<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the Thirteen Weeks Ended August 2, 1997

                          Commission File Number 1-9647

                            JAN BELL MARKETING, INC.
                            ------------------------ 
             (Exact name of registrant as specified in its charter)

            DELAWARE                                     59-2290953
            --------                                     ----------
    (State of Incorporation)                  (IRS Employer Identification No.)

                 14051 N.W. 14TH STREET, SUNRISE, FLORIDA 33323
                 ----------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (954) 846-2719
                                 --------------
              (Registrant's telephone number, including area 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                   25,912,504 COMMON SHARES ($.0001 PAR VALUE)
                            AS OF SEPTEMBER 16, 1997


<PAGE>   2


                                    FORM 10-Q
                                QUARTERLY REPORT

                       THIRTEEN WEEKS ENDED AUGUST 2, 1997

                                TABLE OF CONTENTS

                                 -----------------


<TABLE>
<CAPTION>
PART I:  FINANCIAL INFORMATION                                                          PAGE NO.

<S>                                                                                       <C>
         Item 1. Consolidated Financial Statements

                  A. Consolidated Balance Sheets............................................3
                  B. Consolidated Statements of Operations..................................4
                  C. Consolidated Statements of Cash Flows..................................6
                  D. Notes to Consolidated Financial Statements.............................7

         Item 2. Management's Discussion and Analysis of Financial
                   Condition and Results of Operations......................................9

PART II: OTHER INFORMATION

         Items 1, 2, 3 and 5 have been omitted because they are not
                   applicable with respect to the current reporting period.

         Item 4. Submission of Matters to a Vote of Security Holders.......................14
         Item 6. Exhibits and Reports on Form 8-K..........................................14

</TABLE>





                                       2
<PAGE>   3


                          PART I: FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

                            JAN BELL MARKETING, INC.
                           CONSOLIDATED BALANCE SHEETS
          (Amounts shown in thousands except share and per share data)

<TABLE>
<CAPTION>

                                                          August 2,     February 1,
                                                             1997          1997
                                                         -----------    -----------
                                                         (Unaudited)

                                    ASSETS
<S>                                                        <C>          <C>
CURRENT ASSETS:

Cash and cash equivalents                                  $  25,227    $  23,525
Accounts receivable, net                                       6,799        6,162
Inventories                                                   75,165       79,893
Other current assets                                           1,387        1,260
                                                           ---------    ---------
    Total current assets                                     108,578      110,840
Property, net                                                 19,630       21,481
Goodwill                                                       2,662        2,860
Other assets                                                   3,801        4,204
                                                           ---------    ---------
                                                           $ 134,671    $ 139,385
                                                           =========    =========             

                     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable                                           $   6,108    $   8,222
Accrued expenses                                               6,204        5,790
                                                           ---------    ---------
Total current liabilities                                     12,312       14,012



STOCKHOLDERS' EQUITY:

Common stock, $.0001 par value,
  50,000,000 shares authorized,
  25,912,504 and 25,894,428 shares
  issued and outstanding, respectively                             3            3
Additional paid-in capital                                   180,482      180,448
Accumulated deficit                                          (56,287)     (53,338)
Foreign currency translation adjustment                       (1,839)      (1,740)
                                                           ---------    ---------
                                                             122,359      125,373
                                                           ---------    ---------
                                                           $ 134,671    $ 139,385
                                                           =========    =========
</TABLE>





                 See notes to consolidated financial statements.




                                       3
<PAGE>   4


                            JAN BELL MARKETING, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
          (Amounts shown in thousands except share and per share data)

<TABLE>
<CAPTION>
                                                       Thirteen Weeks          Thirteen Weeks
                                                            Ended                  Ended
                                                       August 2, 1997          August 3, 1996
                                                       --------------          --------------
                                                                     (Unaudited)
<S>                                                    <C>                     <C>        
Net sales                                              $    53,309             $    55,152

Cost of sales and
  occupancy costs                                           41,365                  43,060
                                                       -----------             -----------
Gross profit                                                11,944                  12,092

