                    |                      | 3,650                    | 3,961          | 4,421                   
|Long-term capital leases                                                                                   |                      | 4,712                    | 5,764          | 6,506                   
|Other long-term liabilities                                                                                |                      | 7,485                    | 6,865          | 6,756                   
|Total liabilities                                                                                          |                      | 72,007                   | 80,314         | 75,995                  
|                                                                                                           | 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; none issued                                                           |                      |                          |                |                         
|Common stock, $.001 par value; authorized                                                                  |                      |                          |               
|30,000,000 shares; issued 14,248,200 shares;                                                               |                      |                          |                |                         
|outstanding 12,937,304 shares                                                                              |                      | 14                       | 14             | 14                      
|Additional paid-in capital                                                                                 |                      | 83,696                   | 83,601         | 83,473                  
|Retained earnings                                                                                          |                      | 14,265                   | 23,056         | 44,370                  
|Treasury stock (1,310,896 shares) at cost                                                                  |                      | (7,676)                  | (7,676)        | (7,676)                 
|Total stockholders' equity                                                                                 |                      | 90,299                   | 98,995         | 120,181                 
|Total liabilities and stockholders' equity                                                                 |                      | $162,306                 | $179,309       | $196,176                

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

---

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

|                                      | Thirteen Weeks Ended | Twenty-Six Weeks Ended |            |           
|------------------------------------- | -------------------- | ---------------------- | ---------- | ----------
|
|Net sales                             | $104,790             | $113,674               | $206,320   | $229,248  
|                                      |                      |                        |            |           
|Cost of goods sold, including         |                      |                        |            |           
|buying and occupancy costs            | 83,119               | 92,609                 | 162,480    | 177,398   
|                                      |                      |                        |            |           
|Gross profit                          | 21,671               | 21,065                 | 43,840     | 51,850    
|                                      |                      |                        |            |           
|General, administrative and           |                      |                        |            |           
|store operating expenses              | 25,616               | 28,142                 | 51,996     | 54,155    
|                                      |                      |                        |            |           
|Operating loss                        | (3,945)              | (7,077)                | (8,156)    | (2,305)   
|                                      |                      |                        |            |           
|Interest expense, net                 | 212                  | 184                    | 464        | 388       
|                                      |                      |                        |            |           
|Loss before income taxes              | (4,157)              | (7,261)                | (8,620)    | (2,693)   
|                                      |                      |                        |            |           
|Benefit from income taxes             | (1,789)              | (2,622)                | (3,808)    | (930)     
|Provision for the valuation allowance |                      |                        |            |           
|for the net deferred tax assets       | 1,878                | -                      | 3,979      | -         
|                                      |                      |                        |            |           
|Net loss                              | ($4,246)             | ($4,639)               | ($8,791)   | ($1,763)  
|                                      |                      |                        |            |           
|Net loss per share                    |                      |                        |            |           
|Basic                                 | ($0.33)              | ($0.35)                | ($0.68)    | ($0.13)   
|Diluted                               | ($0.33)              | ($0.35)                | ($0.68)    | ($0.13)   
|                                      |                      |                        |            |           
|Weighted average number of            |                      |                        |            |           
|shares outstanding                    |                      |                        |            |           
|Basic                                 | 12,937,304           | 13,107,544             | 12,937,304 | 13,155,831
|Common stock equivalents              |                      |                        |            |           
|(stock options)                       | 0                    | 0                      | 0          | 0         
|Diluted                               | 12,937,304           | 13,107,544             | 12,937,304 | 13,155,831

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

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

|                                                        | Twenty-Six Weeks Ended |         
|------------------------------------------------------- | ---------------------- | --------
|
|Cash Flows From Operating Activities:                   |                        |         
|Net loss                                                | ($8,791)               | ($1,763)
|Adjustments to reconcile net loss to net cash           |                        |         
|provided from operating activities:                     |                        |         
|Depreciation and amortization of property and equipment | 6,289                  | 6,053   
|Amortization of deferred charges and other              |                        |         
|intangible assets                                       | 255                    | 311     
|Loss on disposal of assets                              | 276                    | 254     
|Deferred compensation                                   | 95                     | 156     
|Provision for deferred income taxes                     | -                      | (940)   
|Deferred lease assumption revenue amortization          | (21)                   | (76)    
|Changes in operating assets and liabilities:            |                        |         
|Accounts receivable                                     | 1,739                  | (266)   
|Income taxes                                            | 1,246                  | 1,899   
|Inventory                                               | 16,667                 | 3,645   
|Accounts payable and accrued expenses                   | (8,467)                | (308)   
|Prepaid expenses                                        | (68)                   | (520)   
|Other assets and liabilities                            | 587                    | 856     
|Net Cash Provided from Operating Activities             | 9,807                  | 9,301   
|                                                        |                        |         
|Investing Activities:                                   |                        |         
|Capital expenditures                                    | (1,795)                | (7,084) 
|Deferred payment for property and equipment             | 58                     | 528     
|                                                        |                        |         
|Net Cash Used in Investing Activities                   | (1,737)                | (6,566) 
|                                                        |                        |         
|Financing Activities                                    |                        |         
|Repayments of long-term debt                            | (760)                  | (704)   
|Payments on capital lease obligations                   | (983)                  | (859)   
|Issuance of short-term debt                             | 290                    | -       
|Repayments of short-term debt                           | (290)                  | -       
|Issuance of loans to officers                           | -                      | (52)    
|Proceeds from exercise of stock options                 | -                      | 36      
|                                                        |                        |         
|Net Cash Used in Financing Activities                   | (1,743)                | (1,579) 
|                                                        |                        |         
|Net increase in cash and cash equivalents               | 6,327                  | 1,166   
|Cash and cash equivalents, beginning of period          | 17,540                 | 27,812  
|Cash and cash equivalents, end of period                | $23,867                | $28,978 

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

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UNITED RETAIL GROUP, INC.

