2

                            UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                        Washington D.C.  20549


                              FORM 10-Q

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

For the quarterly period ended October 29,
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 No.  1-10892

                        HAROLD'S STORES, INC.
        (Exact name of registrant as specified in its charter)


        Oklahoma                                    73-1308796
    (State or other                                (IRS Employer
    jurisdiction of                             Identification No.)
    incorporation or
     organization)

   5919 Maple Avenue                              (214) 366-0600
  Dallas, Texas  75235                        (Registrant's telephone
 (Address of  principal                               number,
   executive offices)                          including area code)
       (Zip Code)

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

               Yes   [X]                     No   [   ]

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

             Yes   [   ]                     No   [X]

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

             Yes   [   ]                     No   [X]

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

As of November 30, 2005, the registrant had 6,223,508 shares of Common
Stock outstanding.


                  Harold's Stores, Inc. & Subsidiaries
                                Index to
                      Quarterly Report on Form 10-Q
                  For the Period Ended October 29, 2005


Part I - FINANCIAL INFORMATION                                       Pag
                                                                      e

Item Financial Statements
1.

     Consolidated Balance Sheets - October 29, 2005 (unaudited) and     3
     January 29, 2005

     Consolidated Statements of Operations -
          Thirteen and Thirty-nine Weeks ended October 29, 2005         5
          (unaudited) and October 30, 2004 (Restated), (unaudited)

     Consolidated Statements of Cash Flows -
          Thirty-nine Weeks ended October 29, 2005 (unaudited) and      6
          October 30, 2004 (Restated), (unaudited)

     Notes to Interim Consolidated Financial Statements                 7

Item Management's Discussion and Analysis of Financial Condition       15
2.   and Results of Operations

Item Quantitative and Qualitative Disclosures About Market Risk        20
3.

Item Controls and Procedures                                           20
4.

Part II - OTHER INFORMATION

Item Legal Proceedings                                                 21
1.

Item Unregistered Sales of Equity Securities and Use of Proceeds       21
2.

Item Defaults Upon Senior Securities                                   21
3.

Item Submission of Matters to a Vote of Security Holders               22
4.

Item Other Information                                                 22
5.

Item Exhibits                                                          23
6.

     Signatures                                                          7  23

                             PART I

ITEM 1.   FINANCIAL STATEMENTS

       HAROLD'S STORES, INC. AND SUBSIDIARIES
             CONSOLIDATED BALANCE SHEETS
                       ASSETS
                   (In Thousands)

                                   October    January
                                     29,        29,
                                     2005      2005
                                   (Unaudi
                                     ted)

Current assets:

Cash and cash equivalents                 $         $
                                      1,811       674
Trade accounts receivable, less
allowance for doubtful accounts       8,129     7,343
of $155 as of October 29 and
$200 as of January 29
Note and other receivables               50       125
Merchandise inventories              16,438    20,123
Prepaid expenses                      1,116     1,254

Total current assets                 27,544    29,519

Property and equipment, at cost      42,498    44,211
Less accumulated depreciation        (31,742    (30,66
and amortization                           )        5)

Net property and equipment           10,756    13,546

Total assets                        $38,300    $43,06
                                                    5




       HAROLD'S STORES, INC. AND SUBSIDIARIES
            CONSOLIDATED BALANCE SHEETS
       LIABILITIES AND STOCKHOLDERS' DEFICIT
          (In Thousands Except Share Data)

                                   October     January
                                     29,        29,
                                     2005      2005
                                   (Unaudi
                                     ted)

Current liabilities:

Accounts payable                           $        $
                                      4,812    7,116
Redeemable gift certificates            712    1,130
Accrued payroll expenses and            890      613
bonuses
Accrued rent expense                  1,262    1,141
Deferred gain on sale of                 73        -
building
Current maturities of long-term      20,483    19,95
debt (See Note 6)                                  8

Total current liabilities            28,232    29,95
                                                   8

Accrued rent expense, net of          4,700    5,630
current maturities
Deferred gain, net of current            74        -
portion
Long-term debt, net of current        1,212      580
maturities

Total liabilities                    34,218    36,16
                                                   8

Commitments and contingencies
(See Note 8)

Convertible preferred stock of
$.01 par value
Amended      Series      2001-A,
authorized    600,000    shares,
issued  and outstanding  339,972      6,800    6,725
as  of October 29 and 336,231 as
of January 29
Series     2002-A,    authorized
300,000   shares,   issued   and
outstanding   224,870   as    of      4,497    4,340
October  29  and 217,732  as  of
January 29
Series     2003-A,    authorized
100,000   shares,   issued   and
outstanding 55,372 as of October      5,531    5,426
29 and 54,514 as of January 29
2001-A  and  2002-A entitled  to
$20.00  per  share,  and  2003-A
entitled  to $100.00 per  share,
in  each  case plus accrued  but
unpaid dividends in liquidation

                                     16,828    16,49
                                                   1

Stockholders' deficit:

Common stock of $.01 par value
 Authorized  25,000,000  shares;
   issued     and    outstanding         62       62
   6,223,508  as of  October  29
   and January 29
Additional paid-in capital           34,469    34,46
                                                   8
Accumulated deficit                  (47,275    (44,1
                                           )      22)
                                     (12,744    (9,59
                                           )       2)
Less:  Treasury stock of 205 shares
as  of October 29 and January 29         (2)      (2)
recorded at cost
Total stockholders' deficit          (12,746    (9,59
                                           )       4)

Total liabilities and               $38,300    $43,0
stockholders' deficit                             65

             HAROLD'S STORES, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF OPERATIONS
              (In Thousands Except Per Share Data)
                           (Unaudited)

                               13 Weeks Ended     39 Weeks Ended
                               October  October   October  October
                                29,      30,       29,      30,
                                2005     2004      2005     2004
                                        (Restat            (Restat
                                         ed)                ed)

Sales                           $23,3    $23,1     $67,6    $66,5
                                   39       10        01       69

Costs and expenses:
Costs of goods sold (including
occupancy and central buying
expenses, exclusive of items    15,57    14,46     45,60    42,20
shown separately below)             9        3         6        4

Selling, general and             7,028    6,680     20,73    20,35
administrative expenses                                5        1

Depreciation and amortization     942    1,023     2,884    3,075

Operating costs and expenses    23,54    22,16     69,22    65,63
                                    9        6         5        0

Operating income (loss)         (210)      944    (1,624      939
                                                       )

Interest expense                  405      281     1,102      699

Gain on sale of building        (703)        -     (703)        -

Income (loss) before income        88      663    (2,023      240
taxes                                                  )

(Provision) benefit for             -        -         -        -
income taxes

Net income (loss)                   $        $    $(2,02        $
                                   88      663        3)      240


NET INCOME (LOSS) APPLICABLE
TO COMMON STOCKHOLDERS:

Net income (loss)                   $        $    $(2,02        $
                                   88      663        3)      240

Less:  Preferred stock
dividends and accretion of        378      377     1,130    1,122
preferred stock issuance
costs

Net income (loss) applicable        $        $    $(3,15        $
to common stockholders          (290)      286        3)    (882)

Net income (loss) per common
share:
Basic                          $(0.05    $0.05     $(0.5   $(0.14
                                    )                 1)        )
Diluted                        $(0.05    $0.04     $(0.5   $(0.14
                                    )                 1)        )



        HAROLD'S STORES, INC. AND SUBSIDIARIES
        CONSOLIDATED STATEMENTS OF CASH FLOWS
                    (In Thousands)
                     (Unaudited)

                                      39 Weeks Ended
                                    October    October
                                      29,        30,
                                      2005      2004
                                               (Restate
                                                 d)

Cash flows from operating
activities:
Net income (loss)                          $         $
                                     (2,023)       240
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization          2,884     3,075
Gain on sale of assets                 (729)       (50)
Changes in assets and
liabilities:
Increase in trade and other            (772)     (1,162
accounts receivable                                   )
Decrease (increase) in                 3,685     (3,161
merchandise inventories                               )
Decrease in prepaid expenses             138         39
Decrease in accounts payable         (2,304)     (1,565
                                                      )
Decrease in accrued expenses           (803)      (680)

Net cash provided by (used in)            76     (3,264
operating activities                                  )

Cash flows from investing
activities:
Acquisition of property and            (632)     (1,712
equipment                                             )
Proceeds from disposal of              1,267        51
property and equipment
Issuance of note receivable              (6)        (2)
Payments received for notes               66        13
receivable

Net cash provided by (used in)           695     (1,650
investing activities                                  )

Cash flows from financing
activities:
Borrowings on long-term debt           1,300         -
Payments on long-term debt           (1,381)      (210)
Advances on revolving line of         73,677    77,059
credit
Payments on revolving line of        (72,439     (71,34
credit                                     )         6)
Proceeds from exercise of common           1        19
stock options
Preferred stock dividends              (792)      (795)

Net cash provided by financing           366     4,727
activities

Increase (decrease) in cash            1,137      (187)
Cash and cash equivalents at             674     1,118
beginning of period
Cash and cash equivalents at end           $         $
of period                              1,811       931


Non-cash investing and financing
activities:
Issuance of preferred stock in             -       142
lieu of rent
Preferred stock dividends paid           304       280
in shares of preferred stock
             HAROLD'S STORES, INC. AND SUBSIDIARIES
       NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
              October 29, 2005 and October 30, 2004
                           (Unaudited)

1.   Unaudited Interim Periods

      In the opinion of the Company's management, all adjustments
(all of which are normal and recurring) have been made which  are
necessary  to fairly state the financial position of the  Company
as of October 29, 2005 and the results of its operations and cash
flows for the thirty-nine week periods ended October 29, 2005 and
October 30, 2004.  The results of operations for the thirteen and
thirty-nine  week periods ended October 29, 2005 and October  30,
2004  are not necessarily indicative of the results of operations
that   may  be  achieved  for  the  entire  year.   For   further
information,  refer to the consolidated financial statements  and
footnotes thereto included in the Company's Annual Report on Form
10-K for the year ended January 29, 2005.

