<PAGE>  1
                                     
                    SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.  20549
                               FORM 10-K/A
 
 [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities          
   Exchange Act of 1934 
     For the fiscal year ended December 31, 1996
 
 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities      
   Exchange Act of 1934 
     For the transition period from ________________ to _______________
 
 Commission File Number 1-542
 
                             GROSSMAN'S INC.
 --------------------------------------------------------------------------   
         (Exact Name of Registrant as Specified in Its Charter)
                           
                  Delaware                                   38-0524830     -
 -------------------------------------------           -------------------
        (State or other jurisdiction of                 (IRS Employer
         incorporation or organization)                 Identification No.)
                                            
     45 Dan Road, Canton, Massachusetts                        02021
 --------------------------------------------           -------------------
   (Address of principal executive offices)                  (Zip Code)
 
                              (617) 830-4000
 --------------------------------------------------------------------------
             Registrant's telephone number, including area code
 
 Securities registered pursuant to Section 12(b) of the Act:
 
                                                     Name of Exchange
             Title of Class                          on Which Registered  
 ---------------------------------------        ---------------------------
 Common Stock, par value $0.01 per share          The Nasdaq Stock Market
 
 Securities registered pursuant to Section 12(g) of the Act:
 
                                   None
 --------------------------------------------------------------------------
                             (Title of Class)
 
 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 the 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 March 31, 1997 was $5,317,362 (For this purpose directors
 have been deemed affiliates)
 
     Indicate by check mark whether the registrant has filed all documents
 and reports required to be filed by Sections 12, 13, or 15(d) of the
 Securities Exchange Act of 1934 subsequent to the distribution of securities
 under a plan confirmed by a court.
 
          Yes______                       No________
 

<PAGE>  2

     The Company filed a Voluntary Petition pursuant to the provisions of
 Chapter 11 of the U.S. Bankruptcy Code on April 7, 1997.  No Plan has been
 submitted to the Court.
 
 The number of shares of the registrant's class of Common Stock ($.01 par
 value) outstanding on March 31, 1997 was 27,978,074.
 
     
                        Documents Incorporated By Reference
 
 This amendment files Part III, Items 10, 11, 12, and 13, incorporated by
 reference to this amendment into the Company's Annual Report on Form 10-K.
 
                      Part III
 
     Capitalized terms used herein without definition have the meanings
 specified in the Company's Annual Report on Form 10-K for the fiscal year
 ended December 31, 1996 (the "1996 Form 10K").
 
 Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     (a)  Identification of Directors
 
          As of March 31, 1997, the following seven directors,
 constituting the Board of Directors of the Company, were either elected by a
 vote of stockholders or appointed by remaining directors to fill vacancies
 on the Board of Directors:
 
     Thomas E. Arnold Jr.          Age: 52
 
          Mr. Arnold has been President of Thomas E. Arnold & Associates,
 a real estate investment firm headquartered in Phoenix, Arizona since 1992. 
 Mr. Arnold also served as Chairman of the Board of Trustees responsible for
 the liquidation of certain assets of Executive Life Insurance Company from
 1994 to 1997 and served as court-appointed Chairman of the Board, President
 and Chief Executive Officer, in the liquidation of American Continental
 Corporation, a real estate investment Company, from 1990 to 1994.  Mr.
 Arnold has been a director of the Company since December, 1996 when he was
 appointed by the Board of Directors to fill a vacancy on the Board.
 
     Russell Cox                   Age: 70
 
          Mr. Cox has been President of Resort Management Inc., a property
 management and real estate consulting firm located in Waterville Valley, New
 Hampshire, since 1977 and has been general partner of Real Estate Venture
 Fund since 1985.  Mr. Cox has been a director of the Company since 1987.
 
 
     Theodore H. Schnormeier       Age: 62
 
     Mr. Schnormeier has been Senior Vice President and a director of JELD-
 WEN, inc., a window, door, and mill work manufacturer headquartered in
 Klamath Falls, Oregon since 1965.  He also serves as a director of Arial
 Corporation, a manufacturer of compressors of Mount Vernon, Ohio, and
 Palmer-Snyder Company, a furniture manufacturer of Milwaukee Wisconsin.  He
 has been a director of the Company since February 1997 when he was appointed
 by the Board of Directors to fill a vacancy on the Board of Directors.
 
 
                                     2

<PAGE>  3

     Robert K. Swanson                  Age: 65
 
     Mr. Swanson has been non-executive Chairman of the Board of the
 Company since November 23, 1994 and served as Chief Executive Officer from
 October 1996 to February 1997.  He also serves as Chairman of the Board of
 RKS, Inc., an investment and marketing consulting firm in Phoenix, Arizona. 
 He also serves as a director of American Southwest Concepts, Inc. and
 Arizona Desert Saguaro Inc.  He was Chairman and Chief Executive Officer of
 Del Webb Corporation, a diversified company located in Phoenix, Arizona,
 engaged in the management and development of real estate and leisure
 operations, from 1981 to 1987, when he retired from that position.
 