NOTES TO 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 August 2, 2003 and August 3, 2002
are unaudited and are presented pursuant to the rules and regulations of the Securities
and Exchange Commission. Accordingly, the consolidated financial statements should be read
in conjunction with the financial statement disclosures contained in the Companys
2002 Annual Report and 2002 Form 10-K, as amended. In the opinion of management, the
accompanying consolidated financial statements reflect all adjustments necessary (which
are of a normal recurring nature) 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.

Certain prior year balances have been
reclassified to conform with the current year presentation.

# 2. Net 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 has been computed on the basic shares because for the thirteen and
twenty-six weeks ended August 2, 2003 and August 3, 2002, the effect of stock options is
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                          | 1,812,912            | 791,072                | 1,812,912    | 798,572     
|Range of option prices per share | $2.25-$15.13         | $8.50-$15.13           | $2.25-$15.13 | $8.13-$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 is recorded ratably over the five-year vesting period
of the options.

The following table illustrates the
effect on net loss and 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 loss                  | ($4,246)             | ($4,639)               | ($8,791) | ($1,763)
|Add back: Compensation expense     | 17                   | 78                     | 95       | 156     
|Deduct: Total stock-based          |                      |                        |          |         
|employee compensation              |                      |                        |          |         
|expense determined under fair      |                      |                        |          |         
|value based method for all         |                      |                        |          |         
|awards, net of related tax effects | (99)                 | (159)                  | (168)    | (471)   
|                                   |                      |                        |          |         
|Pro forma net loss                 | ($4,328)             | ($4,720)               | ($8,864) | ($2,078)
|                                   |                      |                        |          |         
|Loss per share:                    |                      |                        |          |         
|Basic - as reported                | ($0.33)              | ($0.35)                | ($0.68)  | ($0.13) 
|Basic - pro forma                  | ($0.33)              | ($0.36)                | ($0.69)  | ($0.16) 
|                                   |                      |                        |         
|Diluted - as reported              | ($0.33)              | ($0.35)                | ($0.68)  | ($0.13) 
|Diluted - pro forma                | ($0.33)              | ($0.36)                | ($0.69)  | ($0.16) 

# 3. Financing Arrangements

In 1993, the Company executed a
ten-year $7.0 million note bearing interest at 7.3%. Interest and principal are payable in
equal monthly installments beginning November 1993. The note is collateralized by the
material handling equipment in the distribution center.

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 provides a revolving
line of credit for a term ending August 15, 2005 in the aggregate amount of $40 million
for the Companies, subject to availability of credit according to a borrowing base
computation. 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.

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.

In the event a loan is made to one of
the Companies, interest is payable monthly based on a 360-day year at the prime rate or at
two percent plus the LIBOR rate on a per annum basis, at the borrowers option.

The line of credit is secured by a
security interest in inventory and proceeds and by the balance on deposit from time to
time in a bank account that has been pledged to the lenders.

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.

At August 2, 2003, the combined
borrowing capacity of the Companies, after satisfying the $5 million minimum availability
requirement, was $5.1 million, no balance was in the pledged account, the aggregate
outstanding amount of letters of credit, including $5.5 million of standby letters of
credit, arranged by CIT was $26.7 million and no loan had been drawn down. The
Companys cash on hand was 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.

Between 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% to 6.64% per annum aggregating approximately $1.4 million. The
Company has the option of buying the systems at the end of the term for a nominal price.

# 4. Income Taxes

The
provision for (benefit from) income taxes consists of (dollars in thousands):

|                   | Thirteen Weeks Ended | Twenty-Six Weeks Ended |      |       
|------------------ | -------------------- | ---------------------- | ---- | ------
|
|Currently payable: |                      |                        |      |       
|Federal            | $ -                  | ($1,720)               | $ -  | ($156)
|State              | 89                   | 30                     | 171  | 166   
|                   | 89                   | (1,690)                | 171  | 10    
|                   |                      |                        |      |       
|Deferred:          |                      |                        |      |       
|Federal            | -                    | (767)                  | -    | (774) 
|State              | -                    | (165)                  | -    | (166) 
|                   | -                    | (932)                  | -    | (940) 
|                   | $89                  | ($2,622)               | $171 | ($930)

Reconciliation of the provision for
(benefit from) income taxes from the U.S. Federal statutory rate to the Companys
effective rate is as follows (dollars in thousands):

|                                 | Thirteen Weeks Ended |         |          |        
|-------------------------------- | -------------------- | ------- | -------- | -------
|
|Tax at Federal rate              | ($1,455)             | (35.0%) | ($2,541) | (35.0%)
|State income taxes, net of       |                      |         |          |        
|Federal benefit                  | (92)                 | (2.2%)  | (88)     | (1.2%) 
|Benefit from state net operating |                      |         |          |        
|losses ("NOL's)                  | (249)                | (6.0%)  | -        | -      
|Other                            | 7                    | 0.2%    | 7        | 0.1%   
|Sub-total                        | ($1,789)             | (43.0%) | ($2,622) | (36.1%)
|                                 |                      |         |          |        
|Deferred tax valuation allowance | 1,878                | 45.2%   | -        | -      
|                                 |                      |         |          |        
|                                 | $89                  | 2.2%    | ($2,622) | (36.1%)

| |  | 
| |  | 
| |  | 

|                                 | Twenty-Six Weeks Ended |         |        |        
|-------------------------------- | ---------------------- | ------- | ------ | -------
|
|Tax at Federal rate              | ($3,017)               | (35.0%) | (943)  | (35.0%)
|State income taxes, net of       |                        |         |        |        
|federal benefit                  | (105)                  | (1.2%)  | -      | -      
|Benefit from state operating     |                        |         |        |        
|losses ("NOL's)                  | (700)                  | (8.1%)  | -      | -      
|Other                            | 14                     | 0.2%    | 13     | 0.5%   
|Sub-total                        | ($3,808)               | (44.1%) | ($930) | (34.5%)
|                                 |                        |         |        |        
|Deferred tax valuation allowance | 3,979                  | 46.1%   | -      | -      
|                                 |                        |         |        |        
|                                 | $171                   | 2.0%    | ($930) | (34.5%)