2.   Definition of Fiscal Year

     The Company has a 52-53 week year which ends on the Saturday
closest  to January 31.  The period from January 30, 2005 through
January 28, 2006, has been designated as 2005.

3.   Basis of Presentation

      The  consolidated financial statements include the accounts
of  the  Company  and its subsidiaries, all of which  are  wholly
owned.   All  significant intercompany accounts and  transactions
have been eliminated.

4.   Impact of New Accounting Pronouncements

     In  December  2004, the FASB issued Statement  of  Financial
Accounting  Standards  No.  123  (revised  2004),  "  Share-Based
Payment " (SFAS 123R).  This statement eliminates the alternative
to  apply the intrinsic value measurement provisions of APB 25 to
stock compensation awards issued to employees.  Rather, SFAS 123R
requires  companies  to  measure the cost  of  employee  services
received in exchange for an award of equity instruments based  on
the  grant-date  fair  value of the award.   That  cost  will  be
recognized  in  the consolidated statements of  income  over  the
period  during which an employee is required to provide  services
in  exchange  for  the  award, usually the vesting  period.   The
Company  is  evaluating the impact of the new  standard  and  the
method  of adoption.  SFAS 123R will be effective for the Company
beginning January 1, 2006.

     In  the  third  quarter of 2005, the Company, with  approval
from  its Board of Directors, announced the acceleration  of  all
unvested  stock options granted and outstanding.   The  Company's
decision  to accelerate the vesting of certain outstanding  stock
option  grants  was made as part of a broad review  of  long-term
incentive  compensation in light of changes in  market  practices
and upcoming accounting changes.

5.   Restatement of Financial Statements

      In light of an SEC clarification on lease accounting issued
in  February 2005, the Company re-evaluated its lease  accounting
practices in the first quarter of 2005 and has corrected the  way
it  accounts  for  its leases, specifically  the  accounting  for
operating  leases  with  scheduled  rent  increases  and   tenant
allowances.

      Under  the  requirements of FASB Technical  Bulletin  85-3,
"Accounting  for Operating Leases with Scheduled Rent Increases,"
rent  expense should be amortized on a straight-line  basis  over
the  term  of  the  lease.   In prior periods,  the  Company  had
determined  that the term of the lease begins on the commencement
date  of  the  lease, which generally coincides  with  the  store
opening  date, instead of at the time the Company takes  physical
possession  of  the property to start construction  on  leasehold
improvements.  This had the effect of excluding the  construction
period  of  the  stores from the calculation of the  period  over
which  rent is expensed.  The Company has restated its previously
reported   Consolidated  Financial  Statements  to  correct   its
accounting   for  scheduled  rent  increases  by  including   the
construction period.

      In  addition,  under FASB Technical Bulletin 88-1,  "Issues
Relating  to  Accounting for Leases," lease  incentives  such  as
tenant   allowances   received  from  the   landlord   to   cover
construction costs incurred by the Company should be reflected as
a  deferred liability, amortized over the term of the  lease  and
reflected  as  a  reduction  to rent expense.   The  Company  had
previously classified tenant allowances as a reduction  to  store
build  out  costs  (leasehold improvements).   As  a  result,  it
reflected the amortization as a reduction to depreciation expense
instead  of  as  a  reduction to rent expense.  The  Company  has
restated   its   previously   reported   Consolidated   Financial
Statements to properly account for tenant allowances.

      As  a result of these restatements, the Company's financial
results for the thirteen and thirty-nine weeks ended October  30,
2004  have  been  adjusted as follows (in thousands,  except  per
share data):

                               As                   As
                            Previous             Restated
                               ly
                            Reported

                                Thirteen Weeks Ended
                            October              October
                              30,      Adjustme    30,
                              2004       nts       2004
Sales                       $23,110          -    $23,110
Costs and expenses:
Cost of goods sold           14,728      (265)     14,463
Selling, general and          6,680          -      6,680
administrative expenses
Depreciation and                772        251      1,023
amortization
Operating costs and          22,180       (14)     22,166
expenses
Operating income                930         14        944
Interest expense                281          -        281
Income before income            649         14        663
taxes
Provision for income              -          -          -
taxes
Net income                        $         14          $
                                649                   663
NET INCOME APPLICABLE TO
COMMON STOCKHOLDERS:
Net income                        $         14          $
                                649                   663
Less:  Preferred stock
dividends and accretion         377          -        377
of preferred stock
issuance costs
Net income applicable to          $         14          $
common stockholders             272                   286
Net income per common
share:
Basic                             $       0.01          $
                               0.04                  0.05
Diluted                           $       0.00          $
                               0.04                  0.04



                               Thirty-nine Weeks Ended
                            October              October
                              30,      Adjustme    30,
                              2004       nts       2004
Sales                       $66,569          -    $66,569
Costs and expenses:
Cost of goods sold           42,999      (795)     42,204
Selling, general and         20,351          -     20,351
administrative expenses
Depreciation and              2,324        751      3,075
amortization
Operating costs and          65,674       (44)     65,630
expenses
Operating income                895         44        939
Interest expense                699          -        699
Income before income            196         44        240
taxes
Provision for income              -          -          -
taxes
Net income                        $         44          $
                                196                   240
NET INCOME (LOSS)
APPLICABLE TO COMMON
STOCKHOLDERS:
Net income                        $         44          $
                                196                   240
Less:  Preferred stock
dividends and accretion       1,122          -      1,122
of preferred stock
issuance costs
Net income (loss)
applicable to common               $        44          $
stockholders                   (926)                (882)
Net income (loss) per
common share:
Basic                              $      0.01          $
                              (0.15)               (0.14)
Diluted                            $      0.01          $
                              (0.15)               (0.14)

6.   Long-term Debt

     The Company's original three-year credit facility with Wells
Fargo  Retail  Finance  II, LLC, ("WFRF")  was  entered  into  on
February  5,  2003  and  provided  the  Company  with  a  maximum
available  credit  limit  of  $22 million.   This  agreement  was
scheduled  to  expire in February 2006.  As discussed  below,  on
April  29,  2004, the maximum available credit line was increased
to  the  lesser  of  $25 million or $22 million plus  outstanding
participant  advances, and the expiration date  was  extended  to
February   5,   2007.   The  credit  facility   is   secured   by
substantially all assets of the Company and its subsidiaries  and
is  subject  to a borrowing base calculation based  primarily  on
inventory  and  accounts  receivable.   The  facility   has   two
financial  covenants, a minimum excess availability  covenant  of
$1.35   million  and  a  maximum  capital  expenditure  covenant,
established at $2.75 million for 2005.  Interest rates under  the
facility  are  at prime plus 0.5% or LIBOR plus 2.50%,  with  the
ability  to  reduce  the  rate if the  Company  achieves  certain
financial  criteria.   The balance outstanding on  the  Company's
line of credit at October 29, 2005 was $20,416,000 which includes
the  $4  million outstanding under the bridge facility  discussed
below.  At October 29, 2005 the Company's availability under  the
WFRF  line  of  credit was approximately $1.7 million  above  the
minimum availability requirement of $1.35 million and the average
interest rate on the credit line was 6.56%.

     Subsequent  to  securing the initial  credit  facility,  the
Company  negotiated  an  increase of  $2  million  in  its  total
borrowing  availability under its existing credit  facility  with
WFRF.  The Company obtained this increase in order to provide for
additional  working capital.  The full $2 million  was  available
for  borrowing  on  July 15, 2003 and has been  extended  to  the
Company  by Wells Fargo based upon a loan participation agreement
between  Wells  Fargo and RonHow, LLC, an entity  established  in
July 2003 which is owned and controlled directly or indirectly by
Ronald  de Waal and W. Howard Lester.  Mr. de Waal and Mr. Lester
are  both major beneficial owners of the Company's common  stock,
and Mr. Lester is also a director of the Company.

