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 27, 1998                      Commission File No. 0-12375


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


           Florida                                            59-2166041
 (State or Other Jurisdiction                         (I.R.S. Employer I.D. No.)
of 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 27, 1998, 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 27, 1998 (Unaudited)
              and March 28, 1998                                               3

            Condensed  Statements of Operations and Retained
              Deficit-Three Months Ended June 27, 1998 and
              June 28, 1997 (Unaudited)                                        4

            Condensed Statements of Cash Flows-Three Months
              Ended June 27, 1998 and June 28, 1997 (Unaudited)                5

             Notes to Condensed Financial Statements                           6

  Item 2. Management's Discussion and Analysis of
            Financial Condition and Results of Operations                      8

PART II. OTHER INFORMATION

  Item 6.  Exhibits and Reports on Form 8-K                                   11

SIGNATURES                                                                    12


                                      - 2-

<PAGE>


                         PART I - FINANCIAL INFORMATION
                          Item 1. Financial Statements

                        PEACHES ENTERTAINMENT CORPORATION

                            Condensed Balance Sheets

                        June 27, 1998 and March 28, 1998

<TABLE>
<CAPTION>
                                     Assets
                                                               June 27,       March 28,
                                                                 1998           1998
                                                             -----------    -----------
                                                             (unaudited)
<S>                                                          <C>              <C>      
Current assets:
   Cash and cash equivalents                                 $   607,096      1,080,694
   Inventories                                                 2,535,148      2,433,433
   Prepaid expenses and other current assets                     205,753        308,419
                                                             -----------    -----------

         Total current assets                                  3,347,997      3,822,546

Property and equipment, net                                    1,431,922      1,349,732
Other assets                                                     186,031        180,925
                                                             -----------    -----------

                                                             $ 4,965,950      5,353,203
                                                             ===========    ===========

                      Liabilities and Shareholders' Equity

Current liabilities:
   Current portion of long-term obligations                      652,665        732,319
   Accounts payable                                            2,058,160      2,014,674
   Accrued liabilities                                           729,775        822,670
                                                             -----------    -----------

         Total current liabilities                             3,440,600      3,569,663

Long-term obligations                                            548,457        578,127
Due to Parent                                                    389,594        382,156
Deferred rent                                                     63,988         62,834
                                                             -----------    -----------

         Total liabilities                                     4,442,639      4,592,780
                                                             -----------    -----------

Shareholders' equity:
   Preferred stock, $100 par value; 50,000 shares
      authorized; 5,000 shares issued and outstanding            500,000        500,000
   Common stock, $.01 par value; 40,000,000 shares
      authorized; 39,781,270 shares issued                       397,813        397,813
   Additional paid-in capital                                  1,734,190      1,749,190
   Retained deficit                                           (2,108,692)    (1,886,580)
                                                             -----------    -----------

         Total shareholders' equity                              523,311        760,423
                                                            
Commitments and contingencies
                                                             -----------    -----------
                                                             $ 4,965,950      5,353,203
                                                             ===========    ===========
</TABLE>

See accompanying notes to condensed financial statements.


                                     - 3 -

<PAGE>

                        PEACHES ENTERTAINMENT CORPORATION

             Condensed Statements of Operations and Retained Deficit

                      Three months ended June 27, 1998 and
                            June 28, 1997 (Unaudited)


                                                       June 27,       June 28,
                                                         1998           1997
                                                     -----------    -----------
                                                                     (Unaudited)

Net sales                                            $ 3,869,760      4,124,351
                                                     -----------    -----------

Costs and expenses:
   Cost of sales                                       2,318,804      2,553,090
   Selling, general and administrative expenses        1,682,525      1,628,010
   Depreciation and amortization                          57,961         65,700
                                                     -----------    -----------

                                                       4,059,290      4,246,800
                                                     -----------    -----------

         Loss from operations                           (189,530)      (122,449)
                                                     -----------    -----------

Other (expense) income:
   Interest expense                                      (37,254)       (60,651)
   Interest income                                         4,672          2,543
                                                     -----------    -----------

