UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended June 28, 1997                      Commission File No. 0-12375


                       PEACHES ENTERTAINMENT CORPORATION
             (Exact Name of Registrant as Specified in Its Charter)


         Florida                                       59-2166041
(State or Other Jurisdiction of                  (I.R.S. Employer I.D. No.)
 Incorporation or Organization)


1180 E Hallandale Beach Blvd., Hallandale, FL            33009
 (Address of Principal Executive Offices)              (Zip Code)


Registrant's telephone number, including area code: (954) 454-5554


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  registrants  were
required  to file  such  reports),  and  (2)  has  been  subject  to the  filing
requirements for at least the past 90 days.


                         YES   _X_       NO ___


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


At June 28, 1997, there were outstanding:


39,781,270 shares of common stock


<PAGE>


                        PEACHES ENTERTAINMENT CORPORATION

                                      Index


PART I. FINANCIAL INFORMATION

   Item 1.  Financial Statements

     Condensed Balance Sheets-June 28, 1997
     (Unaudited) and March 29, 1997                                        3

     Condensed Statements of Operations and Retained
     Deficit-Three Months Ended June 28, 1997 and June 29,                 4
     1996 (Unaudited)

     Condensed Statements of Cash Flows-Three Months Ended
     June 28, 1997 and June 29, 1996 (Unaudited)                           5

     Notes to Condensed Financial Statements                               6

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

PART II. OTHER INFORMATION

    Item 6.  Exhibits and Reports on Form 8-K                             10

SIGNATURES                                                                11


                                      -2-
<PAGE>


                         PART I - FINANCIAL INFORMATION
                          Item 1. Financial Statements

                       PEACHES ENTERTAINMENT CORPORATION

                            Condensed Balance Sheets

                        June 28, 1997 and March 29, 1997

                                                       June 28,       March 29,
                                 Assets                   1997           1997
                                 ------                   ----           ----
                                                       (unaudited)

Current assets:
  Cash and cash equivalents                             $1,256,156     1,456,070
  Inventories                                            2,904,024     2,855,494
  Prepaid expenses and other current assets                135,358       260,008
                                                        ----------    ----------
          Total current assets                           4,295,538     4,571,572

Property and equipment, net                              1,395,285     1,439,731
Other assets                                               159,246       158,762
                                                        ----------    ----------

                                                        $5,850,069     6,170,065
                                                        ==========    ==========

                  Liabilities and Shareholders' Equity
                  ------------------------------------

Current liabilities:
  Current portion of long-term obligations               730,726        730,239
  Accounts payable                                     1,619,788      1,371,869
  Accrued liabilities                                    732,848        956,005
                                                     -----------    -----------
          Total current liabilities                    3,083,362      3,058,113

Long-term obligations                                  1,227,866      1,337,190
Due to parent                                            719,687        704,813
Deferred rent                                            144,798        156,036
                                                     -----------    -----------
          Total liabilities                            5,175,713      5,256,152
                                                     -----------    -----------

Shareholders' equity:
  Preferred stock, $100 par value; 50,000 shares
  authorized; 5,000 shares issued and outstanding        500,000        500,000
  Common stock subscribed (20,000,000 shares)            350,000        350,000
  Common stock, $.01 par value; 40,000,000 shares
   authorized; 19,889,120 shares issued                  198,892        198,892
  Additional paid-in capital                           1,284,471      1,284,471
  Retained deficit                                   (1,639, 227)    (1,399,670)
                                                     -----------    -----------
                                                         694,136        933,693

Treasury stock, 107,850 common shares, at cost           (19,780)       (19,780)
                                                     -----------    -----------
          Total shareholders' equity                     674,356        913,913

Commitments and contingencies

                                                     $ 5,850,069      6,170,065
                                                     ===========    ===========


See accompanying notes to condensed financial statements.


                                      -3-
<PAGE>


                        PEACHES ENTERTAINMENT CORPORATION

             Condensed Statements of Operations and Retained Deficit

               Three months ended June 28, 1997 and June 29, 1996
                                   (Unaudited)


                                                       June 28,      June 29,
                                                         1997          1996
                                                         ----          ----
                                                            (Unaudited)

Net sales                                            $ 4,124,351      4,305,821
                                                     -----------    -----------

Costs and expenses:
     Cost of sales                                     2,553,090      2,824,152
     Selling, general and administrative expenses      1,628,010      1,836,059
     Depreciation and amortization                        65,700         74,366
                                                     -----------    -----------
                                                       4,246,800      4,734,577
                                                     -----------    -----------
          Loss from operations                          (122,449)      (428,756)
                                                     -----------    -----------

