SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED  SEPTEMBER  26, 1998         
COMMISSION FILE NUMBER    1-9838   


NS GROUP, INC.               
(Exact name of registrant as specified in its charter)
 

        Kentucky                      61-0985936             
(State or other jurisdiction      (I.R.S. Employer         
of incorporation or organization)  Identification Number)
                                             
Ninth and Lowell Streets, Newport, Kentucky  41072           
 (Address of principal executive offices)


Registrant's telephone number, including area code 
(606) 292-6809    

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

                                                             
                                     Name of each exchange
Title of each class                  on which registered
Common Stock, no par value           New York Stock Exchange
Preferred Stock Purchase Rights      New York Stock Exchange

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

     Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90
days.   YES     X           NO 

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

     Based on the closing sales price of November 30, 1998,
as reported in The Wall Street Journal, the aggregate market
value of the voting stock held by non-affiliates of the
registrant was approximately $97.7 million.

   The number of shares outstanding of the registrant's
Common Stock, no par value, was 22,632,570 at November 30,
1998.

Documents Incorporated by Reference

Parts I, II and III incorporate certain information by
reference from the Annual Report to Shareholders for the
fiscal year ended September 26, 1998 ("1998 Annual Report to
Shareholders").  Part III also incorporates certain
information by reference from the Company's Proxy Statement
dated December 21, 1998 for the Annual Meeting of
Shareholders on February 11, 1999.

Table of Contents

PART I    
                                            Page
 Item 1.     Business                          3  
 Item 2.     Properties                       10
 Item 3.     Legal Proceedings                11
 Item 4.     Submission of Matters to 
             a Vote of Security Holders       11

PART II

 Item 5.     Market for Registrant's Common 
             Equity and Related Stockholder 
             Matters                          12
 Item 6.     Selected Consolidated Financial 
             Data                             12
 Item 7.     Management's Discussion and 
             Analysis of Financial Condition 
             and Results of Operations        12
 Item 7A.    Quantitative and Qualitative 
             Disclosures About Market Risk    12 
 Item 8.     Financial Statements and 
             Supplementary Data               12
 Item 9.     Changes in and Disagreements 
             with Accountants on Accounting 
             and Financial  Disclosure        12

 PART III

 Item 10.   Directors and Executive Officers 
            of the Registrant                 13
 Item 11.   Executive Compensation            13
 Item 12.   Security Ownership of Certain 
            Beneficial Owners and Management  13
Item 13.   Certain Relationships and 
           Related Transactions               13

PART  IV

Item 14.   Exhibits, Financial Statement 
           Schedules and Reports on Form 8-K  13


PART I
     
ITEM 1.   BUSINESS

General

     The Company was incorporated in Kentucky in 1980 as
Newport Steel Corporation.  The Company changed its name to
NS Group, Inc. in 1987.  As used herein, the terms "Company"
and "NS Group" refer to NS Group, Inc. and its subsidiaries,
unless otherwise required by the context.

     NS Group conducts business in two industry segments,
the specialty steel segment and the adhesives segment. 
Incorporated herein by reference from the 1998 Annual Report
to Shareholders is the segment data included in Management's
Discussion and Analysis of Financial Condition and Results
of Operations in "Results of Operations" and Note 13 to the
Consolidated Financial Statements, which contains additional
information pertaining to industry segment data.
     
Specialty Steel Segment
 
     The Company is a producer of specialty steel products
serving the energy industry.  These products are produced at
its two mini-mills,  Newport Steel Corporation (Newport) and
Koppel Steel Corporation (Koppel), and include welded and
seamless tubular goods, primarily used in oil and natural
gas drilling and production operations, referred to as oil
country tubular goods (OCTG); and line pipe, used in the
transmission of oil, natural gas and other fluids.  Both
Newport and Koppel are certified by the American Petroleum
Institute (API) for production of these products. The
Company also produces special bar quality products,
primarily used in the manufacture of heavy industrial
equipment; and hot rolled coils, which are sold to service
centers and other manufacturers for further processing.  The
term mini-mill connotes a smaller, relatively low-cost mill
that typically uses steel scrap as its basic raw material
and offers a relatively limited range of products. 


