# 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 April 30, 2005

OR

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

For the transition period from ___________________ to _____________________

Commission file number   00019774

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

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

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

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

_______________________________________________________________

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

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Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the Exchange Act) during the preceding 12
months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

|            |           
|----------- | ----------
|YES ___X___ | NO _______

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

|            |           
|----------- | ----------
|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 May 31, 2005, there were
outstanding 12,680,134 units, each consisting of one share of the registrants common
stock, $.001 par value per share, and one attached stock purchase right. The units are
referred to herein as shares.

---

PART I - FINANCIAL INFORMATION

ITEM I - FINANCIAL STATEMENTS

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

|                                                        |                      | April 30,2005(Unaudited) | January 29,2005 | May 1,2004(Unaudited)
|------------------------------------------------------- | -------------------- | ------------------------ | --------------- | ---------------------
|                                                        | ASSETS               |                          |                 |                      
|Current Assets:                                         |                      |                          |                 |                      
|Cash and cash equivalents                               |                      | $18,591                  | $12,596         | $14,344              
|Accounts receivable                                     |                      | 1,672                    | 1,504           | 1,703                
|Inventory                                               |                      | 52,952                   | 49,503          | 60,787               
|Prepaid rents                                           |                      | 4,655                    | 4,599           | 4,740                
|Restricted cash                                         |                      | 511                      | 742             | -                    
|Other prepaid expenses                                  |                      | 1,700                    | 1,712           | 1,712                
|Total current assets                                    |                      | 80,081                   | 70,656          | 83,286               
|                                                        |                      |                          |                 |                      
|Property and equipment, net                             |                      | 75,749                   | 79,026          | 88,048               
|Deferred compensation plan assets                       |                      | 3,304                    | 3,473           | 5,114                
|Deferred charges and other intangible assets, net of    |                      |                          |                 |                      
|accumulated amortization of $469, $453 and $405         |                      | 578                      | 741             | 602                  
|Other assets                                            |                      | 1,298                    | 1,312           | 1,366                
|Total Assets                                            |                      | $161,010                 | $155,208        | $178,416             
|                                                        |                      |                          |                
|                                                        | LIABILITIES          |                          |                 |                      
|Current liabilities:                                    |                      |                          |                 |                      
|Current portion of distribution center financing        |                      | $708                     | $693            | $650                 
|Current portion of capital leases                       |                      | 1,837                    | 1,873           | 2,062                
|Current portion of revolver                             |                      | -                        | 100             | -                    
|Accounts payable and other                              |                      | 22,768                   | 18,336          | 29,902               
|Disbursement accounts                                   |                      | 10,938                   | 9,066           | 9,007                
|Accrued expenses                                        |                      | 24,102                   | 24,252          | 21,662               
|Total current liabilities                               |                      | 60,353                   | 54,320          | 63,283               
|                                                        |                      |                          |                 |                      
|Long-term distribution center financing                 |                      | 2,450                    | 2,633           | 3,158                
|Long-term capital leases                                |                      | 1,273                    | 1,735           | 3,148                
|Deferred lease incentives                               |                      | 12,262                   | 12,908          | 14,331               
|Deferred compensation plan liabilities                  |                      | 4,787                    | 4,853           | 5,114                
|Other long-term liabilities                             |                      | 8,820                    | 8,710           | 12,725               
|Total liabilities                                       |                      | 89,945                   | 85,159          | 101,759              
|                                                        | STOCKHOLDERS' EQUITY |                          |                 |                      
|Preferred stock, $.001 par value; authorized            |                      |                          |                 |                      
|1,000,000 shares; none issued                           |                      |                          |                 |                      
|Series A junior participating preferred stock           |                      |                          |                 |                      
|$.001 par value; authorized 150,000 shares; none issued |                      |                          |                 |                      
|Common stock, $.001 par value; authorized               |                      |                          |                
|30,000,000 shares; issued 14,253,900 shares,            |                      |                          |                 |                      
|14,249,800 shares, and 14,248,200 shares                |                      | 14                       | 14              | 14                   
|Additional paid-in capital                              |                      | 84,868                   | 84,856          | 83,696               
|(Accumulated deficit) Retained earnings                 |                      | (5,490)                  | (6,494)         | 623                  
|Treasury stock (1,590,766 shares, 1,590,766 shares      |                      |                          |                 |                      
|and 1,310,896 shares) at cost                           |                      | (8,327)                  | (8,327)         | (7,676)              
|Total stockholders' equity                              |                      | 71,065                   | 70,049          | 76,657               
|Total liabilities and stockholders' equity              |                      | $161,010                 | $155,208        | $178,416             

