<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                                   FORM 10-K
               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
                  For the Fiscal Year Ended November 30, 1997

                        Commission File Number 1-10226

                          ROWE FURNITURE CORPORATION
            (Exact name of registrant as specified in its charter)

           Nevada                                             54-0458563
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                          Identification Number)

      Registrant's telephone number, including area code:  (540) 389-8671

          Securities registered pursuant to Section 12(b) of the Act:

     Title of Each Class               Name of Each Exchange on which Registered
     -------------------               -----------------------------------------
Common Stock, $1.00 par value                    New York Stock Exchange

       Securities registered pursuant to Section 12(g) of the Act:  None

     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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of February 12, 1998 (the exclusion from such amount of the market
value of the shares owned by any person shall not be deemed to be an admission
by the registrant that such person is an affiliate of the registrant) was
$79,173,199.

     As of February 12 1998, there were issued and outstanding 12,544,327 shares
of the registrant's Common Stock.

                      DOCUMENTS INCORPORATED BY REFERENCE
<TABLE> 
<CAPTION> 
  DOCUMENT                                                                  WHERE INCORPORATED
  --------                                                                  ------------------
<S>                                                                         <C> 
Portions of Annual Report for the year ended November 30, 1997                Parts II and IV
Portions of the Annual Proxy Statement for the year ended November 30, 1997   Part III
</TABLE> 
<PAGE>
 
                                    PART I


ITEM 1.  BUSINESS.

GENERAL

The Company is a designer and manufacturer of furniture, primarily consisting of
sofas, sleeper sofas, loveseats and chairs.  The Company's products are sold
primarily in the middle to upper-middle price range, with sofas customarily
retailing between $600 and $1,400.

The Company sells its products nationwide through an exclusive sales force of
commissioned employees to over 1,000 national, regional and local retailers
consisting of furniture chains, independent furniture retailers, warehouse
showrooms, and over 100 Rowe ShowPlace locations.  Ten of the Rowe ShowPlace
locations are operated by the Company.  A Rowe ShowPlace is either a dedicated
gallery area within a retail furniture store or a freestanding retail furniture
store where the Company's products are displayed on an exclusive basis.  The
Company's manufacturing facilities consist of four plants, two of which are
located in Missouri and two of which are located in Virginia.  In addition to
manufacturing its own line of furniture, the Company manufactures furniture
frames and kiln-dries hardwood and pine lumber for outside customers. As of
January 1, 1998, through a newly-created, wholly-owned subsidiary, The Wexford
Collection, Inc., the Company manufacturers a line of solid wood casual
furniture.  This subsidiary was formed to acquire the assets and liabilities of
J & M Designs, Ltd., d.b.a. The Wexford Collection, a ten year old manufacturer
located in Carson, California.

Rowe Furniture Corporation was founded as a furniture manufacturer in June,
1946, and its original manufacturing facility is located in Salem, Virginia. In
1968, the Company expanded its operations to the Midwest with the addition of
its first facility in Missouri.

The Company is incorporated under the laws of Nevada. Its principal
administrative offices are located at 239 Rowan Street, Salem, Virginia 24153,
and its telephone number is (540) 389-8671. Unless the context indicates
otherwise, references herein to the "Company" include Rowe Furniture
Corporation, its predecessors, and its subsidiaries.

Effective December 3, 1995, the Company merged its four manufacturing
subsidiaries (Rowe Furniture Corporation-Virginia, Rowe Furniture Corporation-
Missouri, Salem Frame Company, Inc. and Himmelberger-Harrison Company, Inc.)
into a wholly-owned subsidiary, Rowe Manufacturing, Inc. On December 1, 1997, 
all of the assets of Rowe Manufacturing, Inc., exclusive of intellectual 
property, were transferred to a new wholly-owned subsidiary, Rowe Industries, 
Inc. Rowe Manufacturing, Inc. was then merged into the Company. These 
reorganizations were effected to simplify the organizational structure and 
improve internal reporting.
<PAGE>
 
December, 1997, The Wexford Collection, Inc., a new wholly-owned subsidiary was
created to acquire the assets and liabilities of J & M Designs, Ltd.

Management believes that recent consolidation in the retail furniture industry
has increased the importance of maintaining strong relationships with customers
and responding effectively to their demands.  The Company's objective is to
provide enhanced service and value to its customers through quick delivery of
high quality upholstered furniture at competitive prices.  A lifetime limited
warranty applicable to all the Company's products covering frames, springs,
mechanisms and selected cushions reflects its commitment to high quality.  In
recent years, the Company took a number of steps to reduce costs and improve
quality while generally maintaining constant price levels.  These steps
included: (i) implementing an innovative employee involvement and compensation
program, (ii) using more efficient manufacturing techniques, (iii) accelerating
deliveries, and (iv) expanding the Company's computerized management information
system.