Manufacturing Facilities and Processes - Specialty Steel
Segment

        Newport Facilities

     The Company manufactures welded OCTG and line pipe
products and hot rolled coils at its facilities located near
Newport, Kentucky.  The production process for Newport's
welded tubular products includes three separate operations: 
melting, rolling and pipe-making.  

     Steel scrap is melted into molten steel utilizing
electric arc furnaces.  Molten steel, reaching 3,000 degrees
Fahrenheit, is tapped from the furnaces into ladles.  The
ladles are then moved to an auxiliary stir station where an
argon lance stir process improves steel quality through
consistent metal deoxidation and desulfurization.  Steel
refining continues at the ladle metallurgical station (LMS). 
The LMS, which serves a dual role, allows for the precise
control of temperature and chemistry and enables continuous
production sequencing of the molten steel to the continuous
slab caster, thereby optimizing melt shop productivity. 
Once strict metallurgical standards have been met, the
molten steel is "cast" into slabs that range in size from 7
to 10 inches in thickness, 28 to 55 inches in width and 15
to 34 feet in length.  Slabs are cut to length and lifted
onto specially designed rail cars for transportation to the
adjacent reheat furnace.  

     At Newport's hot strip rolling mill, slabs are
processed through the walking beam slab reheat furnace where
they are evenly heated to temperatures over 2,400 degrees
Fahrenheit.  Slabs exit directly from the reheat furnace
onto the hot strip rolling mill where they are reduced to
desired thickness and rolled into coils in sizes up to a
maximum of 50 inches in width.  Coils are either slit and
formed into welded tubular products at one of the two
pipe-making facilities or are sold as hot rolled coils. 
Newport's welded tubular products range in size from 4.5 to
13.375 inches in outside diameter and are available in both
carbon and alloy grades.
     
     Newport is currently installing a new AC electric arc
furnace that will replace the three furnaces it is currently
utilizing.  The project will cost approximately $25 million
and is estimated to be completed in the second quarter of
fiscal 1999.

     For fiscal 1998, the Newport facilities' rated
capacities and capacity utilization were as follows:

                         Rated Capacity  Capacity
                          (in tons)      Utilization

     Melt shop            700,000            47%
     Hot strip rolling
      mill                750,000            49%
     Welded pipe mills   580,000             54%




       Koppel Facilities

     The Company manufactures seamless OCTG, line pipe
products and SBQ products at its facilities located in
Koppel and Ambridge, Pennsylvania and Baytown, Texas.  The
operations consist of a melting and casting facility and bar
mill located in Koppel, a seamless tubemaking facility
located approximately 20 miles away in Ambridge, and
finishing facilities located in Baytown, Texas.

     The melting and casting facilities at Koppel consist of
an AC electric arc furnace, a ladle refining station and a
four-strand continuous bloom/billet caster.  Select grades
of steel scrap are melted utilizing the furnace.  Once the
molten steel reaches temperatures of approximately 3,000
degrees Fahrenheit, it is tapped from the furnace into a
ladle and transported to the ladle refining station.  The
ladle refining station allows for the addition of alloys,
thereby providing precise chemical compositions, and it
maintains the molten steel at proper temperatures for the
caster.  Once the chemistries are analyzed and conform to
metallurgical standards, the ladle is carried by crane to
the continuous caster.  The continuous caster is capable of
casting 9 inch square blooms or 5.5 inch round billets. 

     Blooms and billets are further processed at the
tubemaking facilities into seamless tubular products or at
the bar facilities into SBQ products, or they can be sold as
"as cast" (semi-finished) product.

