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 April 29,
2006

                                  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 a large accelerated
filer, an accelerated filer or a non-accelerated filer (as defined  in
Rule 12b-2 of the Exchange Act)

 Large accelerated filer  Accelerated filer  Non-accelerated filer
                   [   ]        [  ]         [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  May  31, 2006, 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 April 29, 2006


Part I - FINANCIAL INFORMATION                                       Pag
                                                                      e

Item Financial Statements
1.

     Consolidated Balance Sheets - April 29, 2006 (unaudited) and       3
     January 28, 2006

     Consolidated Statements of Operations -
          Thirteen Weeks ended April 29, 2006 (unaudited) and April     5
          30, 2005, (unaudited)

     Consolidated Statements of Cash Flows -
          Thirteen Weeks ended April 29, 2006 (unaudited) and April     6
          30, 2005, (unaudited)

     Notes to Interim Consolidated Financial Statements                 7

Item Management's Discussion and Analysis of Financial Condition       13
2.   and Results of Operations

Item Quantitative and Qualitative Disclosures About Market Risk        18
3.

Item Controls and Procedures                                           18
4.

Part II - OTHER INFORMATION

Item Legal Proceedings                                                 18
1.

Item Risk Factors                                                      19
1A.

Item Unregistered Sales of Equity Securities and Use of Proceeds       19
2.

Item Defaults Upon Senior Securities                                   19
3.

Item Submission of Matters to a Vote of Security Holders               19
4.

Item Other Information                                                 19
5.

Item Exhibits                                                          19
6.

     Signatures                                                          7  20

                             PART I

ITEM 1.   FINANCIAL STATEMENTS

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

                                   April 29,  January
                                     2006       28,
                                               2006
                                   (Unaudi
                                     ted)

Current assets:

Cash and cash equivalents                 $         $
                                      1,100       636
Trade accounts receivable, less
allowance for doubtful accounts       7,092     6,343
of $110 as of April 29 and $138
as of January 28
Note and other receivables               20       157
Merchandise inventories              20,467    16,657
Prepaid expenses                      1,083     1,146

Total current assets                 29,762    24,939

Property and equipment, at cost      42,582    41,670
Less accumulated depreciation        (32,140    (31,39
and amortization                           )        4)

Net property and equipment           10,442    10,276

Total assets                        $40,204    $35,21
                                                    5




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

                                   April 29,   January
                                     2006       28,
                                               2006
                                   (Unaudi
                                     ted)
Current liabilities:
Accounts payable                           $        $
                                      6,960    9,013
Redeemable gift certificates            867    1,105
Accrued payroll expenses and            778      747
bonuses
Accrued rent expense                    360      353
Deferred gain on sale of                 74       74
building
Current maturities of long-term      26,321    17,64
debt                                               7

Total current liabilities            35,360    28,93
                                                   9

Accrued rent expense, net of          4,848    5,164
current
Deferred gain, net of current            37       55
portion
Long-term debt, net of current        1,184    1,199
maturities (See Note 5)

Total long-term liabilities           6,069    6,418

Total liabilities                    41,429    35,35
                                                   7

Commitments and contingencies
(See Note 7)

Convertible preferred stock of
$.01 par value
Amended      Series      2001-A,
authorized    500,000    shares,
issued  and outstanding  342,653      6,853    6,826
as of April 29, 2006 and 341,296
as of January 28, 2006

Series     2002-A,    authorized
300,000   shares,   issued   and
outstanding 231,550 as of  April      4,631    4,548
29,  2006  and  227,372  as   of
January 28, 2006

Series     2003-A,    authorized
100,000   shares,   issued   and
outstanding 56,742 as  of  April      5,674    5,567
29,2006 and 55,673 as of January
28,2006

Series     2006-A,    authorized          -        -
100,000 shares, none issued

2001-A  and  2002-A entitled  to
$20.00 per share, and 2003-A and
2006-A  entitled to $100.00  per
share, in each case plus accrued
but    unpaid    dividends    in
liquidation

                                     17,158    16,94
                                                   1
Stockholders' deficit:
Common stock of $.01 par value
 Authorized  25,000,000  shares;
   issued     and    outstanding         62       62
   6,223,508  as  of  April  29,
   2006 and January 28, 2006
Additional paid-in capital           34,469    34,46
                                                   9
Accumulated deficit                  (52,912    (51,6
                                           )      12)
                                     (18,381    (17,0
                                           )      81)
Less:  Treasury stock of 205 shares
as of April 29, 2006 and January         (2)      (2)
28, 2006 recorded at cost
Total stockholders' deficit          (18,383    (17,0
                                           )      83)

Total liabilities and               $40,204    $35,2
stockholders' deficit                             15

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

                               13 Weeks Ended
                               April    April
                                29,      30,
                                2006     2005

Sales                           $21,1    $23,9
                                   08       65

Costs    of    goods     sold
(including   occupancy    and
central    buying   expenses,   13,41    14,46
exclusive   of  items   shown       2        9
separately below)

Gross margin                    7,696    9,496

Selling, general and             7,323    7,401
administrative expenses

Depreciation and amortization     852      974

Operating (loss) income         (479)    1,121

Interest expense                  470      339

Gain on sale of building         (18)        -

                                  452      339

(Loss) income before income     (931)      782
taxes

Provision for income taxes          -        -

Net (loss) income                   $        $
                                (931)      782