     In order to achieve additional liquidity, on April 29, 2004,
the  Company  completed an amendment to the credit facility  with
WFRF  which increased the Company's borrowing availability  under
the  facility.   The  amendment increased the  Company's  maximum
inventory advance rate cap from 75% to 80% during non-peak  times
and  from 80% to 85% during peak times.  Peak times were  amended
to  include  the eight weeks prior to Easter and the eight  weeks
prior  to  October 1.  Additionally, the amendment  extended  the
term of the credit facility by one year, with a new expiration of
February  5,  2007.   The  amendment also increased  the  maximum
revolver amount from $22 million to the lesser of $25 million  or
$22  million plus outstanding participant advances.  Finally, the
amendment  provided for an additional increase of $2  million  in
the  Company's  borrowing availability under the  facility  based
upon  an  increase  in the existing loan participation  agreement
between WFRF and RonHow, LLC.  WFRF will continue to serve as the
lending agent for the Company under the credit facility, and  the
principal  covenants  and  conditions imposed  upon  the  Company
pursuant   to  the  WFRF  credit  facility  agreement  have   not
materially  changed.   RonHow, LLC's right to  repayment  of  any
advances under the credit facility that are attributable  to  its
total  $4 million participation is generally subordinate  to  the
repayment rights of the other credit facility lenders.   However,
the  Company  may repay these advances provided it meets  certain
conditions, including the maintenance of an average daily  excess
availability  under the credit facility of at least $2.5  million
for  the  30  days  prior  to and 30 days  projected  immediately
following   the  repayment.   The  average  excess   availability
requirement  is  higher  than the excess  availability  otherwise
required  of  the  Company  under the credit  facility.   If  the
Company  does not repay the new $2 million loan participation  of
RonHow  during the 18 months subsequent to April 29, 2004, RonHow
will  have  an  option  at  that  time  to  convert  any  of  the
incremental  $2 million not repaid into shares of authorized  but
unissued  2003-A Preferred Stock, which will be convertible  into
shares of common stock at a price of $2.524 per share, which  was
the  20-day  average closing price of the Company's common  stock
for  the  period ending immediately before closing  of  the  loan
amendment.   As of October 29, 2005, RonHow had not notified  the
Company  of  its intention to convert the outstanding  borrowings
into  additional preferred shares.  Additionally, if the  Company
has  not  repaid the initial $2 million of loan participation  by
February  2006,  the Company will pay an additional  4%  fee  per
annum  on  the outstanding participation amount up to $2 million.
This transaction was approved by the independent directors.

     The  Company  was in compliance with its debt covenants  for
the  quarter ended October 29, 2005.  Although the Company's line
of  credit  with  WFRF does not expire until February  2007,  the
Company has classified its borrowings under its line of credit as
current  in its consolidated balance sheets due to the  terms  of
its  agreement with the lender.  Under the bank agreement,  there
is  an  acceleration clause which potentially allows the bank  to
demand  immediate payment of all outstanding borrowings upon  the
occurrence  of  a  material  adverse  change  in  the   Company's
operations   or  financial  position.   Determination   of   what
constitutes a material adverse change is at the discretion of the
bank,  however,  it is subject to reasonableness  standards.   In
addition,  the  Company  is  required  to  maintain  a   lock-box
agreement  with  the  bank whereby all cash received  is  applied
against  current  borrowings.  As a result of  these  items,  the
Company is required to classify its line of credit borrowings  as
current   as   proscribed   by   EITF   95-22,   "Balance   Sheet
Classification  of Borrowings Outstanding under Revolving  Credit
Agreements that include both a Subjective Acceleration Clause and
a Lock-Box Arrangement."

7.   Income Taxes

     The  Company's federal net operating losses of approximately
$21.6 million will begin to expire in 2021.  The Company also has
state  net operating losses of approximately $30.7 million  which
begin  to  expire  in  2005.  The Company  provides  a  valuation
allowance  for  all  deferred tax assets  because  the  Company's
recent history of operating losses made the realization of  these
assets more unlikely than likely.

     The  ability  of  the Company to utilize net operating  loss
carryforwards to reduce future federal taxable income and federal
income tax of the Company is subject to various limitations under
the  Internal Revenue Code of 1986 ("the Code"), as amended.  The
utilization  of  such  carryforwards  may  be  limited  upon  the
occurrence  of certain ownership changes, including the  issuance
or  exercise of rights to acquire stock, the purchase or sale  of
stock by 5% stockholders, as defined in the Treasury regulations,
and  the  offering of stock by the Company during any  three-year
period  resulting in an aggregate change of more than 50% in  the
beneficial ownership of the Company.

      In  the event of an ownership change (as defined for income
tax  purposes),  Section  382  of  the  Code  imposes  an  annual
limitation  on the amount of a corporation's taxable income  that
can  be  offset  by  these  carryforwards.   The  limitation   is
generally  equal to the product of (i) the fair market  value  of
the  equity  of  the  Company multiplied  by  (ii)  a  percentage
approximately  equivalent to the yield on  long-term  tax  exempt
bonds during the month in which an ownership change occurs.   The
Company's management, in consultation with its tax advisors,  has
been  assessing the impact its preferred stock issuances  had  on
the  change  in  the  beneficial ownership of  the  Company,  and
whether  or not such a change would impact the Company's  ability
to  utilize its net operating loss carryforwards ("NOLs").  After
thorough review, it was determined that a change in ownership had
occurred on October 1, 2002, and that this change resulted  in  a
limitation  on  the Company's ability to utilize its  NOLs  under
Section  382  of  the Code.  As a result of the  limitation,  the
Company  may  only  utilize $1.0 million per year  of  its  total
October 1, 2002 pre-change NOL of $12.5 million.  Any portion  of
the  $1.0  million annual limitation not utilized in a particular
year  may  be  carried over to the next year and  added  to  that
year's limitation.  Based on the Company's 2004 projected taxable
loss,  the cumulative excess annual limitation carryover to  2005
is  approximately $2.4 million.  In 2005 the Company's total  NOL
available for use is $12.6 million.

8.   Commitments and Contingencies

     The  Company  is  occasionally involved in  various  claims,
administrative agency proceedings and litigation arising  out  of
the  normal conduct of its business.  At October 29, 2005,  there
existed  only one minor litigation matter.  Although the ultimate
outcome of such litigation cannot be predicted at this time,  the
management  of  the  Company,  after  discussions  with  counsel,
believes  that the resulting liability, if any, will not  have  a
material effect upon the Company's financial position or  results
of operations.

9.   Preferred Stock

     On  February  28,  2001, the Company executed  a  definitive
agreement  to  allow  an investor to purchase  from  the  Company
300,000  shares  of  convertible  preferred  stock  for  a  total
purchase  price  of  $6  million.   Under  this  preferred  stock
agreement,  each  of  the  300,000  initially  issued  shares  of
preferred  stock is convertible into common stock of the  Company
at  a  fixed rate of $1.275 per share.  The preferred shares have
voting  rights  equal to the number of common shares  into  which
they  may be converted.  Until converted, the preferred stock  is
entitled to receive quarterly dividends that cumulate annually at
a rate of 10% per annum, which are reduced to 8% per annum if the
Company's  operating  income for any  fiscal  year  ending  after
February 28, 2001 exceeds $4,735,000.  Dividends were payable 50%
in  cash  and  50% in additional shares of preferred stock  until
February 28, 2003 and thereafter are paid in additional shares of
preferred stock or cash as the holder of the preferred stock  may
elect.   Shares of preferred stock issued in respect of dividends
are  convertible into common stock based upon an  average  market
price  of  the common stock as of the respective dividend  dates.
These preferred shares are presently redeemable at the option  of
the  Company at a price equal to the initial purchase price  plus
cumulated and accrued but unpaid dividends.

     On  August  2,  2002,  the  Company  executed  a  definitive
agreement  to  allow a group of investors to  purchase  from  the
Company  200,000  shares of Series 2002-A  convertible  preferred
stock  for  a  total  purchase price of $4 million.   Under  this
preferred  stock agreement, each of the 200,000 initially  issued
shares of preferred stock is convertible into common stock of the
Company at a fixed rate of $2.72 per share.  The preferred shares
have  voting  rights  equal to the number of common  shares  into
which  they  may  be converted.  Until converted,  the  preferred
stock  is  entitled to receive quarterly dividends that  cumulate
annually  at a rate of 8% per annum, which is reduced to  6%  per
annum  if  certain profitability targets are met by the  Company.
Dividends  were payable 50% in cash and 50% in additional  shares
of  preferred stock until July 1, 2003 and thereafter are paid in
additional shares of preferred stock or cash as the holder of the
preferred  stock may elect.  Following the third  anniversary  of
the original issuance date, the Series 2002-A Preferred Stock  is
redeemable at the option of the Company at a price equal  to  the
initial  purchase  price plus cumulated and  accrued  but  unpaid
dividends.