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

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

|                                                         | Thirteen Weeks Ended |           
|-------------------------------------------------------- | -------------------- | ----------
|
|Net Sales                                                | $106,531             | $97,519   
|Cost of goods sold, including buying and occupancy costs | 80,840               | 76,727    
|Gross profit                                             | 25,691               | 20,792    
|General, administrative and store operating expenses     | 24,827               | 23,890    
|Operating income (loss)                                  | 864                  | (3,098)   
|Interest income                                          | 55                   | 14        
|Interest expense                                         | (219)                | (230)     
|Income (loss) before income taxes                        | 700                  | (3,314)   
|(Benefit from) provision for income taxes                | (304)                | 49        
|Net income (loss)                                        | $1,004               | ($3,363)  
|                                                         |                      |           
|Net income (loss) per share                              |                      |           
|Basic                                                    | $0.08                | ($0.26)   
|Diluted                                                  | $0.08                | ($0.26)   
|                                                         |                      |           
|Weighted average number of                               |                      |           
|shares outstanding                                       |                      |           
|Basic                                                    | 12,662,190           | 12,937,304
|Common stock equivalents (stock options)                 | 207,757              | -         
|Diluted                                                  | 12,869,947           | 12,937,304

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

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

|                                                             | Thirteen Weeks Ended |         
|------------------------------------------------------------ | -------------------- | --------
|
|Cash Flows From Operating Activities:                        |                      |         
|Net income (loss)                                            | $1,004               | ($3,363)
|Adjustments to reconcile net income (loss) to net cash       |                      |         
|provided by operating activities:                            |                      |         
|Depreciation and amortization of property and equipment      | 3,403                | 3,687   
|Amortization of deferred charges and other intangible assets | 24                   | 117     
|Loss on disposal of assets                                   | 7                    | 26      
|Deferred compensation                                        | 104                  | -       
|Deferred lease assumption revenue amortization               | -                    | (2)     
|Changes in operating assets and liabilities:                 |                      |         
|Accounts receivable                                          | (168)                | 86      
|Income taxes                                                 | (37)                 | 34      
|Inventory                                                    | (3,449)              | (11,733)
|Accounts payable and accrued expenses                        | 4,466                | 9,886   
|Prepaid expenses                                             | 187                  | 418     
|Deferred lease incentives                                    | (646)                | (662)   
|Other assets and liabilities                                 | 115                  | 2,599   
|Net Cash Provided by Operating Activities                    | 5,010                | 1,093   
|                                                             |                      |         
|Investing Activities:                                        |                      |         
|Capital expenditures                                         | (133)                | (58)    
|Deferred payment for property and equipment                  | -                    | (10)    
|                                                             |                      |         
|Net Cash Used in Investing Activities                        | (133)                | (68)    
|                                                             |                      |         
|Financing Activities                                         |                      |         
|Repayments of long-term debt                                 | (168)                | (153)   
|Payments on capital lease obligations                        | (498)                | (522)   
|Increase (decrease) in disbursement accounts                 | 1,872                | (427)   
|Repayments under line-of-credit agreement                    | (100)                | -       
|Proceeds from exercise of stock options                      | 12                   | -       
|                                                             |                      |         
|Net Cash Used in Financing Activities                        | 1,118                | (1,102) 
|                                                             |                      |         
|Net increase (decrease) in cash and cash equivalents         | 5,995                | (77)    
|Cash and cash equivalents, beginning of period               | 12,596               | 14,421  
|Cash and cash equivalents, end of period                     | $18,591              | $14,344 

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

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

# 1.   Basis of Presentation

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

The consolidated financial statements
as of and for the thirteen weeks ended April 30, 2005 and May 1, 2004 are unaudited and
are presented pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, the consolidated financial statements are condensed and do not
include all disclosures required by generally accepted accounting principles for a full
set of financial statements and should be read in conjunction with the financial statement
disclosures contained in the Companys 2004 Annual Report and 2004 Form 10-K. In the
opinion of management, the accompanying consolidated financial statements reflect all
adjustments necessary to present fairly the financial position and results of operations
and cash flows for the interim periods, but are not necessarily indicative of the results
of operations for a full fiscal year.

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

# 2.   Net Earnings / (Loss)
Per Share

Basic per share data has been
computed based on the weighted average number of shares of common stock outstanding.
Diluted per share data includes the weighted average effect of dilutive options on the
weighted average shares outstanding. The computation of earnings per diluted share
excludes options whose exercise prices were greater than the average market price of the
common shares for the thirteen weeks ended April 30, 2005. The computation of (loss) per
share for the thirteen weeks ended May 1, 2004 excludes options to purchase shares of
common stock as inclusion of such shares would be anti-dilutive.

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

|                                 |                      |                
|-------------------------------- | -------------------- | ---------------
|                                 | Thirteen Weeks Ended |                
|                                 | April 30,2005        | May 1,2004     
|                                 |                      |                
|Options                          | 1,236,100            | 1,931,812      
|Range of option prices per share | $5.88 -  $15.13      | $1.80 -  $15.13