In addition, the Company has enhanced its marketing efforts to existing
retailers, while identifying and adding new retailers in existing markets and in
regions where its products are not widely distributed.  When adding retailers,
the Company targets financially sound retailers committed to progressive
marketing techniques.  The Company also has implemented plans to increase
foreign sales and to add new Rowe ShowPlace locations.

STRATEGY

Management believes in the importance of maintaining strong relationships with
customers and responding effectively to their demands.  The Company's objective
is to provide enhanced service and value to its customers through quick delivery
of high quality upholstered furniture at competitive prices.  The key elements
of the Company's strategy to achieve this objective include:

Product Quality and Value.  The Company is committed to providing high quality,
value oriented furniture at competitive prices.  Management believes the Company
adheres to strict quality standards in all aspects of design and production,
including material selection, frame design and construction, workmanship, and
appearance.  Product quality improvements in recent years include better
undercarriage construction, the use of higher quality cushioning materials and
improved fabric matching.  A lifetime limited warranty applicable to all the
Company's products covering the frames, springs, mechanisms and selected
cushions reflects the Company's commitment to high quality.  The Company has
been successful in providing this quality while generally holding prices
constant in recent years.

Employee Involvement and Compensation.  A critical component of the Company's
strategy has been the implementation of what management believes to be an
innovative employee involvement program.  The furniture industry has
traditionally 
<PAGE>
 
compensated manufacturing employees on a piecework basis. Management believes
that piecework compensation, which rewards employees based upon the number of
units produced by the individual employee or production line, emphasizes
quantity. A focus on quantity is often at the expense of quality, and does not
provide incentive for employees to produce high quality products and to generate
ideas that will contribute to facility-wide efficiency improvements. In
contrast, the Company encourages all employees to participate in decision-
making, and compensates employees based on hourly rates plus monthly bonuses for
productivity improvements and cost reductions on a facility-wide basis. This
approach provides incentives for employees to contribute to facility-wide
efficiency, quality improvements and cost reductions, and has also reduced
supervisory expense. Management believes that the employee involvement and
compensation program has contributed significantly to improvements in operating
efficiencies, labor productivity, employee morale, product quality and customer
service.

Dedication to Customer Service.  The Company is dedicated to providing a high
level of service to all its customers.  The Company maintains close contact and
communicates frequently with its customers in order to better identify,
understand and meet their needs.  Management believes the utilization of
Company-employed sales persons enables it to better communicate with its
customers.

Important aspects of the Company's service to certain customers include its
automated order entry, bar coding and electronic data interchange systems.
These systems give customers the ability to place orders directly, and allows
the Company to monitor the status of orders and track inventory and sales
activity.  The Company is in the process of enhancing the capabilities of these
systems and increasing the number of customers who utilize them.  In addition,
the Company has introduced point-of-sale computer systems into Rowe ShowPlace
and other dealer locations that allow retailers to display for consumers full-
color pictures of various combinations of furniture styles and fabric patterns
and to enter consumers' orders directly with the Company.  The Company has
established regional repair service centers so that it can respond quickly to
consumers' needs.

Another special emphasis of the Company's customer service is the prompt
delivery of its products, a significant portion of which are manufactured and
shipped within 30 days of receipt of an order.  The Company's order entry,
credit approval, manufacturing and shipping systems are all designed to provide
prompt delivery to its customers.

Manufacturing Efficiencies.  Management has taken a number of steps to improve
the Company's manufacturing efficiencies, including implementation of
computerized systems in its manufacturing facilities to manage more effectively
its inventories, purchasing, labor and manufacturing processes; the development
of its employee involvement program; and the establishment of new internal
systems to control overhead and material usage.  In addition, the Company has
added modern equipment, such as computerized routers utilized in its milling
operations and new computerized cover cutting machines that enhance
efficiencies.  Management believes through a 
<PAGE>
 
combination of increased efficiencies, improved product quality, accelerated
deliveries and stable pricing, the Company will maintain a competitive advantage
in marketing its products.

Expanding Retail Distribution.  Despite the recent consolidation in the retail
furniture industry, management believes there are ample opportunities to expand
the Company's retail distribution network.  The Company strives to maintain
strong relationships with, and increase sales to, its existing retailers.  It
also attempts to increase sales by adding new retailers, particularly in
geographic regions where its products currently are not widely distributed, such
as the Southwest and the West.  When adding retailers, the Company targets what
it believes to be financially sound retailers committed to progressive marketing
approaches and the desire to carry a significant portion of the Company's
product line.  The Company also intends to increase the number of Rowe ShowPlace
locations in selected markets.  In addition, the Company has implemented plans
to increase foreign sales, and has become affiliated with nonexclusive
commissioned sales representatives in Canada, Mexico, Scandinavia, the
Caribbean, the Middle East, the Far East, Australia and other regions.

THE INDUSTRY

As reported by the American Furniture Manufacturers Association in December,
1997 the following table sets forth estimated factory shipments for the domestic
furniture industry in general, and the upholstered furniture segment in
particular, during each of the four years ended December 31, 1997.