Store and warehouse
  operating and selling expenses                             8,056                   7,776
General and administrative expenses                          3,070                   2,348
Other charges                                                   --                     777
Depreciation and amortization                                1,828                   2,251
Currency exchange (gain)/loss                                    2                     (10)
                                                       -----------             -----------
Operating loss                                              (1,012)                 (1,050)
Interest and other income                                      433                     359
Interest expense                                                --                     457
                                                       -----------             -----------

Loss before income taxes                                      (579)                 (1,148)
Income tax provision                                            64                      29
                                                       -----------             -----------

Net loss                                               $      (643)            $    (1,177)
                                                       ===========             ===========
Net loss per common share                              $     (0.02)            $     (0.05)

Weighted average shares outstanding                     25,901,099              25,844,226

</TABLE>






                 See notes to consolidated financial statements.




                                       4
<PAGE>   5


                            JAN BELL MARKETING, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
          (Amounts shown in thousands except share and per share data)

<TABLE>
<CAPTION>
                                                      Twenty-Six Weeks        Twenty-Six Weeks
                                                            Ended                  Ended
                                                       August 2, 1997          August 3, 1996
                                                      ----------------        ----------------
                                                                     (Unaudited)

<S>                                                    <C>                     <C>      
Net sales                                              $    100,286            $  102,602

Cost of sales and
  occupancy costs                                            77,999                80,799
                                                       ------------            ----------     
Gross profit                                                 22,287                21,803

Store and warehouse
  operating and selling expenses                             15,648                15,587
General and administrative expenses                           6,457                 5,109
Other charges                                                    --                 2,643
Depreciation and amortization                                 3,845                 4,477
Currency exchange (gain)/loss                                     2                    (5)
                                                       ------------            ----------   

Operating loss                                               (3,665)               (6,008)
Interest and other income                                       824                   749
Interest expense                                                 --                   984
                                                       ------------            ----------
                                                               
Loss before income taxes                                     (2,841)               (6,243)
Income tax provision                                            108                     5
                                                       ------------            ----------

Net loss                                               $     (2,949)           $   (6,248)
                                                       ============            ==========

Net loss per common share                              $      (0.11)           $    (0.24)

Weighted average shares outstanding                      25,897,820            25,841,325
</TABLE>






                 See notes to consolidated financial statements.




                                       5
<PAGE>   6


                            JAN BELL MARKETING, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (Amounts shown in thousands)

<TABLE>
<CAPTION>
                                                               Twenty-Six Weeks            Twenty-Six Weeks
                                                                     Ended                      Ended
                                                                August 2, 1997              August 3, 1996
                                                               ----------------            -----------------
                                                                              (Unaudited)
<S>                                                              <C>                           <C>
Cash flows from operating activities:

  Cash received from customers                                   $  99,616                     $ 103,545
  Cash paid to suppliers and employees                             (97,391)                      (92,679)
  Interest and other income received                                   824                           749
  Interest paid                                                         --                          (984)
  Income taxes (paid) refunded                                          14                           (30)
                                                                 ---------                     ---------
Net cash provided by operating activities                            3,062                        10,601
                                                                 ---------                     ---------

Cash flows from investing activities:
  Capital expenditures                                                (987)                         (297)
                                                                 ---------                     ---------
Net cash used in investing activities                                 (987)                         (297)
                                                                 ---------                     ---------

Cash flows from financing activities:
  Net borrowings under line of credit                                   --                         2,100
  Debt repayment                                                        --                       (17,500)
  Other                                                               (366)                          100
                                                                 ---------                     ---------
Net cash (used in) financing activities                               (366)                      (15,300)
                                                                 ---------                     ---------

Effect of exchange rate on cash                                         (7)                          (25)
                                                                 ---------                     ---------
Net increase (decrease) in cash and cash equivalents                 1,702                        (5,021)
Cash and cash equivalents at beginning of period                    23,525                        14,955
                                                                 ---------                     ---------
Cash and cash equivalents at end of period                          25,227                     $   9,934
                                                                 =========                     =========