The Company uses the intrinsic value
method to account for stock-based compensation in accordance with Accounting Principles
Board Opinion No. 25, Accounting For Stock Issued To Employees (Opinion No.
25) and has adopted the disclosure provisions of Statement of Financial Accounting
Standards (SFAS) No. 123, Accounting For Stock-Based Compensation (SFAS No.
123). 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 under SFAS No. 123, Accounting For Stock-Based
Compensation to stock-based employee compensation:

|                                                                                                                                         |                      |           
|---------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | ----------
|                                                                                                                                         | Thirteen Weeks Ended |           
|(dollars in thousands except forper share amounts)                                                                                       | April 30,2005        | May 1,2004
|                                                                                                                                         |                      |           
|Reported net income (loss)                                                                                                               | $1,004               | ($3,363)  
|Deduct: Total stock-based employeecompensation expense determined underfair value based method for all awards,net of related tax effects | (106)                | (75)      
|                                                                                                                                         |                      |           
|Pro forma net income (loss)                                                                                                              | $898                 | ($3,438)  
|                                                                                                                                         |                      |           
|Income (loss) per share:                                                                                                                 |                      |           
|Basic - as reported                                                                                                                      | $0.08                | ($0.26)   
|Basic - pro forma                                                                                                                        | $0.07                | ($0.27)   
|                                                                                                                                         |                      |           
|Diluted - as reported                                                                                                                    | $0.08                | ($0.26)   
|Diluted - pro forma                                                                                                                      | $0.07                | ($0.27)   

# 3.   Financing Arrangements

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

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

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

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

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

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

At April 30, 2005, the borrowing
capacity of the Companies under the Financing Agreement with CIT, after satisfying the $5
million minimum availability requirement, was $17.6 million, trade letters of credit for
the account of the Companies were outstanding in the amount of $20.8 million, standby
letters of credit were outstanding in the amount of $6.1 million and no loan from CIT was
outstanding. The Companys balance sheet cash and cash equivalents of $18.6 million
were unrestricted.

In January 2002, the Company executed
a five-year $8.2 million sale and lease back agreement for certain fixtures in new and
remodeled stores. The lease bears an interest rate of 7.0% per annum. The Company was
required to pay sales tax as part of the agreement. The agreement provides for equal
monthly rent payments of $163,344 beginning February 2002 and gives the Company the option
of buying back the fixtures at the end of the term for a nominal price.

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

# 4.   Income Taxes

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

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

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

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

The Company recorded additional
valuation allowances of $12.6 million, $4.3 million and $0.5 million in fiscal 2003,
fiscal 2004 and thirteen week period ended April 30, 2005, respectively. The Company
intends to maintain a valuation allowance for its net deferred tax assets and net
operating loss carryforwards until sufficient positive evidence exists to support its
reversal.

# 5.   Stock Appreciation
Rights Plan

Commencing in May 2000 and annually
thereafter, each nonmanagement Director received an award under the Companys Stock
Appreciation Rights Plan that provides for a cash payment by the Company when the Director
exercises the stock option granted to him contemporaneously under the Companys Stock
Option Plans. 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 sum of 1) the exercise price of the corresponding option plus
2) any personal income tax withholding on the gain arising from the exercise. No such
payments have been made to date.

# 6.   Supplemental Cash
Flow Information

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

|                             |                      |            
|---------------------------- | -------------------- | -----------
|                             | Thirteen Weeks Ended |            
|                             | April 30, 2005       | May 1, 2004
|                             |                      |            
|Net cash interest paid       |                      |            
|including interest           |                      |            
|received of $55 and $14      | $170                 | $193       
|                             |                      |            
|Income taxes (refunded) paid | ($268)               | $15        

# 7.   Contingencies

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

A subsidiary of United Retail Group,
Inc., United Retail Incorporated (URI), is the defendant in a suit in
California Superior Court, Los Angeles County, styled Erik Stanford vs. United Retail
Incorporated, served on URI by two former store managers in California. The suit is
purportedly a class action on behalf of certain current and former URI associates employed
in California. The plaintiffs in the Stanford case assert wage and hour claims and related
claims against URI with respect to the period since April 1999.

On December 29, 2004, in mediation
proceedings, URI and the plaintiffs in the Stanford case entered into a Memorandum of
Understanding that provided for a settlement in the total amount of up to approximately
$2.3 million, including interest and payroll taxes, payable on a claims made basis in
installments of approximately $1.3 million during the third quarter of fiscal 2005 and up
to approximately $1.0 million on April 28, 2006. In connection with the settlement,
compensation of store managers employed by the Company in California was converted from
salaries to hourly wages in January 2005.

On March 18, 2005, URI and the
plaintiffs in the Stanford case replaced the Memorandum of Understanding with a
Stipulation and Settlement Agreement (Settlement Agreement), which provides
for the same payment terms as the Memorandum of Understanding. The Settlement Agreement
has received preliminary court approval.

A final Court hearing to rule on the
fairness of the terms of the Settlement Agreement is scheduled to be held in the third
quarter of fiscal 2005.

Total expense related to this matter
was $0.7 million in fiscal 2003 and $1.6 million in fiscal 2004.

Management believes that the probable
outcome of the case will be Court approval of the agreed-upon settlement.

In the event that the Court at the
final hearing reverses its preliminary approval of the Settlement Agreement, the Company
intends to oppose class certification strongly. To the extent that the plaintiffs
successfully obtain class certification, the Company intends to defend the Stanford
case vigorously on the merits at trial.

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

EXECUTIVE SUMMARY

Introduction

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

Products and Purchasing

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

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

Customer Base

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

Merchandising and
Marketing

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

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

Channel of Distribution

The Companys channel of
distribution is retail stores using its AVENUE® trade name. At April 30, 2005, it
leased 512 stores in 37 states. See, Stores. The Company also operates a
website at www.avenue.com that sells a selection of the merchandise that is also on sale
in the stores (referred to as Shop @ Home operations).