     On  February  5, 2003, the Company closed on  a  $5  million
private equity investment by Inter-Him, N.V., of which Ronald  de
Waal is a Managing Director, and W. Howard Lester, a director  of
the  Company  (the  "Investors").   The  Investors  purchased  an
aggregate  of  50,000 shares of a new series of preferred  stock,
designated Series 2003-A Preferred Stock, at a purchase price  of
$100.00  per  share.  Each of the 50,000 shares of Series  2003-A
Preferred Stock initially issued is convertible into common stock
at a fixed rate of $1.15 per share, and otherwise provides rights
and  preferences substantially similar to the Company's  existing
Series  2002-A  Preferred  Stock.  The  percentage  ownership  of
common  stock on an as-converted basis by Inter-Him  and  Mr.  de
Waal  is approximately 50.8% (assuming conversion of all  of  the
Company's  outstanding preferred stock).  Dividends were  payable
50% in cash and 50% in additional shares of preferred stock until
January 1, 2004, and thereafter are paid in additional shares  of
preferred stock or cash as the holder of the preferred stock  may
elect.   Following the third anniversary of the original issuance
date,  the  Series  2003-A Preferred Stock is redeemable  at  the
option  of  the Company at a price equal to the initial  purchase
price plus cumulated and accrued but unpaid dividends.

     None  of  the  Company's outstanding  preferred  shares  are
included in the stockholders' equity section of the balance sheet
because  the  preferred shareholders have special  voting  rights
that  empower them to elect a majority of the board of  directors
and maintain effective control over the Company.

10.  Stock Options

     The Company follows the intrinsic value method of accounting
for  common  stock options to employees, in accordance  with  the
provisions  of  Accounting  Principles  Board  Opinion  No.   25,
"Accounting   for  Stock  Issued  to  Employees",   and   related
interpretations.

     Had  the  Company elected to recognize compensation  expense
based  on the fair value of the stock options granted as of their
grant date per the standards of Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation", the
Company's 2005 and 2004 pro forma net income (loss) and pro forma
net  income (loss) per share would have differed from the amounts
actually  reported as shown in the table below.   The  pro  forma
amounts shown reflect only options granted in 1995 through  2005.
Therefore, the full impact of calculating compensation  cost  for
stock  options based on their fair value is not reflected in  the
pro   forma   net   income  (loss)  amounts   presented   because
compensation  cost is reflected over the options' vesting  period
of  up  to  ten  years and compensation cost for options  granted
prior to January 29, 1995 is not considered.

                               13 Weeks Ended     39 Weeks Ended
                               October  October  October  October
                                29,      30,      29,       30,
                                2005     2004     2005     2004
                                        (Restat           (Restat
                                         ed)                ed)
                                (In thousands, except per share
                                             data)

Net income (loss) applicable
to common stockholders, as     $(290)        $   $(3,153        $
reported                                   286         )    (881)

Add:
Stock-based employee
compensation expense included      -         -        -        -
in reported net income (loss)

Deduct:
Stock-based employee
compensation expense              533      196      770      616
determined under fair value
method for all awards

Pro forma net income (loss)
applicable to common           $(823)   $   90   $(3,923  $(1,497
stockholders                                           )        )

Net income (loss) per average
common share:
Basic, as reported             $(0.05)    $0.05   $(0.51   $(0.14)
                                                      )
Basic, pro forma               $(0.13)    $0.01   $(0.63   $(0.24)
                                                      )

Diluted, as reported           $(0.05)    $0.04   $(0.51   $(0.14)
                                                      )
Diluted, pro forma             $(0.13)    $0.03   $(0.63   $(0.24)
                                                      )

11.  Revenue Recognition

     Sales from store locations represented approximately 97% and
96% of the Company's total sales for the thirteen and thirty-nine
weeks,  respectively, ended October 29, 2005.  This  compares  to
store  location  sales  of approximately  98%  and  99%  for  the
thirteen and thirty-nine week periods, respectively, of the prior
year.   These sales are recognized at the time of the  customer's
purchase.  During the third quarter of 2003, the Company returned
to  the  direct  channel  business by  offering  direct  response
catalogs.  During the third quarter of 2004, the Company returned
to  the  internet commerce business by offering purchase  options
through its web site.  The sales related to these direct response
catalogs  and  internet  transactions  were  approximately   four
percent  of  total sales for the thirty-nine weeks ended  October
29,  2005, and a return reserve was established for this  revenue
stream beginning August 2003.  Direct channel and internet  sales
are  recognized at the time the order is shipped to the customer.
All  sales  are net of returns and exclude sales tax.  Gift  card
sales  are  recognized as revenue when the gift card is redeemed,
not when it is sold.

12.  Earnings per Share

     Outstanding shares for purposes of basic and diluted
earnings per share were calculated as follows:

                              13 Weeks Ended     39 Weeks Ended
                             October  October   October   October
                              29,       30,       29,       30,
                              2005     2004      2005      2004
                                      (Restat             (Restat
                                        ed)                 ed)
                                        (in thousands)

Net income (loss)
applicable to common              $       286   $(3,153         $
shareholders - basic and      (290)                   )     (881)
diluted

Average common shares         6,223     6,221     6,223     6,216
outstanding

Effect of dilutive
securities:
Employee stock options            -       162         -         -

Convertible preferred             -    11,319         -         -
stock

Diluted average common        6,223    17,702     6,223     6,216
shares outstanding

     Approximately 1,755,826 shares and 1,616,445 shares for  the
thirteen  weeks  ended  October 29, 2005 and  October  30,  2004,
respectively,  and  approximately 1,719,974  shares  and  879,983
shares  for  the  thirty-nine weeks ended October  29,  2005  and
October  30, 2004, respectively, related to outstanding  employee
stock  options, were not included in the calculation  of  diluted
earnings per average common share because the effect of including
those  shares is anti-dilutive as the exercise price of the stock
options exceeded the average common stock market price during the
respective  period.   For the thirteen weeks  ended  October  29,
2005,  approximately  620,214 preferred shares  convertible  into
11,589,648 common shares, were not included in the calculation of
diluted  earnings per average common share because the effect  of
including those shares is anti-dilutive.  For the thirteen  weeks
ended  October  30, 2004, all preferred shares  convertible  into
common shares were included in the calculation of diluted earning
per  average  common  share.  Approximately 620,214  and  604,688
preferred  shares  convertible  into  11,589,648  and  11,340,091
common  shares,  respectively, for the  thirty-nine  weeks  ended
October 29, 2005 and October 30, 2004, were not included  in  the
calculation of diluted earnings per average common share  because
the effect of including those shares is anti-dilutive.

13.  Reclassifications

     Certain reclassifications have been made to the prior period
balances to conform to the October 29, 2005 presentation.

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

     From  time  to time, the Company may publish forward-looking
statements  relating  to  certain matters  including  anticipated
financial performance, business prospects, the future opening  or
closing   of   stores,  inventory  levels,  anticipated   capital
expenditures,  and  other  matters.  All  statements  other  than
statements of historical fact contained in this Form 10-Q  or  in
any  other  report of the Company are forward-looking statements.
The  Private Securities Litigation Reform Act of 1995 provides  a
safe  harbor for forward-looking statements.  In order to  comply
with  the  terms of that safe harbor, the Company  notes  that  a
variety of factors, individually or in the aggregate, could cause
the  Company's actual results and experience to differ materially
from  the anticipated results or other expectations expressed  in
the   Company's  forward-looking  statements  including,  without
limitation,  the  following:   the  ability  of  the  Company  to
generate cash flow from operations in amounts sufficient to  meet
debt  obligations  and  provide working  capital  and  funds  for
growth,  ability  to  fund  operating losses,  consumer  spending
trends  and  habits; competition in the retail clothing  segment;
the  customary risks of purchasing merchandise abroad,  including
longer  lead  times,  higher  initial  purchase  commitments  and
foreign  currency fluctuations; the Company's ability to  attract
and   retain  qualified  personnel;  weather  conditions  in  the
Company's  operating  regions; laws and  government  regulations;
general   business  and  economic  conditions;  availability   of
capital;  the  existence  or  absence of  operating  initiatives,
publicity,  advertising  and  promotional  efforts;  changes   in
accounting policies; and the ability of new management to improve
the  Company's financial condition and performance.  In addition,
the  Company  disclaims any intent or obligation to update  those
forward-looking statements.

Overview

      Harold's  is a multi-channel specialty retailer of  ladies'
and  men's apparel, including accessories and footwear.  Harold's
markets  its merchandise through retail stores, catalogs and  its
website at www.harolds.com.

Results of Operations

      The  following table sets forth for the periods  indicated,
the percentage of net sales represented by items in the Company's
statements of operations.

                              13 Weeks Ended     39 Weeks Ended
                             October  October   October   October
                              29,       30,       29,       30,
                              2005     2004      2005      2004
                                      (Restat             (Restat
                                        ed)                 ed)
Sales                        100.0%    100.0%    100.0%    100.0%

Costs of goods sold           (66.8)    (62.6)    (67.4)   (63.3)

Selling, general and         (30.1)    (28.9)    (30.7)   (30.6)
administrative expenses

Depreciation and              (4.0)     (4.4)     (4.3)    (4.6)
amortization

Interest expense              (1.7)     (1.2)     (1.6)    (1.1)

Gain on sale of building        3.0        -       1.0         -

Income (loss) before            0.4      2.9      (3.0)      0.4
income taxes

(Provision) benefit for           -         -         -         -
income taxes

Net income (loss)              0.4%      2.9%    (3.0)%      0.4%

      The following table reflects the sources of the changes  in
Company  sales for the periods indicated, with percentage changes
compared to the comparable period of the prior year.