NET (LOSS) INCOME APPLICABLE
TO COMMON STOCKHOLDERS:

Net (loss) income                   $        $
                                (931)      782

Less:  Preferred stock
dividends and accretion of        369      377
preferred stock issuance
costs

Net (loss) income applicable        $        $
to common stockholders         (1,300      405
                                    )

Net (loss) income per common
share:
Basic                          $(0.21    $0.07
                                    )
Diluted                        $(0.21    $0.04
                                    )



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

                                      13 Weeks Ended
                                    April 29,   April
                                      2006       30,
                                                2005

Cash flows from operating
activities:
Net (loss) income                          $         $
                                       (931)       782
Adjustments to reconcile net
(loss) income to net cash used
in operating activities:
Depreciation and amortization            852       974
Gain on sale of assets                  (37)        (7)
Changes in assets and
liabilities:
Increase in trade and other            (617)      (836)
accounts receivable
Increase in merchandise              (3,810)     (2,292
inventories                                           )
Decrease in prepaid expenses              63        294
Decrease in accounts payable         (2,053)     (1,471
                                                      )
Decrease in accrued expenses           (534)      (298)

Net cash used in operating           (7,067)     (2,854
activities                                            )

Cash flows from investing
activities:
Acquisition of property and            (999)      (226)
equipment
Proceeds from disposal of                 18         7
property and equipment
Payments received for notes                5        24
receivable

Net cash used in investing             (976)      (195)
activities

Cash flows from financing
activities:
Borrowings on long-term debt               -     1,300
Payments on long-term debt              (33)      (665)
Advances on revolving line of         30,585    28,267
credit
Payments on revolving line of        (21,894     (25,11
credit                                     )         8)
Preferred stock dividends              (151)      (264)

Net cash provided by financing         8,507     3,520
activities

Net increase in cash and cash            464       471
equivalents
Cash and cash equivalents at             636       674
beginning of period
Cash and cash equivalents at end           $         $
of period                              1,100     1,145


Non-cash investing and financing
activities:
Preferred stock dividends paid           218        99
in shares of preferred stock
             HAROLD'S STORES, INC. AND SUBSIDIARIES
       NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                April 29, 2006 and April 30, 2005
                           (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 April 29, 2006 and the results of its operations and  cash
flows  for  the thirteen week periods ended April  29,  2006  and
April 30, 2005.  The results of operations for the thirteen  week
periods  ended  April  29,  2006  and  April  30,  2005  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 28, 2006.

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 29, 2006 through
February 3, 2007, has been designated as 2006.

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 Financial Accounting Standards Board
("FASB")  issued Statement of Financial Accounting Standards  No.
123  (Revised 2004), Share-Based Payment, ("SFAS 123 (R)").  This
Statement requires companies to expense the estimated fair  value
of  stock  options  and  similar  equity  instruments  issued  to
employees  in  its  financial statements.  Previously,  companies
were  required  to calculate the estimated fair  value  of  these
share-based  payments  and  could elect  to  either  include  the
estimated  cost in earnings or disclose the pro forma  effect  in
the  footnotes  to  their  financial  statements.   We  chose  to
disclose the pro forma effect for all periods through January 28,
2006.

     Beginning   January  29,  2006,  the  Company  adopted   the
provisions   of  SFAS  123(R)  using  the  modified   prospective
application method.  Under this method, the Company records stock-
based  compensation  expense based on the grant-date  fair  value
estimated in accordance with the original provisions of Statement
of  Financial Accounting Standards No. 123, Accounting for Stock-
Based  Compensation, and previously presented in  the  pro  forma
footnote  disclosures, for all options issued after the  adoption
date.  In addition, the Company records compensation expense  for
the  share-based awards granted prior to, but not vested  as  of,
the adoption date using the same methodology.  Accordingly, prior
period amounts have not been restated.

     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 to avoid the recognition of  compensation
expense is the 2006 and future financial statements.

     In   addition  to  requiring  companies  to  recognize   the
estimated  fair  value of share-based payments in earnings,  SFAS
123(R)  modified  the  presentation of tax benefits  received  in
excess  of  amounts determined based on the compensation  expense
recognized.  Previously, such amounts were considered sources  of
cash in the operating activities section of the Statement of Cash
Flows.  For periods after adopting SFAS 123(R) under the modified
prospective  method, such benefits are presented as a  source  of
cash in the financing section of the Statement of Cash Flows.

5.   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.  As discussed below, on January 24, 2006,  the
maximum  available credit line was increased, and the  expiration
date  was  extended to February 5, 2010.  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, which was reduced to $1.0 million in  January
2006, and a maximum capital expenditure covenant, established  at
$2.75 million for 2006.  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 April
29,   2006   was  $26,227,000  which  includes  the  $7   million
outstanding under the loan participations discussed  below.   The
Company's  credit line had an average balance of $22,695,000  and
$21,223,000 for the thirteen weeks ended April 29, 2006 and April
30,  2005,  respectively.  During the thirteen weeks ended  April
29,  2006,  the  WFRF  line  of credit  had  a  high  balance  of
$26,285,000.  At April 29, 2006 the Company's availability  under
the  WFRF  line  of credit was approximately $736,000  above  the
minimum  availability requirement of $1.0 million and the average
interest rate on the credit line was 7.58%.