Significant components of the
Companys net deferred tax assets as of August 2, 2003 are summarized below (dollars
in thousands):

|                                                          |         
|--------------------------------------------------------- | --------
|Net current asset:                                        |         
|Inventory                                                 | $1,155  
|Accruals and reserves                                     | 597     
|Prepaid rent                                              | (1,171) 
|Sub-total                                                 | $581    
|                                                          |         
|Net long-term asset:                                      |         
|Federal NOL                                               | $5,525  
|State NOL's                                               | 3,674   
|Accruals and reserves                                     | 3,402   
|Compensation                                              | 601     
|Depreciation                                              | (2,554) 
|Sub-total                                                 | $10,648 
|                                                          |         
|Total net deferred tax asset   before valuation allowance | 11,229  
|                                                          |         
|Valuation allowance                                       | (11,229)
|                                                          |         
|Net deferred tax asset                                    | $  -    

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 primary importance on the Companys
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, 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 additional
valuation allowances in the first and second quarters of fiscal 2003 of $2.1 million and
$1.9 million, respectively. Accordingly, the valuation allowance as of August 2, 2003 is
$11.2 million. 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. Advances To Officers

Advances were made by the Company in
February 1998, February 1999 and November 1999 to Raphael Benaroya, the Companys
Chairman of the Board, President and Chief Executive Officer. The purpose of the advances
was to finance payment of income taxes incurred in connection with the exercise of stock
options, totaling approximately $2.3 million. On November 30, 2001, Mr. Benaroya signed a
consolidated promissory note in the amount of approximately $2.8 million, representing the
cumulative advances and accrued interest as of that date, with a term of two years. Mr.
Benaroya repaid the note with accrued interest as of July 1, 2002 by surrendering 278,529
shares of Company common stock. The surrendered shares had a value equivalent to the
consolidated note based on the closing price on the NASDAQ Stock Market on the preceding
trading day. The Compensation Committee of the Board of Directors, which administers the
stock option program, met on the morning of July 1, 2002 and approved the transaction.

# 6. Stock Appreciation
Rights Plan

In May 2000, May 2001, May 2002 and
May 2003, each non-management Director received an annual award (a SAR Award)
under the Companys Stock Appreciation Rights Plan that provides for a cash payment
by the Company when the Director exercises the stock option granted to him
contemporaneously. The payment 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 exercise price of the corresponding option net of any personal
income tax withholding on the gain arising from the exercise.

# 7. Supplemental Cash
Flow Information

Non-cash investing activities include
$1.4 million related to capital lease obligations incurred between January 2002 and
January 2003.

Non-cash financing activities include
the repayment of officer advances with accrued interest as of July 1, 2002 with the
repayment made by surrendering 278,529 shares of Company common stock with a market value
equal to the principal and interest, in lieu of cash payment.

# 8. Contingencies

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

On May 1, 2003, a suit in California
Superior Court styled Erik Stanford vs. United Retail Incorporated was served on the
Company by a former manager in California. The suit is purportedly a class action on
behalf of certain current and former associates in California in the past four years.

The plaintiff asserts state wage and
hour claims.

Based on a very preliminary factual
review, management believes there are meritorious procedural defenses available that the
plaintiff does not adequately represent the classes identified in the lawsuit. The Company
intends to vigorously oppose class certification. Nevertheless, successful procedural
defenses might not be dispositive of all the claims if a more adequate class
representative replaced Mr. Stanford in the case.

The Company also intends to defend
the case vigorously on the merits.

Although counsel is unable at this early
stage to predict the ultimate outcome of the case and the amount of any potential
liability with any accuracy, management does not believe that the case will have a
material impact on the Companys financial condition or results of operations.

# ITEM 2.
MANAGEMENTS DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF
OPERATIONS

# Second Quarter Of Fiscal
2003 Versus Second Quarter Of Fiscal 2002

Net sales for the second quarter of
fiscal 2003 decreased 7.8% from the second quarter of fiscal 2002, to $104.8 million from
$113.7 million from a decrease in units sold. Comparable store sales for the second
quarter of fiscal 2003 decreased 7.2%. (Comparable store sales are at stores that were
open at least 12 months; this measure of sales performance is commonly used by specialty
retail industry analysts.) Average stores open decreased from 555 to 546. See,
Stores. Internet and catalog (Shop @ Home) sales declined to $1.3
million in the second quarter of fiscal 2003 from $1.7 million in the second quarter of
fiscal 2002, primarily from the suspension of catalog mailings. See, Suspension of
Catalog Operations.

Gross profit was $21.7 million in the
second quarter of fiscal 2003 compared with $21.1 million in the second quarter of fiscal
2002, increasing as a percentage of net sales to 20.7% from 18.5%. Gross profit as a
percentage of net sales increased principally because of higher merchandise margins and
lower in-store shrinkage. Gross profit levels in the future will be subject to
the uncertainties and other risk factors referred to under the caption Future
Results.

General, administrative and store
operating expenses decreased to $25.6 million in the second quarter of fiscal 2003 from
$28.1 million in the second quarter of fiscal 2002. As a percentage of net sales, general,
administrative and store operating expenses decreased to 24.4% from 24.8% principally
because of lower Shop @ Home expenses and higher private label credit card royalties from
World Financial Network National Bank (See Private Label Credit Cards Issued By The
Bank). This decrease was partially offset by higher health insurance expense as a
percentage of net sales and by a higher store payroll percentage resulting from lower net
sales.

The Company incurred operating losses
of $3.9 million in the second quarter of fiscal 2003 and $7.1 million in the second
quarter of the previous year.

Net interest expense was $0.2 million
in the second quarter of both fiscal 2003 and fiscal 2002.

The Company had a provision for
income taxes of $0.1 million in the second quarter of fiscal 2003 and a benefit from
income taxes of $2.6 million in the second quarter of fiscal 2002.

The Company incurred net losses of
$4.2 million in the second quarter of fiscal 2003 and $4.6 million in the second quarter
of fiscal 2002.

In the fourth quarter of fiscal 2002,
the Company established a valuation allowance for all its net deferred tax assets and net
operating loss carryforwards (NOLs). In the second quarter of fiscal
2003, the tax valuation allowance was increased by $1.9 million.