                                                         (32,582)       (58,108)
                                                     -----------    -----------

         Loss before reorganization costs               (222,112)      (180,557)

Reorganization costs:
   Professional fees                                           -        (44,000)
                                                     -----------    -----------
         Net loss                                       (222,112)      (224,557)

Retained deficit, beginning of period                 (1,886,580)    (1,399,670)
                                                     -----------    -----------

Retained deficit, end of period                      $(2,108,692)    (1,624,227)
                                                     ===========    ===========

Basic and diluted loss per common share              $      (.01)          (.01)
                                                     ===========    ===========


See accompanying notes to condensed financial statements.




                                     - 4 -

<PAGE>


                        PEACHES ENTERTAINMENT CORPORATION
                       Condensed Statements of Cash Flows

               Three months ended June 27, 1998 and June 28, 1997
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                 June 27,       June 28,
                                                                   1998           1997
                                                               -----------    -----------
<S>                                                            <C>               <C>      
Cash flows from operating activities:
   Net loss                                                    $  (222,112)      (224,557)
                                                               -----------    -----------
   Adjustments to reconcile net loss to net cash used in
      operating activities:
      Depreciation and amortization                                 57,961         65,700
      Deferred rent                                                  1,154        (11,238)
      Changes in assets and liabilities affecting cash flows
         from operating activities:
            (Increase) decrease in:
               Inventories                                        (101,715)       (48,530)
               Prepaid expenses and other current assets           102,666        124,650
               Other assets                                         (5,106)          (484)
            Increase (decrease) in:
               Accounts payable                                     43,486        247,919
               Accrued liabilities                                 (92,895)      (223,157)
                                                               -----------    -----------

         Net cash used in operating activities                    (216,561)       (69,697)
                                                               -----------    -----------

Cash flows from investing activities:
   Purchase of property and equipment                             (140,151)       (21,254)
                                                               -----------    -----------

         Net cash used in investing activities                    (140,151)       (21,254)
                                                               -----------    -----------

Cash flows from financing activities:
   Repayment of long-term obligations                             (109,324)      (108,837)
   Dividends paid                                                  (15,000)       (15,000)
   Due to Parent                                                     7,438         14,874
                                                               -----------    -----------

         Net cash used in financing activities                    (116,886)      (108,963)
                                                               -----------    -----------

         Net decrease in cash and cash equivalents                (473,598)      (199,914)

Cash and cash equivalents, beginning of period                   1,080,694      1,456,070
                                                               -----------    -----------

Cash and cash equivalents, end of period                       $   607,096      1,256,156
                                                               ===========    ===========

Supplemental disclosures of cash flow information:
   Cash paid during the period for interest                    $    10,218         19,633
                                                               ===========    ===========
</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 28, 1998.

     As of June 27, 1998, the Company was a 93.5 percent-owned subsidiary of URT
     Industries, Inc. (the "Parent").

     The results of operations for the three months ended June 27, 1998, are not
     necessarily indicative of the operating results to be expected for the year
     ending April 3, 1999.  The Company's  business is seasonal in nature,  with
     the highest sales and earnings historically  occurring in the third quarter
     of its fiscal year, which includes the holiday selling season.

     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 28, 1997
     quarterly financial  information to conform to the presentation used in the
     (unaudited) June 27, 1998 financial information.

(2)  Earnings Per Share

     In December  1997,  the Company  adopted the  provisions  of  Statement  of
     Financial  Accounting  Standards No. 128,  "Earnings Per Share" ("Statement
     128"),  which  establishes  new  standards  for  computing  and  presenting
     earnings per share  ("EPS").  Earnings per share for all prior periods have
     been restated to reflect the provisions of this Statement.

     Basic and diluted  earnings  per share have been  computed by dividing  net
     loss,  less  preferred  dividends by the weighted  average number of shares
     outstanding during the period.