Other (expense) income:
     Interest expense                                    (60,651)       (18,613)
     Interest income                                       2,543         14,012
                                                      -----------   -----------

                                                         (58,108)        (4,601)
                                                     -----------    -----------

          Loss before reorganization costs              (180,557)      (433,357)

Reorganization costs:
     Professional fees                                   (44,000)       (97,538)
                                                     -----------    -----------

          Net loss                                      (224,557)      (530,895)

Retained deficit, beginning of period                 (1,399,670)      (496,429)

Preferred stock dividend                                 (15,000)          --
                                                     -----------    -----------
Retained deficit, end of period                      $(1,639,227)    (1,027,324)
                                                     ===========    ===========

Net loss per common share                            $      (.01)          (.03)
                                                     ===========    ===========

See accompanying notes to condensed financial statements.



                                      -4-
<PAGE>




                        PEACHES ENTERTAINMENT CORPORATION
                       Condensed Statements of Cash Flows

               Three months ended June 28, 1997 and June 29, 1996
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                               June 28,      June 29,
                                                                 1997          1996
                                                                 ----          ----
                                                                           (Unaudited)
<S>                                                          <C>               <C>
Cash flows from operating activities:
     Net loss                                                $  (224,557)      (530,895)
                                                             -----------    -----------
     Adjustments to reconcile net loss to net cash used 
      in operating activities:
       Depreciation and amortization                              65,700         74,366
       Deferred rent                                             (11,238)          (863)
       Changes in assets and liabilities affecting
        cash flows from operating activities:
         (Increase) decrease in:
          Inventories                                            (48,530)       981,253
          Prepaid expenses and other current assets              124,650         77,699
          Other assets                                              (484)        19,757
       Increase (decrease) in:
          Accounts payable                                       247,919        325,613
          Accrued liabilities                                   (223,157)        27,795
          Liabilities subject to compromise                         --       (1,391,267)
                                                             -----------    -----------
          Net cash used in operating activities                  (69,697)      (416,542)
                                                             -----------    -----------
Cash flows from investing activities:
     Purchase of property and equipment                          (21,254)       (28,436)
                                                             -----------    -----------
          Net cash used in investing activities                  (21,254)       (28,436)
                                                             -----------    -----------
Cash flows from financing activities:
     Repayment of long-term obligations                         (108,837)       (39,507)
     Dividends paid                                              (15,000)          --
     Due to parent                                                14,874           --
                                                             -----------    -----------
          Net cash used in financing activities                 (108,963)       (39,507)
                                                             -----------    -----------
          Net decrease in cash and cash equivalents             (199,914)      (484,485)

Cash and cash equivalents, beginning of period                 1,456,070      1,917,566
                                                             -----------    -----------
Cash and cash equivalents, end of period                     $ 1,256,156      1,433,081
                                                             ===========    ===========
Supplemental disclosures of cash flow information:
     Cash paid during the period for interest                $    19,633         18,613
                                                             ===========    ===========

Supplemental schedule of non-cash operating and investing 
   activities relating to the reorganization:
     Liabilities subject to compromise, March 30, 1996                      $ 5,671,434
     Less: inventory returns for credit                                     (1,391,267)
                                                                            -----------
          Liabilities subject to compromise,
            June 29, 1996                                                   $ 4,280,167
                                                                            ===========
</TABLE>


See accompanying notes to condensed financial statements.


                                      -5-
<PAGE>


                       PEACHES ENTERTAINMENT CORPORATION

                    Notes to Condensed Financial Statements

(1)  Basis of Financial Statement Presentation

     The  accompanying   unaudited  condensed  financial  statements  have  been
     prepared in accordance with the  instructions to Form 10-Q and,  therefore,
     do  not  include  all  footnotes  and  information  necessary  for  a  fair
     presentation of financial position, results of operations and cash flows in
     conformity with generally accepted accounting  principles.  However, in the
     opinion of management, all adjustments (consisting only of normal recurring
     accruals) necessary for a fair presentation have been made.

     It  is  suggested  that  the  accompanying  unaudited  condensed  financial
     statements be read in conjunction  with the financial  statements and notes
     included in the Peaches  Entertainment  Corporation (the "Company")  annual
     report on Form 10-K for the year ended March 29, 1997.

     As of June 29, 1997,  the Company was an 93.5  percent-owned  subsidiary of
     URT Industries, Inc. (the "Parent").

     The results of operations for the three months ended June 28, 1997, are not
     necessarily indicative of the operating results to be expected for the year
     ending March 28, 1998.  The Company's  business is seasonal.  Historically,
     approximately  24 percent of the Company's sales have occurred in the first
     fiscal quarter.