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 Of Fiscal
2003 Versus First Half Of Fiscal 2002

Net sales for the first half of
fiscal 2003 decreased 10.0% from the first half of fiscal 2002, to $206.3 million from
$229.2 million from a decrease in units sold. Comparable store sales for the first half of
fiscal 2003 decreased 9.5%. Average stores open decreased from 555 to 548. Shop @ Home
sales declined to $2.8 million in the first half of fiscal 2003 from $4.1 million in the
first half of fiscal 2002, primarily from the suspension of catalog mailings.  The Company mailed AVENUE catalogs from September 2000 to March 2003, when the Company suspended catalog operations indefinitely.

Gross profit was $43.8 million in the
first half of fiscal 2003 compared with $51.9 million in the first half of fiscal 2002,
decreasing as a percentage of net sales to 21.2% from 22.6%. Gross profit as a percentage
of net sales decreased principally because occupancy costs were negatively leveraged by
the decline of net sales. This decrease was partially offset by a reduction in the
in-store shrinkage percentage.

General, administrative and store
operating expenses decreased to $52.0 million in the first half of fiscal 2003 from $54.2
million in the first half of fiscal 2002. As a percentage of net sales, however, general,
administrative and store operating expenses increased to 25.2% from 23.6% principally
because of a higher store payroll percentage resulting from lower net sales and of higher
health insurance expense as a percentage of net sales.

The Company incurred operating losses
of $8.2 million in the first half of fiscal 2003 and $2.3 million in the first half of the
previous year.

Net interest expense was $0.5 million
in the first half of fiscal 2003 and $0.4 million in the first half of fiscal 2002, as a
result of lower cash balances and lower interest rates on cash balances.

The Company had a provision for
income taxes of $0.2 million in the first half of fiscal 2003 and a benefit from income
taxes of $0.9 million in the first half of fiscal 2002.

The Company incurred net losses of
$8.8 million in the first half of fiscal 2003 and $1.8 million in the first half of fiscal
2002.

In the fourth quarter of fiscal 2002,
the Company established a valuation allowance for all its net deferred tax assets and
NOLs. In the first half of fiscal 2003, the tax valuation allowance was
increased by $4.0 million to $11.2 million.

# August Sales

Net sales for the month of August
2003 decreased 8.7% from August 2002 to $24.9 million from $27.3 million. Comparable store
sales for the month decreased 8.2%. Net sales for the month were impacted by an electrical
power failure in the Northeast and Midwest regions of the country.

# Liquidity and Capital
Resources

Cash Flow

Cash provided from operating
activities increased to $9.8 million in the first half of fiscal 2003 from $9.3 million in
the first half of fiscal 2002. The principal differences in cash provided from operating
activities in the two semi-annual periods were a decrease in inventory during the first
half of fiscal 2003 that exceeded the corresponding decrease in inventory during the first
half of fiscal 2002 by $13.0 million, partially offset by a decrease in accounts payable
and accrued expenses during the first half of fiscal 2003 that exceeded the corresponding
decrease in accounts payable and accrued expenses during the first half of fiscal 2002 by
$8.2 million. The decrease in inventory during the first half of fiscal 2003 resulted
principally from lower inventory receipt plans intended to increase inventory turns. The
decrease in accounts payable and accrued expenses during the first half of fiscal 2003 was
composed of a decrease in accounts payable, partially offset by an increase in accrued
expenses. The decrease in accounts payable was principally the result of the decrease in
inventory.

Capital expenditures were $1.8
million in the first half of fiscal 2003 and $7.1 million in the first half of fiscal
2002, principally because (i) in fiscal 2002, the Company incurred $2.4 million in construction costs for the fulfillment center at its national distribution center, and (ii) the Company plans to open only five new stores in fiscal 2003 as
a whole compared with the 24 stores that were opened in fiscal 2002 (see,Stores).

Capital Expenditure Budget

Capital expenditures for fiscal 2003
as a whole are budgeted at approximately $5.0 million. The Company funded capital
expenditures from net cash provided from operating activities during the first half of
fiscal 2003 but expects to fund them principally from cash reserves during the year as a
whole. The largest category of annual capital expenditures will be new store construction.
See, Stores. This paragraph constitutes forward-looking information under the
Private Securities Litigation Reform Act of 1995 (the Reform Act) and is
subject to the uncertainties and other risk factors referred to under the Caption
Future Results.

Balance Sheet Sources of
Liquidity

The Companys cash and cash
equivalents were $23.9 million at August 2, 2003 compared with $29.0 million at August 3,
2002. Cash and cash equivalents were $17.5 million at February 1, 2003.

During the first half of fiscal 2003,
a decrease in inventories was planned. Inventories were stated at $44.9 million at August
2, 2003 compared with $58.1 million at August 3, 2002, principally as a result of fewer
units. At February 1, 2003, inventories were stated at $61.6 million. (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 decreased
to $83.0 million at August 2, 2003 from $89.4 million at August 3, 2002 and $87.7 million
at February 1, 2003, principally from depreciation.

Other Liquidity Sources

Import purchases by the Company are
made in U.S. dollars, are generally financed by trade letters of credit and constituted
approximately 54% of total purchases in fiscal 2002.

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 a
revolving line of credit for a term ending August 15, 2005 in the aggregate amount of $40
million for the Companies, 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. As of
August 2, 2003, trade letters of credit for the account of the Companies and supported by
CIT were outstanding in the amount of $21.1 million and standby letters of credit were
outstanding in the amount of $5.5 million, principally in connection with insurance
policies issued to the Company.

Subject to the following paragraph,
the availability of credit (within the aggregate $40 million line of credit) to any of the
Companies at any time is the excess of its borrowing base over the sum of (x) the
aggregate outstanding amount of its letters of credit and its revolving loans, if any, and
(y) at CITs option, the sum of (i) unpaid sales taxes, and (ii) up to $500,000 in
total liabilities of the Companies under permitted encumbrances (as defined in the
Financing Agreement). The borrowing base, as to any of the Companies, is 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 60% to 65% depending on the month,
and (y) the balance from time to time in an account in its name that has been pledged to
the lenders (a Pledged Account).