                          13 Weeks Ended      39 Weeks Ended
                         October   October   October   October
                          29,       30,       29,       30,
                          2005      2004      2005      2004

Sales (000's)            23,339    23,110    67,601    66,569

Total sales increase        1.0%    (3.2)%      1.6%    (2.3)%
(decrease)
Change in comparable
store sales               (0.4)%    (4.7)%    (0.1)%      1.9%
(52 week basis) (1)
Store locations:
Existing stores             41        41        41        42
Stores closed                -         -         -        (1)
New stores opened            -         -         -         -
Total stores at end of      41        41        41        41
period

( The  Company considers a store comparable if it  has  been
1 open  for  12 full months and has not changed  its  square
) footage by more than 20%.  Closed and relocated stores are
  excluded from the comparable calculation beginning in  the
  month   in   which  the  store  is  closed  or  relocated.
  Renovated stores are considered comparable as long as  the
  store square footage does not change by more than 20%.

      The  Company  opened no new stores during  the  thirty-nine
weeks  ended October 29, 2005 and October 30, 2004 and closed  no
stores  for the thirty-nine weeks ended October 29, 2005 compared
to  the  thirty-nine weeks ended October 30, 2004  in  which  one
store  was closed.  The Company currently has no plans  to  close
additional  stores.  However, it does have plans to relocate  two
stores and to open two new stores during 2006.

     The  slight  decline  in  comparable  store  sales  for  the
thirteen weeks ended October 29, 2005 are due to several factors.
Sales were strong during the month of August, as the Company  was
successful  in improving the sales velocity of spring and  summer
clearance  merchandise,  but September sales  were  approximately
$1.5  million  below last year's level due to  unseasonably  warm
temperatures,  the  impact of hurricanes Katrina  and  Rita  that
directly  affected the Company's Louisiana, Texas and Mississippi
stores  and  overall lack of consumer response to  the  Company's
fall    and    winter   offerings.    October   sales   recovered
significantly, as management re-positioned the fall season  full-
line  store sales event from November 2004 into October of  2005,
the  month  where  it  had historically been  held.   The  slight
increase  in  sales experienced for the thirty-nine  week  period
ended  October  29,  2005  are primarily  attributable  to  mixed
customer  reactions  to  the  Company's  merchandise  assortments
leading to sales below Company plans.  The Company's direct sales
(internet  and catalog) were $2.4 million during the year-to-date
period  ended  October 29, 2005, nearly three times  last  year's
sales of $837,000, leading to the increase in total sales.

      Gross margin represents net sales less cost of products and
merchandising.   Cost  of  products  and  merchandising  consists
primarily   of   product  and  operating  costs  (e.g.,   product
development, sourcing, inbound freight, merchandising,  inventory
control,  inspection, warehousing, internal transfer,  purchasing
and  receiving costs, inventory markdowns and occupancy costs for
the  Company's  retail stores).  The Company's gross  margin  was
33.2% for the third quarter of 2005, as compared to 37.4% in  the
same  period  of last year.  The gross margin for the thirty-nine
week  period ended October 29, 2005 declined to 32.6% from  36.7%
during the same period of the prior year.  All of the decrease in
gross   margin   is   attributable  to   incremental   markdowns.
Additional markdowns were incurred on fall merchandise during the
third  quarter  to  stimulate business after the  hurricanes  and
unseasonably warm weather.  For the thirty-nine week  period,  in
addition  to the incremental fall markdowns, the Company recorded
higher  markdowns  in  order to clear excess  spring  and  summer
merchandise.

       Selling,  general  and  administrative  expenses   consist
primarily of retail store selling costs, costs to produce,  print
and  distribute  direct response catalogs, as well  as  corporate
administrative   costs.  Selling,  general   and   administrative
expenses  (including  advertising and catalog  production  costs)
increased  to  30.1%  of  sales for the  third  quarter  of  2005
compared to 28.9% for the third quarter of 2004 and increased  to
30.7%  of sales for the thirty-nine weeks ended October 29,  2005
from  30.6% for the same period of the prior year.  The  increase
is  principally  a  result  of incremental  costs  to  conduct  a
warehouse  sale  during the third quarter of 2005  combined  with
increased health insurance costs.

      Depreciation and amortization expense decreased to 4.0%  of
sales  for  the  third quarter of 2005 from 4.4%  for  the  third
quarter  of  2004 and decreased to 4.3% of sales for the  thirty-
nine  weeks ended October 29, 2005 from 4.6% for the same  period
of  the  prior year.  These decreases are partially  due  to  the
total  sales  increase and partially due to an  increase  in  the
Company's fully depreciated assets.

      On  October 17, 2005, the Company closed on the sale of its
Norman, Oklahoma office building to H.D. Investments, LLC  for  a
price  of  $1.25 million.  This was later assigned to Asp  Street
Investments,  LLC, an independent third party.   The  closing  of
this  transaction was contingent upon the Company and  the  buyer
finalizing an agreement for the Company to lease the first  floor
of  the  building from Asp Street Investments, LLC and the  buyer
obtaining  and approving the final plans for the remodel  of  the
first  floor.  Both of these contingencies were met.  As a result
of  the  sale,  the  Company realized a gain  in  the  amount  of
approximately   $850,000.   Because  this  was  a  sale-leaseback
transaction, approximately $703,000 of this amount was recognized
in  the  third quarter ended October 29, 2005, and the  remaining
$147,000  was deferred and will be recognized over  the  next  24
months.

      The  Company  reported  a  net loss  applicable  to  common
stockholders  of  $290,000 or $0.05 per basic and  diluted  share
during  the  third  quarter of 2005 compared  to  net  income  of
$286,000 or $0.05 per basic and $0.04 per diluted share  for  the
third  quarter  of  last year.  For the thirty-nine  week  period
ended  October  29,  2005, the Company reported  a  net  loss  of
$3,153,000 or $0.51 per basic and diluted share compared to a net
loss  of  $881,000 or $0.14 per basic and diluted share  for  the
same  period  of the prior year.  These losses are primarily  the
result of declines in gross margin as described above.

       The   average  balance  of  total  outstanding  debt   was
$23,083,000  for  the thirty-nine weeks ended  October  29,  2005
compared  to  $20,293,000  for the same  period  of  2004.   This
increase  in average balances resulted principally from increased
merchandise  purchases that were not offset by  increased  sales.
Interest expense increased slightly as a percentage of sales  due
to a combination of the Company's higher average debt balance and
increasing  interest  rates.  The average interest  rate  on  the
Company's  line  of  credit was 6.56% at the  end  of  the  third
quarter  2005  compared to 4.68% at the end of the third  quarter
2004.

     The  fourth  quarter,  which includes  the  holiday  period,
represents  an  important selling season for the Company.   Sales
for  the  month of November were below the Company's expectations
due  to low inventory levels, coupled with late deliveries of new
merchandise receipts.  During the latter part of November and the
first  week  of  December, the merchandise that  was  anticipated
for  earlier in November was received resulting in the percentage
of  new merchandise offered this holiday season being higher than
last year.

Liquidity and Capital Resources

     The Company's working capital needs arise primarily from the
need  to support costs incurred in advance of revenue generation,
such   as  inventory  acquisition  and  direct  response  catalog
development, production and mailing costs.  Other liquidity needs
relate to the revolving customer charge accounts on the Company's
proprietary  credit card, the need to cover operating  cash  flow
deficits  and  to invest in remodeling, fixtures  and  equipment.
The Company recognizes two selling seasons that correspond to the
fashion seasons.  The spring season begins in January and ends in
July.   The fall season begins in July and ends in January.   The
Company  has  relied on its bank credit facility  to  meet  these
needs as well as proceeds from preferred stock investments of  $6
million  in  February  2001, $4 million in  August  2002  and  $5
million in February 2003.  The Company experienced operating cash
flows of $76,000 for the thirty-nine weeks ended October 29, 2005
compared  to deficit operating cash flows of $3,264,000  for  the
thirty-nine weeks ended October 30, 2004.  This increase in  cash
flows  is  principally related to the decrease of  the  Company's
inventory and partially offset by the Company's increase  in  net
loss compared to the same period of 2004.  The Company's decrease
in  merchandise  inventories  is primarily  attributable  to  the
Company's  efforts to manage inventory by lowering its levels  of
winter merchandise purchases in 2005 compared to 2004.

       Changes  in  the  Company's  investing  activities  relate
primarily  to  the sale of the Norman, Oklahoma office  building.
See   "Other   Information"   below.    The   Company's   capital
expenditures  were also considerably less than prior  year.   The
budgeted  capital  expenditures for  2005  are  approximately  $2
million  which  are expected to be used for new store  locations,
store relocations and initial deposits related to a new point  of
sale system to be implemented during 2006.