                                                      Year Ended December 31,
                                                   ----------------------------
                                                   1994    1995    1996    1997
                                                   ----    ----    ----    ----
                                                           (in billions)

     Industry shipments                           $18.6   $19.0   $20.0   $21.1
     Upholstered furniture shipments                7.1     7.4     7.9     8.4

The principal categories of furniture products include wood, upholstered and
metal furniture products.  Of these categories, wood is the largest,
representing approximately half of total industry sales, while upholstered
furniture represents approximately 40% and metal and other products account for
the balance.  Within each category, furniture manufacturers generally focus on
particular price ranges and styles.

The furniture industry historically has been cyclical, fluctuating with the
general economy.  Management believes that the industry is significantly
influenced by consumer behavior and confidence, personal disposable income,
demographics, housing activity, interest rates, and credit availability.  The
upholstered segment of the furniture industry generally has followed the same
trends as the rest of the furniture industry.  There can be no assurance that an
economic downturn would not have a material adverse effect on the Company.
<PAGE>
 
PRODUCT LINES

The Company's products encompass a full line of upholstered furniture including
sofas, sleeper sofas, loveseats, and chairs. The Company's products are
available in approximately 600 different fabrics.  Styles offered include
traditional, contemporary, and country.  The Company also markets under the Rowe
name a limited line of leather furniture purchased from another manufacturer.
In addition, the Company-owned Rowe ShowPlace locations offer complementary
accessory items such as lamps, rugs, and tables from other manufacturers.

The Company's product strategy is to provide a wide choice of furniture styles
and fabrics while providing high quality at competitive prices.  The Company
continually reviews and evaluates its designs, and annually adds and
discontinues designs as it deems appropriate.  The Company identifies trends in
styles, colors, and patterns through independent research, contacts with the
Company's customers and the occasional use of independent designers.  Management
also solicits opinions from its customers, and manufacturing and marketing
employees prior to final design selection.

MARKETING AND SALES

The Company has developed a broad and diverse national customer base.  The
Company sells its products through commissioned sales personnel who are
employees of the Company dedicated to marketing the Company's products
exclusively.  Management believes that this gives the Company a competitive
advantage over many of its competitors which sell their products through
independent sales representatives who represent more than one manufacturer.  The
Company's products are sold to over 1,000 national, regional, and local
furniture retailers, including Levitz, Leath, Jordan's Furniture, Star Furniture
and Sears Homelife.  During 1997, Levitz accounted for approximately 16% of the
Company's 1997 shipments, and its ten largest customers (including Levitz)
accounted for approximately 34% of 1997 shipments.  Other than Levitz, no
customer accounted for more than 3% of the 1997 shipments.  While the loss of
Levitz or other large customers could have a material adverse effect on its
business, management believes that dependence on any one customer will diminish
as the Company diversifies its customer base and the markets served.

While the Company sells its products throughout the United States, management
believes that there are opportunities for greater penetration in the regions
where the Company's products are not currently widely distributed.  The Company
has targeted key retailers in these markets as opportunities for further growth.

The general marketing practice in the furniture industry is to exhibit products
at international and regional furniture markets.  The Company displays its
product lines and introduces new products in April and October of each year at
an eight day furniture market held in High Point, North Carolina.  The Company
maintains a 28,000 square 
<PAGE>
 
foot showroom at the High Point market. In addition, the Company has developed
plans to increase sales in foreign markets. Approximately 5% of 1997 sales were
to customers located outside of the United States.

ROWE SHOWPLACE PROGRAM

A Rowe ShowPlace is either a dedicated gallery area within an independent retail
furniture store or a freestanding retail furniture store where the Company's
products are displayed on an exclusive basis together with other manufacturers'
complementary furniture accessories.  The Company has implemented the Rowe
ShowPlace program featuring the Company's furniture in order to increase its
market penetration and name recognition among customers.  There are currently
approximately over 100 Rowe ShowPlace locations in operation. Most are dedicated
galleries located within stores operated by retailers that also sell other
manufacturers' products, six are freestanding independently owned retail
locations, and ten are freestanding Company-owned retail locations.  In-store
locations are situated on a separate, generally prominent part of the sales
floor dedicated to displaying the Company's products and marketing materials.
The Rowe ShowPlace program accounted for more than 15% of the Company's fiscal
1997 shipments.

A Rowe ShowPlace offers the retail customer a choice of a wide variety of
contemporary and traditional upholstered furniture styles, as well as
approximately 600 different fabrics.  By choosing various combinations of style
and fabric, the consumer is able to customize his or her selection.

Most Rowe ShowPlace locations, including all freestanding locations, have a
point-of-sale computer system that displays any fabric on any style, allowing
the consumer to combine fabrics and styles and have an immediate picture of the
finished product before making a selection.