Reconciliation of net loss to net cash provided by (used
 in) operating activities:
Net loss                                                         $  (2,949)                    $  (6,248)
Adjustments to reconcile net loss to net cash provided by
   (used in) operating activities:

   Depreciation and amortization                                     3,845                         4,477
   Currency exchange (gain) loss                                         2                            (5)
   (Increase) Decrease in assets:
      Accounts receivable (net)                                       (670)                          943
      Inventories                                                    4,703                         5,481
      Other                                                           (164)                         (896)
   Increase (Decrease) in liabilities:
      Accounts payable                                              (2,120)                        7,202
      Accrued expenses                                                 415                          (353)
                                                                 ---------                     ---------
Net cash provided by (used in) operating activities              $   3,062                     $  10,601
                                                                 =========                     =========
</TABLE>







                 See notes to consolidated financial statements.




                                       6
<PAGE>   7



                            JAN BELL MARKETING, INC.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

A.  Unaudited Financial Statements

         The Company's financial statements for the thirteen and twenty-six week
periods ended August 2, 1997 and August 3, 1996 have not been audited by
certified public accountants, but in the opinion of management of the Company
reflect all adjustments (which include only normal recurring accruals) necessary
to present fairly the financial position, results of operations and cash flows
for those periods. Results of the thirteen and twenty-six week periods ended
August 2, 1997 and August 3, 1996 are not necessarily indicative of annual
results because of the seasonality of the Company's business.

         The accompanying financial statements should be read in conjunction
with the Company's annual consolidated financial statements and the notes
thereto for the year ended February 1, 1997.

B.  Relationship with Sam's Wholesale Club

         The Company operates an exclusive leased department at all existing and
future domestic and Puerto Rican Sam's Wholesale Club ("Sam's") locations under
an agreement which expires February 1, 2001 with either party having the right
to request one additional five year period, subject to appropriate notice
provisions. The Company pays Sam's a tenancy fee of 9% of net sales. During the
thirteen and twenty-six weeks ended August 2, 1997, approximately 90% and 92% of
the Company's net sales were from Sam's customers and for the foreseeable future
it is expected that the substantial portion of net sales will be generated
through this agreement. The Company and Sam's each have determined that the
present relationship is in need of modification and believe that there is a
basis to have a mutually beneficial future relationship beyond 2001. Both the
Company and Sam's would like to evaluate the mix of responsibilities to take
better advantage of their respective expertise's within the merchandising and
retailing disciplines. While the agreement as presently structured will not be
extended beyond its primary term, the Company and Sam's intend to proceed in
order to hopefully implement specific terms of a modified relationship prior to
the expiration date.

         During Fiscal 1995, a dispute considered in nature and magnitude
outside the normal course of business arose between Sam's and the Company
related to certain wholesale sales and returns, primarily relating to certain
claims by Sam's for credits for certain merchandise returns. The total
difference between the amount of credits that Sam's originally claimed and the
amount the Company believes is appropriate is approximately $6.7 million. The
Company and Sam's have held discussions and negotiations regarding this matter;
however, no final resolution has been reached. While the Company believes that
no further amounts are owed to Sam's, the outcome remains uncertain. The
financial statements do not include a provision for any loss that may result
from the resolution of this matter.





                                       7
<PAGE>   8



                            JAN BELL MARKETING, INC.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

C.  Inventories:

         Inventories are summarized as follows:


<TABLE>
<CAPTION>
                                                          August 2,                February 1,
                                                            1997                      1997
                                                            ----                      ----   

                                                            (Amounts shown in thousands)
                                                     Company     Held on      Company      Held on
                                                      Owned    Consignment     Owned     Consignment
                                                    --------   -----------    -------    -----------
<S>                                                 <C>          <C>          <C>         <C>
Precious and semi-precious gem jewelry                                                          
related merchandise (and associated gold):
   Raw materials                                    $  9,217     $     --     $ 6,257     $    --
   Finished goods                                     33,930        1,532      39,054       1,378
Gold jewelry-related merchandise                      11,971          293      12,639         705
Watches                                                9,140           55      10,414          --
Other consumer products                               10,907          261      11,529          --
                                                    --------     --------     -------     -------
                                                    $ 75,165     $  2,141     $79,893     $ 2,083
                                                    ========     ========     =======     =======
</TABLE>