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 financial covenants. (At August 2, 2003, the combined
borrowing capacity of the Companies , after satisfying the $5 million minimum availability
requirement, was $5.1 million; the Pledged Account had a zero balance; the Companies
cash on hand was unrestricted; and no loan was outstanding.)

The line of credit is secured by a
security interest in inventory and proceeds and by the balance from time to time in the
Pledged Account.

The Financing Agreement 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 first half of fiscal 2003, the
Company drew on the revolving loan facility under the Financing Agreement to meet its peak
working capital requirements. Interest is payable monthly based on a 360-day year at the
prime rate or at two percent plus the LIBOR rate on a per annum basis, at the
borrowers option.

The Companys obligation to pay
customs duties on merchandise imports was collateralized by an unsecured surety bond for
$1.5 million during the first half of fiscal 2002. The tightening market for surety bonds
has made it necessary for the Company to support the surety bond with a standby letter of
credit under the Financing Agreement in the amount of $0.5 million.

Short-term trade credit represents a
significant source of financing for domestic merchandise purchases. Trade credit arises
from the willingness of the Companys domestic vendors 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
liquidity in general and the amount of its cash and cash equivalents and borrowing
capacity under the Financing Agreement in particular.

As of July 1, 2002, an outstanding
loan to a Company officer in the principal amount of approximately $2.8 million plus
accrued interest was paid by the surrender of 278,529 shares of Company stock that the
officer owned. The repurchased shares became treasury stock. The repurchased shares had a
value equivalent to the loan based on the closing price on the NASDAQ Stock Market on the
preceding trading day. (The exchange was approved in advance by the Compensation Committee
of the Board of Directors on the morning of July 1, 2002.)

# Principal Contractual
Obligations and Certain Other Commercial Commitments

The principal contractual obligations
of the Company and certain other commercial commitments at August 2, 2003 (see, also
Critical Accounting Policies  Incurred But Not Reported Claims For Personal
Injuries and Medical Benefits) are summarized in the following charts:

|                             | Payments Due by Period (000's omitted) |        |        |       
|---------------------------- | -------------------------------------- | ------ | ------ | ------
|
|Fixture Sale and Lease Back  | $5,908                                 | $1,561 | $3,544 | $803  
|Distribution Center Mortgage | 4,259                                  | 609    | 1,387  | 1,648 
|Call Center Capital Lease    | 836                                    | 471    | 365    | 0     
|Distribution Center Note     | 162                                    | 162    | 0      | 0     
|Total                        | $11,165                                | $2,803 | $5,296 | $2,451

| |  |  |  |  | 
| |  |  |  |  | 
| |  |  |  |  | 

|                          | Amount of Commitment Per Period (000's omitted) |         |         |        
|------------------------- | ----------------------------------------------- | ------- | ------- | -------
|
|Operating Leases          | $284,476                                        | $43,715 | $75,472 | $58,552
|Trade Letters of Credit*  | 21,121                                          | 21,121  | 0       | 0      
|Standby Letters of Credit | 5,545                                           | 5,545   | 0       | 0      
|Total                     | $311,142                                        | $70,381 | $75,472 | $58,552

---

*Trade letters of credit support
certain Company obligations under purchase orders for merchandise imports for which
payment is not yet due. (Other purchase orders are not supported by trade letters of
credit.)

# Total Cash Requirements

During the first half of fiscal 2003,
the Company funded capital expenditures and payments on debt and capital lease obligations
from net cash provided from operating activities. The Company believes that its cash on
hand and the availability of short-term trade credit and of credit under the Financing
Agreement on a revolving basis will be adequate for the next 12 months to meet its cash
requirements, including (i) anticipated working capital needs, including seasonal
inventory financing, (ii) investing activities, including construction costs for the
stores that it is committed to open (see, Stores) and (iii) financing
activities, including payments due on its principal contractual obligations. The preceding
sentence constitutes forward-looking information under the Reform Act and is subject to
the uncertainties and other risk factors referred to under the caption Future
Results.

# Critical Accounting
Policies

Introduction

Financial statements prepared by
companies in accordance with generally accepted accounting principles are affected by the
policies followed by their managements 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, for self-insured 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 have a valuation allowance for the
Companys net deferred tax assets and NOLs.

Inventory

The margins at which the
Companys inventories can be sold are central to its business. In accordance with
generally accepted accounting principles, inventories are stated at the lower of cost or
market. At August 2, 2003, inventories were stated at $44.9 million. 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 which
can significantly impact the ending inventory valuation at cost, as well as resulting
margins. The necessity for management estimates, 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 fiscal quarter, management conducts a thorough review of inventory on hand and, based
on its business judgment, may reduce further the carrying value of inventories by
recording a markdown reserve for inventory categories with sales performance below
expectations and/or unsold quantities in excess of expectations.

Recording a reserve reduces the
inventory recorded 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 quarter, assets and income for that quarter would be overstated and margins for
the beginning of the next quarter would come in lower. (The opposite would be true if
inventories were underestimated.)

Consistency in inventory valuation
practices is one of the Companys important accounting objectives.

The Companys management
believes that the inventory shown on the balance sheets at August 2, 2003 and August 3,
2002 included in the financial statements contained in this Quarterly Report (this
Report) were properly stated in all material respects, subject to (i) changes
in consumer spending patterns, consumer preferences and overall economic conditions, (ii)
changes in weather patterns, (iii) the seasonality of the retail industry, (iv) risks
related to consumer acceptance of the Companys products, and (v) war risks.

Incurred But Not Reported
Claims For Personal Injuries and Medical Benefits

In accordance with generally accepted
accounting principles, the Company records a liability for IBNR Claims. This liability 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 personal injury claims but it remains liable for a self-insured retention,
which is collateralized by standby letters of credit under the Financing Agreement. The
Company is self-insured for most workers compensation benefits and for its medical,
dental and prescription plans for associates but it has stop loss insurance policies to
limit its liability.)

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

A consistent approach to estimating
liability for IBNR Claims reflected in the Companys balance sheet is one of the
Companys important accounting objectives.