     Inventories,  which consist of compact discs,  tapes and  accessories,  are
     stated at the lower of cost (principally average) or market.


     Certain  reclassifications  have been made to the (unaudited) June 29, 1996
     quarterly financial  information to conform to the presentation used in the
     (unaudited) June 28, 1997 financial information.

(2)  Reorganization and Emergence From Chapter 11

     On  January  16,  1996  (the  "Petition   Date"),   Peaches   Entertainment
     Corporation  commenced  reorganization  proceedings under Chapter 11 of the
     United  States  Bankruptcy  Code.  An amended  plan of  reorganization  was
     confirmed by the  Bankruptcy  Court on October 23, 1996 (the  "confirmation
     date"),  and became  effective  February  3, 1997 (the  "effective  date"),
     subject to satisfaction of certain conditions which were satisfied February
     19, 1997.  All of the allowed claims were either paid on the effective date
     or are  reflected in current and  long-term  obligations  in the  financial
     statements,  payable  primarily  over a two year period from the  effective
     date.  The mortgage  holder will receive 100 percent of the allowed  claim,
     with interest,  except the balloon payment was extended from September 1997
     to September 2002.

(3)  Loss Per Common Share

     Net loss per common share was computed by dividing net loss, less preferred
     stock  dividends,  by the weighted  average  number of total common  shares
     outstanding during the periods.


                                      -6-
                                                                     (Continued)
<PAGE>


                       PEACHES ENTERTAINMENT CORPORATION

                    Notes to Condensed Financial Statements


(4)  Income Taxes

The Company follows Statement of Financial Accounting Standard ("SFAS") No. 109,
Accounting for Income Taxes.  The Company files a  consolidated  tax return with
its Parent.  Any  applicable  tax charge or credits are  allocated on a separate
return  basis.  For the three month  period  ended June 28,  1997,  there was no
(benefit)  provision  for income  taxes as the  Company has net  operating  loss
carryforwards for federal income tax purposes.

(5)  New Accounting Pronouncements

                                                                              
In February 1997, the FASB issued  Statement of Financial  Accounting  Standards
No. 128, "Earnings Per Share" ("Statement 128").  Statement 128 is effective for
financial  statements  issued  for  periods  ending  after  December  15,  1997.
Statement 128  establishes  standards for computing and presenting  earnings per
share  ("EPS"),  simplifies  the  standards  previously  found  in APB  No.  15,
"Earnings Per Share," and makes them comparable to international  EPS standards.
The Company will begin disclosing EPS in accordance with Statement 128 beginning
with the year ended March 28, 1998.



                                      -7-
                                                                     (Continued)
<PAGE>


                       PEACHES ENTERTAINMENT CORPORATION


                                                                   
Item 2. Management's Discussions and Analysis of Financial Condition and Results
        of  Operations  for the Three Months  Ended June 28, 1997,  Compared to 
        the Three Months ended June 29, 1996.

From  time to  time,  the  Company  may make  certain  statements  that  contain
"forward-looking"  information (as defined in the Private Securities  Litigation
Reform  Act  of  1995).  Words  such  as  "believe,"  "anticipate,"  "estimate,"
"project" and similar expressions are intended to identify such  forward-looking
statements.  Forward-looking  statements may be made by management  orally or in
writing,  including,  but not  limited  to, in press  releases,  as part of this
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  and as a part of  other  sections  of this  Annual  Report  or other
filings.   Readers  are  cautioned   not  to  place  undue   reliance  on  these
forward-looking  statements,  which speak only as of their respective dates, and
are subject to certain risks, uncertainties and assumptions.  Should one or more
of these risks or  uncertainties  materialize,  or should any of the  underlying
assumptions prove incorrect, actual results of current and future operations may
vary materially from those anticipated, estimated or projected.

Results of Operations

Net sales for the three  months  ended June 28, 1997 (such three month period is
hereafter referred to as "1997") decreased by approximately 4.2 percent compared
to the three  months  ended June 29, 1996 (such three month  period is hereafter
referred to as "1996").  Such decrease is attributed to a decrease in comparable
store sales (4.2 percent).

The cost of sales for 1997 was lower  than  that for 1996 due  principally  to a
decrease in net sales.  Cost of sales as a percentage of net sales has decreased
from 65.6 percent in 1996 to 61.9 percent in 1997 primarily due to the fact that
the  Company  began to receive  discounts  associated  with  normal  trade terms
throughout  1997,  increases  in other  purchase  discounts  and an  increase in
certain retail selling prices.