 
     Richard L. Wendt                   Age: 66
 
     Mr. Wendt has been Chairman of the Board of JELD-WEN, inc., a window,
 door and millwork manufacturer headquartered in Klamath Falls, Oregon since
 1965.  Mr. Wendt has been a director of the Company since February 1997 when
 he was appointed by the Board of Directors to fill a vacancy on the Board of
 Directors.
 
 
     Lawrence V. Wetter            Age: 63
 
 Mr. Wetter has been a Vice Chairman of JELD-WEN, inc. since 1992.  Mr.
 Wetter has been a Director of the Company since February 1997 when he was
 appointed by the Board of Directors to fill a vacancy on the Board of
 Directors.
 
 
 
     Dr. Abraham Zaleznik               Age: 73
 
     Dr. Zaleznik is Professor of Leadership Emeritus at Harvard Business
 School and has been a business and government consultant since 1990.  He
 also serves as Chairman of the Board of King Ranch Inc., and as a director
 of Ogden Corp., Ardco Inc., Timberland Co., Freedom Communication Inc.,
 American Greetings Corporation and Butcher Inc.  Dr. Zaleznik was a director
 of the Company from 1987 to 1994 and rejoined the Board as a director in
 December 1996 when he was appointed by the Board of Directors to fill a
 vacancy on the Board of Directors.
 .
     The above elections and appointments to the Board of Directors of the
 Company are effective until successor directors are elected and qualified. 
 The Company anticipates that the Board of Directors will call a meeting of
 the stockholders of the Company when practicable to elect directors and vote
 upon certain other matters.  Messrs. Schnormeier, Wendt and Wetter were
 appointed to the Board of Directors pursuant to the Registrant's loan
 agreement with G.D.I. Company, Inc., which agreement was filed as an exhibit
 to the Registrant's Form 8-K dated March 1997.  Under that agreement the
 Registrant agreed to use its best efforts to elect Messrs. Schnormeier,
 Wendt and Wetter to the Board and, as long as the loan under the agreement
 is outstanding, to include the JELD-WEN nominees among the nominees for its
 seven member Board of Directors for whom proxies are solicited by the
 Registrants' proxy material for Annual Meetings of Stockholders.
 
 
 
 
                                     3

<PAGE>  4

     (b)  Identification of Executive Officers
 
     Seymour Kroll                 Age: 69
 
     Mr. Kroll has been President and Chief Executive Officer of the
 Company since February 1997.  He was President of Sugarcreek Window and Door
 Company of Ann Arbor, Michigan from May 1995 to February 1997 and from 1992
 to 1994 was President of Acorn Window Systems, Inc. of Quincy, Michigan.
 
     Thomas A. Ford                Age: 40
 
     Mr. Ford has been Executive Vice President and Chief Operating Officer
 since February 7, 1997.  Prior to that time he was President of the
 Company's Mr. 2nd's Bargain Outlet Division, a position held since December
 8, 1996.  From 1994 through such date he was Divisional Vice President and
 General Manager of the Bargain Outlet Division, and from 1992 to 1994 he was
 Vice President of Operations in the Company's Eastern Division.  Mr Ford has
 been employed by the Company in a variety of operational positions since
 1973.
 
     Richard E. Kent                    Age: 68
 
     Mr. Kent has been Vice President, Secretary and General Counsel of the
 Company for more than five years and has been with the Company 26 years.
 
     Arthur S. Ryan                Age: 52
 
     Mr. Ryan has been Vice President and Treasurer of the Company since
 December 1994 and was Vice President - Taxes for more than three years prior
 to December 1994.  He has been with the Company 9 years.
 
     Steven L. Shapiro                  Age: 39
 
     Mr. Shapiro has been Vice President - Controller of the Company since
 September 1995, was Controller from 1993 to 1995 and prior to that time was
 Assistant Controller.  He has been with the Company 12 years.
  
     (c)  Identification of Certain Significant Employees
 
          Not applicable
 
     (d)  Family Relationships
 
          Not applicable
 
     (e)  Business Experience
 
     The business experience of each director of the Company is set forth
 in Item 10(a) hereof, "Identification of Directors", and the business
 experience of each executive officer of the Company is set forth in Item
 10(b) hereof, "Identification of Executive Officers".
 
     (f)  Involvement in certain Legal Proceedings
 
          None
 
     (g)  Promoters and Control Persons
 
          Not applicable
 
                                     4


<PAGE>  5

Item 11.  EXECUTIVE COMPENSATION
 
                                     
 COMPENSATION OF EXECUTIVE OFFICERS
 
     The following table sets forth information with respect to
 compensation for services to the Company in 1996 paid to or accrued on
 behalf of (i) all persons serving as the chief executive officer during
 1996, and (ii) each of the four most highly compensated executive officers
 of the Company, other than the chief executive officer, as of December 31,
 1996 (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>

                                                  Long Term
                                    Annual       Compensation(1)
       Name and                  Compensation    ------------
       Principal               -----------------    Option     All Other
       Position          Year   Salary    Bonus    Awards #   Compensation(5)
 ----------------------  ----  --------  -------   --------   ---------------
 <S>                     <C>   <C>       <C>        <C>           <C>
 Robert K. Swanson(2)    1996  $   -0-   $75,000    500,000       $172,000
 Chairman of the         1995      -0-       -0-     75,000         88,000
 Board of Directors      1994      -0-       -0-        -0-         89,500
 