The Company's emphasis will continue to be on opening additional Rowe Furniture
Galleries in select retail furniture stores and freestanding Company-owned Rowe
ShowPlace stores where additional locations are planned for 1998. The expansion
of Company-owned ShowPlace stores is supported by the addition of personnel with
furniture retailing experience. The Company is expanding the program of national
advertising intended to increase recognition of the Rowe name and to complement
the development of the Rowe ShowPlace program. The freestanding Rowe ShowPlace
locations are subject to all of the risks generally associated with operating a
retail establishment, including suitable site selection, competition for retail
customers, and the need for qualified management and sales personnel. In
addition, because the Rowe ShowPlace program accounted for more than 15% of
fiscal 1997 shipments, a material reduction in sales at such stores may have an
adverse effect on the Company's results.
<PAGE>
 
MANUFACTURING AND DISTRIBUTION

The Company's upholstery and frame manufacturing operations are conducted in
four owned facilities, two located in Virginia and two located in Missouri,
comprising an aggregate of approximately one million square feet.  In addition
to manufacturing its own lines of furniture, the Company manufacturers furniture
frames and kiln dries hardwood and pine lumber for outside customers.
Manufacturing for The Wexford Collection line of wood furniture is conducted in
a 103,000 sq. ft. facility under a long-term lease in Carson, California.

Manufacturing Process.  The Company utilizes a vertically integrated
manufacturing process which includes kiln-drying of hardwood, wood milling,
frame construction, fabric cutting and sewing, foam cutting and filling,
upholstery and final assembly of the upholstered product.  The Company
manufactures and assembles all of the frames used in its upholstered furniture.
The Company utilizes computer-aided design patterns for manufacturing frames and
upholstered furniture and utilizes specialized machines in the fabric cutting
process which facilitate design work, help maximize fabric yield, and increase
the efficiency of the assembly process. The completed pieces of upholstered
furniture are then cleaned, inspected and packed for shipping.

Employee Involvement and Compensation.  A key aspect of the Company's
manufacturing process is its employee involvement and compensation program.
This program involves all of the Company's workers in the improvement of the
manufacturing process by providing incentives to increase productivity, to
reduce costs, and to improve quality.  The Company encourages all employees to
participate in decision-making, and compensates employees based on hourly rates
plus bonuses for productivity improvements and cost reductions on a facility-
wide basis.  Management believes that this program provides incentive for
employees to contribute to facility-wide efficiency, quality improvements and
cost reductions.  Since implementation of the program, the Company has
experienced a significant increase in employee suggestions leading to such
improvements and reductions.  On a facility-wide basis, 1997 incentive bonuses
ranged up to approximately 15% of hourly compensation.  Salaried employees also
participate in this program, however, their bonuses cannot exceed the highest
amount paid to an hourly employee.

Computer Systems.  The Company makes extensive use of a computerized management
information system (MIS) in the manufacturing process.  The MIS, which includes
software developed by the Company, helps the Company manage order entry,
purchasing, labor, inventories, receivables, and product shipping.  Management
believes that its MIS is advanced by furniture industry standards; however, the
Company intends to continue to upgrade the system by developing and/or
purchasing new software to handle new applications and additional demands of
anticipated future growth.  New software that is currently being installed in
connection with a more fully integrated system will address a portion of the 
Company's year 2000 issues.  
<PAGE>
 
Other year 2000 issues are being assessed by an internal task-force to determine
the score of changes needed to software and equipment.

Manufacturing Capacity.  While the Company primarily operates its manufacturing
facilities on a one-shift, five or six day per week basis, partial second shifts
are in operation at all its facilities. Management believes that the Company
could increase production without substantial capital expenditures by expanding
the number of personnel on both first and second shifts.

Backlog.  The Company generally manufactures its products in response to actual
customer orders and typically ships the finished product within 30 days
following receipt of the related order, depending upon fabric availability.
Accordingly, the level of backlog at any particular time is limited, and is not
necessarily indicative of the level of future shipments.  The Company's backlog
of unshipped orders was approximately $14.4 million as of November 30, 1997 as
compared to $10.4 million as of December 1, 1996, higher primarily from
increased orders in the last half of 1997.  The Company anticipates that 100% of
the backlog as of November 30, 1997 will be shipped in 1998.

Distribution.  The Company has contracted with a truck leasing company to
provide dedicated carriage services of its products.  Under the agreement, the
Company's products are delivered in accordance with the Company's specifications
on a modern fleet of over-the-road tractors and trailers that prominently
display the Company's name.  Management believes that the arrangement offers the
Company favorable terms, allows it to meet its delivery deadlines, and improves
the Company's name recognition.  For West Coast shipments, the Company has what
management believes to be a favorable arrangement for carriage of the Company's
products with third party motor carriers. For international shipments,
upholstered furniture is shipped primarily in full containers utilizing third-
party freight forwarders. Approximately 90% of the Company's fiscal year 1997
upholstered shipments were delivered under these arrangements.