     Koppel's tubemaking facility includes a rotary hearth
furnace where round billets (tube rounds) are reheated to
temperatures over 2,200 degrees Fahrenheit.  Tube rounds
exit the furnace to a piercer where a hollow tube is formed. 
Hollow tubes are then rolled to a specific size and wall
thickness by passing through either the mandrell mill or
transval mill.  Seamless tubular products are produced in
both carbon and alloy grades in sizes ranging from 1.875 to
8.5 inches in outside diameter.

     At Koppel's bar mill, blooms are reheated in a rotary
hearth furnace to temperatures over 2,200 degrees
Fahrenheit.  Blooms, upon exiting the furnace, pass through
a series of rolls, where they are reshaped into round bars. 
SBQ products are available in both carbon and alloy grades
in sizes measuring 2.875 to 6 inches in diameter.

     For fiscal 1998, the Koppel facilities' rated
capacities and capacity utilization were as follows:  

                  Rated Capacity    Capacity 
                    (in tons)       Utilization   

     Melt shop       450,000            78%
     Seamless 
      tube mill      250,000            60%
     Bar mill        200,000            86%

     
       Finishing Facilities

     The Company processes and finishes its welded and
seamless tubular products at facilities located at the Port
of Catoosa, near Tulsa, Oklahoma (Erlanger Tubular
Corporation, or Erlanger); at Baytown, Texas, located near
Houston, Texas (Baytown); and at the Koppel facilities
located in Pennsylvania.  The finishing processes include
upsetting, which is a forging process that thickens tube
ends; heat treating, which is a furnace operation designed
to strengthen the steel; straightening; non-destructive
testing; coating for rust prevention; and threading.

Products - Specialty Steel Segment

       OCTG Products

     The Company's welded OCTG products, which are produced
by Newport, are used primarily as casing in oil and natural
gas wells during drilling operations.  Casing forms the
structural wall of oil and natural gas wells to provide
support and prevent caving during drilling operations and is
generally not removed after it has been installed in a well. 
Welded OCTG products are generally used when higher strength
is not required, typically in wells less than 10,000 feet in
depth.  The Company sells its welded OCTG products as both a
plain end and as a finished tubular product in both carbon
and alloy grades.  

     The Company's seamless OCTG products, which are
produced by Koppel, are used as drill pipe, casing and
production tubing.  Drill pipe is used and may be reused to
drill several wells.    Production tubing is placed within
the well and is used to convey oil and natural gas to the
surface.  The Company's seamless OCTG products are sold as a
finished threaded and coupled product in both carbon and
alloy grades.   Compared to similar welded products,
seamless production tubing and casing are better suited for
use in hostile drilling environments such as deeper wells or
off-shore drilling because of their greater strength and
durability.  The production of seamless tubular products
with these properties requires a more costly and specialized
manufacturing process than does the production of welded
tubular products.  The majority of the Company's seamless
OCTG product sales are production tubing in sizes ranging
from 1.9 inches to 5 inches in outside diameter.

     Demand for the Company's OCTG products is cyclical in
nature, being dependent on the number and depth of oil and
natural gas wells being drilled in the United States and
globally.  The level of drilling activity is largely a
function of the current prices of oil and natural gas and
expectations of future prices.  In addition, shipments by
domestic producers of OCTG products are influenced by the
levels of inventory held by producers, distributors and end
users as well as the level of foreign imports of OCTG
products.  The average number of oil and natural gas
drilling rigs in operation in the United States was 905, 906
and 759 in fiscal 1998, 1997 and 1996, respectively.  In
fiscal 1998, the average quarterly rig count ranged from a
high of 997 in the first fiscal quarter to a low of 794 in
the fourth fiscal quarter.

   Line Pipe Products

     The Company's line pipe products, which are produced by
both Newport and Koppel, are used primarily in gathering
lines for the transportation of oil and natural gas at the
drilling site and in transmission lines by both gas utility
and transmission companies.  Line pipe products are coated
and shipped as a plain end product and welded together on
site.  The majority of the Company's line pipe sales are
welded products.   