 Sydney L. Katz(3)       1996  306,154       -0-    200,000        506,967
 President and CEO       1995  400,000   234,000        -0-            520
                         1994  304,125              235,000            520
 
 Michael J. Shea(4)      1966  175,000    40,000        -0-            520
 Executive Vice          1995   58,333    15,000     80,000            -0-
 President/CFO           1994      -0-       -0-        -0-            -0-
 
 Thomas A. Ford          1996  150,000    76,800    100,000            520
 Executive Vice Pres.    1995  144,167    40,500        -0-            520
 and Pres., Bargain      1994  127,529       -0-     35,000            520
 Outlet Division
 
 Richard E. Kent         1996  167,700       -0-        -0-            520
 Vice President          1995  167,700       -0-        -0-            520
 Secretary General       1994  164,450       -0-      8,000            520
 Counsel
 
 Arthur S. Ryan          1996  145,000    20,000        -0-            520
 Vice President          1995  142,500       -0-        -0-            520
 and Treasurer           1994  133,812       -0-      8,000            520
 
</TABLE>

<F1>
 (1) In addition Mr. Swanson was awarded 100,000 shares and Mr. Katz was
 awarded 200,000 shares of Common Stock of the Company in 1996.  Named
 Executive Officers also received awards of Restricted Common Stock under the
 Company's Restricted Stock Plan, as follows:  Mr. Katz received 50,000
 shares in 1994 and 102,500 shares in 1995; Mr. Shea 10,000 shares in 1995;
 Mr. Ford 8,000 shares in 1995; Mr. Kent 5,000 shares in 1994 and Mr. Ryan
 10,000 shares in 1994.

<F2>
 (2) Mr. Swanson served as Chief Executive Officer from October 4, 1996 until
 February 7, 1997.  In accordance with Mr. Swanson's engagement agreement,
 the stock option granted on October 4, 1996 for 500,000 shares of the
 Company's Common Stock at an exercise price of $1.375 per share is subject
 to stockholder approval at the next Annual Meeting of Stockholders, and if 
 
 
 
 
                                     5


<PAGE>  6

 not so approved the Company is to pay Mr. Swanson 500,000 times the
 difference upon subtracting $1.375 from the market price for the Company's
 stock on the date of the meeting or December 31, 1997, whichever is higher.
 Mr. Swanson's compensation shown in the table includes compensation received
 as a director of the Company.

<F3> 
 (3) Mr. Katz served as Chief Executive Officer until October 4, 1996.  His
 retirement benefit is included under "all other compensation" in the table.

<F4> 
 (4) Mr. Shea was employed by the Company from September 1995 to March 1997.

<F5> 
 (5) "All Other Compensation" for the Named Executive Officers other than Mr.
 Swanson includes a $520 Company contribution under the Company's 401(k)
 Savings Plan.
 
      The table below sets forth the information with respect to options
 granted to the Named Executive Officers in 1996.  The options listed below
 are reflected in the Summary Compensation Table above.  No stock
 appreciation rights were granted by the Company in 1996.
 
<TABLE>
<CAPTION>
 
                         OPTION GRANTS IN LAST FISCAL YEAR
                                                                              
                                                              POTENTIAL
                               INDIVIDUAL GRANTS            REALIZABLE VALUE
                    --------------------------------------  AT ASSUMED ANNUAL
                              % OF                           RATES OF STOCK
                               TOTAL                       PRICE APPRECIATION
                              OPTIONS  EXERCISE             FOR OPTION TERM
                     OPTIONS    TO      PRICE   EXPIRATION ------------------
                     GRANTED EMPLOYEES  ($/SH)     DATE     5%    $ 10%     $
                     ------- --------- -------- ---------- ------- ----------
 <S>                 <C>       <C>      <C>      <C>       <C>     <C>
 Robert K. Swanson(1)500,000   36.5     $1.37    10/04/06  432,400 $1,095,700
 
 Sydney L. Katz....  200,000   14.6     $1.625   08/21/06  204,400 $  518,000
                                                                              
 Thomas A. Ford....  100,000    7.3     $1.625   08/21/06  102,200 $  259,000
 
</TABLE>

<F1>
 (1) The option to acquire 500,000 shares of the Company's stock is subject
 to stockholder approval; if not so approved his engagement agreement (see
 Employment and Other Agreements) provides for a cash payment equal to the
 number of shares times stock appreciation.
 