     In  July  2003,  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 WFRF based upon a loan participation
agreement  between  WFRF and RonHow, LLC  ("RonHow"),  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 April 2004, RonHow provided an additional $2 million
of  funding  through  another loan participation  agreement  with
WFRF.

      In  order  to achieve additional liquidity, on January  24,
2006,  the  Company  entered into an amendment  to  its  existing
credit facility with WFRF which increased the Company's borrowing
availability under the facility.  The amendment extended the term
of  the credit facility by three years, with a new expiration  of
February  5,  2010.   The  amendment also increased  the  maximum
revolver  amount from the lesser of $25 million  or  $22  million
plus  outstanding  participant advances  to  the  lesser  of  $28
million  or  $22  million plus outstanding participant  advances.
Additionally, the minimum required excess availability under  the
credit  facility was reduced from $1.35 million to $1.0  million.
Finally, the amendment provided for an increase of $3 million  in
the  Company's  borrowing availability under the  facility  based
upon  an  increase  in the existing loan participation  agreement
between  WFRF  and RonHow.  Messrs. de Waal and Lester  are  both
significant beneficial owners of the Company's common stock,  and
Mr. Lester is also a director of the Company.  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's right  to  repayment  of  any
advances under the credit facility that are attributable  to  its
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,  for  payments of up to $2 million of these  advances,
the maintenance of an average daily excess availability under the
credit facility of at least $1.5 million for the 30 days prior to
and  30  days projected immediately following the repayment,  and
for  payments  of  the  remaining amount of these  advances,  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.   In consideration for RonHow's agreement to  fund  the
Company's  additional $3 million in borrowing capacity under  the
credit  facility,  the Company granted to  RonHow  the  right  to
convert any of the incremental $3 million not repaid into  shares
of  a  new  series  of authorized but unissued  preferred  stock,
designated  Series  2006-A Preferred Stock.   The  Series  2006-A
Preferred Stock to be issued upon conversion of this option  will
be  convertible into shares of common stock at a price  of  $0.87
per  share,  equal  to the 20-day average closing  price  of  the
Company's  common stock for the period ending immediately  before
closing  of the loan amendment, assuming this conversion  feature
is  approved  by  the Company's shareholders at its  2006  annual
meeting of shareholders.  Additionally, the Company will  pay  an
additional  4% fee per annum on the outstanding new participation
amount up to $3 million, commencing immediately.  This fee is  in
addition  to  the additional 4% fee per annum which  the  Company
will  be  obligated to pay on up to $2 million of the outstanding
participation amount funded by RonHow in April 2004 commencing on
March 1, 2006.

      In  connection with the foregoing transactions, the Company
and  RonHow  agreed  upon a new repayment priority  for  RonHow's
participations  in the credit facility.  Unless otherwise  agreed
to  by  the Company and RonHow at the time of any repayment,  any
repayments  of  participations  will  be  applied  first  to  the
repayment  of RonHow's first $2 million participation  funded  in
July  2003,  next  to  the repayment of the  RonHow's  second  $2
million  participation funded in April 2004, and finally  to  the
repayment  of  RonHow's  new $3 million participation  funded  on
January  24,  2006.   The parties amended  the  Option  Agreement
previously   executed  on  April  30,  2004,  to  document   this
agreement.   As part of the foregoing participation  transaction,
WFRF,  RonHow  and  the Company have entered  into  a  letter  of
understanding which establishes a framework for RonHow to  obtain
the  right  to convert its aggregate $7 million participation  in
the  Company's credit facility into a subordinated  loan  to  the
Company on or before January 24, 2007, subject to the negotiation
of  mutually  acceptable definitive agreements.  The Company  has
agreed that the options to convert to preferred stock granted  by
the  Company  to RonHow to permit RonHow to convert  its  new  $3
million  participation  and its prior  $2  million  participation
funded  in  April  2004  would continue  to  apply  to  any  such
subordinated   loan   to  the  extent  such  participations   are
converted.

     These   transactions   were  approved   by   the   Company's
independent directors.

     The  Company  was in compliance with its debt covenants  for
the period ended April 29, 2006.  Although the Company's line  of
credit with WFRF does not expire until February 2010, 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."

6.   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 $30.4 million  which
begin to expire in 2006.  The Company's valuation allowance fully
provides  for  all  remaining deferred  tax  assets  because  the
Company's  history  of operating losses made the  realization  of
these assets uncertain.  The Company's valuation allowance as  of
April  29,  2006  and January 28, 2006 is equal to  100%  of  its
deferred tax assets.

     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,
determined  in  2004 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  taxable   losses,   the
cumulative  excess  annual  limitation  carryover  to   2006   is
approximately $3.4 million.

7.   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 April 29,  2006,  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.

8.   Preferred Stock

      The  Company  has authorized 1,000,000 shares of  preferred
stock,  par  value $.01 per share.  This preferred stock  may  be
issued  in  one or more series and the terms and rights  of  such
stock  will  be  determined by the Board  of  Directors.   As  of
January  28,  2006,  The  Board had  authorized  four  series  of
preferred  stock,  the  Amended  Series  2001-A  Preferred  Stock
consisting   of  500,000  shares,  the  2002-A  Preferred   Stock
consisting   of  300,000  shares,  the  2003-A  Preferred   Stock
consisting  of  100,000  shares and the  2006-A  Preferred  Stock
consisting of 100,000 shares.