                                                                     (Continued)
                                     - 6 -

<PAGE>

                        PEACHES ENTERTAINMENT CORPORATION

                     Notes to Condensed Financial Statements

     Basic and diluted loss per share were calculated as follows:

                                                            Three months
                                                               ended
                                                       June 27,       June 28,
                                                         1998           1997
                                                     -----------    -----------

Basic and diluted:
   Net income (loss) less preferred dividends        $  (237,112)      (239,557)
                                                     ===========    ===========

   Weighted average shares                            39,781,270     39,781,270
                                                     ===========    ===========

Basic and diluted loss per share                            (.01)          (.01)
                                                     ===========    ===========

(3)  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 27, 1998,
     there was no (benefit) provision for income taxes as the Company has excess
     net operating loss carryforwards for federal income tax purposes.

(4)  New Accounting Pronouncements

     In June 1997, the FASB issued  Statement of Financial  Accounting  Standard
     No. 130, "Reporting  Comprehensive Income" ("Statement 130"). Statement 130
     establishes standards for the reporting and display of comprehensive income
     and its components in a full set of general  purpose  financial  statements
     and is effective for fiscal years  beginning  after  December 31, 1997. The
     adoption of Statement  130 did not have a material  impact on the Company's
     financial position, results of operations or cash flows.

     In 1997,  the FASB issued  Statement of Financial  Accounting  Standard No.
     131,  "Disclosure about Segments of an Enterprise and Related  Information"
     ("Statement  131").  Statement 131  establishes  standards for the way that
     public business  enterprises report information about operating segments in
     annual  financial  statements  and requires that these  enterprises  report
     selected  information about operating segments in interim financial reports
     to  shareholders.  Statement 131 is effective for financial  statements for
     the periods  beginning  after  December 15, 1997. The adoption of Statement
     131 will not have an effect on the Company  because it operates in a single
     segment.


                                                                     (Continued)
                                     - 7 -

<PAGE>

                        PEACHES ENTERTAINMENT CORPORATION

Item 2. Management's Discussions and Analysis of Financial Condition and Results
        of Operations for the Three Months Ended June 27, 1998,  Compared to the
        Three Months ended June 28, 1997.

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

Sales.  Net  sales  for the  three  months  ended  June 27,  1998  decreased  by
approximately  6 percent  compared to the three months ended June 28, 1997. Such
decrease is attributed to a 4 percent  decrease in comparable store sales, and a
2.2 percent  decrease  due to a store that  closed in the third  quarter of 1998
fiscal year offset by the new store  which  opened late in the first  quarter of
1999 fiscal year.

Cost of Sales.  The cost of sales for the first  quarter of 1999 fiscal year was
lower than that of the first  quarter of 1998 fiscal year due  principally  to a
decrease in net sales.  Cost of sales as a percentage of net sales has decreased
from 61.9  percent in the first  quarter of 1998 fiscal year to 59.9  percent in
the first  quarter in 1999 fiscal year  primarily  due to an increase in certain
retail selling prices and increases in purchase discounts.

Selling, General and Administrative.  Selling, general and administrative (SG&A)
expenses,  including  depreciation,  in the first  quarter of 1999  fiscal  year
increased by 2.8 percent compared to the first quarter of 1998 fiscal year. Such
increase is primarily  attributable  to the opening of the  Company's  new store
offset by the closing of one underperforming  store in the third quarter of 1998
fiscal  year as well as being  offset by a 1.4 percent  decrease  in  comparable
store  expenses.  SG&A expenses as a percentage of net sales  increased  from 41
percent in the first  quarter of 1998  fiscal  year to 45 percent in 1999 fiscal
year first quarter due to the fact that there were expenses incurred  throughout
the  Company's  first  quarter of 1999  fiscal  year  relating to the new store,
although the new store did not open until late in the Company's first quarter of
1999 fiscal year.

Net Loss. The Company incurred a net loss of approximately $222,000 in the first
quarter of 1999 fiscal year versus a net loss of  approximately  $225,000 in the
first  quarter  of 1998  fiscal  year.  Out of the above set forth  figure  with
respect to the first quarter of the 1999 fiscal year,  costs associated with the
opening of the new  location  in  Orlando  resulted  in a loss of  approximately
$127,000.