<TABLE>
<CAPTION>
 
                                   YEAR-END OPTION VALUES
 
                                       Number of         Value of Unexercised
                                        Options          In-the-Money Options
                  Shares           at December 31, 1996  at December 31, 1996
                 Acquired          --------------------- --------------------
                    on     Value    Exer-     Unexer-     Exer-       Unexer-
 Name            Exercise Realized  cisable   cisable     cisable     cisable
 --------------- -------- -------- --------- ----------- ----------   -------
 <S>                  <C>      <C>   <C>        <C>             <C>      <C>
 Thomas A. Ford       -        -     32,500     117,500         -         -
 Richard E. Kent      -        -     94,000       4,000         -         -
 Robert K. Swanson    -        -     30,000     545,000         -         -
 Arthur S. Ryan       -        -     49,000       4,000         -         -
 Michael J. Shea      -        -     20,000        -0-          -         -

</TABLE>
 
                                     6


<PAGE>  7

EMPLOYMENT AND OTHER AGREEMENTS
 
          The Company had an employment agreement dated December 1, 1994
 with Mr. Katz, providing for his employment as President of the Company for
 a three-year rolling term.  His annual base salary under the agreement was
 $400,000.  Upon termination without cause, the contract provided for a lump
 sum severance payment ("Severance Payment") equal to 300% of his base salary
 in effect at the time of such termination plus his target bonus for the
 current year (50% of base salary for 1996).  The agreement also provided for
 continued medical and other benefits for three years and additional
 severance in the event of termination following a "change of control."  In
 addition the agreement provided that his benefits under the Company's ERISA
 Excess Plan and Supplemental ERISA Excess Plan were to be computed on a
 final pay formula rather than a career average formula.  As of October 4,
 1996, Mr. Katz resigned from the offices of President and Chief Executive
 Officer and entered into a negotiated Retirement Agreement that terminated
 the employment agreement except for provisions preserving (i) the
 continuation of medical and other benefits for three years following
 termination, (ii) his right to  a "gross-up payment" in the event he is
 subject to a surtax on any excess parachute payment, (iii) his agreement not
 to disclose confidential information and (iv) his agreement not to compete
 with the Company for one year.  Under the  Retirement Agreement Mr. Katz
 received a payment of $506,447 and 200,000 shares of the Company's common
 stock on October 4, 1996.  He was due to receive payments of $356,445 plus
 accrued interest on January 3, and April 4, 1997, each; however such amounts
 have not been paid. 
 
     On October 5, 1996, Mr. Swanson was elected as Chief Executive Officer
 of the Company in addition to his continuing duties as Chairman of the Board
 of Directors.  The Company entered into an Amended and Restated Agreement
 ("Engagement Agreement") with Mr. Swanson providing, among other terms,
 for (i) continuation of his $15,000 annual retainer as a director, payable
 in stock, $2,000 per year in cash for service as Chairman of the Executive
 Committee, and $500 in cash for attending each meeting of the Board or any
 Board committee of which he is a member (ii) $1,000 in cash plus $1,000 in
 Company stock for each day up to a maximum of 150 days per calendar year for
 services rendered as Chief Executive Officer and Chairman of the Board of
 Directors, (iii) a stock option for 500,000 shares of common stock at an
 exercise price of $1.375 per share and (iv) the issuance to Mr. Swanson of
 100,000 shares of common stock.  The agreement also provided for stock
 bonuses based upon increases in stock values and severance upon termination
 by the Company without cause.  Mr. Swanson resigned as Chief Executive
 Officer effective February 7, 1997 and his Engagement Agreement was
 terminated; however, the Company agreed to continue to pay Mr. Swanson at
 the rate of $2,000 per day for services rendered as Chairman of the Board of
 Directors.
 
     Effective April 3, 1997 Mr. Swanson's prior agreements were restated
 to provide among other terms, for continuation of his compensation as a
 director, including attendance fees, plus $2,000 per day for up to 40 days
 from April 3, 1997 to July 7, 1997 and up to 60 days from July 8, 1997 to
 December 31, 1997.  The term of the restated agreement expires on the
 earlier of December 31, 1997 or the date upon which JELD-WEN or an affiliate
 sells or disposes of its position as a lender to the Company ("Termination
 Date").  In the event of termination by either the Company or Mr. Swanson
 prior to the Termination Date, Mr. Swanson will receive $200,000 less
 amounts previously paid as per diem compensation.
 
 
                                     7

<PAGE>  8

     Thomas E. Arnold had a consulting agreement with the Company, dated
 February 16, 1996, to raise capital from borrowings secured by or proceeds
 from the sale of the Eastern Division stores.  The Company paid Mr. Arnold a
 retainer of $15,000 and if he had been successful, a success fee of 2 1/2%
 of the funds received by the Company would have been payable.  In addition
 on April 15, 1997 the Company engaged Mr. Arnold to supervise the Company's
 Chapter 11 proceeding at a rate of $2,000 per day plus certain other
 benefits to be incorporated into an agreement, which will be subject to
 approval by the Bankruptcy Court.  No fees, other than the $15,000 retainer,
 were paid to Mr. Arnold for consulting services in 1996.
 
     Mr. Shea left the Company on March 3, 1997.  He had an Amended and
 Restated Employment and Severance Agreement dated December 12, 1996 that
 provided for a lump sum severance payment equal to his annual base salary of
 $200,000  upon termination by the Company and 200% of such amount upon
 termination following certain events.  In addition, he had been awarded a
 bonus of 10,000 shares of the Company's common stock subject to a restricted
 stock agreement dated in November 1995.  The restricted stock agreement
 provided for forfeiture of the stock in the event he resigned prior to April
 25, 1998 unless the Company agreed to waive such forfeiture.  Mr. Shea was
 also awarded a bonus of $40,000 on January 16, 1997 pursuant to an agreement
 to repay such amount if he left the employment of the Company prior to May
 30, 1997.  Neither the 10,000 shares of the Company's stock nor the $40,000
 bonus has been returned to the Company; however, the Company has withheld
 certain amounts otherwise due to Mr. Shea to partially off-set such amounts
 and other obligations due by Mr. Shea to the Company.
 