     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 15.6863  shares  of  common
stock  of  the Company.  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 are payable  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.  The preferred shares are 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 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
are  payable in additional shares of preferred stock or  cash  as
the  holder of the preferred stock may elect.  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.   The  Series  2003-A  Preferred  Stock   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 2002-A Preferred Stock.   As  a
result  of the sale of the 2003-A Preferred Stock, the percentage
ownership  of  common  stock on an as-converted  basis  (assuming
conversion  of all of the Company's outstanding preferred  stock)
by Inter-Him and Mr. de Waal is 51.8%.

     In   consideration  for  RonHow's  agreement  to  fund   the
Company's  additional $3 million in borrowing capacity under  the
credit facility as described above, the Company granted to RonHow
the right to convert any of the incremental $3 million not repaid
into  shares of a new series of authorized but unissued preferred
stock, designated Series 2006-A Preferred Stock.  The Series 2006-
A  Preferred  Stock to be issued upon conversion of  this  option
will  be  convertible into shares of common stock at a  price  of
$0.87 per share, equal to the 20-day average closing price of the
Company's  common stock for the period ending immediately  before
closing  of the loan amendment, assuming this conversion  feature
is  approved  by  the Company's shareholders at its  2006  annual
meeting of shareholders.

     On  June  1, 2006, the Company closed on an additional  $2.5
million   private  equity  investment  by  the  Investors.    The
Investors purchased an aggregate of 25,000 shares of  Series 2006-
A  Preferred  Stock,  at a purchase price of $100.00  per  share.
These  shares  of  Series 2006-A Preferred Stock are  convertible
into  common  stock  at  a fixed rate of  $0.67  per  share,  and
otherwise  have rights and preferences substantially  similar  to
the  Company's  existing  other series of  outstanding  preferred
stock.   As  a result of the sale of the 2006-A Preferred  Stock,
the percentage ownership of common stock on an as-converted basis
(assuming   conversion  of  all  of  the  Company's   outstanding
preferred stock) by the Investors is 73.7%.

     None   of   the  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.

9.   Stock Options

      In  December 2004, the Financial Accounting Standards Board
("FASB")  issued Statement of Financial Accounting Standards  No.
123  (Revised 2004), Share-Based Payment, ("SFAS 123 (R)").  This
Statement requires companies to expense the estimated fair  value
of  stock  options  and  similar  equity  instruments  issued  to
employees  in  its  financial statements.  Previously,  companies
were  required  to calculate the estimated fair  value  of  these
share-based  payments  and  could elect  to  either  include  the
estimated  cost in earnings or disclose the pro forma  effect  in
the  footnotes  to  their  financial  statements.   We  chose  to
disclose the pro forma effect for all periods through January 28,
2006.

     Beginning   January  29,  2006,  the  Company  adopted   the
provisions   of  SFAS  123(R)  using  the  modified   prospective
application method.  Under this method, the Company records stock-
based  compensation  expense based on the grant-date  fair  value
estimated in accordance with the original provisions of Statement
of  Financial Accounting Standards No. 123, Accounting for Stock-
Based  Compensation, and previously presented in  the  pro  forma
footnote  disclosures, for all options issued after the  adoption
date.  In addition, the Company records compensation expense  for
the  share-based awards granted prior to, but not vested  as  of,
the adoption date using the same methodology.  Accordingly, prior
period amounts have not been restated.

     The following table illustrates the effect on net income and
net income per share for the thirteen week period ended April 30,
2005  as  if  the Company had applied the fair value  recognition
provisions  of  SFAS 123(R) to stock-based employee  compensation
for the options granted under its plans:

                                 13
                               Weeks
                               Ended
                               April
                                30,
                                2005
                                (In
                               thousan
                                ds,
                               except
                                per
                               share
                               data)

Net   income  applicable   to
common    stockholders,    as  $ 405
reported

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

Deduct:
Total   stock-based  employee
compensation          expense
determined  under fair  value     82
based  method for all awards,
net of related tax effects

Pro    forma    net    income  $ 323
applicable     to      common
stockholders

Net income per average common
share:
Basic, as reported             $0.07
Basic, pro forma               $0.05

Diluted, as reported           $0.04
Diluted, pro forma             $0.02

10.  Revenue Recognition

      Sales from store locations represented approximately 95% of
the  Company's total sales for the thirteen weeks ended April 29,
2006.  This compares to store location sales of approximately 96%
for  the thirteen-week period of the prior year.  These sales are
recognized at the time of the customer's purchase.  The Company's
direct  catalog and internet sales represented about four percent
of  the  total sales for the thirteen weeks ended April 29,  2006
compared  to  store location sales of approximately four  percent
for  the thirteen-week period of the prior year.  These sales are
recognized  at  the time the order is shipped  to  the  customer.
Gift  card sales are recognized as revenue when the gift card  is
redeemed, not when it is sold.

11.  Earnings per Share

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

                              13 Weeks Ended
                             April     April
                              29,       30,
                              2006     2005
                              (in thousands)
Net (loss) income
applicable to common              $       405
shareholders - basic         (1,300)

Preferred stock dividends         -       363

Net (loss) income
applicable to common              $       768
shareholders - basic and     (1,300)
diluted

Average common shares         6,223     6,222
outstanding

Effect of dilutive
securities:
Employee stock options            -        31

Convertible preferred             -    11,319
stock

Diluted average common        6,223    17,644
shares outstanding

Net (loss) income
Basic                        $(0.21     $0.07
                                  )
Diluted                      $(0.21     $0.04
                                  )

     Approximately 1,879,293 shares and 1,972,291 shares for  the
thirteen  weeks  ended  April  29,  2006  and  April  30,   2005,
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 April  29,  2006,  approximately
630,945  preferred  shares  convertible  into  12,043,820  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 April  30,
2005,  all  preferred shares convertible into common shares  were
included in the calculation of diluted earning per average common
share.