     The demand for line pipe is only partially dependent on
oil and gas drilling activities.  Line pipe demand is also
dependent on factors such as the level of pipeline
construction activity, line pipe replacement requirements,
new residential construction and gas utility purchasing
programs.  

     Special Bar Quality Products

     The Company manufactures a specialized market niche of
SBQ products at Koppel in sizes ranging from 2.875 to 6.0
inches in diameter.  The Company produces its SBQ products
from continuous cast blooms that enables substantial size
reduction in the bloom during processing and provides
greater strength-to-weight ratios.  These SBQ products are
primarily used in critical weight-bearing applications such
as suspension systems, gear blanks, drive axles for tractors
and off-road vehicles, heavy machinery components and
hydraulic and pneumatic cylinders.  Koppel's SBQ products
are ISO 9002 certified.  The demand for the Company's SBQ
products is cyclical in nature and is sensitive to general
economic conditions.

     Hot Rolled Coils

     The Company produces commercial quality grade hot
rolled coils at Newport, from 28 to 50 inches in width,
between 0.125 and 0.500 inches in gauge, and in 15 ton coil
weights.  These products are sold to service centers and to
others for use in high-strength applications.  The demand
for these products is cyclical in nature and is sensitive to
general economic conditions.

       Other Products

     The Company's OCTG products are inspected and tested to
ensure that they meet or exceed API specifications. 
Products that do not meet specification are classified as
less than prime products and are sold at substantially
reduced prices.  

Markets and Distribution - Specialty Steel Segment

     The Company sells its specialty steel products to its
customers through an in-house sales force.  The primary end
markets for the Company's seamless tubular products have
been the southwest United States and certain foreign
markets, including offshore applications.  The Company has
historically marketed its welded tubular products in the
east, central and southwest regions of the United States, in
areas where shallow oil and gas drilling and exploration
activity utilize welded tubular products.  Nearly all of the
Company's OCTG products are sold to domestic distributors,
some of whom subsequently sell the Company's products into
the international marketplace.  The Company sells its SBQ
products to customers located generally within 400 miles of
the Koppel facilities.

     All of the Company's steel-making and finishing
facilities are located on or near major rivers or waterways,
enabling the Company to transport its tubular products into
the southwest by barge.  The Company ships substantially all
of its seamless and welded OCTG products destined for the
southwest region by barge.

Customers - Specialty Steel Segment

     The Company has approximately 300 specialty steel
product customers.  The Company's OCTG and line pipe
products are used by major and independent oil and natural
gas exploration and production companies in drilling and
production applications.  Line pipe products are also used
by gas utility and transmission companies.  The majority of
the Company's OCTG products are sold to domestic
distributors.  Line pipe products are sold to both domestic
distributors and directly to end users.  The Company sells
its SBQ products to service centers, cold finishers, forgers
and original equipment manufacturers.  Hot rolled coils are
sold primarily to service centers and other manufacturers
for further processing.  The Company has long-standing
relationships with many of its larger customers; however,
the Company believes that it is not dependent on any
customer and that it could, over time, replace lost sales
attributable to any one customer.  In fiscal 1998, no one
customer accounted for more than 10% of total net sales.  

Competition - Specialty Steel Segment

     The markets for the Company's specialty steel products
are highly competitive and cyclical.    The Company's
principal competitors in its primary markets include
domestic and foreign integrated producers, mini-mills and
welded tubular product processing companies, many of which
have substantially greater assets and larger sales
organizations than the Company.  The Company believes that
the principal competitive factors affecting its business are
price, quality and customer service.