     The Company also awarded bonuses to Messrs. Ford and Ryan on January
 16, 1997 in the amounts of $76,800 and $20,000, respectively pursuant to
 agreements providing for forfeiture of such amounts in the event they leave
 the employment of the company before May 30, 1997.  Mr. Ryan also has been
 advised by the Company that he will receive his normal severance (annual
 salary plus bonus) in a lump sum payment plus an additional amount equal to
 his target bonus ($36,250) if he does not leave the Company prior to
 December 31, 1997.  In addition he was advised that the Company would
 continue his medical and certain other benefits for six months following an
 involuntary termination.
 
     The Company has an employment agreement with Mr. Kent providing for
 his employment for a two-year rolling term.  Mr. Kent's minimum salary under
 his agreement $167,700.  In addition, upon involuntary termination without
 cause he would be entitled to severance equal to his annual salary plus any
 bonus received within the preceding 12-month period.  Upon such a
 termination or a constructive termination, following a change in control, he
 would be entitled to 200% of the greater of (i) his annual salary plus any
 bonus received within the preceding 12 months and (ii) the average of his
 annual base salary plus bonuses paid during the preceding three years.
 
 
 COMPENSATION OF DIRECTORS
  
          Pursuant to the 1995 Directors Stock and Option Plan, each director
 who is not an employee of the Company receives, as an annual fee payable in
 Common Stock of the Company having an equivalent market value on the date of
 issuance of $15,000.  In addition, each such new Director receives a
 nonqualified stock option to purchase 25,000 shares of the Company's Common 
 
 
 
                                     8


<PAGE>  9

 Stock at an exercise price equal to the fair market value of such stock on
 the date the option is granted.  Each option is immediately exercisable as
 to 5,000 shares and will become exercisable to the extent of an additional
 5,000 shares on each of the four succeeding anniversaries of the date the
 option is granted.  The options expire ten years from the date of the grant. 
 
     In addition, each director who is not an employee of the Company
 receives an attendance fee of $500 for each meeting at which he is present
 in person and $200 for each telephonic meeting lasting more than one hour. 
 The Chairman of each committee of the Board of Directors receives an annual
 fee of $2,000.  Each member of a committee (other than an employee of the
 Company) receives an attendance fee of $500 for each meeting at which he is
 present in person and $200 for each telephonic meeting lasting more than one
 hour.  Directors are reimbursed for expenses incurred in performing their
 duties.
   
     Mr. Swanson was elected non-executive Chairman of the Board of
 Directors on November 23, 1994.  In connection with such election, Mr.
 Swanson entered into a consulting agreement with the Company.  Pursuant to
 this agreement, in 1995 Mr. Swanson received a one-time grant of an option
 covering 50,000 shares of the Common Stock of the Company  Prior to his
 agreement effective October 5, 1996 (see above under "Employment and Other
 Agreements"), Mr Swanson received for each day that he worked on the affairs
 of the Company, up to a maximum of 90 days per calendar year, shares of
 Common Stock of the Company having a fair market value on the last day of
 each calendar quarter equal to $1,000 and $1,000 in cash.  He received
 $136,000 and 176,152 shares of Common Stock of the Company for services in
 1996 in addition to the 100,000 shares received upon becoming Chief
 Executive Officer in October 1996.
 
 
 Item 12. OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  
 MANAGEMENT AND DIRECTORS
 
     The following table sets forth the beneficial ownership, reported to
 the Company as of March 30, 1997, of Common Stock of the Company, including
 shares as to which the right to acquire ownership exists by the exercise of
 stock options, within the meaning of Rule 13d-3 under the Securities
 Exchange Act of 1934 (the "Exchange Act"), of each director, the current
 chief executive officer, each of the "Named Executive Officers" as defined
 above under "Compensation of Executive Officers," and all directors and
 executive officers as a group.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                    9


<PAGE>  10

<TABLE>
<CAPTION>

                                             Number of Shares of  Percent of
 Name                                         Common Stock (1)(3)  Class (2)
 -------------------------------------------  -------------------  ---------
 <S>                                                 <C>             <C>
 Thomas E. Arnold, Jr.......................         19,873            *
 Russell N. Cox.............................         30,440            *
 Thomas A. Ford.............................         42,500            *
 Sydney L. Katz.............................         --0---
 Richard E. Kent............................         97,000            *
 Seymour Kroll..............................         --0---            *
 Arthur S. Ryan.............................         63,100            *
 Theodore H. Schnormeier....................         39,047            *   
 Michael J. Shea............................         --0---
 Robert K. Swanson..........................        525,296           1.8%
 Richard L. Wendt...........................      3,147,200          10.0%
 Lawrence V. Wetter.........................         39,047            *
 Dr. Abraham Zaleznik.......................         30,873            *
 
 All of the directors and executive officers
 as a group (13 persons) ................         4,034,376          13.0%
 
</TABLE>

 Information with respect to stock ownership has been furnished by the
 persons named or reported by reference to filings with the Securities and
 Exchange Commission, except with respect to Messrs. Katz and Shea, whose
 holdings are based solely upon ownership of record (see also "Employment and
 other Agreements")

<F1> 
 (1) The persons named have sole voting and investment power with respect 
 to shares listed.