                                                                     (Continued)
                                     - 8 -

<PAGE>

                        PEACHES ENTERTAINMENT CORPORATION

LIQUIDITY AND CAPITAL RESOURCES

Liquidity  and  Capital  Resources.  Cash  generated  from  operations  and cash
equivalents   are  the  Company's   primary  source  of  liquidity.   Management
anticipates  that the cash generated from  operations,  cash equivalents on hand
and financing will provide  sufficient  liquidity to maintain  adequate  working
capital for operations.  Management used funds generated from operations as well
as funds to be  received  from its  landlord  for the  building of the new store
which  opened  in May  1998.  Management  anticipates  that it would  use  funds
generated from operations as well as possible financing,  for the opening of any
new stores,  which it may plan to open this fiscal  year.  For a  discussion  of
uncertainties affecting the Company's liquidity and capital resources,  see note
3 to the financial statements on form 10-K for the year ended March 28, 1998.

Long-Term  Obligations.  At June 27, 1998, the Company had long-term obligations
of  $548,457.  Management  anticipates  that its ability to repay its  long-term
obligations  will be  satisfied  primarily  through  funds  generated  from  its
operations.

OTHER MATTERS

Impact of  Inflation.  Although  the Company  cannot  accurately  determine  the
precise  effect of  inflation  on its  operations,  management  does not believe
inflation  has had a material  effect on the results of  operations  in the last
three  fiscal  years.  When the cost of  merchandise  items has  increased,  the
Company has been able to pass the increase on to its customers.

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

Year 2000  Compliance.  The Year 2000 Issue is the result of  computer  programs
being written using two digits rather than four to define the  applicable  year.
Any of the Company's  computer  programs that have  data-sensitive  software may
recognize a date using "00" as year 1900  rather than the year 2000.  This could
result in a system failure or miscalculations causing disruptions of operations.
The Company  has  assessed  that it will be required to upgrade  portions of its
software  which was  originally  purchased  from  outside  vendors,  so that its
computer  systems will properly  utilize dates beyond  December 31, 1999.  These
upgrades are  currently  available,  and the Company  believes  that the cost of
these  upgrades  will not have a  material  impact  on the  ongoing  results  of
operations or financial position of the Company.  However,  the Company could be
adversely  impacted if year 2000  modifications  are not  properly  completed by
either the Company,  or its  suppliers,  banks or any other entity with whom the
Company conducts business.

New Accounting  Policies.  In June 1997, the FASB issued  Statement of Financial
Accounting Standard No. 130, "Reporting Comprehensive Income" ("Statement 130').
Statement   130   establishes   standards  for  the  reporting  and  display  of
comprehensive  income  and  its  components  in a full  set of  general  purpose
financial  statements and is effective for fiscal year beginning  after December
31, 1997.  The adoption of Statement  130 did not have a material  impact on the
Company's financial position, results of operations or cash flows.



                                                                     (Continued)
                                     - 9 -

<PAGE>

                        PEACHES ENTERTAINMENT CORPORATION

In 1997,  the FASB issued  Statement of Financial  Accounting  Standard No. 131,
"Disclosure about Segments of an Enterprise and Related Information" ("Statement
131").  Statement 131  establishes  standards  for the way that public  business
enterprises  report  information  about operating  segments in annual  financial
statements and requires that these enterprises report selected information about
operating  segments in interim financial reports to shareholders.  Statement 131
is effective for financial  statements for the periods  beginning after December
15, 1997.  The adoption of Statement  131 will not have an effect on the Company
because it operates in a single segment.








                                                                     (Continued)
                                     - 10 -

<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)
                                     - 11 -

<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:
     -----------------------        -------------------------------------
                                    Allan Wolk, Chairman of the Board, President
                                    (Principal Executive Officer)




Date:
     -----------------------        -------------------------------------
                                    Jason Wolk, Executive Vice President,
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)





                                     - 12 -