RAW MATERIALS

The raw materials used by the Company include fabrics, hardwood lumber, plywood,
polyurethane foam, metal components, mattresses and finishing materials.   Other
than lumber and fabric, all raw materials used by the Company are generally
available on an "as needed" basis.  The Company maintains what it believes to be
an adequate supply of raw materials in inventory.

The Company currently obtains its raw materials from a limited number of
suppliers, and in the case of hardwood plywood, a single supplier.  However,
management does not believe the Company is dependent upon a single supplier for
any of its materials, as substitute suppliers are available. Management believes
that its sources of raw materials are adequate and that it forms strong
relationships with its suppliers and negotiates favorable prices for its raw
materials.
<PAGE>
 
To improve quality, maximize the opportunities to implement labor saving
technology, hedge against the potential of rising wood costs and free up kiln
capacity, the Company has increased the substitution of hardwood plywood for
hardwood in certain aspects of the construction of its furniture frames.
Because plywood construction is less labor-intensive, and in many respects more
structurally sound than hardwood construction, this method has improved product
quality while helping to reduce overall cost.

GOVERNMENTAL REGULATIONS AND ENVIRONMENTAL CONSIDERATIONS

The Company's operations are required to meet federal, state and local
regulatory standards in the areas of safety, health, and environmental pollution
controls.  Historically, compliance with these standards has not had a material
adverse effect on the Company's operations.  Management believes that the
Company's plants are in compliance in all material respects with applicable
federal, state and local laws and regulations concerned with safety, health, and
environmental protection.

The Company currently anticipates increased federal and state environmental and
health and safety regulation affecting the furniture industry, particularly
regarding emissions from paint and finishing operations and wood dust levels in
the manufacturing process.  Any such additional regulations could affect the
Company's wood milling and finishing operations.  The industry and its suppliers
are attempting to develop water-based finishing materials to replace commonly
used organic-based finishes which are a major source of regulated emissions.
The Company cannot at this time estimate the impact of any new regulations on
the Company's operations or the costs of compliance.

COMPETITION

The furniture industry is highly competitive and includes a large number of
manufacturers.  The market in which the Company competes includes a large number
of manufacturers of upholstered furniture.  Certain of the Company's competitors
have greater financial resources than the Company.  Management believes that the
high quality, design, and competitive pricing of the Company's products, the
Company's reputation among retailers, and the Company's commitment to customer
service have enabled the Company to compete successfully in this market.

EMPLOYEES

As of November 30, 1997, the Company employed approximately 1,650 full-time
employees, of which 194 are in management, supervisory, and sales positions.
Approximately 100 employees employed at a single plant, 8 of whom are members of
a labor union, are covered by a collective bargaining agreement.  No other
employees are covered by such an arrangement, and the Company considers its
employee relations to be good.
<PAGE>
 
TRADEMARKS

The Company has registered its "Rowe", "A Whole New Way to Buy Furniture", "The
Rowe ShowPlace", "The ShowPlace Coordinated Home Furnishings by Rowe", "Rowe
First in Fashion", "Regency Manor", "The Rowe ShowMe Machine", "Limited
Editions" and "The ShowPlace" trademarks with the United States Patent and
Trademark Office. Applications for registration of the Company's "Cover Ups",
"Comfortable Stuff" and "Comfortable Stuff by Rowe" trademarks are pending
before the United States Patent and Trademark Office. In connection with the
Company's acquisition of J & M Designs, Ltd., the Company also owns the "The
Wexford Collection" and "The Wexford Group" trademarks, which are registered
with the United States Patent and Trademark Office and the California Secretary
of State. In addition, the Company has certain of its trademarks registered in
Australia, Canada and Mexico, and applications for registration of certain of
the Company's trademarks are pending in Australia, Canada, Germany and the
European Community. Management believes that its trademark position is
adequately protected in all markets in which the Company does business.
Management also believes that the Company's trade names are recognized by
dealers and distributors and are associated with a high level of quality and
value.

INSURANCE

The Company maintains what management believes is a complete liability and
property insurance program.  Additionally, the Company maintains a self-
insurance program for that portion of health care costs not covered by
insurance.

ITEM 2.  PROPERTIES.

The following table sets forth certain information concerning the Company's
manufacturing facilities:

                                                            Approximate
                                                                Size in
Location                      Description                   Square Feet
--------                      -----------                   -----------
 
Salem, Virginia               Administrative Office
                              and Manufacturing                 335,000
Salem, Virginia               Manufacturing                     241,000
Poplar Bluff, Missouri        Manufacturing                     300,000
Morehouse, Missouri           Manufacturing                     136,000
Carson, California            Administrative Office  
                              and Manufacturing                 103,000
<PAGE>
 
In addition, the Company maintains executive offices in leased offices in
McLean, Virginia.  The Company considers its equipment and its manufacturing and
office facilities to be adequate and well-maintained.