<F2> 
 (2) Asterisks indicate beneficial ownership of less than 1% of the
 outstanding Common Stock.

<F3> 
 (3) Stock beneficially owned includes the following shares which may be
 acquired upon the exercise of options within 60 days of March 31, 1997, as
 follows: Mr. Arnold -- 5,000 shares; Mr. Cox -- 10,000 shares;  Mr. Ford --
 34,000 shares;  Mr. Kent -- 95,000 shares; Mr. Ryan --50,000 shares; Mr.
 Schnormeier -- 5,000 shares;  Mr. Swanson -- 30,000 shares;  Mr. Wendt --
 5,000 shares; Mr. Wetter -- 5,000 shares;  Dr. Zaleznik -- 5,000 shares; and
 the group -- 235,000 shares.  Not included are shares which may be acquired
 upon the exercise of options which are not presently exercisable by May 31,
 1997 as follows:  Mr. Arnold 20,000 shares; Mr. Cox 15,000 shares; Mr. Ford
 115,000 shares; Mr. Kent --  3,000 shares;  Mr. Ryan 3,000 shares; Mr.
 Swanson --545,000 shares; Messrs. Schnormeier, Wendt, Wetter Zaleznik 20,000
 shares each; and the group -- 781,000 shares.

<F4>                              
 (4) The percentage of outstanding Common Stock held by all directors and
 executive officers as a group has been calculated on the basis of 27,978,074
 shares of Common Stock outstanding on March 30, 1997, plus 742,000 shares of
 Common Stock subject to stock options exercisable by May 31, 1997 held by
 such group.

<F5> 
 (5)  Mr. Katz resigned as President and Chief Executive Officer of the
 Company on October 4, 1996 and Mr. Shea, Executive Vice President and Chief
 Financial Officer of the Company, left the Company on March 3, 1997 (See
 Employment and Other Agreements).
 
 
 
 
                                     10


<PAGE>  11

RETIREMENT PLANS
  
      The Company has a non-contributory defined benefit pension plan (the
 "Pension Plan"), which covers substantially all of its employees and an
 ERISA Excess Plan (the "EEP"), to preserve certain benefits for employees
 whose retirement benefits under the Pension Plan are affected by limitations
 imposed by the Internal Revenue Code.
 
     The following table shows the estimated annual benefits payable upon
 retirement at age 65 under the Pension Plan as supplemented by the EEP for
 services performed and compensation earned through December 31, 1996 on a
 100% straight-life annuity basis to persons in specified remuneration and
 years-of- service classifications.  The straight-life annuity benefit is
 approximately 110% of the 10-year certain benefit.  Such benefits reflect a
 reduction for annual earnings below $21,800 in 1997 to recognize in part the
 Company's cost of Social Security benefits related to credited service under
 the Pension Plan.
 
<TABLE>
<CAPTION>
 
                                        Years of Service
    Annual       ----------------------------------------------------------
 Compensation    10 Years  15 Years  20 Years  25 Years  30 Years  35 Years
 ------------    --------  --------  --------  --------  --------  --------
 <S>             <C>       <C>       <C>       <C>       <C>       <C>
 $   50,000      $  6,103  $  8,681  $ 11,310  $ 13,938  $ 16,567  $ 19,195
    100,000        12,844    18,275    23,807    29,338    34,870    40,401
    150,000        19,584    27,869    36,304    44,738    53,173    61,608
    200,000        26,325    37,463    48,801    60,138    71,476    82,814
    250,000        33,066    47,056    61,297    75,539    89,780   104,021
    300,000        39,807    56,650    73,794    90,939   108,083   125,227
    350,000        46,547    66,244    86,291   106,339   126,386   146,434
    400,000        53,288    75,838    98,788   121,739   144,689   167,640
    500,000        66,770    95,025   123,782   152,539   181,296   210,053
    600,000        80,251   114,213   148,776   183,339   217,903   252,466
    700,000        93,733   133,401   173,770   214,140   254,509   294,879
    800,000       107,214   152,588   198,764   244,940   291,116   337,292
    900,000       120,696   171,776   223,758   275,740   327,722   379,704
  1,000,000       134,177   190,963   248,752   306,540   364,329   422,117

</TABLE>
                 
 
 Reference earnings ("Reference Earnings") covered by the Pension Plan, and
 EEP include all direct compensation payments, including overtime, bonuses,
 commissions and similar payments.  Reference Earnings for any year are
 determined by reference to payments made during the year, whereas
 compensation set forth in the Summary Compensation Table is determined by
 reference to payments, whether made during the year or thereafter, for
 services during the year.  In 1996, Reference Earnings for the Named
 Executive Officers were substantially (within a 10% variance) the same as
 the annual compensation (salary and bonus) reported in the Summary
 Compensation Table.
  