     In the welded OCTG and line pipe market, the Company
competes against certain manufacturers who purchase hot
rolled coils for further processing into welded OCTG and
line pipe products.  The cost of finished tubular products
for these manufacturers is largely dependent on the market
price of hot rolled coils.  Depending on market demand for
hot rolled coils, these tubular manufacturers may purchase
hot rolled coils at a lower or higher cost than the
Company's cost to manufacture hot rolled coils.  Increases
in imports of hot rolled coils can impact the market price
for hot rolled coils.  During fiscal 1998, increases in
imports of hot rolled coils contributed significantly to
lower market prices for hot rolled coils in the U.S compared
to fiscal 1997.

      In the small diameter seamless OCTG market in which
Koppel competes, its principal competitors include the
USS/Kobe Steel Company and a number of foreign producers. 
With respect to its SBQ products, Koppel competes with a
number of steel manufacturers, including USS/Kobe Steel
Company, CSC Industries, Inc., Republic Engineered Steels,
Inc., Inland Steel Industries, Inc., Qualitech, Inc., Bar
Technologies, Inc., MacSteel Division of Quanex Corporation,
North Star Steel Company, Inc. and The Timken Company. 
Newport's principal domestic competitors in the welded
tubular market are Lone Star Steel Company, LTV Corporation,
IPSCO Steel, Inc. and Maverick Tube Corporation. 

     Since 1995, the U.S. government has been imposing
duties on the imports of various OCTG products from certain
foreign countries in response to antidumping and
countervailing duty cases filed by several U.S. steel
companies.  The duties are subject to annual reviews by the
U.S. Department of Commerce through 2000.  The Company
believes the imposition of the duties have had a positive
effect on its shipments and pricing of certain of its
seamless tubular products; however, it cannot predict the
U.S. government's future actions regarding import duties or
other trade restrictions on imports of OCTG products.

Raw Materials and Supplies - Specialty Steel Segment

     The Company's major raw material is steel scrap, which
is generated principally from industrial, automotive,
demolition, railroad and other steel scrap sources.  Steel
scrap is purchased by the Company either through scrap
brokers or directly in the open market.  The long-term
demand for steel scrap and its importance to the domestic
steel industry may be expected to increase as steel-makers
continue to expand steel scrap-based electric arc furnace
and thin slab casting capacities.  For the foreseeable
future, however, the Company believes that supplies of steel
scrap will continue to be available in sufficient quantities
at competitive prices.  In addition, a number of
technologies exist for the processing of iron ore into forms
which may be substituted for steel scrap in electric arc
furnace-based steel-making operations.  Such forms include
direct-reduced iron, iron carbide and hot-briquette iron.  

     The Company's steel manufacturing facilities consume
large amounts of electricity.  The Company currently
purchases its electricity from utilities near its
steel-making facilities pursuant to separate contracts
entered into by Koppel and Newport.  Koppel's contract
expired in 1996 and, since such time, Koppel has been
operating under monthly extensions of the prior contract.  
In connection with the deregulation of the purchase of
electricity in Pennsylvania effective January 1999, Koppel
is currently seeking proposals from multiple suppliers for
its electricity needs for the future.  Newport's contract
expires in 2001.  The contracts contain provisions that
provide for lower priced demand charges during off-peak
hours and known maximums in higher cost firm demand power. 
Also, the Company receives discounted demand rates in return
for the utilities' right to periodically curtail service
during periods of peak demand.  These curtailments are
generally limited to a few hours and historically have had a
negligible impact on the Company's operations. 

     The Company also consumes smaller quantities of
additives, alloys and flux which are purchased from a number
of suppliers.

Adhesives Segment

     The Company, through its wholly-owned subsidiary,
Imperial Adhesives, Inc. (Imperial),  is a custom
manufacturer of water-borne, solvent borne and hot melt
adhesives and footwear finishes.  These products are
manufactured at plants located in Cincinnati, Ohio;
Nashville, Tennessee and Lynchburg, Virginia.