In addition to its manufacturing and office facilities, the Company owns the
following properties that are held for investment and are leased on a net basis:
 
                                                              Approximate
                              Lease                               Size in
Location                      Expires        Description      Square Feet
--------                      -------        -----------      -----------
 
Christiansburg, Virginia      Various thru   Industrial            79,000*
                              02-28-02      
Jessup, Maryland              Various thru   Office/
                              12-31-04       Industrial           180,000
Sylmar, California            03-31-04       Industrial           115,000

----------
* 12,000 square feet is currently leased.

The investment properties located in Christiansburg, Virginia and Sylmar,
California were originally acquired by the Company between 1972 and 1988 for
utilization as  Company manufacturing facilities. In past years, the Company
ceased utilizing these facilities for its own operations and determined that the
best return on these properties could be realized by leasing them to third
parties. In February, 1995, the Company completed the sale of a 175,000 square
foot warehouse in Sylmar, California.  The warehouse had been held by the
Company as investment property.  The after-tax gain was approximately $3.0
million, net of lost rents during the disposition period.  In June of 1995, the
Company purchased other rental income-producing property in Jessup, Maryland to
permit a "tax-deferred" exchange with the proceeds realized from this
transaction. A retail property located in Leesburg, Florida which was acquired
in 1984 was sold during fiscal year 1997.  Aggregate rental income from
investment properties, net of commissions, was $1,005,000, $1,442,000 and
$1,399,000  in 1995, 1996 and 1997, respectively.


ITEM 3.  LEGAL PROCEEDINGS.

There are no pending legal proceedings, other than routine litigation incidental
to the business of the Company.  While the outcome of these routine legal
proceedings cannot be predicted with certainty, it is the opinion of management
that the resolution of these legal proceedings should not have a material
adverse effect on the Company's financial position.

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

No matter was submitted to a vote of security holders, through the solicitation
of proxies, or otherwise, during the quarter ended November 30, 1997.
<PAGE>
 
                                    Part II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     (a)  The information contained under the caption "Stock Price and Dividend
Data" in the Annual Report to Stockholders for the fiscal year ended November
30, 1997 is included in Exhibit 13 hereto and incorporated herein by reference.

     (b)  Approximate Number of Equity Security Holders.

                                        Approximate Number of Record
     Title of Class                     Holders as of November 30, 1997
     --------------                     -------------------------------

     Common Stock, par value                        1,100
     $1.00 per share

ITEM 6.  SELECTED FINANCIAL DATA.

The information contained under the caption "Five-year Summary" in the Annual
Report to Stockholders for the fiscal year ended November 30, 1997 is included
in Exhibit 13 hereto and incorporated herein by reference.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

The management's discussion and analysis of financial condition and results of
operations section of the Annual Report to Stockholders for the fiscal year
ended November 30, 1997 is included in Exhibit 13 hereto and incorporated herein
by reference.

FORWARD LOOKING INFORMATION

Certain portions of this report, and particularly the Notes to the Consolidated
Financial Statements and the Management's Discussion and Analysis of Financial
Condition and Results of Operations in Part II of this report and the portions
of Item II in Part I contain forward-looking statements.  These statements can
be identified by the use of future tense or dates or terms such as "believe,"
"expect," "anticipate" or "plan."  Important factors could cause actual results
to differ materially from those anticipated by some of the statements made in
this report.  Some of the factors include, among other things, changes from
anticipated levels of sales, whether due to future national or regional economic
and competitive conditions, customer acceptance of existing and new products, or
otherwise; pending or future litigation; pricing pressures due to excess
capacity; raw material cost increases; transportation cost increases; the
inability of a major customer to meet its obligations; loss of significant
customers in connection with 
<PAGE>
 
a merger or acquisition, bankruptcy or otherwise; actions of current or new
competitors; increased advertising costs associated with promotional efforts;
change of tax rates; change of interest rates; future business decisions and
other uncertainties, all of which are difficult to predict and many of which are
beyond the control of the Company.

ITEM 7A.  QUANTITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The following information in the Annual Report to Stockholders of the fiscal
year ended November 30, 1997 is included in Exhibit 13 hereto and incorporated
herein by reference:

     Consolidated Balance Sheets -- November 30, 1997 and December 1, 1996

     Consolidated Statements of Income --
      Years Ended November 30, 1997, December 1, 1996, and December 3, 1995

     Consolidated Statements of Stockholders' Equity --
      Years Ended November 30, 1997, December 1, 1996, and December 3, 1995

     Consolidated Statements of Cash Flows --
      Years Ended November 30, 1997, December 1, 1996, and December 3, 1995

     Notes to Consolidated Financial Statements (includes selected quarterly
     financial data)

     Report of Independent Certified Public Accountants

     ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

     None
<PAGE>
 
                                    Part III

Notwithstanding anything below to the contrary, the Report of the Compensation
and Stock Option Committees and the Performance Graph contained on pages 12
through 14 of the Company's 1998 Annual Meeting Proxy Statement are not
incorporated by reference in this Form 10-K.

Item 10.  Directors and Executive Officers.