D.  Income Taxes

         The Company's provision (benefit) for income taxes for 1997 and 1996 is
related to domestic operations and the operation of the foreign subsidiaries.
The federal portion of the income tax provision relates to the federal
alternative minimum tax. Federal and state tax benefits have not been recognized
for the domestic loss for 1996 and 1995 due to the fact that all loss carrybacks
have been fully utilized and, under SFAS No. 109, "Accounting for Income Taxes,"
the Company has determined that it is more likely than not that the deferred tax
asset will not be realized.

E.   Other Charges

         Other charges of $777,000 and $2.6 million for the thirteen and
twenty-six weeks ended August 3, 1996 represent severance payments to the
Company's former President and Chief Executive Officer, $147,000 of which was
incurred in the thirteen weeks ended August 3, 1996 and a write-off of $630,000
of financing costs in connection with the Company's pay-off of senior
noteholders, also in the thirteen weeks ended August 3, 1996.

F.   Litigation

         The Company is presently a defendant in a lawsuit alleging copyright
infringement in the procurement and sale of certain non-jewelry products. The
general issues services involved in this lawsuit are now being reviewed in a
separate case involving other parties by the United States Supreme Court, which
is expected to rule in the first or second quarter of 1998. There can be no
assurance as to the outcome or potential financial impact of these cases;
however, adverse rulings could have significant negative financial impact as 
well as the potential of other similar liabilities involving other non-jewelry 
products.




                                       8
<PAGE>   9


ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

         The discussion and analysis below contain trend analysis and other
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The
Company's actual results could differ materially from those anticipated in any
forward-looking statements as a result of certain factors set forth below and
elsewhere in this Report.

         The Company operates an exclusive leased department at all existing and
future domestic and Puerto Rican Sam's Wholesale Club ("Sam's") locations under
an agreement which expires February 1, 2001 with either party having the right
to request one additional five year period, subject to appropriate notice
provisions. The Company pays Sam's a tenancy fee of 9% of net sales. During the
thirteen and twenty-six weeks ended August 2, 1997, approximately 90% and 92% of
the Company's net sales were from Sam's customers and for the foreseeable future
it is expected that the substantial portion of net sales will be generated
through this agreement. The Company and Sam's each have determined that the
present relationship is in need of modification and believe that there is a
basis to have a mutually beneficial future relationship beyond 2001. Both the
Company and Sam's would like to evaluate the mix of responsibilities to take
better advantage of their respective expertise's within the merchandising and
retailing disciplines. While the agreement as presently structured will not be
extended beyond its primary term, the Company and Sam's intend to proceed in
order to hopefully implement specific terms of a modified relationship prior to
the expiration date.

         Net sales were $53.3 million and $100.3 million for the thirteen and
twenty-six week periods ended August 2, 1997 compared to $55.2 million and
$102.6 million for the thirteen and twenty-six week periods ended August 3,
1996. Net sales in the retail locations for the thirteen and twenty-six week
periods ended August 2, 1997 were $48.8 million and $93.3 million compared to
$51.9 million and $95.8 million for the thirteen and twenty-six week periods
ended August 3, 1996. Comparable retail sales for the thirteen and twenty-six
week periods ended August 2, 1997 were $47.7 million and $91.3 million compared
to $51.6 million and $95.1 million for the thirteen and twenty-six week periods
ended August 3, 1996. The decline in revenues for the thirteen and twenty-six
weeks ended August 2, 1997 is mainly attributable to decreases sales of in
non-jewelry merchandise.

         Sales in the future may be adversely impacted by general economic
conditions, the level of spending in the wholesale club environment and changes
to the Company's existing relationship with Sam's. The retail jewelry market is
particularly subject to the level of consumer discretionary income and the
subsequent impact on the type and value of goods purchased. With the
consolidation of the retail industry, the Company believes that competition both
within the warehouse club industry and with other competing general and
specialty retailers and discounters will continue to increase.