Increased Competition

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

Deflationary Price Trend
in Apparel Industry

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

Company Sales Fluctuations

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

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

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

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

Seasonal Operating Results

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

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

Product Repositioning Plan

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

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

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

Decline in Annual Store
Count

Store counts averaged 557 stores, 546
stores and 531 stores, respectively, for fiscal 2002, 2003 and 2004. In fiscal 2004, the
Company opened two stores and closed 23 stores. In fiscal 2005, the Company is planning to
close approximately 15-20 stores as part of its normal lease maintenance program and to
open one new store. Thus, the average number of stores is expected to decline further in
fiscal 2005.

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

Liquidity

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

In early fiscal 2003, the Company
adopted an integrated operational plan designed to reposition the Companys product
offering. This plan has four principal components: (i) to improve the design of the
Companys merchandise and thereby differentiate it from competitors
merchandise, (ii) to market more items together as coordinated outfits rather than
separately as individual garments, (iii) to put more emphasis on fashionable merchandise
and less on basic items; and (iv) to raise the level of merchandise presentation in the
store to make shopping easier and to encourage outfit buying.

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

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

DISCUSSION AND ANALYSIS

(This section provides details about
the material line items in the Companys statements of operations.)

First Quarter Fiscal 2005
Versus First Quarter Fiscal 2004

Net sales for the first quarter of
fiscal 2005 increased 9.2% from the first quarter of fiscal 2004, to $106.5 million from
$97.5 million.

The sources of net sales growth were
as follows:

|Amount        | Attributable to                         
|------------- | ----------------------------------------
|$10.2 million | 10.9% increase in comparable store sales
|0.5 million   | new stores                              
|(2.8) million | closed stores                           
|1.1 million   | other                                   
|$9.0 million  | Total                                   

Comparable store sales increases in
regions of the country with warmer weather were higher than average.

Compared to the first quarter of
fiscal 2004, units sold per average store increased 20.8%, average price per unit sold
decreased 7.0% and transactions per average store increased 22.7%.

There was better customer acceptance
of denim, accessories and woven tops, which, together with the introduction of Spring
sweaters to the merchandise assortment, collectively increased net sales by $9.2 million
in comparison to the first quarter of fiscal 2004.

The average number of stores
decreased from 534 in the first quarter of the previous year to 513 in the first quarter
of fiscal 2005. The average number of stores is expected to continue to decrease. See,
Stores.

Gross profit increased to $25.7
million in the first quarter of fiscal 2005 from $20.8 million in the first quarter of
fiscal 2004, increasing as a percentage of net sales to 24.1% from 21.3%. Gross profit as
a percentage of net sales increased because (i) rent and occupancy costs declined as a
percentage of net sales (230 basis points as a percentage of net sales) and (ii)
merchandise margins increased (60 basis points). Rent and occupancy costs declined in
percentage terms principally because average store sales increased. Higher merchandise
margins were the result of lower cost of goods sold. Gross profit levels in the future
will be subject to the variables, uncertainties and other risk factors referred to under
the caption Future Results. The amount of rent and occupancy costs is expected
to decline further as the average number of stores decreases.

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

General, administrative and store
operating expenses increased to $24.8 million in the first quarter of fiscal 2005 from
$23.9 million in the first quarter of fiscal 2004. The increase in the amount of expenses
was for legal and consulting fees totaling $0.9 million in connection with preparations
for a potential proxy contest that has since been satisfactorily resolved. However,
expenses decreased as a percentage of net sales to 23.3% from 24.5%, principally from a
reduction in store payroll (110 basis points). There is no assurance that general,
administrative and store operating expenses will continue to decrease in percentage terms.
In addition to general cost inflation, the Company expects consulting and professional
fees and Finance Department payroll to increase because of additional resources required
to support new regulatory compliance. Also, although the number of associates employed in
stores is expected to decrease as a result of routine store closings, possible increases
in minimum wages may put pressure on the wage rates paid to the remaining store
associates.

The Company had operating income of
$0.9 million in the first quarter of fiscal 2005 and incurred an operating loss of $3.1
million in the first quarter of the previous year.

The Company had a benefit from income
taxes of $0.3 million in the first quarter of fiscal 2005, in the form of a state income
tax refund.

There is a valuation allowance
provided for the Companys net operating loss (NOL) carryforwards and
other net deferred tax assets. In the first quarter of fiscal 2005, the Companys tax
valuation allowance was increased by $0.5 million.

The Company had net income of $1.0
million in the first quarter of fiscal 2005 and incurred a net loss of $3.4 million in the
first quarter of fiscal 2004.

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

May Sales

Net sales for May 2005 increased 8.6%
from May 2004 to $39.1 million from $36.0 million. Comparable store sales for the month
increased 10.2%. Average number of stores decreased from 533 to 512.