The estimates underlying the
liability for IBNR Claims are matters of judgment on which insurance experts may differ.
The use of different estimates or assumptions would change the amount recorded.

The Companys management
believes that the liability for IBNR Claims reflected in the balance sheets at August 2,
2003 and August 3, 2002 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 greater than anticipated inflation in medical costs.

Tax Valuation Allowance

In the fourth quarter of fiscal 2002,
the Company recorded a $7.3 million non-cash charge to establish a valuation allowance for
its net deferred tax assets and NOLs. The tax valuation allowance was calculated in
accordance with the provisions of SFAS No. 109, Accounting for Income Taxes
(SFAS No. 109), which places primary importance on the Companys
operating results in the most recent three-year period when assessing the need for a tax
valuation allowance. The Companys cumulative loss in the three-year period,
including the net loss reported in the fourth quarter of fiscal 2002, was sufficient to
require a full tax valuation allowance under the provisions of SFAS No. 109. In the first
half of fiscal 2003 the tax valuation allowance was increased by $4.0 million.

The Company intends to maintain a
valuation allowance for its net deferred tax assets and NOLs 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. 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 Company customers who apply to the Bank. Net
credit transaction volume with the Bank increased to $55.1 million in the first half of
fiscal 2003 from $52.1 million in the first half of fiscal 2002. 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 and,
depending on the circumstances, might not purchase the accounts from the Bank upon the
expiration of the contractual term. 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). Receivables as defined in the
Credit Card Program Agreement were $75.0 million at August 2, 2003 and $74.0 million at
August 3, 2002.

As to the Companys statements
of operations, general, administrative and store operating expenses were offset in part by
premiums received from the Bank of $1.8 million in the first half of fiscal 2003 and $1.0
million in the first half of fiscal 2002. The increase in premiums from the Bank was due
to an increase in customer fees paid to the Bank.

The credit card program premium (or
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 based
on the volume of credit card program processing activities performed by the Bank.

Royalties are based on program
revenues minus receivables written off by the Bank and the cost of funds for the program,
which, for up to the first $85 million of receivables, means the one-year Constant
Maturities Treasury (CMT) rate plus 25 basis points to be reset every three
months (the published CMT rate was 1.31% per annum at August 2, 2003), with the CMT rate
not to be more than 6.75% per annum and not to 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 August 2, 2003, 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.)

When the Credit Card Program
Agreement expires, currently scheduled for February 28, 2007, the Company shall have the
right to purchase the customer accounts from the Bank for a price equal to the
receivables. Also, the Bank shall have the right to sell the customer accounts to the
Company at that price if the Company decides to commence a private label credit card
program 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 bank support.

# Stores

The Company leased 544 stores at
August 2, 2003, of which 413 stores were in strip shopping centers, 106 stores were in
malls, 19 stores were in downtown shopping districts and 6 stores were in outlet malls.
Retail selling space was approximately 2.4 million square feet both at August 2, 2003 and
August 3, 2002.

In the first half of fiscal 2003, the
Company closed 11 stores and opened two stores. Management believes that 15-25 stores will
be closed during the entire fiscal year, principally as a result of routine lease
maintenance. Store closings generally take place at lease expiration. The Company intends
to lease and open five new stores during fiscal 2003 as a whole. Start-up costs will be
expensed but are not expected to have a material effect on general, administrative and
store operating expenses. This paragraph includes forward-looking information under the
Reform Act, which is subject to the uncertainties and other risk factors referred to under
the caption Future Results.

Substantially all the construction
cost of new stores has been capitalized. Depreciation and amortization of property and
equipment relate principally to assets in stores and were $6.3 million in the first half
of fiscal 2003 and $6.1 million in the first half of fiscal 2002.

# E-Commerce

The Company has an Internet site
(www.avenue.com) that sells the Companys proprietary brands, AVENUE® apparel and
accessories, AVENUE BODY® lingerie and CLOUDWALKERS® footwear. The Company has an
e-commerce fulfillment operation at its national distribution center in Troy, Ohio.

# Suspension of Catalog
Operations

The Company mailed AVENUE catalogs
from September 2000 to March 2003, when the Company suspended catalog operations
indefinitely.

During the second quarter of fiscal
2003, the catalog and internet operations incurred an operating loss before unallocated
corporate expenses and net interest expense of approximately $0.4 million compared with
approximately $1.4 million during the second quarter of the previous year. Such losses
were approximately $1.1 million and approximately $2.3 million in the third and fourth
quarters of fiscal 2002, respectively.

# Stock Repurchases

The Company did not repurchase shares
of its own stock in the first half of fiscal 2003. The Company has no plans to repurchase
shares of its own stock at present except with trust funds under the Companys
Supplemental Retirement Savings Plan to satisfy obligations that may arise under that plan
to invest a portion of participants accounts in Company stock.

# Seasonality

The fourth quarter of the fiscal year
generally has higher sales for the Company than other quarters.

Corporate Acquisition
Reviews

As a matter of routine, 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 following factors, among others, could 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: war risk; changes in consumer spending patterns, consumer preferences and
overall economic conditions; the impact of competition and pricing; changes in weather
patterns; the seasonality of the retail industry; risks related to consumer acceptance of
the Companys products and the ability to develop new merchandise; 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; and political instability and other risks associated
with foreign sources of production.

# 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, (i) the seventh paragraph under the caption
Managements Discussion and Analysis of Financial Condition and Results
of Operations  Other Liquidity Sources regarding the variable interest rate
payable on revolving loans to the Companies and (ii) the penultimate paragraph under the caption
Managements Discussion and Analysis of Financial Condition and Results of
Operations  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.