12.  Reclassifications

     Certain reclassifications have been made to the prior period
balances to conform to the April 29, 2006 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.  These risk factors are
all described in the Company's annual report on Form 10-K for the
year ended January 28, 2006.  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
                             April     April
                              29,       30,
                              2006     2005

Sales                        100.0%    100.0%
Costs of goods sold           (63.5     (60.4)
                                 )

Gross margin                  36.5      39.6
Selling, general and         (34.8)    (30.8)
administrative expenses
Depreciation and              (4.0)     (4.1)
amortization

Operating (loss) income       (2.3)      4.7

Interest expense              (2.2)     (1.4)
Gain on sale of building       0.1         -

                              (2.1)     (1.4)
(Loss) income before          (4.4)      3.3
income taxes
Provision for income              -         -
taxes

Net (loss) income             (4.4)%     3.3%

      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
                         April     April
                          29,       30,
                          2006      2005

Sales (000's)            21,108    23,965

Total sales decrease     (11.8)%    (0.8)%
Change in comparable
store sales              (16.6)%      0.1%
(52 week basis) (1)
Store locations:
Existing stores             41        41
Stores closed                -         -
New stores opened            1         -
Total stores at end of      42        41
period

(1)   The   Company  considers   a   store
comparable  if it has been  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 one new store in Montgomery,  Alabama,
relocated  one  store in Atlanta, Georgia and  closed  no  stores
during  the thirteen weeks ended April 29, 2006.  No stores  were
opened, relocated or closed during the thirteen weeks ended April
30, 2005.  The Company plans to open one more new store in Little
Rock,  Arkansas  and  to relocate its Charlotte,  North  Carolina
store during 2006.

     The decline in comparable store sales for the thirteen weeks
ended  April 29, 2006 is due to a significant decrease  in  sales
volume  during February, caused by a combination of  having  much
less fall and winter merchandise to sell at clearance than during
February  2005, and to unfavorable customer response to  February
2006  spring  merchandise  receipts.  These  receipts  were  more
casual   and  trendier  than  historical  offerings.    Customers
responded  considerably better to the Company's March  and  April
deliveries,  which were dressier and included  more  of  Harold's
classically-inspired apparel.  The improvement was sufficient  to
enable  the  total sales decline for the last six  weeks  of  the
quarter  to narrow to just 0.8% to last year, from 22.4%  in  the
first  seven  weeks.   Direct (internet and catalog)  sales  were
approximately $1.1 million, 21.0% more than last year.

      Gross  margin represents net sales less cost  of  products,
merchandising  functions  and store occupancy  costs  for  retail
stores.  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 36.5%  for  the  first
quarter of 2006, as compared to 39.6% in the same period of  last
year.   Merchandise  gross margin actually increased  1.1%  as  a
percent of sales during the quarter due to fewer markdowns needed
on  reduced  ownership of fall and winter clearance  merchandise.
However, the significant sales declines caused the occupancy  and
central buying office costs included in cost of goods sold to  be
higher  as  a percentage of sales in the first quarter  of  2006,
resulting in an overall decline in gross margin.

       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  34.8%  of  sales for the  first  quarter  of  2006
compared  to  30.8%  for  the first quarter  of  2005.   Selling,
general  and  administrative expenses actually  declined  in  the
aggregate  but were higher as a percentage of sales  due  to  the
lack of sales leverage.

      Depreciation and amortization expense decreased slightly to
4.0%  of  sales for the first quarter of 2006 from 4.1%  for  the
first  quarter of 2005.  Total depreciation expense  declined  in
the  aggregate due to the sale of the Company's Norman,  Oklahoma
office  building during the third quarter of 2005.  This decrease
was  offset by the Company's decline in sales causing the percent
of sales to remain relatively unchanged from the prior year.

       The   average  balance  of  total  outstanding  debt   was
$23,941,000 for the thirteen weeks ended April 29, 2006  compared
to  $22,997,000  for the same period of 2005.  This  increase  in
average  balances  resulted principally from  the  sales  decline
noted  and  costs  associated with the opening of  a  new  store,
relocation  of a store and increased inventory levels.   Interest
expense  increased 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 7.58% at the end of the first quarter 2006 compared
to 5.63% at the end of the first quarter 2005.

      The  Company  reported  a  net loss  applicable  to  common
stockholders  of $1,300,000 or $0.21 per basic and diluted  share
during  the  first  quarter of 2006 compared  to  net  income  of
$405,000 or $0.07 per basic and $0.04 per diluted share  for  the
first  quarter of last year.  The current year loss is  primarily
the result of the decline in sales, as described above.