Increased Competition

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

Product Repositioning Plan

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

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

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

Liquidity and Capital
Resources

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

Cash Flow

Net cash provided from operating
activities increased to $5.0 million in the first quarter of fiscal 2005 from $1.1 million
in the first quarter of the previous year, principally as a result of (i) a smaller
increase in inventory levels during the first quarter of fiscal 2005 ($3.4 million)
compared with the increase during the first quarter of fiscal 2004 ($11.7 million) and
(ii) net income of $1.0 million for the first quarter of fiscal 2005 versus a net loss of
$3.4 million for the first quarter of fiscal 2004, partially offset by (i) a smaller
increase in accounts payable and accrued expenses during the first quarter of fiscal 2005
($4.5 million) compared with the first quarter of fiscal 2004 ($9.9 million) and (ii) a
smaller net increase in cash flow from the other assets and liabilities category in the
first quarter of fiscal 2005 ($0.1 million) compared with the first quarter of fiscal 2004
($2.6 million).

Balance Sheet Sources of
Liquidity

The Companys cash and cash
equivalents increased to $18.6 million at April 30, 2005 from $14.3 million at May 1, 2004
and $12.6 million at January 29, 2005.

Inventories were stated at $53.0
million at April 30, 2005, $60.8 million at May 1, 2004 and $49.5 million at January 29,
2005. Inventory per selling square foot excluding Shop @ Home inventories decreased 10.3%
from May 1, 2004 to April 30, 2005. (See, Critical Accounting Policies 
Inventory for a discussion of estimates made by management in stating inventories in
financial statements prepared in accordance with generally accepted accounting
principles.)

Property and equipment decreased to
$75.7 million at April 30, 2005 from $88.0 million at May 1, 2004 and $79.0 million at
January 29, 2005, principally from depreciation. The Company expects property and
equipment to decrease further during the remainder of fiscal 2005, principally from
depreciation.

Other Liquidity Sources

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

The Financing Agreement was extended
and expanded during fiscal 2003. The term was extended three years to August 15, 2008. The
line of credit was increased from $40 million to $50 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. At April 30, 2005, trade letters of credit
for the account of the Companies and supported by CIT were outstanding in the amount of
$20.8 million and standby letters of credit were outstanding in the amount of $6.1
million. Standby letters of credit were used principally in connection with insurance
policies issued to the Company.

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

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

The combined borrowing capacity of
the Companies is cyclical due to the seasonality of the retail industry. At April 30,
2005, the combined borrowing capacity of the Companies, after satisfying the $5 million
minimum availability requirement, was $17.6 million; the Pledged Account had a zero
balance; no loan was outstanding; and the Companies balance sheet cash and cash
equivalents of $18.6 million were unrestricted.

The line of credit is collateralized
by a security interest in (i) inventory and its proceeds, (ii) receivables from credit
card companies and (iii) the balance, if any, from time to time in the Pledged Account.
Further, the Company has agreed with CIT to have its subsidiary, Avenue Giftcards, Inc.
(which issues AVENUE® giftcards), maintain a minimum level of high-grade liquid
investments. These investments amounted to $0.5 million at April 30, 2005 and were
classified as restricted cash on the balance sheet. The amount of these investments will
fluctuate each quarter in relation to the volume of net issuances of AVENUE® giftcards
and merchandise credits during the previous six months. (The volume of net issuances is
seasonal.)

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

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

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

Capital Expenditures

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

Capital expenditures increased to
$0.1 million in the first quarter of fiscal 2005 from a lesser amount in the first quarter
of the previous fiscal year.

Capital expenditures are budgeted at
approximately $3.0 million for fiscal 2005, including implementation of the Companys
product repositioning plan. This paragraph constitutes forward-looking information under
the Reform Act and is subject to the variables, uncertainties and other risk factors
referred to under the caption Future Results.

Principal Contractual
Obligations and Certain Other Commercial Commitments

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

Governmental Restraints
On Imports from China

A material portion of the apparel
sold by the Company has been imported from China, either directly by the Company or by the
Companys domestic vendors. The United States Committee for Implementation of Textile
Agreements has imposed restraint levels for exports to the United States that leave China
during the period from May 27, 2005 to December 31, 2005, including several categories of
apparel. Exports of each specified product category will continue to be admitted into the
United States in the ordinary course until the restraint level for that category is
reached, after which further exports will be embargoed and wont be cleared until
after January 2006. The Company does not expect that a material amount of its current
on-order inventory will be embargoed for an extended period. However, there is no
assurance that (i) the Company and its domestic vendors will be able to find elsewhere
replacements for suppliers in China that may be temporarily cut off by embargoes, (ii) the
cost of using alternative sources of supply elsewhere will not be higher than the cost of
using suppliers in China, (iii) delays in deliveries from countries other than China will
not occur or (iv) deliveries of orders placed with suppliers in China in the future will
not be embargoed for an extended period. Further, there is no assurance that similar
restraint levels will not be imposed during the next several years on additional product
categories offered for sale by the Company.

Pending Litigation

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

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

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

On March 18, 2005, the plaintiffs in
the Stanford case and the Company entered into a Stipulation and Settlement
Agreement (the Settlement Agreement), which has received preliminary Court
approval. The Settlement Agreement provides for payments in the total amount of up to
approximately $2.3 million, including interest and payroll taxes, payable on a claims made
basis in installments of up to approximately $1.3 million in the third quarter of fiscal
2005 and up to approximately $1.0 million on April 28, 2006. In connection with the
settlement, compensation of store managers employed by the Company in California was
converted from salaries to hourly wages in January 2005.