# ITEM 4. CONTROLS AND
PROCEDURES

1. The  Company  performed  an  evaluation,  in  which  the  Company's  Chief  Executive  Officer  and  Chief  Financial  Officer
         participated,  of its  disclosure  controls  and  procedures  (as  defined by Exchange  Act Rule  13a-14(c))  with  respect to
         information  required to be disclosed by the Company  ("Disclosures")  in filings with the Securities and Exchange  Commission
         (the "Commission").  The Company's  disclosure  controls and procedures are designed to provide reasonable  assurance that the
         disclosure  controls and procedures  will meet their  objectives.  Based on their  evaluation,  the Company's  Chief Executive
         Officer and Chief  Financial  Officer each  concluded  that,  as of August 2, 2003,  these  controls and  procedures  provided
         reasonable  assurance that  Disclosures  are (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.
2. During the second quarter of fiscal 2003, there were no significant changes in the Company's internal control over financial
         reporting that materially affected or are reasonably likely to materially affect internal control over financial reporting.

# PART II  OTHER INFORMATION

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

| | (a) | The 11th Annual Meeting of Stockholders (the Meeting) was
               held on May 29, 2003.
| | --- | ------------------------------------------------------------------------------------------------

| | (c) | (i) The Meeting elected all the directors of the Company for terms ending at the
               12th Annual Meeting of Stockholders, by the following vote:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

|                      |            |          
|--------------------- | ---------- | ---------
|
|Joseph A. Alutto      | 10,806,235 | 1,578,493
|Raphael Benaroya      | 10,575,728 | 1,809,000
|Joseph Ciechanover    | 10,806,235 | 1,578,493
|Michael Goldstein     | 11,409,735 | 974,993  
|Ilan Kaufthal         | 11,409,735 | 974,993  
|Vincent P. Langone    | 10,806,235 | 1,578,493
|George R. Remeta      | 11,409,735 | 974,993  
|Richard W. Rubenstein | 11,234,966 | 1,149,762
|                      |            |          

(ii) The Meeting approved the adoption of the 2003 Stock Option Plan by a vote of 11,239,015 FOR, 1,081,438 AGAINST and 64,275 ABSTAIN.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)    
          The following exhibits are filed herewith:

|Number | Description                                                                                                                                                         
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1*  | Amendment, dated September 2, 2003, to Employment Agreement, dated November 20, 1998, between the Corporation and Raphael Benaroya ("Benaroya Employment Agreement")
|10.2*  | Amendment, dated September 2, 2003, to Employment Agreement, dated November 20, 1998, between the Corporation and George R. Remeta ("Remeta Employment Agreement")  
|10.3*  | Amendment, dated September 2, 2003, to Employment Agreement, dated November 20, 1998,between the Corporation and Kenneth P. Carroll ("Carroll Employment Agreement")
|21     | Subsidiaries of the Corporation                                                                                                                                     
|31     | Certifications pursuant to Section 302                                                                                                                              

The following exhibit is furnished
herewith:

|Number | Description                           
|------ | --------------------------------------
|32     | Certifications pursuant to Section 906

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended May 3, 2003 is
incorporated herein by reference:

|Number in Filing | Description                                                
|---------------- | -----------------------------------------------------------
|10*              | Amendments to Restated Supplemental Retirement Savings Plan

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 exhibits to the
Corporations Annual Report on Form 10-K, as amended, for the year ended February 1,
2003 are incorporated herein by reference:

|Number in Filing | Description                                                                                                                                                                                         
|---------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3                | Restated By-laws of the Corporation                                                                                                                                                                 
|10.1             | Amendment, dated January 31, 2003, to Financing Agreement among the Corporation, United Retail Incorporated, Cloudwalkers, Inc. and The CIT Group/Business Credit, Inc., as Agent and Lender ("CIT")
|10.2*            | Amendment to Restated Supplemental Retirement Savings Plan                                                                                                                                          

The following exhibits to the
Corporations Quarterly Report on Form 10-Q for the period ended November 2, 2002 are
incorporated herein by reference:

|Number In Filing | Description                                                        
|---------------- | -------------------------------------------------------------------
|10.1*            | Amendment, dated December 6, 2002, to Benaroya Employment Agreement
|10.2*            | Amendment, dated December 6, 2002, to Remeta Employment Agreement  
|10.3*            | Amendment, dated December 6, 2002, to Carroll Employment Agreement 

The following exhibits to the
Corporations Quarterly Report on Form 10-Q for the period ended August 3, 2002 are
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
|10.2*            | Amendment to Restated Supplemental Retirement Savings Plan                                                                           
|10.3             | Purchase and Sale Agreement, dated as of July 1, 2002, between Raphael Benaroya and the Corporation                                  

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 20, 2002, to Benaroya Employment Agreement

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                                                                                                                                                                     
|10.4*            | Letter, dated March 1, 2002, from the Corporation to Raphael Benaroya with respect to the cost of living adjustment under the Benaroya Employment 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                                                                                                                                                  
|---------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1*            | Amendment, dated November 29, 2001, to Benaroya Employment Agreement                                                                                         
|10.2*            | Amendment, dated November 29, 2001, to Remeta Employment Agreement                                                                                           
|10.3*            | Amendment, dated November 29, 2001, to Carroll Employment Agreement                                                                                          
|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(Confidential portions filed separately with the Secretary of the Commission)
|10.6*            | Promissory note, dated November 30, 2001, from Raphael Benaroya to the Corporation (paid as of July 1, 2002)                                                 

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended August 4, 2001 is
incorporated herein by reference:

|Number in Filing | Description                            
|---------------- | ---------------------------------------
|10.1*            | Restated Stock Appreciation Rights Plan

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 Quarterly Report on Form 10-Q for the period ended October 28, 2000 are
incorporated herein by reference:

|Number in Filing | Description                                                       
|---------------- | ------------------------------------------------------------------
|10.1*            | Amendment, dated August 18, 2000, to Benaroya Employment Agreement
|10.2*            | Amendment, dated August 18, 2000, to Carroll Employment Agreement 

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 October 31, 1998 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 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 exhibits to the Corporation's Quarterly Report on Form 10-Q for the period ended August 2, 1997 are
incorporated herein by reference:

|Number in Filing | Description                                               
|---------------- | ----------------------------------------------------------
|10.1             | Financing Agreement                                       
|10.2*            | Amendment to Restated Supplemental Retirement Savings Plan

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended November 2, 1996 is
incorporated herein by reference:

|Number in Filing | Description                                  
|---------------- | ---------------------------------------------
|10.1*            | Restated Supplemental Retirement Savings Plan

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                                                                                                                         
|10.2.1           | Software License Agreement, dated as of April 30, 1989, between The Limited Stores, Inc. and Sizes Unlimited, Inc. (now known as United Retail Incorporated) ("Software License")
|10.2.2           | Amendment, dated December 10, 1991, to Software License                                                                                                                          

---

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

(b)  The Company filed Current Reports on Form 8-K:

1. on May 14, 2003, to furnish summary financial information for the first quarter of
           fiscal 2003; and
2. on May 19, 2003, to announce the suspension of the program to repurchase Company   stock, except with respect to
           possible purchases by the Company's Supplemental Retirement
           Savings Plan.