         Gross profit was $11.9 million or 22.4% of net sales for the thirteen
weeks ended August 2, 1997 compared to $12.1 million or 21.9% of net sales for
the thirteen weeks ended August 3, 1996. Gross profit was $22.3 million or 22.2%
of net sales for the twenty-six weeks ended August 2, 1997 compared to $21.8
million or 21.3% of net sales for the twenty-six weeks ended August 3, 1996. The
increase in gross profit as a percentage of net sales was primarily attributable
to continued margin improvements that are being recognized in the Company's
retail locations because of a shift in merchandising strategies that emphasize
higher margin gem, gold and watch products in place of other lower margin
products and categories, and improvements as a percentage of sales in product
handling costs and inventory shrinkage.

         Management recognizes that improvements in net sales, gross margins and
expense reductions must be achieved for the Company to return to profitability.



                                       9
<PAGE>   10

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (continued)

         Store and warehouse operating and selling expenses were $8.1 million
and $15.6 million for the thirteen and twenty-six weeks ended August 2, 1997
compared to $7.8 million and $15.6 million for the thirteen and twenty-six weeks
ended August 3, 1996. The incremental increase in these expenses for the
thirteen weeks ended August 2, 1997 compared to the thirteen weeks ended August
3, 1996 is primarily attributable to increased travel and other store expenses.

         General and administrative expenses were $3.1 million and $6.5 million
for the thirteen and twenty-six weeks ended August 2, 1997 compared to $2.3
million and $5.1 million for the thirteen and twenty-six weeks ended August 3,
1996. The increase in these expenses is primarily attributable to increased
professional fees related to the Company's legal matters.

         Other charges of $777,000 and $2.6 million for the thirteen and
twenty-six weeks ended August 3, 1996 represent severance payments to the
Company's former President and Chief Executive Officer, $147,000 of which was
incurred in the thirteen weeks ended August 3, 1996 and a write-off of $630,000
of financing costs in connection with the Company's pay-off of senior
noteholders, also in the thirteen weeks ended August 3, 1996. There were no
other charges for the thirteen and twenty-six weeks ended August 2, 1997.

         The decrease in depreciation and amortization expense from $2.3 million
and $4.5 million for the thirteen and twenty-six weeks ended August 3, 1996 to
$1.8 million and $3.8 million for the thirteen and twenty-six weeks ended August
2, 1997 is primarily attributable to a decrease in amortization expense due to
higher costs related to the Company's senior note financing during the thirteen
and twenty-six weeks ended August 3, 1996. A significant amount of these costs
were either written off or fully amortized prior to the thirteen and twenty-six
weeks ended August 2, 1997.

         The retail jewelry business is seasonal in nature with a higher
proportion of sales and a significant portion of earnings generated during the
fourth quarter holiday selling season. As a result, operating results for the
thirteen and twenty-six weeks ended August 2, 1997 are not necessarily
indicative of results of operations for the entire fiscal year.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

         As of August 2, 1997, cash and cash equivalents totaled $25.2 million,
an increase of $1.7 million from February 1, 1997 which resulted primarily from
cash flows generated from operating activities net of capital expenditures. The
Company had no short-term borrowings under its $40 million working capital
facility outstanding as of August 2, 1997 and was in compliance with all of the
facility's financial ratio and performance covenants.

         The Company's working capital requirements are directly related to the
amount of inventory required to support its retail operations. During the
thirteen and twenty-six weeks ended August 2, 1997, the inventory decrease of
$4.7 million reflects the Company's continued efforts to reduce and better
balance its inventory levels.

         For the remainder of Fiscal 1997, based on discussions with Sam's, the
Company expects a very limited increase in the number of leased departments it
operates, and with the exception of the normal short term build for the
Christmas selling season the Company does not foresee a need for a significant
increase in inventory. Capital expenditures for Fiscal 1997 are projected not to
exceed $3 million.