A final Court hearing to rule on the
fairness of the terms of the Settlement Agreement is scheduled to be held in the third
quarter of fiscal 2005.

In the event that the Court at the
final hearing reverses its preliminary approval of the Settlement Agreement, the Company
intends to oppose class certification strongly. To the extent that the plaintiffs
successfully obtain class certification, the Company intends to defend the Stanford
case vigorously on the merits at trial.

Prior to fiscal 2005, the Company
recorded an accrual for the cost of the agreed amount of the settlement in the
Stanford case described above.

Meeting Cash Requirements

The Companys cash requirements
include (i) anticipated working capital needs, including seasonal inventory financing,
(ii) financing activities, including payments due on its principal contractual obligations
and (iii) investing activities, including costs for building stores and replacing fixtures
where appropriate. The Stanford wage and hour class action will either be
settled (the cost of which has been included in working capital) with Court approval in the third quarter of fiscal 2005 or will go to trial
afterwards (see, Pending Litigation).

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

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

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

Critical Accounting
Policies

Introduction

This section discusses the
Companys critical accounting policies.

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

Inventory

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

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

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

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

The markdown reserve was $1.0 million
both at April 30, 2005 and at May 1, 2004.

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

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

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

Incurred But Not Reported
Claims For Personal Injuries and Medical Benefits

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

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

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

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

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

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

Tax Valuation Allowance

In fiscal 2002, the Company first
recorded a charge to establish a valuation allowance for its NOL carryforwards and other
net deferred tax assets in accordance with the provisions of SFAS No. 109,
Accounting for Income Taxes, which places significant importance on the
Companys cumulative operating results in the most recent three-year period when
assessing the need for a tax valuation allowance. At April 30, 2005, the accumulated tax
valuation allowance was $24.7 million.

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

Private Label Credit
Cards Issued By The Bank

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

Under the Credit Card Program
Agreement, the Bank issues credit cards to eligible Company customers who apply to the
Bank. Net credit sales volume with the Bank increased to $31.7 million in the first
quarter of fiscal 2005 from $27.5 million in the first quarter of fiscal 2004. Customers
must meet standards for creditworthiness set by the Bank with the approval of the Company,
provided, however, that the Bank shall take any actions required to prevent unsafe and
unsound banking practices. The credit cards issued by the Bank are co-branded with both
the Companys AVENUE service mark and the Banks name. The credit cards are used
only for merchandise and services offered by the Company. Credit card holders remit
payments to the Bank, generally by mailing personal checks. The Bank also handles all
statement processing, payment processing, cardholder customer service and collections from
delinquent cardholders.

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

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

Receivables as defined in the Credit
Card Program Agreement at the close of the last billing cycle in the first quarter
increased to $74.2 million in fiscal 2005 from $70.7 million in fiscal 2004.

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

General, administrative and store
operating expenses were offset in part by premiums received from the Bank. Premiums
increased 8.0% to $1,038,000 in the first quarter of fiscal 2005 from $961,000 in the
first quarter of fiscal 2004, principally because of lower net write-offs of bad debt.

Royalties are based on program
revenues minus receivables written off by the Bank and the cost of funds for the program.
For up to the first $85 million of receivables, cost of funds means the one-year Constant
Maturities Treasury (CMT) rate plus 25 basis points to be reset every three
months (the published CMT rate was 3.33% per annum at April 30, 2005). However, the CMT
rate shall not be more than 6.75% per annum and not be less than 5.00% per annum for the
purpose of this calculation. (The Banks receivables for the program were less than
$85 million at April 30, 2005 but, if they grew larger than that amount, the cost of funds
for the excess would be based primarily on the cost of borrowing of a trust for the
purpose of securitizing receivables.)

Fiscal 2006 Accruals for
Unvested Employee Stock Options

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

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

Stores

The Companys channel of
distribution is retail stores using its AVENUE® trade name. The Company leased 512
stores in 37 states at April 30, 2005.

Store counts averaged 557 stores, 546
stores and 531 stores, respectively, for fiscal 2002, 2003 and 2004. In fiscal 2004, the
Company opened two stores and closed 23 stores. In fiscal 2005, the Company is planning to
close approximately 15-20 stores as part of its normal lease maintenance program and to
open one new store. Thus, the average number of stores is expected to decline further in
fiscal 2005. This paragraph includes forward-looking information under the Reform Act,
which is subject to the variables, uncertainties and other risk factors referred to under
the caption Future Results.

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

Retail selling space was
approximately 2.2 million square feet at April 30, 2005 and 2.3 million square feet at May
1, 2004.

Depreciation and amortization of
property and equipment relate principally to assets in stores and declined to $3.4 million
in the first quarter of fiscal 2005 from $3.7 million in the first quarter of the previous
year. Further declines in depreciation and amortization accruals are expected for the
remainder of fiscal 2005.