      The  Company's ability to achieve positive cash flows  from
operating activities depends on its ability to improve sales  and
gross  margin which should allow the Company to sustain a  return
to profitability.  Additionally, the Company may experience needs
for additional capital.  While the Company has been successful in
covering cash flow deficits through line of credit borrowings and
private equity investments from its principal shareholders, there
can be no assurances that these, or any other financing resources
will be available for future needs.

     The Company's original three-year credit facility with Wells
Fargo  Retail  Finance  II, LLC, ("WFRF")  was  entered  into  on
February  5,  2003  and  provided  the  Company  with  a  maximum
available  credit  limit  of  $22 million.   This  agreement  was
scheduled  to  expire in February 2006.  As discussed  below,  on
April  29,  2004, the maximum available credit line was increased
to  the  lesser  of  $25 million or $22 million plus  outstanding
participant  advances, and the expiration date  was  extended  to
February   5,   2007.   The  credit  facility   is   secured   by
substantially all assets of the Company and its subsidiaries  and
is  subject  to a borrowing base calculation based  primarily  on
inventory  and  accounts  receivable.   The  facility   has   two
financial  covenants, a minimum excess availability  covenant  of
$1.35   million  and  a  maximum  capital  expenditure  covenant,
established at $2.75 million for 2005.  Interest rates under  the
facility  are  at prime plus 0.5% or LIBOR plus 2.50%,  with  the
ability  to  reduce  the  rate if the  Company  achieves  certain
financial  criteria.   The balance outstanding on  the  Company's
line of credit at October 29, 2005 was $20,416,000 which includes
the  $4  million outstanding under the bridge facility  discussed
below.  At October 29, 2005 the Company's availability under  the
WFRF  line  of  credit was approximately $1.7 million  above  the
minimum availability requirement of $1.35 million and the average
interest rate on the credit line was 6.56%.

     Subsequent  to  securing the initial  credit  facility,  the
Company  negotiated  an  increase of  $2  million  in  its  total
borrowing  availability under its existing credit  facility  with
WFRF.  The Company obtained this increase in order to provide for
additional  working capital.  The full $2 million  was  available
for  borrowing  on  July 15, 2003 and has been  extended  to  the
Company  by Wells Fargo based upon a loan participation agreement
between  Wells  Fargo and RonHow, LLC, an entity  established  in
July 2003 which is owned and controlled directly or indirectly by
Ronald  de Waal and W. Howard Lester.  Mr. de Waal and Mr. Lester
are  both major beneficial owners of the Company's common  stock,
and Mr. Lester is also a director of the Company.

     In order to achieve additional liquidity, on April 29, 2004,
the  Company  completed an amendment to the credit facility  with
WFRF  which increased the Company's borrowing availability  under
the  facility.   The  amendment increased the  Company's  maximum
inventory advance rate cap from 75% to 80% during non-peak  times
and  from 80% to 85% during peak times.  Peak times were  amended
to  include  the eight weeks prior to Easter and the eight  weeks
prior  to  October 1.  Additionally, the amendment  extended  the
term of the credit facility by one year, with a new expiration of
February  5,  2007.   The  amendment also increased  the  maximum
revolver amount from $22 million to the lesser of $25 million  or
$22  million plus outstanding participant advances.  Finally, the
amendment  provided for an additional increase of $2  million  in
the  Company's  borrowing availability under the  facility  based
upon  an  increase  in the existing loan participation  agreement
between WFRF and RonHow, LLC.  WFRF will continue to serve as the
lending agent for the Company under the credit facility, and  the
principal  covenants  and  conditions imposed  upon  the  Company
pursuant   to  the  WFRF  credit  facility  agreement  have   not
materially  changed.   RonHow, LLC's right to  repayment  of  any
advances under the credit facility that are attributable  to  its
total  $4 million participation is generally subordinate  to  the
repayment rights of the other credit facility lenders.   However,
the  Company  may repay these advances provided it meets  certain
conditions, including the maintenance of an average daily  excess
availability  under the credit facility of at least $2.5  million
for  the  30  days  prior  to and 30 days  projected  immediately
following   the  repayment.   The  average  excess   availability
requirement  is  higher  than the excess  availability  otherwise
required  of  the  Company  under the credit  facility.   If  the
Company  does not repay the new $2 million loan participation  of
RonHow  during the 18 months subsequent to April 29, 2004, RonHow
will  have  an  option  at  that  time  to  convert  any  of  the
incremental  $2 million not repaid into shares of authorized  but
unissued  2003-A Preferred Stock, which will be convertible  into
shares of common stock at a price of $2.524 per share, which  was
the  20-day  average closing price of the Company's common  stock
for  the  period ending immediately before closing  of  the  loan
amendment.   As of October 29, 2005, RonHow had not notified  the
Company  of  its intention to convert the outstanding  borrowings
into  additional preferred shares.  Additionally, if the  Company
has  not  repaid the initial $2 million of loan participation  by
February  2006,  the Company will pay an additional  4%  fee  per
annum  on  the outstanding participation amount up to $2 million.
This transaction was approved by the independent directors.

     The  Company  was in compliance with its debt covenants  for
the  quarter ended October 29, 2005.  Although the Company's line
of  credit  with  WFRF does not expire until February  2007,  the
Company has classified its borrowings under its line of credit as
current  in its consolidated balance sheets due to the  terms  of
its  agreement with the lender.  Under the bank agreement,  there
is  an  acceleration clause which potentially allows the bank  to
demand  immediate payment of all outstanding borrowings upon  the
occurrence  of  a  material  adverse  change  in  the   Company's
operations   or  financial  position.   Determination   of   what
constitutes a material adverse change is at the discretion of the
bank,  however,  it is subject to reasonableness  standards.   In
addition,  the  Company  is  required  to  maintain  a   lock-box
agreement  with  the  bank whereby all cash received  is  applied
against  current  borrowings.  As a result of  these  items,  the
Company is required to classify its line of credit borrowings  as
current   as   proscribed   by   EITF   95-22,   "Balance   Sheet
Classification  of Borrowings Outstanding under Revolving  Credit
Agreements that include both a Subjective Acceleration Clause and
a Lock-Box Arrangement."

     At  October  29, 2005 the Company's availability  under  the
WFRF  line  of credit was approximately $1,659,000 million  above
the  minimum  availability requirement of $1.35 million  and  the
average  interest  rate  on  the  credit  line  was  6.56%.   The
Company's  credit line had an average balance of $21,209,000  and
$18,799,000 for the thirty-nine weeks ended October 29, 2005  and
October  30,  2004,  respectively.  During the thirty-nine  weeks
ended  October  29,  2005, the WFRF line of  credit  had  a  high
balance  of $22,829,000.  The balance outstanding on October  29,
2005 was $20,416,000.

The Company considers the following as measures of liquidity and
capital resources as of the dates indicated:

                            October   Januar     October
                              29,      y 29,      30,
                             2005      2005      2004
                                                (Restat
                                                  ed)
Working capital (000's)      $(688)    $(439)      $182
Current ratio                 .98:1     .99:1    1.01:1
Ratio of working capital     (.02):    (.01):     .00:1
to total assets                   1         1
Ratio of total debt to       (1.70)    (2.14)    (2.62)
stockholders' deficit            :1        :1        :1

Seasonality

      The  Company's business is subject to seasonal  influences,
with  the major portion of sales realized during the fall  season
(third and fourth quarters) of each year, which includes the back-
to-school and holiday selling seasons.  In light of this pattern,
selling, general and administrative expenses are typically higher
as  a  percentage  of sales during the spring season  (first  and
second quarters) of each year.

Inflation

      Inflation affects the costs incurred by the Company in  its
purchase of merchandise and in certain components of its selling,
general  and  administrative expenses.  The Company  attempts  to
offset  the  effects  of inflation through  price  increases  and
control  of expenses, although the Company's ability to  increase
prices   is  limited  by  competitive  factors  in  its  markets.
Inflation   has  had  no  meaningful  effect  on  the   Company's
operations.

Critical Accounting Estimates and Commitments

      There  have  been  no  material changes  in  the  Company's
critical  accounting estimates or in its commitments  from  those
disclosed  in  the Company's Annual Report on Form 10-K  for  the
year ended January 29, 2005.

ITEM  3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT  MARKET
RISK

     The  primary  objective  of this disclosure  is  to  provide
forward-looking  quantitative and qualitative  information  about
the  Company's  potential exposure to  market  risks.   The  term
"market  risk" for the Company refers to the risk of loss arising
from  adverse  changes  in  interest rates  and  various  foreign
currencies.   The  disclosures  are  not  meant  to  be   precise
indicators  of  expected future losses, but rather indicators  of
reasonably  possible  losses.  There  have  been  no  significant
changes  to  this  forward-looking information during  the  third
quarter of 2005 that would materially alter the Company's  market
risk exposures.