         The Company's business is highly seasonal, with seasonal working
capital needs peaking in October and November before the holiday selling season.



                                       10
<PAGE>   11

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (continued)

         The Company believes that its cash on hand, projected cash from
operations and availability under the Working Capital Facility will be
sufficient to meet its anticipated working capital and capital expenditure needs
for the remainder of Fiscal 1997. There can be no assurance that the Company's
future operating results will be sufficient to sustain any debt service and
working capital needs.

NEW ACCOUNTING PRONOUNCEMENTS

         The Company will adopt the following Statement of Financial Accounting
Standards ("SFAS") in the thirteen weeks ending January 31, 1998. SFAS No. 128
"Earnings Per Share" establishes financial accounting and reporting standards
for earnings per share. SFAS No. 128, which supersedes Accounting Principles
Board ("APB") Opinion No. 15, requires a dual presentation of basic and diluted
earnings per share on the face of the income statement and is effective for
financial statements issued for periods ending after December 15, 1997. As a
result of the Company's net loss for the thirteen weeks and twenty-six weeks
ended August 2, 1997 and the thirteen weeks and twenty-six weeks ended August 3,
1996, basic and diluted net loss per share, as computed under SFAS No. 128,
would not differ from the net loss per share shown in the accompanying
consolidated financial statements.

         In June 1997, SFAS No. 130, "Reporting Comprehensive Income," was
issued. SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains, and losses)
in a full set of general-purpose financial Statements. SFAS No. 130 requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. SFAS No. 130
requires that a company (a) classify items of other comprehensive income by
their nature in a financial statement and (b) display the accumulated balance of
other comprehensive income separately from retained earnings and additional
paid-in capital in the equity section of the balance sheet. SFAS No. 130 is
effective for fiscal years beginning after December 15, 1997. Reclassification
of financial statements for earlier periods provided for comparative purposes is
required. The Company has not determined the effect, if any, that SFAS No. 130
will have on its consolidated financial statements.

         In June 1997, SFAS No. 131, "Disclosures about Segments of an
Enterprise and related Information," was issued. SFAS No. 131 establishes
standards for the way that public companies report selected information about
operating segments in annual financial statements and requires that those
companies report selected information about segments in interim financial
reports issued to shareholders. It also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
SFAS No. 131, which supersedes SFAS No. 14. "Financial Reporting for Segments of
a Business Enterprise," but retains the requirement to report information about
major customers, requires that a public company report financial and descriptive
information about its reportable operating segments. Operating segments are
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance. Generally,
financial information is required to be reported on the basis that it is used
internally for evaluating segment performance and deciding how to allocate
resources to segments. SFAS No. 131 requires that a public company report a
measure of segment profit or loss, certain specific revenue and expense items,
and segment assets. However, SFAS No. 131 does not require the reporting of
information that is not prepared for internal use if reporting it would be
impractable. SFAS No. 131 also requires that a public company report descriptive
information about the way that the operating segments were determined, the
products and services provided by the operating segments, differences between
the measurements used in reporting segment information and those used in the
enterprise's general-purpose financial statements, and changes in the
measurement of segment amounts from period to period. SFAS No. 131 is effective
for financial statements for periods beginning after December 15, 1997. The
Company has not determined the effect, if any, SFAS No. 131 will have on the
disclosures in its consolidated financial statement.



                                       11
<PAGE>   12

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (continued)

FUTURE OPERATING RESULTS

         The future operating results of the Company may be affected by a number
of factors, including without limitation the following:

         The Company is focusing on strategic business development and the
Company incurred expenses for the initial phase of the project of approximately
$800,000. A portion of those costs were expensed by the Company during the
twenty-six weeks ended August 2, 1997. The Company is currently unable to
determine to what extent the strategies will be implemented or the impact of any
potential growth opportunities on its future operating results or capital
requirements.