Shop @ Home Operations

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

Stock Repurchases

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

Supplemental Retirement
Savings Plan

With respect to the deferred
compensation obligations of the Companys Supplemental Retirement Savings Plan (the
SRSP), the liability was marked to market and this liability adjustment flowed
through the statement of operations as either an increase or a decrease in compensation
expense. With respect to the SRSP assets, marketable securities were also marked to market
except shares of Company stock, which were recorded permanently at cost. This asset
adjustment also flowed through the statement of operations. The liability adjustment and
the asset adjustment were not necessarily equal in amount because of the disparate
treatment of Company stock. In the first quarter of fiscal 2005, the market price of
Company stock rose and compensation expense was increased $0.1 million as a result of the
foregoing accounting treatment with respect to SRSP liabilities and assets.

The Compensation Committee of the
Companys Board of Directors, with the assistance of independent legal counsel, is
reviewing the Companys deferred compensation and equity-based compensation programs,
including the SRSP. In the event that the Compensation Committee recommends, and the Board
approves, an amendment to the SRSP, the accounting treatment of SRSP liabilities and
assets discussed in the preceding paragraph may change.

Corporate Acquisition
Reviews

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

Future Results

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

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

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

Although the Company has not yet been
required to complete an assessment of its internal control over financial reporting in
accordance with Section 404 of the Sarbanes-Oxley Act of 2002, it is devoting significant
management and financial resources to document, test, monitor and enhance internal control
over financial reporting in order to meet the general requirements of that act. There is
no assurance that these measures will make the controls adequate or effective in
preventing fraud or human error. Any failure in the effectiveness of internal control over
financial reporting that might occur could have a material effect on financial reporting
or cause the Company to fail to meet reporting obligations, which upon disclosure, could
negatively impact the market price of the Common Stock.

The following additional factors,
among others, could also affect the Companys actual results and could cause actual
results to differ materially from those expressed or implied in any forward-looking
statements included in this Report or otherwise made by management: threats of terrorism;
war risk; shifts in consumer spending patterns, overall economic conditions; the impact of
increased competition; variations in weather patterns; uncertainties relating to execution
of the Companys product repositioning strategy; store lease expirations; risks
associated with the financial performance of the World Financial Network National Bank
private label credit card program; increases in interest rates; the ability to retain,
hire and train key personnel; risks associated with the ability of the Companys
manufacturers to deliver products in a timely manner; governmental restrictions on the
volume of imports of apparel from China; political instability and other risks associated
with foreign sources of production and increases in fuel costs. Further, the
Stanford wage and hour class action will either be settled with Court approval in
the third quarter of fiscal 2005 or go to trial afterwards (see, Pending
Litigation).

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

Stockholder Rights Plan

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

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

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

ITEM 4.   CONTROLS AND PROCEDURES.

Internal Control Over
Financial Reporting

Based on the definition of the term
material weakness in the Public Company Accounting Oversight Boards
Auditing Standard No. 2. An Audit of Internal Control Over Financial Reporting
Performed in Conjunction With an Audit of Financial Statements, management notified
the Audit Committee of the Board of Directors and the Companys independent
registered public accounting firm of the existence of a material weakness as of January
29, 2005. The matter is described in Item 9A Controls and Procedures in the
Companys Annual Report on Form 10-K for the year ended January 29, 2005.

Beginning in January 2005, the
Company implemented the following measures to correct this material weakness:

1. the Company retained an experienced accounting consultant to (1) provide advice on current
                  accounting developments, new accounting pronouncements and emerging accounting issues on a
                  regular basis, (2) review and comment on a preliminary draft of each of the Company's Annual
                  Reports on Form 10-K and Quarterly Reports on Form 10-Q and (3) provide advice on technical
                  accounting matters on request;
2. the Company implemented a process for a regular internal review and discussion of emerging
                  accounting issues and new accounting pronouncements by a committee of senior executives in the
                  Company's Finance Department;
3. the Company subscribed to a professional service that provides complete analysis on emerging
                  accounting issues and new accounting pronouncements; and
4. the Company implemented a process for regularly completing a comprehensive regulatory
                  disclosure checklist.

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

The Companys Chief Executive
Officer and Chief Financial Officer (the CEO and CFO) evaluated
the implementation of the remedial measures described above and believe that no
material weakness existed as of April 30, 2005 and so advised the Audit
Committee.

The Company has not yet been required
to complete an assessment of its internal control over financial reporting in accordance
with Section 404 of the Sarbanes-Oxley Act of 2002. Therefore, there can be no assurance
that other material weaknesses will not be identified when an assessment is performed.

Disclosure Controls

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

# PART II  OTHER
INFORMATION

ITEM 1.   LITIGATION.

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

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS.

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

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

(1)    The following exhibit is filed herewith:

|Number | Description                           
|------ | --------------------------------------
|31     | Certifications pursuant to Section 302

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

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

The following exhibit to the Corporation's Current Report on Form 8-K filed on April 29, 2005 is incorporated
herein by reference:

|Number in Filing | Description                                                      
|---------------- | -----------------------------------------------------------------
|99.2             | Letter, dated April 28, 2005, from Raphael Benaroya
to John Pound

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

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

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

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

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

|Number in Filing | Description                                    
|---------------- | -----------------------------------------------
|10.1*            | 2005 Incentive Compensation Plan Agreement form
|10.2*            | 2005 Tandem Bonus Plan Agreement               
|10.3*            | Supplemental Retirement Savings Plan ("SRSP")  
|10.4*            | Amendment to SRSP                              