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 has also received funding
from loan participations purchased by significant shareholders in
the  amounts  of $2 million in 2003, $2 million in  2004  and  $3
million in 2006.  The Company experienced deficit operating  cash
flows  of $7,067,000 for the thirteen weeks ended April 29,  2006
compared  to deficit operating cash flows of $2,854,000  for  the
thirteen weeks ended April 30, 2005.  This decrease in cash flows
is  principally related to the decrease of the Company's earnings
and  the  Company's increase in its inventories  for  2006.   The
Company's   increase  in  merchandise  inventories  is  primarily
attributable to the Company owning 17% less inventory at  January
28,  2006 than at January 29, 2005.  At April 29, 2006, inventory
levels  were  nine percent lower than at April 30,  2005  due  to
reduced ownership of prior season inventories.  The negative cash
flow  for  the  first  quarter  has  resulted  in  the  need  for
additional cash.  As a result on June 1, 2006, Inter-Him N.V. and
W. Howard Lester, the principal owners of the Company's preferred
stock,  purchased  $2.5  million of the Company's  Series  2006-A
Preferred Stock.

       Changes  in  the  Company's  investing  activities  relate
primarily to the capital expenditures incurred for the opening of
the Montgomery, Alabama store and the relocation of the Perimeter
store in Atlanta, Georgia.  The budgeted capital expenditures for
2006 are approximately $2.5 million which are expected to be used
for  new  store locations, store relocations and a new  point  of
sale system to be implemented during late 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 achieve a  return
to   future   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.  As discussed below, on January 24, 2006,  the
maximum  available credit line was increased, and the  expiration
date  was  extended to February 5, 2010.  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, which was reduced to $1.0 million in  January
2006, and a maximum capital expenditure covenant, established  at
$2.75 million for 2006.  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 April
29,   2006   was  $26,227,000  which  includes  the  $7   million
outstanding under the loan participations discussed  below.   The
Company's  credit line had an average balance of $22,695,000  and
$21,223,000 for the thirteen weeks ended April 29, 2006 and April
30,  2005,  respectively.  During the thirteen weeks ended  April
29,  2006,  the  WFRF  line  of credit  had  a  high  balance  of
$26,285,000.  At April 29, 2006 the Company's availability  under
the  WFRF  line  of credit was approximately $736,000  above  the
minimum  availability requirement of $1.0 million and the average
interest rate on the credit line was 7.58%.

     In  July  2003,  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 WFRF based upon a loan participation
agreement  between  WFRF and RonHow, LLC  ("RonHow"),  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 April 2004, RonHow provided an additional $2 million
of  funding  through  another loan participation  agreement  with
WFRF.

      In  order  to achieve additional liquidity, on January  24,
2006,  the  Company  entered into an amendment  to  its  existing
credit facility with WFRF which increased the Company's borrowing
availability under the facility.  The amendment extended the term
of  the credit facility by three years, with a new expiration  of
February  5,  2010.   The  amendment also increased  the  maximum
revolver  amount from the lesser of $25 million  or  $22  million
plus  outstanding  participant advances  to  the  lesser  of  $28
million  or  $22  million plus outstanding participant  advances.
Additionally, the minimum required excess availability under  the
credit  facility was reduced from $1.35 million to $1.0  million.
Finally, the amendment provided for an increase of $3 million  in
the  Company's  borrowing availability under the  facility  based
upon  an  increase  in the existing loan participation  agreement
between  WFRF  and RonHow.  Messrs. de Waal and Lester  are  both
significant beneficial owners of the Company's common stock,  and
Mr. Lester is also a director of the Company.  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's right  to  repayment  of  any
advances under the credit facility that are attributable  to  its
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,  for  payments of up to $2 million of these  advances,
the maintenance of an average daily excess availability under the
credit facility of at least $1.5 million for the 30 days prior to
and  30  days projected immediately following the repayment,  and
for  payments  of  the  remaining amount of these  advances,  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.   In consideration for RonHow's agreement to  fund  the
Company's  additional $3 million in borrowing capacity under  the
credit  facility,  the Company granted to  RonHow  the  right  to
convert any of the incremental $3 million not repaid into  shares
of  a  new  series  of authorized but unissued  preferred  stock,
designated  Series  2006-A Preferred Stock.   The  Series  2006-A
Preferred Stock to be issued upon conversion of this option  will
be  convertible into shares of common stock at a price  of  $0.87
per  share,  equal  to the 20-day average closing  price  of  the
Company's  common stock for the period ending immediately  before
closing  of the loan amendment, assuming this conversion  feature
is  approved  by  the Company's shareholders at its  2006  annual
meeting of shareholders.  Additionally, the Company will  pay  an
additional  4% fee per annum on the outstanding new participation
amount up to $3 million, commencing immediately.  This fee is  in
addition  to  the additional 4% fee per annum which  the  Company
will  be  obligated to pay on up to $2 million of the outstanding
participation amount funded by RonHow in April 2004 commencing on
March 1, 2006.

      In  connection with the foregoing transactions, the Company
and  RonHow  agreed  upon a new repayment priority  for  RonHow's
participations  in the credit facility.  Unless otherwise  agreed
to  by  the Company and RonHow at the time of any repayment,  any
repayments  of  participations  will  be  applied  first  to  the
repayment  of RonHow's first $2 million participation  funded  in
July  2003,  next  to  the repayment of the  RonHow's  second  $2
million  participation funded in April 2004, and finally  to  the
repayment  of  RonHow's  new $3 million participation  funded  on
January  24,  2006.   The parties amended  the  Option  Agreement
previously   executed  on  April  30,  2004,  to  document   this
agreement.   As part of the foregoing participation  transaction,
WFRF,  RonHow  and  the Company have entered  into  a  letter  of
understanding which establishes a framework for RonHow to  obtain
the  right  to convert its aggregate $7 million participation  in
the  Company's credit facility into a subordinated  loan  to  the
Company on or before January 24, 2007, subject to the negotiation
of  mutually  acceptable definitive agreements.  The Company  has
agreed that the options to convert to preferred stock granted  by
the  Company  to RonHow to permit RonHow to convert  its  new  $3
million  participation  and its prior  $2  million  participation
funded  in  April  2004  would continue  to  apply  to  any  such
subordinated   loan   to  the  extent  such  participations   are
converted.