         The Company markets its products principally through Sam's Club, a
division of Wal-Mart, Inc., pursuant to an arrangement whereby the Company
operates an exclusive leased department at all of Sam's existing and future
domestic and Puerto Rican locations through February 1, 2001. Accordingly, the
Company is dependent on Sam's to conduct its business, and the loss of the
leased department arrangement with Sam's would have a material adverse effect on
the business of the Company. The Company is focused on developing retail
opportunities outside its traditional core business within Sam's Club.

         Whether by acquisition or by developing alternative retail concepts,
management believes that the Company should be in a diversified position if it
is to successfully renegotiate or absorb the expiration of its Sam's Club lease
in 2001. The pursuit of any such opportunity will require a significant
investment of capital and attention by management. Such business development is
subject to all risks inherent to establishing or acquiring an additional
business, including competition and consumer uncertainties.

         On November 9, 1995, the Company opened its first "Jewelry Depot", a
6,071 square foot value oriented jewelry and luxury gift store in Framingham,
Massachusetts. Subsequently, the Company also opened two "Jewelry Depot
Outlets", a 2,207 square foot facility in Vero Beach, Florida and a 891 square
foot store in Worcester, Massachusetts. The "Jewelry Depot" and "Jewelry Depot
Outlets" each were opened as prototypes for potential stand-alone jewelry
operations that the Company has evaluated as possible long term sources of
additional revenue. The Framingham and Worcester locations have not been
successful and in January 1997 the Company decided it would close these
operations. Additionally, during the third quarter of 1996, the Company acquired
from Andin International, Inc. its three Manhattan Diamond locations in the
Potomac Mills, Gurnee Mills and Orlando Belz outlet malls. The Company currently
is unable to determine the impact of these three stand-alone jewelry operations
on its future operating results or capital requirements.

         The Company's retail operation requires expertise in the areas of
merchandising, sourcing, selling, personnel, training, systems and accounting.
The Company must look to increases in the number of retail locations to occur,
thereby increasing the Company's customer base, for expansion. The retail
jewelry market is particularly subject to the level of consumer discretionary
income and the subsequent impact on the type and value of goods purchased. With
the consolidation of the retail industry, the Company believes that competition
both within the warehouse club industry and with other competing general and
specialty retailers and discounters will continue to increase. Further
consolidation of the warehouse club industry due to geographic constraints and
market consolidation might also adversely affect the Company's existing
relationship with Sam's and the Company's business. The opening and success of
the leased locations and locations to be opened in later years, if any, will
depend on various factors, including general economic and business conditions
affecting consumer spending, the performance of the Company's retail programs
and concepts, and the ability of the Company to manage the leased operations and
future expansion and hire and train personnel.

         The Company purchases diamonds and other gemstones directly in
international markets located in Tel Aviv, New York, Antwerp and elsewhere. The
Company seeks to meet its diamond requirements with purchases on a systemic
basis throughout the year. Hedging is not available with respect to possible
fluctuations in the price of




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<PAGE>   13

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (continued)

gemstones. If such fluctuations should be unusually large or rapid and result in
prolonged higher or lower prices, there is no assurance that the necessary price
adjustments could be made quickly enough to prevent the Company from being
adversely affected. Further, the continued availability of diamonds to the
Company is dependent, to some degree, upon the political and economic situation
in South Africa and Russia, which have been unstable. Several other countries
also are major suppliers of diamonds, including Botswana and Zaire. In the event
of an interruption of diamond supplies, or a material or prolonged reduction in
the world supply of finished diamonds, the Company could be adversely affected.

         Although purchases of several critical raw materials, notably gold and
gemstones, are made from a limited number of sources, the Company believes that
there are numerous alternative sources for all raw materials used in the
manufacture of its finished jewelry, and the failure of any principal supplier
would not have a material adverse effect on operations. Any changes in foreign
or domestic laws and policies affecting international trade may have a material
adverse effect on the availability or price on the diamonds, other gemstones,
precious metals and non-jewelry products purchased by the Company. Because
supplies of parallel marketed products are not always readily available, it can
be a difficult process to match the customer demand to market availability.