     Benefits are based upon the average of the highest five of the last 
 ten years for service prior to 1991 and upon annual reference earnings for
 each year thereafter.  The Summary Compensation Table does not include the
 value of retirement benefits earned in 1996.
 
 
 
 
 
                                     11


<PAGE>  12

     As of December 31, 1996 the years of credited service for the employees
 named in the Cash Compensation Table above were:  Sydney L. Katz, 13 years,
 Thomas A. Ford, 23 years, Richard E. Kent, 26 years and Arthur S. Ryan, 9
 years.  For purposes of the portion of the Pension Plan formula determined
 on a final average pay basis for service prior to 1991, supplemented by the
 EEP, the covered compensation for service prior to 1991 of Messrs. Ford,
 Kent and Ryan are $75,060, $184,823, and $105,791, respectively.  Mr. Kent
 received  lump sum benefits under the Pension Plan at age 65 in each of 1994
 and 1995 and has not accrued any additional benefit since 1995.  Mr. Katz is
 entitled to a retirement benefit computed on a final average pay basis for
 his entire credited service.  Mr. Shea does not have any vested benefit
 under the plan.
 
 
                     REPORT OF COMPENSATION COMMITTEE
  
 BASE SALARIES
  
     Base salaries for new executive officers are determined by evaluating
 the responsibilities of the position and the experience of the individual,
 with reference to the marketplace for executive talent, including a
 comparison to base salaries for comparable positions with other
 corporations.  Annual salary adjustments are determined by evaluating the
 performance of the Company and of each executive officer with consideration
 to any new responsibilities of such officer.  In the case of corporate
 officers with responsibility for operating divisions, the financial results
 of the division are considered in the context of economic and competitive
 factors.  The Committee also grants appropriate consideration to such
 non-financial performance measures as the quality of work, business
 relationships and operational efficiency.
  
  
 ANNUAL BONUS
  
      The Company's executive officers are eligible for an annual cash 
 bonus awarded by reference to an operating income plan for the Company and,
 where appropriate, for a division of the Company.  Target bonus levels for
 all executives, including the President, are periodically evaluated by the
 Committee to ensure that they represent competitive pay opportunities for
 comparable executives in the retail industry.  In 1996, such target
 percentage rates ranged from 25% to 50% for executive officers of the
 Company, with Mr. Katz assigned a 50% opportunity.  Bonuses for executive
 officers are awarded as a percentage of the target bonus, ranging in 1996
 from 0% to 200% of the target bonus upon achievement of scaled percentages
 of the applicable operating income plan for the last three quarters of the
 year.
  
      In 1996, the Company did not achieve its corporate operating income
 plan, however, bonuses were paid to certain executive officers, including
 certain Named Executive Officers, in recognition of strong performance, and
 contributions to the Company during a difficult year.  Special bonus awards
 are considered by the Company to be non-recurring and outside the criteria
 typically utilized in considering pay competitiveness.
 
 
 
 
 
 
                                    12


<PAGE>  13
 
 STOCK OPTIONS
  
      Under the Company's 1986 Nonqualified Stock Option Plan, as amended,
 stock options are granted from time to time to key employees, including
 executive officers, of the Company.  The Committee sets guidelines for the
 size of stock option awards based upon competitive practice, base salary and
 other factors, including contributions to initiatives adopted by the Company
 to increase stockholder value, similar to the factors considered in setting
 base salary.
 
      Stock options are designed to align the interests of executives with
 those of the stockholders, as part of the compensation objectives of the
 Company.  Stock options are granted with an exercise price equal to the
 market price of the Company's common stock on the date of grant.  The
 options generally vest over four years.  Accordingly, the full benefit of
 the options is realized only when stock price appreciation occurs over an
 extended period.
  
      The Committee has endeavored to motivate executives by granting 
 options that present executives an opportunity for significant gains
 commensurate with gains in stockholder values.  Options for an aggregate of
 1,022,500 shares were granted in 1996.  The only stock options granted to
 Named Executive Officers in 1996 were granted in August 1996 to Mr. Katz for
 200,000 shares and to Mr. Ford for 100,000 shares at an exercise price of
 $1.625 per share and in October 1996 to Mr. Swanson for 520,000 shares at
 $1.375 per share, which option, however, is subject to stockholder approval. 
 The grant to Mr. Katz was immediately exercisable.
 
  The Plan expired in September 1996, and no further options may be granted
 under the plan.
  
      In 1995, the Company also adopted the 1995 Restricted Stock Plan 
 whereby awards of Common Stock will be issued to officers and key employees
 as an incentive to increase the profitability of the Company.  In 1996, the
 Board of Directors approved awards under the Plan for an aggregate of 21,000
 shares of Common Stock to key employees, executive officers did not receive
 any shares under the Plan in 1996.
  