     These   transactions   were  approved   by   the   Company's
independent directors.

     The  Company  was in compliance with its debt covenants  for
the period ended April 29, 2006.  Although the Company's line  of
credit with WFRF does not expire until February 2010, 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."

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

                             April    January     April
                              29,       28,       30,
                             2006      2006      2005
Working capital (000's)      $(5,59    $(4,00    $1,690
                                 8)        0)
Current ratio                 .84:1     .86:1    1.05:1
Ratio of working capital     (.14):    (.11):     .04:1
to total assets                   1         1
Ratio of total debt to       (22.45    (132.7    3.28:1
stockholders' deficit           ):1      2):1

Strategy and Liquidity Update

     In the Company's Form 10-K filing for the fiscal year ending
January  29,  2006, a Strategy and Liquidity Update was  provided
within   Management's  Discussion  and  Analysis   of   Financial
Condition  and  Results of Operations.  The Company  is  updating
this  disclosure  as follows regarding key strategic  initiatives
that  have  been undertaken to improve its financial results  and
liquidity.

     During the first quarter of 2006, the Company experienced  a
significant  sales decline of 11.8%.  However, the declines  were
mostly  attributable to the first seven weeks,  when  sales  were
down  22.4%  to last year as compared to the last six weeks  when
were  sales declined just 0.8% to last year.  These declines were
principally due to the following:

     -  A decision was made in early 2005 to alter the timing and
     quantity  of  fall,  winter  and  holiday  receipts.    This
     resulted  in  the Company not having adequate quantities  of
     wear-now or clearance apparel available for sale during  the
     month   of  February  2006.   For  2006,  the  Company   has
     established  an  improved  flow  of  merchandise  for  fall,
     winter  and holiday deliveries which will allow  for  a  new
     merchandise delivery in stores approximately every 30 days.
     -  The early spring merchandise that delivered to stores  in
     February  2006  was not well received by customers  as  that
     delivery  was  much  trendier  and  more  casual  than   was
     historically offered at Harold's.
     -  Customers responded considerably better to the  Company's
     March   and  April  2006  deliveries,  which  were  somewhat
     dressier  and included more of Harold's classically-inspired
     apparel.

     Clark  Hinkley, the Company's former Chief Executive Officer
who  retired  in  2003, returned in January 2006  to  assist  the
Company  in the product development areas.   During Mr. Hinkley's
tenure  as  CEO,  the  Company returned to  classically-inspired,
brand  appropriate merchandise that resulted in some of the  best
sales  performance the Company has experienced in  recent  years.
He  continues  to  assist in this area as  a  consultant,  in  an
arrangement that is expected to benefit the Company in  terms  of
future merchandise assortments.

     On June 1, 2006, the Company announced that it had completed
the  sale  of $2.5 million of 2006-A Preferred Stock to  its  two
largest  investors, Inter-Him and W. Howard Lester.  The proceeds
of  this  financing will be utilized for general working  capital
purposes.

     During  the first quarter of 2006, the Company enhanced  its
real estate portfolio through strategic store relocations and new
store openings in markets similar to those that have historically
proven to be successful.  This includes relocations of stores  in
Greenville,  SC  (actually completed in late January  2006),  and
Atlanta,  GA, which were relocated to improved locations,  and  a
new  store  opening  in Montgomery, AL.   A  new  store  is  also
expected  to  open  later in 2006 in Little  Rock,  AR,  and  the
Charlotte, NC will be relocating.  The Company believes  that  in
addition  to  refining  its merchandising,  it  is  important  to
continually  improve its store base in an effort  to  return  the
Company to consistent profitability.

     If  the  Company  can  properly  execute  the  merchandising
initiatives  as  outlined within the Form 10-K  and  above,  this
should  result  in improvements in its operating performance  for
2006.

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 28, 2006.

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  first
quarter of 2006 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  first  quarter  of  2006   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  April 29, 2006, 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 1A  RISK FACTORS

     There have been no material changes in the risk factors from
those  disclosed in the Annual Report on Form 10-K for  the  year
ending January 28, 2006.

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

     On  February 1, 2006, 1,357 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 24.10 shares of  Company  common
stock.

     On April 1, 2006, 4,178 shares of the Company's Series 2002-
A Preferred Stock ("2002 Preferred") were issued as a dividend to
three 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 30.77 shares of Company common stock.

     Also, on April 1, 2006, 1,069 shares of the Company's Series
2003-A  Preferred  Stock  ("2003 Preferred")  were  issued  as  a
dividend to two 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 153.85 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

     None.

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: June 13, 2006

                            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).

4.7  Amendment to the Certificate of Designation of the
     Amended Series 2001-A Preferred Stock ($0.01 Par Value)
     of Harold's Stores, Inc., dated January 24, 2006
     (Incorporated by reference to Exhibit 4.3 to Form 8-K
     dated January 24, 2006).