---

# 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.

|                        | UNITED RETAIL GROUP,INC.(Registrant)                                                                                  
|----------------------- | ----------------------------------------------------------------------------------------------------------------------
|Date: September 4, 2003 | By:/s/GEORGE R. REMETAGeorge R. RemetaVice Chairman of the Boardand Chief Administrative Officer -Authorized Signatory
|                        |                                                                                                                       
|                        | By:/s/JON GROSSMANJon GrossmanVice President-Finance andChief Accounting Officer                                      

EXHIBIT INDEX

(a)    
          The following exhibits are filed herewith:

|Number | Description                                                                                                                                                         
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1*  | Amendment, dated September 2, 2003, to Employment Agreement, dated November 20, 1998, between the Corporation and Raphael Benaroya ("Benaroya Employment Agreement")
|10.2*  | Amendment, dated September 2, 2003, to Employment Agreement, dated November 20, 1998, between the Corporation and George R. Remeta ("Remeta Employment Agreement")  
|10.3*  | Amendment, dated September 2, 2003, to Employment Agreement, dated November 20, 1998,between the Corporation and Kenneth P. Carroll ("Carroll Employment Agreement")
|21     | Subsidiaries of the Corporation                                                                                                                                     
|31     | Certifications pursuant to Section 302                                                                                                                              

The following exhibit is furnished
herewith:

|Number | Description                           
|------ | --------------------------------------
|32     | Certifications pursuant to Section 906

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended May 3, 2003 is
incorporated herein by reference:

|Number in Filing | Description                                                
|---------------- | -----------------------------------------------------------
|10*              | Amendments to Restated Supplemental Retirement Savings Plan

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 exhibits to the
Corporations Annual Report on Form 10-K, as amended, for the year ended February 1,
2003 are incorporated herein by reference:

|Number in Filing | Description                                                                                                                                                                                         
|---------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3                | Restated By-laws of the Corporation                                                                                                                                                                 
|10.1             | Amendment, dated January 31, 2003, to Financing Agreement among the Corporation, United Retail Incorporated, Cloudwalkers, Inc. and The CIT Group/Business Credit, Inc., as Agent and Lender ("CIT")
|10.2*            | Amendment to Restated Supplemental Retirement Savings Plan                                                                                                                                          

The following exhibits to the
Corporations Quarterly Report on Form 10-Q for the period ended November 2, 2002 are
incorporated herein by reference:

|Number In Filing | Description                                                        
|---------------- | -------------------------------------------------------------------
|10.1*            | Amendment, dated December 6, 2002, to Benaroya Employment Agreement
|10.2*            | Amendment, dated December 6, 2002, to Remeta Employment Agreement  
|10.3*            | Amendment, dated December 6, 2002, to Carroll Employment Agreement 

The following exhibits to the
Corporations Quarterly Report on Form 10-Q for the period ended August 3, 2002 are
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
|10.2*            | Amendment to Restated Supplemental Retirement Savings Plan                                                                           
|10.3             | Purchase and Sale Agreement, dated as of July 1, 2002, between Raphael Benaroya and the Corporation                                  

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 20, 2002, to Benaroya Employment Agreement

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                                                                                                                                                                     
|10.4*            | Letter, dated March 1, 2002, from the Corporation to Raphael Benaroya with respect to the cost of living adjustment under the Benaroya Employment 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                                                                                                                                                  
|---------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1*            | Amendment, dated November 29, 2001, to Benaroya Employment Agreement                                                                                         
|10.2*            | Amendment, dated November 29, 2001, to Remeta Employment Agreement                                                                                           
|10.3*            | Amendment, dated November 29, 2001, to Carroll Employment Agreement                                                                                          
|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(Confidential portions filed separately with the Secretary of the Commission)
|10.6*            | Promissory note, dated November 30, 2001, from Raphael Benaroya to the Corporation (paid as of July 1, 2002)                                                 

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended August 4, 2001 is
incorporated herein by reference:

|Number in Filing | Description                            
|---------------- | ---------------------------------------
|10.1*            | Restated Stock Appreciation Rights Plan

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 Quarterly Report on Form 10-Q for the period ended October 28, 2000 are
incorporated herein by reference:

|Number in Filing | Description                                                       
|---------------- | ------------------------------------------------------------------
|10.1*            | Amendment, dated August 18, 2000, to Benaroya Employment Agreement
|10.2*            | Amendment, dated August 18, 2000, to Carroll Employment Agreement 

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 October 31, 1998 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 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 exhibits to the Corporation's Quarterly Report on Form 10-Q for the period ended August 2, 1997 are
incorporated herein by reference:

|Number in Filing | Description                                               
|---------------- | ----------------------------------------------------------
|10.1             | Financing Agreement                                       
|10.2*            | Amendment to Restated Supplemental Retirement Savings Plan

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended November 2, 1996 is
incorporated herein by reference:

|Number in Filing | Description                                  
|---------------- | ---------------------------------------------
|10.1*            | Restated Supplemental Retirement Savings Plan

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                                                                                                                         
|10.2.1           | Software License Agreement, dated as of April 30, 1989, between The Limited Stores, Inc. and Sizes Unlimited, Inc. (now known as United Retail Incorporated) ("Software License")
|10.2.2           | Amendment, dated December 10, 1991, to Software License                                                                                                                          

---

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