ITEM 4.   CONTROLS AND PROCEDURES

     The  Company's  Principal Executive  Officer  and  Principal
Financial  Officer have reviewed and evaluated the  effectiveness
of  the  Company's disclosure controls and procedures (as defined
in  Exchange Act Rule 240.13a-15(e) and 15d-15(e)) as of the  end
of  the  period covered by this report.  Disclosure controls  and
procedures  include, without limitation, controls and  procedures
designed  to ensure that information required to be disclosed  by
an  issuer in reports that it files or submits under the Exchange
Act  is  accumulated and communicated to the issuer's management,
including   its  principal  executive  and  principal   financial
officers, or persons performing similar functions, as appropriate
to  make timely decisions regarding required disclosures.   Based
on  that  evaluation,  the Principal Executive  Officer  and  the
Principal  Financial Officer have concluded  that  the  Company's
current  disclosure  controls  and procedures  are  effective  to
ensure  that information required to be disclosed by the  Company
in the reports that it files or submits under the Exchange Act is
recorded,  processed, summarized and reported,  within  the  time
periods  specified  in  the Securities and Exchange  Commission's
rules and forms.

     No  change  in the Company's internal control over financial
reporting  occurred  during  the  third  quarter  of  2005   that
materially  affected,  or  is  reasonably  likely  to  materially
affect, the Company's internal control over financial reporting.

                             PART II

ITEM 1.   LEGAL PROCEEDINGS

     At October 29, 2005, there existed only one minor litigation
matter.  Although the ultimate outcome of such litigation  cannot
be  predicted at this time, the management of the Company,  after
discussions with counsel, believes that the resulting  liability,
if  any,  will  not  have a material effect  upon  the  Company's
financial position or results of operations.

ITEM 2.    UNREGISTERED  SALES OF EQUITY SECURITIES  AND  USE  OF
     PROCEEDS

     On  August  1,  2005, 1,291 shares of the Company's  Amended
Series 2001-A Preferred Stock ("2001 Preferred") were issued as a
dividend to one of the existing holders of 2001 Preferred at  his
election  pursuant to the original terms of the  2001  Preferred.
Each  share  of  2001  Preferred  issued  in  this  dividend   is
convertible  into  approximately 11.90 shares of  Company  common
stock.

     On  October  1,  2005, 2,452 shares of the Company's  Series
2002-A  Preferred  Stock  ("2002 Preferred")  were  issued  as  a
dividend  to  two  of the existing holders of 2002  Preferred  at
their  election  pursuant  to  the original  terms  of  the  2002
Preferred.  Each share of 2002 Preferred issued in this  dividend
is  convertible into approximately 18.52 shares of Company common
stock.

     Also, on October 1, 2005, 295 shares of the Company's Series
2003-A  Preferred  Stock  ("2003 Preferred")  were  issued  as  a
dividend to one of the existing holders of the 2003 Preferred  in
accordance  with the original terms of the 2003 Preferred.   Each
share  of  2003 Preferred issued in this dividend is  convertible
into approximately 92.59 shares of Company common stock.

     Because  the  shares of 2001 Preferred, 2002  Preferred  and
2003 Preferred described above were all issued as preferred stock
dividends  in accordance with the original terms of each  series,
the  Company  believes  that no sale of securities  has  occurred
which  would  require the registration of such shares  under  the
Securities Act.  However, even if the issuance of such shares  is
deemed  to  be  a  sale for purposes of the Securities  Act,  the
Company  believes the issuance of such shares was, in each  case,
exempt  from  registration under the Securities Act  pursuant  to
Section  4(2)  thereof.   These shares were  issued  without  any
public solicitation to a limited group of investors, all of  whom
are either directors of the Company or beneficially own in excess
of  10% of the Company's outstanding common stock and all of whom
acquired such shares for investment.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

     None.

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

     None.

ITEM 5.   OTHER INFORMATION

      On  October 17, 2005, the Company closed on the sale of its
Norman, Oklahoma office building to H.D. Investments, LLC  for  a
price  of  $1.25 million.  This was later assigned to Asp  Street
Investments,  LLC, an independent third party.   The  closing  of
this  transaction was contingent upon the Company and  the  buyer
finalizing an agreement for the Company to lease the first  floor
of  the  building from Asp Street Investments, LLC and the  buyer
obtaining  and approving the final plans for the remodel  of  the
first  floor.  Both of these contingencies were met.  As a result
of  the  sale,  the  Company realized a gain  in  the  amount  of
approximately   $850,000.   Because  this  was  a  sale-leaseback
transaction, approximately $703,000 of this amount was recognized
in  the  third quarter ended October 29, 2005, and the  remaining
$147,000  was deferred and will be recognized over  the  next  24
months.

ITEM 6.   EXHIBITS

     See the Exhibit Index accompanying this report.

                           SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act
of  1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, hereunto duly authorized.


                      HAROLD'S STORES, INC.

                     By: /s/ Leonard Snyder
                         Leonard Snyder
                 Interim Chief Executive Officer

                     By: /s/ Jodi L. Taylor
                         Jodi L. Taylor
                     Chief Financial Officer


Date: December 13, 2005

                            INDEX TO EXHIBITS

No.   Description

3.1   Certificate of Incorporation of the Company,  as  amended
      (Incorporated by reference to Exhibit 3.1  to  Form  10-K
      for the year ended February 3, 2001).

3.2   By-laws  of  the  Company (Incorporated by  reference  to
      Exhibit   3.2   to   Form  8-B  Registration   Statement,
      Registration No. 1-10892).

4.1   Specimen  Certificate for Common Stock  (Incorporated  by
      reference   to  Exhibit  4.1  to  Form  S-1  Registration
      Statement, Registration No. 33-15753).

4.2   Certificate of Elimination of Designations of the  Series
      2001-A  Preferred  Stock (Incorporated  by  reference  to
      Exhibit 4.1 to Form 8-K dated August 2, 2002).

4.3   Certificate of Designations of the Amended Series  2001-A
      Preferred Stock (Incorporated by reference to Exhibit 4.2
      to Form 8-K dated August 2, 2002).

4.4   Certificate   of  Designations  of  the   Series   2002-A
      Preferred Stock (Incorporated by reference to Exhibit 4.3
      to Form 8-K dated August 2, 2002).

4.5   Amendment to the Certificate of Designation of the
      Amended Series 2001-A Preferred Stock ($0.01 Par Value)
      of Harold's Stores, Inc., dated February 4, 2003
      (Incorporated by reference to Exhibit 4.1 to Form 8-K
      dated February 4, 2003).

4.6   Certificate   of  Designations  of  the   Series   2003-A
      Preferred Stock (Incorporated by reference to Exhibit 4.2
      to Form 8-K dated February 4, 2003).

10.1  Lease Agreement effective May 1, 1996 between Company and
      Carousel  Properties, Inc. (Campus Corner Store,  Norman,
      Oklahoma) (Incorporated by reference to Exhibit  10.7  to
      Form  S-2  Registration Statement, Registration No.  333-
      04117)  and amendment to Lease Agreement dated  April  4,
      2002. (Incorporated by reference to Exhibit 10.1 to  Form
      10-Q for the quarter ended May 4, 2002).

10.2  Amended and Restated Lease Agreement dated as of June  3,
      1996   between  Company  and  329  Partners  II   Limited
      Partnership  (East  Lindsey Warehouse  Facility,  Norman,
      Oklahoma)  (Incorporated by reference to Exhibit 10.13 to
      Amendment  No.  1  to  Form  S-2 Registration  Statement,
      Registration No. 333-04117).

10.3  Amended and Restated Lease Agreement dated as of June 20,
      2001   between  Company  and  329  Partners  II   Limited
      Partnership    (Outlet    Store,    Norman,     Oklahoma)
      (Incorporated by reference to Exhibit 10.6 to  Form  10-K
      for the year ended February 2, 2002).

10.4  2002  Performance and Equity Incentive Plan  of  Company.
*     (Incorporated by reference to Definitive Proxy  Statement
      dated  May  17, 2002, for annual meeting of  shareholders
      held on June 20, 2002).

10.5  Employment  Agreement  dated  February  9,  2004  between
*     Company  and Hubert W. Mullins (Incorporated by reference
      to  Exhibit 10.5 to Form 10-K for the year ended  January
      31, 2004).

10.6  Employment  Agreement  dated  February  9,  2004  between
*     Company  and Clark Hinkley (Incorporated by reference  to
      Exhibit 10.6 to Form 10-K for the year ended January  31,
      2004).

10.7  Stock  Option  Agreement dated February 23, 2001  between
*     Company  and Clark Hinkley (Incorporated by reference  to
      Exhibit 10.12 to Form 10-K for the year ended February 3,
      2001).

10.8  First  Amendment to Stock Option Agreement dated February
*     9,  2004  between Company and Clark Hinkley (Incorporated
      by  reference to Exhibit 10.8 to Form 10-K for  the  year
      ended January 31, 2004).

10.9  Employment  and  Deferred  Compensation  Agreement  dated
*     February  1,  1998 between Company and Harold  G.  Powell
      (Incorporated by reference to Exhibit 10.25 to Form  10-Q
      for quarter ended May 2, 1998).