4.8  Certificate   of   Designations  of  the   Series   2006-A
     Preferred Stock (Incorporated by reference to Exhibit  4.4
     to Form 8-K dated January 24, 2006).

10.  Lease Agreement effective May 1, 1996 between Company  and
1    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.  Amended  and Restated Lease Agreement dated as of June  3,
2    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.  Amended and Restated Lease Agreement dated as of June  20,
3    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.  2002  Performance  and Equity Incentive Plan  of  Company.
4*   (Incorporated  by reference to Definitive Proxy  Statement
     dated  May  17,  2002, for annual meeting of  shareholders
     held on June 20, 2002.)

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

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

10.  First  Amendment to Stock Option Agreement dated  February
7*   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.  Employment  and  Deferred  Compensation  Agreement   dated
8*   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.  First Amendment dated February 28, 2001 to Employment  and
9*   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.  Series  2001-A  Preferred Stock Purchase  Agreement  dated
10   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.  Investor Rights Agreement dated February 28, 2001  between
11   Company and Inter-Him N.V.  (Incorporated by reference  to
     Exhibit 10.2 to Form 8-K dated February 28, 2001).

10.  Voting  Agreement dated February 28, 2001  among  Company,
12   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.  Right  of First Refusal Agreement dated February 28,  2001
13   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.  First  Amended  and Restated Stockholders Agreement  dated
14   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.  First  Amendment dated February 28, 2001 to First  Amended
15   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.  Series 2002-A Preferred Stock Purchase Agreement dated  as
16   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.  First  Amendment to Investor Rights Agreement dated as  of
17   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.  First  Amendment to Right of First Refusal Agreement dated
18   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.  First Amendment to Voting Agreement dated as of August  2,
19   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.  Series 2003-A Preferred Stock Purchase Agreement dated  as
20   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.  Second Amendment to Investor Rights Agreement dated as  of
21   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.  Loan  and Security Agreement dated as of February 5, 2003,
22   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.  Series  2003-A Preferred Stock Investment Agreement  dated
23   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.  Form  of  Indemnification Agreement  between  Company  and
24   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.  Form  of  Waiver  of  Claims  and  Covenant  Not  to   Sue
25   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.  Participation Agreement dated as of July 10, 2003, by  and
26   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.  Amended and Restated Participation Agreement dated  as  of
27   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.  Assignment  and  Assumption of Lease Agreement  and  Third
28   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.  Option  Agreement  between Company and  RONHOW  LLC  dated
29   April  30,  2004  (Incorporated by  reference  to  Exhibit
     10.30 to Form 10-K for the year ended January 31, 2004).

10.  First  Amendment to Loan and Security Agreement  dated  as
30   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.  Second  Amendment to Loan and Security Agreement dated  as
31   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.  Third  Amendment to Loan and Security Agreement  dated  as
32   of  January  24,  2006, by and among  Wells  Fargo  Retail
     Finance   II,   LLC,  Harold's  Stores,   Inc.,   Harold's
     Financial  Corporation,  Harold's Direct,  Inc.,  Harold's
     Stores  of  Texas,  L.P., and Harold's  of  Jackson,  Inc.
     (Incorporated  by reference to Exhibit 10.4  to  Form  8-K
     dated January 24, 2006).

10.  Reaffirmation  of  Continuing  Guaranty  executed  as   of
33   January 24, 2006, by each of The Corner Properties,  Inc.,
     Harold's  DBO,  Inc.,  Harold's  Limited  Partners,  Inc.,
     Harold's   of   White   Flint,  Inc.,   and   HSTX,   Inc.
     (Incorporated  by reference to Exhibit 10.5  to  Form  8-K
     dated January 24, 2006).

10.  Second Amended and Restated Participation Agreement  dated
34   as  of January 24, 2006, by and between Wells Fargo Retail
     Finance   II,   LLC  and  RonHow,  LLC  (Incorporated   by
     reference  to Exhibit 10.6 to Form 8-K dated  January  24,
     2006).

10.  First  Amendment  to Option Agreement  dated  January  24,
35   2006   between  RonHow,  LLC  and  Harold's  Stores,  Inc.
     (Incorporated  by reference to Exhibit 10.8  to  Form  8-K
     dated January 24, 2006).

10.  Option  Agreement dated January 24, 2006  between  RonHow,
36   LLC  and  Harold's Stores, Inc. (Incorporated by reference
     to Exhibit 10.9 to Form 8-K dated January 24, 2006).

10.  Letter  of  Understanding dated January 24,  2006  by  and
37   among  Wells  Fargo  Retail  Financce  II,  LLC,  Harold's
     Stores,  Inc.  and RonHow, LLC (Incorporated by  reference
     to Exhibit 10.10 to Form 8-K dated January 24, 2006).

10.  Employee  Resignation  Agreement dated  January  27,  2006
38   between   Becky   Casey   and   Harold's   Stores,    Inc.
     (Incorporated by reference to Form 8-K dated  January  26,
     2006).

10.  Amended  and restated Voting Agreement dated May  2,  2003
39   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 B-2  to  Amendment  No.  11  to
     Schedule  13D  filed on June 2, 2003 by  Ronald  de  Waal,
     Inter-Him N.V. and W. Howard Lester)

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

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

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

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

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