 CONCLUSION
  
      The programs described above correlate a significant portion of the
 Company's executive compensation to individual and corporate performance and
 stock price appreciation.  During 1996 the Compensation Committee was
 composed of Russell Cox, John R. Grey, and Stephen Oresman until June of
 1996 when Mr. Oresman resigned as a director.  He was replaced on the
 Committee by Leo Kahn and in February 1997 the Committee was reconstituted.
 
      The Company does not have an Option Plan for corporate and divisional
 officers.  The Company has considered an omnibus plan for incentive awards,
 but further consideration has been deferred until the Company's financial
 recovery is confirmed.
  
            The Compensation Committee
  
            Richard L. Wendt, Chairman
            Larry V. Wetter
            Dr. Abraham Zaleznik
 
 
                                     13


<PAGE>  14

PRINCIPAL STOCKHOLDERS
  
      The following table sets forth the name and address of the only 
 persons known to the Company to beneficially own more than 5% of the Common
 Stock as of March 31, 1997, the number of shares beneficially owned and the
 percentage so owned:

<TABLE>
<CAPTION>
  
    NAME AND ADDRESS OF        SHARES BENEFICIALLY           PERCENT OF
     BENEFICIAL OWNER                 OWNED              OUTSTANDING SHARES
 -------------------------     -------------------     --------------------
 <S>                               <C>                          <C>
 Richard L. Wendt                  3,147,200                    11%
 3250 Lakeport Blvd.
 Klamath Falls, OR  97601
 
 
 Merrill Lynch & Co., Inc.         2,284,000                     8
 World Financial Center, 
 North Tower
 250 Vesey Street
 New York, NY  10281
 
 Pioneering Management Corp.       2,235,000                     8
 60 State Street
 Boston, MA  02109
 
</TABLE>

 
              CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
      On April 7, 1997 the Company and two of its subsidiaries filed
 voluntary petitions in the United States District Court for the District of
 Delaware for debtor-in-possession reorganization under Chapter 11 of the
 Bankruptcy Code.
 
      The Bankruptcy Court has approved debtor-in-possession financing by
 G.D.I. Company, Inc.  to fund the Company's operations through the Chapter
 11 proceeding.  The financing is described in the Company's report on Form
 8-K, dated April 22, 1997, which is incorporated herein by reference.
 
      The Company purchases windows from Wenco Industries, Inc. ("Wenco"), a
 major manufacturer of windows and doors and an affiliate of Richard L.
 Wendt, JELD-WEN, inc. and G.D.I. Company Inc.  In 1996 purchases of
 approximately $7.5 million were made at prices competitive in the market. 
 The terms of the transactions have been at least as favorable as those that
 would have been obtained from unaffiliated third parties.  The Company
 continues to purchase windows from Wenco on such competitive terms, and is
 negotiating a product supply agreement with JELD-WEN.
   
 
 
 
 
 
 
 
 
 
 
 
                                     14

<PAGE>  15

Part IV
 
 Item 14c.  EXHIBITS
 
 
 Exhibit 
 Number
 
 10(iii)(o)-3  Second Amended and Restated Agreement, dated April 3, 1997
               between Grossman's Inc. and Robert K. Swanson, filed
               herewith.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                     15


<PAGE>  16

                              SIGNATURES
 
 Pursuant to the requirements of Section 13 or 15(d) of the Securities
 Exchange Act of 1934, the Company has duly caused this report to be signed
 on its behalf by the undersigned thereunto duly authorized.
 
                                           GROSSMAN'S INC.
                                               Company
 
 Date:  April 30, 1997              By /s/ Steven L. Shapiro               
                                       ------------------------------
                                       Steven L. Shapiro
                                       Vice President - Controller
                                       (Principal Accounting Officer)         
                       
 Pursuant to the requirements of the Securities Exchange Act of 1934, this
 Report has been signed below by the following persons on behalf of the
 Company and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
 
       Signature                    Title                        Date     
       ---------                    -----                        ----
 <S>                             <C>                           <C> 
 /s/ Robert K. Swanson           Chairman of the Board         April 30, 1997
 -----------------------------
 Robert K. Swanson
 
 /s/ Seymour Kroll               President and Chief           April 30, 1997
 -----------------------------   Executive Officer          
 Seymour Kroll                   (Principal Executive 
                                 Officer) 
 
 /s/ Steven L. Shapiro           Vice President - Controller   April 30, 1997
 -----------------------------   (Principal Accounting 
 Steven L. Shapiro               Officer)
 
 
 /s/ Thomas E. Arnold, Jr.   
 -----------------------------   Director                      April 30, 1997
 Thomas E. Arnold, Jr.
 
 /s/ Russell Cox                 Director                      April 30, 1997
 -----------------------------
 Russell Cox
 
 /s/ Theodore H. Schnormeier     Director                      April 30, 1997
 -----------------------------
 Theodore H. Schnormeier
          
 /s/ Richard L. Wendt            Director                      April 30, 1997
 -----------------------------
 Richard L. Wendt                             
 
 /s/ Larry V. Wetter             Director                      April 30, 1997
 -----------------------------
 Larry V. Wetter
 
 /s/ Dr. Abraham Zaleznik        Director                      April 30, 1997
 -----------------------------
 Dr. Abraham Zaleznik
                                    16

</TABLE>