         The Company utilizes the services of independent suppliers and customs
agents to comply with U.S. customs laws in connection with its purchases of
gold, diamonds and other raw materials from foreign sources. The Company bears
certain risks in purchasing parallel marketed goods which includes certain
watches and other products such as fragrances and collectibles. Parallel
marketed goods are products to which trademarks are legitimately applied but
which were not necessarily intended by their foreign manufacturers to be
imported and sold in the United States. The laws and regulations governing
transactions involving such goods lack clarity in significant respects. From
time to time, trademark or copyright holders and their licensees initiate
private suits or administrative agency proceedings seeking damages or injunctive
relief based on alleged trademark or copyright infringement by purchasers and
sellers of parallel marketed goods. While the Company believes that its
practices and procedures with respect to the purchase of parallel marketed goods
lessen the risk of significant litigation or liability, the Company is from time
to time involved in such proceedings and there can be assurance that additional
claims or suits will not be initiated against the Company or any of its
affiliates, and there can be no assurances regarding the results of any pending
or future claims or suits. The Company is presently a defendant in a lawsuit
alleging copyright infringement in the procurement and sale of certain
non-jewelry products. The general legal services involved in this lawsuit are
now being reviewed in a separate case involving other parties by the United
States Supreme Court, which is expected to rule in the first or second quarter
of 1998. These can be no assurance as to the outcome or potential financial
impact of these cases; however, adverse rulings have significant negative
financial impact as well as the potential of other similar liabilities involving
other non-jewelry products. Further, legislation has been introduced in Congress
in recent years regarding parallel marketed goods. Certain legislative or
regulatory proposals, if enacted, could materially limit the Company's ability
to sell parallel marketed goods in the United States. There can be no assurances
as to whether or when any such proposals might be acted upon by Congress or that
future judicial, legislative or administrative agency action will restrict or
eliminate these sources of supply. The Company has identified alternate sources
of supply or categories of similar products, although the cost of certain
products may increase or their availability may be lessened.

         The agreements related to the Company's amended Working Capital
Facility contain covenants which require the Company to maintain financial
ratios related to earnings, working capital, inventory turnover, trade payables
and tangible net worth, limit capital expenditures and the incurrence of
additional debt, and prohibit the payment of dividends. There can be no
assurance that the Company's future operating results will be sufficient to meet
the requirements of the foregoing covenants.



                                       13
<PAGE>   14


                           PART II: OTHER INFORMATION

ITEM 4

                       SUBMISSION OF MATTERS TO A VOTE OF
                                SECURITY HOLDERS

         The Annual Meeting of Shareholders was held July 2, 1997. The
Shareholders of the Company elected as directors Isaac Arguetty and Peter
Offerman to serve terms expiring in 2000. The election of directors by the
Shareholders was by the following votes:

                  DIRECTOR                  FOR             WITHHELD
                  --------                  ---             -------- 
               Isaac Arguetty            20,728,805         576,087
               Peter Offermann           20,728,805         576,087

     In addition to Messrs. Arguetty and Offermann, the following are directors
whose term of office continued after the Annual Meeting: Haim Bashan, Greg
Bedol, Robert G. Robison, Thomas Epstein and Sidney Feltenstein.

                  The Shareholders ratified Deloitte and Touche LLP as
independent accountants of the Company for the fiscal year ending January 31,
1998 by a vote of 21,164,211 in favor, 110,228 shares against and 30,453 shares
abstaining.

ITEM 6.

                        EXHIBITS AND REPORTS ON FORM 8-K

(a)      The following list of schedules and exhibits are incorporated by 
         reference as indicated in this Form 10-Q:

(10)     Employment Agreement dated as of June 2, 1997 between the Company and
         Isaac Arguetty

(27)     Financial Data Schedule (for SEC use only).

(b)      Reports on Form 8-K.  None.

                                   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 thereunto duly authorized.



                                            JAN BELL MARKETING, INC.
                                            ----------------------------------- 
                                                   (Registrant)



                                            By: /s/ DAVID P. BOUDREAU
                                               --------------------------------
                                                CHIEF FINANCIAL OFFICER

Date:   SEPTEMBER 16, 1997
        ------------------




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