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

|Number in Filing | Description                                                                                       
|---------------- | --------------------------------------------------------------------------------------------------
|10*              | Severance Pay Agreement, dated October 2, 2004, between United Retail Incorporated and Jerry Soucy
|21               | Subsidiaries of the Corporation                                                                   

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

|Number in Filing | Description                                                                                                                                                                                                                                                                                      
|---------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1*            | Employment Agreement, dated as of September 3, 2004, between the Corporation and Raphael Benaroya                                                                                                                                                                                                
|10.2*            | Employment Agreement, dated as of September 3, 2004, between the Corporation and George R. Remeta                                                                                                                                                                                                
|10.3*            | Employment Agreement, dated as of September 3, 2004, between the Corporation and Kenneth P. Carroll                                                                                                                                                                                              
|10.4*            | Form of Severance Pay Agreement, dated September 9, 2004 (entered into separately
by the Corporation with Paul McFarren and Jon Grossman; similar contracts were entered
into at the same time between the Corporation's respective subsidiaries and the
respective officers of the subsidiaries)

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

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

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

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

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

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

The following exhibits to the
Corporations Quarterly Report on Form 10-Q for the period ended August 2, 2003 are
incorporated herein by reference:

|Number in Filing | 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")

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

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

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

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

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

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended May 4, 2002 is
incorporated herein by reference:

|Number in Filing | Description                                                    
|---------------- | ---------------------------------------------------------------
|10.1*            | Amendment, dated May 30, 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)

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

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

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

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

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

(b)    
          During the first quarter of fiscal 2005, the Company filed Current Reports on
          Form 8-K as follows:

1. on February 28, 2005, to furnish summary financial information for the fourth quarter of fiscal
                  2004;
2. on March 3, 2005, to disclose action taken with respect to management compensation;
3. on March 23, 2005, to file the Settlement Agreement in the Stanford class action against the
                  Company;
4. on April 6, 2005, to furnish a press release with respect to March 2005 sales;
5. on April 22, 2005, to disclose amendments to the Company's Retirement Savings Plan and Stock
                  Appreciation Rights Plan; and
6. on April 29, 2005, to file an exchange of letters between the Company and John C. Pound, the
                  Managing Member of Integrity Brands Fund IIS, LLC regarding candidates for nomination for
                  election to the Company's Board of Directors.

---

# SIGNATURES

Pursuant to the requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.

(Registrant)    
          UNITED RETAIL GROUP, INC.

Date: June 15, 2005

| |                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------
| | By:/s/ GEORGE R. REMETAGeorge R. RemetaVice Chairman of the Board andChief Administrative Officer - Authorized Signatory
| |                                                                                                                         
| | By:/s/ JON GROSSMANJon GrossmanVice President, Finance and Chief Accounting Officer                                     

---

# EXHIBIT INDEX

(1)    The following exhibit is filed herewith:

|Number | Description                           
|------ | --------------------------------------
|31     | Certifications pursuant to Section 302

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

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

The following exhibit to the Corporation's Current Report on Form 8-K filed on April 29, 2005 is incorporated
herein by reference:

|Number in Filing | Description                                                      
|---------------- | -----------------------------------------------------------------
|99.2             | Letter, dated April 28, 2005, from Raphael Benaroya
to John Pound

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

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

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

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

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

|Number in Filing | Description                                    
|---------------- | -----------------------------------------------
|10.1*            | 2005 Incentive Compensation Plan Agreement form
|10.2*            | 2005 Tandem Bonus Plan Agreement               
|10.3*            | Supplemental Retirement Savings Plan ("SRSP")  
|10.4*            | Amendment to SRSP                              

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

|Number in Filing | Description                                                                                       
|---------------- | --------------------------------------------------------------------------------------------------
|10*              | Severance Pay Agreement, dated October 2, 2004, between United Retail Incorporated and Jerry Soucy
|21               | Subsidiaries of the Corporation                                                                   

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

|Number in Filing | Description                                                                                                                                                                                                                                                                                      
|---------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1*            | Employment Agreement, dated as of September 3, 2004, between the Corporation and Raphael Benaroya                                                                                                                                                                                                
|10.2*            | Employment Agreement, dated as of September 3, 2004, between the Corporation and George R. Remeta                                                                                                                                                                                                
|10.3*            | Employment Agreement, dated as of September 3, 2004, between the Corporation and Kenneth P. Carroll                                                                                                                                                                                              
|10.4*            | Form of Severance Pay Agreement, dated September 9, 2004 (entered into separately
by the Corporation with Paul McFarren and Jon Grossman; similar contracts were entered
into at the same time between the Corporation's respective subsidiaries and the
respective officers of the subsidiaries)

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

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

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

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

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

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

The following exhibits to the
Corporations Quarterly Report on Form 10-Q for the period ended August 2, 2003 are
incorporated herein by reference:

|Number in Filing | 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")

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

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

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

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

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

The following exhibit to the
Corporations Quarterly Report on Form 10-Q for the period ended May 4, 2002 is
incorporated herein by reference:

|Number in Filing | Description                                                    
|---------------- | ---------------------------------------------------------------
|10.1*            | Amendment, dated May 30, 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)

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

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

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

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

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