The information required by Item 10 is contained in the Company's 1998 Annual
Meeting Proxy Statement and is incorporated herein by reference. Such Proxy
Statement will be filed with the Securities and Exchange Commission not later
than 120 days after the Company's fiscal year end.

Item 11.  Executive Compensation.

The information required by Item 11 is contained in the Company's 1998 Annual
Meeting Proxy Statement and is incorporated herein by reference. Such Proxy
Statement will be filed with the Securities and Exchange Commission not later
than 120 days after the Company's fiscal year end.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

The information required by Item 12 is contained in the Company's 1998 Annual
Meeting Proxy Statement and is incorporated herein by reference. Such Proxy
Statement will be filed with the Securities and Exchange Commission not later
than 120 days after the Company's fiscal year end.

Item 13.  Certain Relationships and Related Transactions.

The information required by Item 13 is contained in the Company's 1998 Annual
Meeting Proxy Statement and is incorporated herein by reference. Such Proxy
Statement will be filed with the Securities and Exchange Commission not later
than 120 days after the Company's fiscal year end.
<PAGE>
 
                                     Part IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.

         (a)  1.  Financial Statements:

                 The consolidated balance sheets as of November 30, 1997 and
                 December 1, 1996 and the related consolidated statements of
                 income, stockholders' equity, cash flows and notes to
                 consolidated financial statements for each of the three years
                 in the period ended November 30, 1997 together with the report
                 of BDO Seidman, LLP dated December 22, 1997, except for Note
                 12, which is as of January 2, 1998, appearing in the 1997
                 Annual Report to Stockholders are incorporated herein by
                 reference. The following additional financial data should be
                 read in conjunction with the consolidated financial statements
                 in such 1997 Annual Report to Stockholders.

              2.  Financial Statement Schedule:

                 Report of Independent Certified Public Accountants on Financial
                 Statement Schedule
                 II  Valuation and Qualifying Accounts.

Schedules other than those listed above are omitted for the reason that they are
not required or are not applicable, or the required information is shown in the
consolidated financial statements and notes thereto.

              3.  Exhibits:

Exhibit
Number             Exhibit
------             -------

3.1               Articles of Incorporation of the Company (incorporated by
                  reference to the Company's Registration Statement on Form S-1
                  No. 33-74504 filed with the Securities and Exchange Commission
                  on January 27, 1994)

3.2               By-laws of the Company (incorporated by reference to the
                  Company's Registration Statement on Form S-1 No. 33-74504
                  filed with the Securities and Exchange Commission on January
                  27, 1994)

4                 Specimen Stock Certificate (incorporated by reference to the
                  Company's Registration Statement on Form 8-A filed with the
                  Securities and Exchange Commission on January 5, 1994)
<PAGE>
 
10.1              Rowe Furniture Corporation 1983 Stock Option and Incentive
                  Plan (incorporated by reference to the Company's Registration
                  Statement on Form S-1 No. 33-74504 filed with the Securities
                  and Exchange Commission on January 27, 1994)

10.2              Rowe Furniture Corporation 1993 Stock Option and Incentive
                  Plan (incorporated by reference to the Company's registration
                  Statement on Form S-8 No. 2-94943 filed with the Securities
                  and Exchange Commission on October 18, 1993)

10.3              Rowe Furniture Corporation Merged 401(k) and Employee Stock
                  Ownership Plan dated December 1, 1991 (incorporated by
                  reference to the Company's Registration Statement on Form S-1
                  No. 33-74504 filed with the Securities and Exchange Commission
                  on January 27, 1994)

10.4              Rowe Furniture Corporation Amended and Restated Supplemental
                  Executive Retirement Plan II (incorporated by reference to the
                  Company's Registration Statement on Form S-1 No. 33-74504
                  filed with the Securities and Exchange Commission on January
                  27, 1994)

10.5              Employment Agreement dated December 6, 1984 between the
                  Company and Mr. Harvey I. Ptashek (incorporated by reference
                  to the Company's Registration Statement on Form S-1 No. 33-
                  74504 filed with the Securities and Exchange Commission on
                  January 27, 1994)

10.6              Employment Agreement dated December 5, 1985 between the
                  Company and Mr. Arthur H. Dunkin (incorporated by reference to
                  the Company's Registration Statement on Form S-1 No. 33-74504
                  filed with the Securities and Exchange Commission on January
                  27, 1994)

10.7              Employment Agreement dated December 1, 1993 between the
                  Company and Mr. Gerald M. Birnbach (incorporated by reference
                  to the Company's Registration Statement on Form S-1 No. 33-
                  74504 filed with the Securities and Exchange Commission on
                  January 27, 1994)

10.8              Rowe Furniture Corporation Cash-or-Deferred Non-Qualified
                  Executive Retirement Plan (incorporated by reference to the
                  Company's Form 10-K filed with the Securities and Exchange
                  Commission on February 27, 1995)

10.9              Employment Agreement dated February 2, 1998 between the
                  Company and Mr. Gerald M. Birnbach

13                Portions of the Annual Report for the year ended November 30,
                  1997

21                List of Subsidiaries
<PAGE>
 
23                Consent of BDO Seidman, LLP

27                Financial Data Schedule

         (b) Reports on Form 8-K.