Selling,  general and  administrative  (SG&A) expenses in 1997 decreased by 11.3
percent  compared  to 1996.  Such  decrease  is  attributable  to a increase  in
comparable  store expenses (5.3 percent),  and a decrease in corporate  overhead
(6.0  percent).  SG&A expenses as a percentage of net sales  decreased from 42.6
percent in 1996 to 39.5 percent in 1997 primarily due to overhead reductions.

Recently,  the Company's  primary suppliers have taken steps to help protect the
retail marketplace from certain low cost retailers of music. These steps include
not disbursing  cooperative  advertising  funds to retailers which engage in low
cost selling practices in violation of the minimum  advertised  pricing policies
of such suppliers.  Management  believes that such  initiatives,  in combination
with the other factors mentioned  immediately below,  should help the Company to
restore  itself to a  competitive  position in subsequent  fiscal  years.  Other
factors  which,  in  management's  opinion,  should  help the Company to restore
itself to a  competitive  position  in the  future  are the  closing  of the six
unprofitable  stores which were closed  during  1996,  the closing of the former
headquarters  and  warehouse,  the  termination of other  unprofitable  business
arrangements as described  herein and  concentration on advantages which PEC has
over certain of its  competitors,  including large  inventory,  convenient store
locations and a high level of customer  service,  which  includes the ability of
the customer to sample virtually all music before purchasing and an extremely
efficient special order program.

                                                                         
                                                                     (Continued)
                                      -8-

<PAGE>


                       PEACHES ENTERTAINMENT CORPORATION


The Company incurred a net loss of  approximately  $225,000 in 1997 versus a net
loss of approximately $531,000 in 1996. The significant reduction in net loss is
attributed  to the  success of the  Chapter  11  reorganization;  however,  such
success  was offset by  professional  fees  relating  to the  reorganization  of
$44,000.

Liquidity and Capital Resources

The Company  had  working  capital of  $1,212,176  at June 28, 1997  compared to
working  capital of  $1,513,459 at March 29, 1997 and a current ratio (the ratio
of total current  assets to total current  liabilities)  of 1.4 to 1 at June 28,
1997 compared to a current ratio of 1.5 to 1 at March 29, 1997.

At  June  28,  1997,  the  Company  had  long-term  obligations  of  $1,227,866.
Management  anticipates that its ability to repay its long-term obligations will
be satisfied primarily through funds generated from its operations.

Management  anticipates that cash generated from operations and cash equivalents
on hand will provide  sufficient  liquidity to maintain adequate working capital
for operations.  Management would attempt to obtain financing for the opening of
any new stores during the next few years.

Inflation trends have not had an impact upon revenue because  increases in costs
have been passed along to customers.

The  Company's  business  is  seasonal  in nature,  with the  highest  sales and
earnings  occurring in the third fiscal  quarter,  which  includes the Christmas
selling season.

For  a  discussion  of  recent  developments  and  uncertainties  affecting  the
Company's  liquidity and capital  resources,  see notes 2 and 3 to the financial
statements (Confirmation of Amended Plan of Reorganization) on Form 10-K for the
year ended March 29, 1997.

In February 1997, the FASB issued Statement of Financial Accounting Standard No.
128,  "Earnings  Per Share"  ("Statement  128").  Statement 128 is effective for
financial  statements  issued  for  periods  ending  after  December  15,  1997.
Statement 128  establishes  standards for computing and presenting  earnings per
share  ("EPS"),  simplifies  the  standards  previously  found  in APB  No.  15,
"Earnings Per Share," and makes them comparable to International  EPS Standards.
The Company will begin disclosing EPS in accordance with Statement 128 beginning
with the year ended March 28, 1998.

                                                                     (Continued)


                                      -9-
<PAGE>


                       PEACHES ENTERTAINMENT CORPORATION

                               OTHER INFORMATION



PART II

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits

               27.0 Financial Data Schedule

     (b)  Reports on Form 8-K

               None



                                                                            
                                                                     (Continued)


                                      -10-
<PAGE>


                       PEACHES ENTERTAINMENT CORPORATION

                                   SIGNATURES


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


                                    PEACHES ENTERTAINMENT CORPORATION
                                    Registrant


Date:  8/29/97                      /s/ Allan Wolk
                                    --------------------------------------------
                                    Allan Wolk, Chairman of the Board, President
                                    (Principal Executive Officer)  
                                    



Date:  8/29/97                      /s/ Jason Wolk
                                    --------------------------------------------
                                    Jason Wolk, Executive Vice President,
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)




                                      -11-