10.1  First Amendment dated February 28, 2001 to Employment and
0*    Deferred  Compensation  Agreement  between  Company   and
      Harold  G.  Powell (Incorporated by reference to  Exhibit
      10.17 to Form 10-K for the year ended February 3, 2001).

10.1  Series  2001-A  Preferred Stock Purchase Agreement  dated
1     February  23,  2001  between Company and  Inter-Him  N.V.
      (Incorporated by reference to Exhibit 10.1  to  Form  8-K
      dated February 28, 2001).

10.1  Investor Rights Agreement dated February 28, 2001 between
2     Company and Inter-Him N.V.  (Incorporated by reference to
      Exhibit 10.2 to Form 8-K dated February 28, 2001).

10.1  Voting  Agreement dated February 28, 2001 among  Company,
3     Inter-Him  N.V. and the other stockholders named  therein
      (Incorporated by reference to Exhibit 10.3  to  Form  8-K
      dated February 28, 2001).

10.1  Right of First Refusal Agreement dated February 28,  2001
4     among  Company, Inter-Him N.V. and the other stockholders
      named therein (Incorporated by reference to Exhibit  10.4
      to Form 8-K dated February 28, 2001).

10.1  First  Amended and Restated Stockholders Agreement  dated
5     June  15,  1998  among  certain stockholders  of  Company
      (Incorporated by reference to Exhibit 10.2 to  Form  10-Q
      for quarter ended August 1, 1998).

10.1  First  Amendment dated February 28, 2001 to First Amended
6     and   Restated   Stockholders  Agreement  among   certain
      stockholders  of  Company (Incorporated by  reference  to
      Exhibit 10.6 to Form 8-K dated February 28, 2001).

10.1  Series 2002-A Preferred Stock Purchase Agreement dated as
7     of  June  26,  2002, by and among Harold's Stores,  Inc.,
      Inter-Him,  N.V.,  W. Howard Lester, William  E.  Haslam,
      Clark J. Hinkley and Margaret A. Gilliam (Incorporated by
      reference  to  Exhibit 10.1 to Form 8-K dated  August  2,
      2002).

10.1  First Amendment to Investor Rights Agreement dated as  of
8     August 2, 2002, by and among Harold's Stores, Inc., Inter-
      Him, N.V., W. Howard Lester, William E. Haslam, Clark  J.
      Hinkley   and   Margaret  A.  Gilliam  (Incorporated   by
      reference  to  Exhibit 10.2 to Form 8-K dated  August  2,
      2002).

10.1  First Amendment to Right of First Refusal Agreement dated
9     as of August 2, 2002, by and among Harold's Stores, Inc.,
      Inter-Him, N.V., W. Howard Lester, Harold G. Powell, Anna
      M.  Powell, Rebecca Powell Casey, H. Rainey Powell,  Lisa
      Powell Hunt, Clay M. Hunt and Arvest Trust Company,  N.A.
      (Incorporated by reference to Exhibit 10.3  to  Form  8-K
      dated August 2, 2002).

10.2  First Amendment to Voting Agreement dated as of August 2,
0     2002,  by  and  among Harold's Stores,  Inc.,  Inter-Him,
      N.V.,  W.  Howard  Lester, William E.  Haslam,  Clark  J.
      Hinkley, Margaret A. Gilliam, Harold G. Powell,  Anna  M.
      Powell,  Rebecca  Powell Casey, H.  Rainey  Powell,  Lisa
      Powell Hunt, Clay M. Hunt and Arvest Trust Company,  N.A.
      (Incorporated by reference to Exhibit 10.4  to  Form  8-K
      dated August 2, 2002).

10.2  Series 2003-A Preferred Stock Purchase Agreement dated as
1     of  February 5, 2003, by and among Harold's Stores, Inc.,
      Inter-Him  N.V.  and  W. Howard Lester  (Incorporated  by
      reference  to Exhibit 10.1 to Form 8-K dated February  4,
      2003).

10.2  Second Amendment to Investor Rights Agreement dated as of
2     February  5,  2003, by and among Harold's  Stores,  Inc.,
      Inter-Him  N.V.  and  W. Howard Lester  (Incorporated  by
      reference  to Exhibit 10.2 to Form 8-K dated February  4,
      2003).

10.2  Loan and Security Agreement dated as of February 5, 2003,
3     by  and  among Wells Fargo Retail Finance, LLC,  Harold's
      Stores,  Inc.,  Harold's Financial Corporation,  Harold's
      Direct,  Inc.,  Harold's Stores of Texas, L.P.,  Harold's
      Stores  of  Georgia, L.P., and Harold's of Jackson,  Inc.
      (Incorporated by reference to Exhibit 10.3  to  Form  8-K
      dated February 4, 2003).

10.2  Series 2003-A Preferred Stock Investment Agreement  dated
4     as  of  February 4, 2003, by and between Harold's Stores,
      Inc.    and    329   Partners-II   Limited    Partnership
      (Incorporated by reference to Exhibit 10.6  to  Form  8-K
      dated February 4, 2003).

10.2  Form  of  Indemnification Agreement between  Company  and
5     members  of  its  Board  of  Directors  (Incorporated  by
      reference  to  Exhibit 10.36 to Form 10-K  for  the  year
      ended February 1, 2003).

10.2  Form  of  Waiver  of  Claims  and  Covenant  Not  to  Sue
6     Directors  between principal shareholders of the  Company
      and   members   of  the  Company's  Board  of   Directors
      (Incorporated by reference to Exhibit 10.37 to Form  10-K
      for the year ended February 1, 2003).

10.2  Participation Agreement dated as of July 10, 2003, by and
7     between  Wells Fargo Retail Finance II, LLC  and  RonHow,
      LLC (Incorporated by reference to Exhibit 10.3 to Form 8-
      K dated July 10, 2003).

10.2  Amended and Restated Participation Agreement dated as  of
8     April 29, 2004, by and between Wells Fargo Retail Finance
      II,  LLC  and  RonHow, LLC (Incorporated by reference  to
      Exhibit 10.28 to Form 10-K for the year ended January 31,
      2004).

10.2  Assignment  and Assumption of Lease Agreement  and  Third
9     Amendment to Lease Agreement dated October 1, 2003 by and
      between  Company and 329 Partners-II Limited  Partnership
      (Dallas  Buying  Office, Dallas, Texas) (Incorporated  by
      reference to Exhibit 10.1 to Form 10-Q dated November  1,
      2003).

10.3  Option  Agreement  between Company and RONHOW  LLC  dated
0     April  30,  2004  (Incorporated by reference  to  Exhibit
      10.30 to Form 10-K for the year ended January 31, 2004).

10.3  First  Amendment to Loan and Security Agreement dated  as
1     of  February  5,  2003, by and among Wells  Fargo  Retail
      Finance,  LLC, Harold's Stores, Inc., Harold's  Financial
      Corporation,  Harold's Direct, Inc., Harold's  Stores  of
      Texas,  L.P.,  Harold's  Stores  of  Georgia,  L.P.,  and
      Harold's  of Jackson, Inc. (Incorporated by reference  to
      Exhibit 10.31 to Form 10-K for the year ended January 31,
      2004).

10.3  Second Amendment to Loan and Security Agreement dated  as
2     of  April  29,  2004,  by and among  Wells  Fargo  Retail
      Finance,  LLC, Harold's Stores, Inc., Harold's  Financial
      Corporation,  Harold's Direct, Inc., Harold's  Stores  of
      Texas,  L.P.,  Harold's  Stores  of  Georgia,  L.P.,  and
      Harold's  of Jackson, Inc. (Incorporated by reference  to
      Exhibit 10.32 to Form 10-K for the year ended January 31,
      2004).

10.3  Agreement  for  Purchase  and Sale  of  Norman,  Oklahoma
3     office  building  by and between Harold's  Stores,  Inc.,
      Corner  Properties,  Inc.  and  H.D.  Investments,   LLC.
      (Incorporated by reference to Exhibit 10.33 to Form  10-Q
      for the quarterly period ended July 30, 2005).

10.3  Lease  Agreement  between Company and HD Investments  LLC
4     for the Norman office location.

10.3  Indemnification agreement by and between Ronus, Inc.  and
5     Jodi  L.  Taylor, Harold's Stores, Inc.'s Chief Financial
      Officer

22.1  Subsidiaries  of  Company (Incorporated by  Reference  to
      Exhibit   22.1   to  Form  8-B  Registration   Statement,
      Registration No. 1-10892).

31.1  Certification  of  Chief Executive  Officer  Pursuant  to
      Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2  Certification  of  Chief Financial  Officer  Pursuant  to
      Rule 13a-14(a) under the Securities Exchange Act of 1934.

32.1  Certification of Chief Executive Officer Pursuant  to  18
      U.S.C. Section 1350.

 32.2  Certification of Chief Financial Officer Pursuant to 18
       U.S.C. Section 1350
 ___________________________
 *  Constitutes a management contract or compensatory  plan  or
 arrangement  required  to  be filed  as  an  exhibit  to  this
 report.