         One report on Form 8-K was filed in the fourth quarter of the Company's
fiscal year. On November 26, 1997, a Form 8-K was filed reporting that on
November 5, 1997, Rowe Furniture Corporation announced the completion of the
750,000 share buy-back program which was approved by the Board of Directors on
November 6, 1996 (500,000 shares) and June 3, 1997 (250,000 shares) and
announced that the Board of Directors approved the purchase of 1,000,000 shares
of its common stock in open market transactions
<PAGE>
 
                                   SIGNATURES


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

                                           ROWE FURNITURE CORPORATION


                                           By:  /s/ ARTHUR H. DUNKIN
                                              ---------------------------------
February 12, 1998                             A. H. Dunkin, Secretary-Treasurer

Pursuant to the requirements of the Securities Act of 1933, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

<TABLE> 
<CAPTION> 

Signature                                            Title                                    Date
---------                                            -----                                    ----
<S>                                         <C>                                         <C> 
                                            Chairman of the Board
/s/ GERALD M. BIRNBACH                      President, Director                         February 12, 1998
---------------------------------           (Principal Executive Officer) 
G. M. Birnbach   



/s/ RICHARD E. CHENEY                       Director                                    February 12, 1998
---------------------------------
R. E. Cheney


                                            Secretary-Treasurer, Director
/s/ ARTHUR H. DUNKIN                        (Principal Financial and                    February 12, 1998
---------------------------------           Accounting Officer)
A. H. Dunkin           

                                            Senior Vice President and
/s/ HARVEY I. PTASHEK                       Director                                    February 12, 1998
---------------------------------
H. I. Ptashek
</TABLE> 
<PAGE>

<TABLE> 
 <S>                                        <CAPTION>                                    <C> 
/s/ CHARLES T. ROSEN                        Director                                     February 12, 1998
---------------------------------
C. T. Rosen



/s/ KEITH J. ROWE                           Director                                     February 12, 1998
---------------------------------
K. J. Rowe



/s/ SIDNEY J. SILVER                        Director                                     February 12, 1998
---------------------------------
S. J. Silver


/s/ ALLAN TOFIAS                            Director                                     February 12, 1998
---------------------------------
Allan Tofias


/s/ GERALD O. WOODLIEF                      Director                                     February 12, 1998
---------------------------------
G. O. Woodlief
</TABLE> 
<PAGE>
 
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
                        ON FINANCIAL STATEMENT SCHEDULE


Rowe Furniture Corporation
Salem, Virginia

The audits referred to in our report dated December 22, 1997, except for Note
12, which is as of January 2, 1998, relating to the consolidated financial
statements of Rowe Furniture Corporation, which is contained in Item 8 of this
Form 10-K (incorporated in Item 8 of the Form 10-K by reference to the annual
report of stockholders for the year ended November 30, 1997) included the audit
of the financial statement schedule listed in the accompanying index.  The
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion on the financial statement schedule
based upon our audits.

In our opinion such financial statement schedule presents fairly, in all
material respects, the information set forth therein.



High Point, North Carolina                      /s/ BDO SEIDMAN, LLP
December 22, 1997                               --------------------         
                                                BDO SEIDMAN, LLP 

                  
<PAGE>
 
                           ROWE FURNITURE CORPORATION
                                AND SUBSIDIARIES

                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

 FOR THE YEARS ENDED NOVEMBER 30, 1997, DECEMBER 1, 1996, AND DECEMBER 3, 1995

                             (Thousands of Dollars)
<TABLE>
<CAPTION>
 
 
      COL. A              COL. B              COL. C               COL. D           COL. E
-----------------------------------------------------------------------------------------------
                                             ADDITIONS
                                     -------------------------
                                         (1)          (2)
                                                   CHARGED TO
                          BALANCE AT  CHARGED TO        OTHER                       BALANCE AT
                           BEGINNING   COSTS AND     ACCOUNTS    DEDUCTIONS -           END OF
DESCRIPTION                OF PERIOD    EXPENSES     DESCRIBE        DESCRIBE           PERIOD
-----------------------------------------------------------------------------------------------
<S>                       <C>         <C>          <C>          <C>                 <C>
Allowance for doubtful
accounts - 1997                $ 300     $ 3,918        $  -         $ 3,902(A)          $ 316

Allowance for doubtful
accounts - 1996                $ 300     $   490        $  -         $   490(B)          $ 300

Allowance for doubtful
accounts - 1995                $ 300     $   179        $  -         $   179(C)          $ 300
</TABLE>

(A)  Accounts charged off less bad debt recoveries of $274,000

(B)  Accounts charged off less bad debt recoveries of $69,000

(C)  Accounts charged off less bad debt recoveries of $55,000