Manufacturing Process - Adhesives Segment

     Imperial's adhesives products are manufactured by
combining and mixing predetermined quantities of raw
materials.  The raw materials are measured according to
specific formulas and mixed in numerous specially designed
industrial mixers.  Raw materials are available from
multiple sources and consist primarily of
petrochemical-based materials.  Pricing of raw materials
generally follows trends in the petrochemical markets.  The
physical properties of finished formulas are measured and
monitored by a statistical process control system.  Imperial
works closely with its customers to develop adhesive
applications designed to meet their specific product
requirements.
     
Products and Markets - Adhesives Segment

     Imperial maintains approximately 950 active formulas
for the manufacture of water-borne, solvent-borne and
hot-melt adhesives products and approximately 500 active
formulas for the manufacture of footwear finishes.  Its
multiple product lines are used primarily in product
assembly applications within such industries as footwear,
foam bonding, marine and recreational vehicles, consumer
packaging, construction, furniture, and transportation.  In
fiscal 1998, approximately 18% of Imperial's sales were to
the footwear industry.  The Company's industrial adhesives
products are marketed throughout the United States and
Caribbean basin through an in-house sales force as well as a
number of independent sales representatives.  Products are
distributed from Imperial's manufacturing sites and a number
of public warehouses across the United States and in Puerto
Rico.  

     Competition in the industrial adhesives industry
includes several major producers, as well as numerous small
and mid-sized companies comparable to Imperial.  Imperial
competes on the basis of price, product performance and
customer service and believes that its diversity and ability
to develop applications to meet customers' specific needs
allows it to compete effectively with all adhesives
producers in its markets.

Environmental Matters

     The Company is subject to federal, state and local
environmental laws and regulations, including, among others,
the Resource Conservation and Recovery Act (RCRA), the Clean
Air Act, the 1990 Amendments to the Clean Air Act and the
Clean Water Act, and all regulations promulgated in
connection therewith, including, among others, those
concerning the discharge of contaminants as air emissions or
waste water effluents and the disposal of solid and/or
hazardous wastes such as electric arc furnace dust.  As
such, the Company is from time to time involved in
administrative and judicial proceedings and administrative
inquiries related to environmental matters.

     As with other steel mills in the industry, the
Company's steel mini-mills produce dust which contains lead,
cadmium and chromium, and is classified as a hazardous
waste.  The Company currently collects the dust resulting
from its electric arc furnace operations through emission
control systems and contracts with a company for treatment
and disposal of the dust at an EPA-approved facility.  

     In August 1998, Newport received separate Notices of
Violation (NOV) from the Kentucky Division of Waste
Management and the Kentucky Division of Water relating to a
release of oil into the Licking River and certain related
actions taken by Newport in connection therewith.  Newport
understands that there is a federal criminal investigation
underway relating to this matter.  Based upon the
information available to date, the Company is unable to
determine the extent of civil penalties which may be
assessed, or whether criminal charges will be filed, in
connection with this incident.

     In November 1996, Koppel received an NOV from the EPA
alleging violations of the Clean Air Act and the
Pennsylvania State Implementation Plan.  The violations
allegedly occurred during 1995 and 1996 and pertain to air
emissions from Koppel's electric arc furnace operations. The
conditions which contributed to the alleged violations were
corrected and Koppel has demonstrated compliance with air
emission regulations.  At this time, the Company is unable
to determine the extent of civil penalties which the EPA may
assess.

     In March 1995, Koppel and the EPA signed a Consent
Order relating to an April 1990 RCRA facility assessment
(the Assessment) completed by the EPA and the Pennsylvania
Department of Environmental Resources.  The Assessment was
performed in connection with a permit application pertaining
to a landfill that is adjacent to the Koppel facilities. 
The Assessment identified potential releases of hazardous
constituents at or adjacent to the Koppel facilities prior
to the Company's acquisition of the Koppel facilities.  In
accordance with the Consent Order, investigation,
monitoring, testing and analysis of the potential releases
has been completed and a final report has been forwarded to
the EPA; however,  additional remediation may be required. 
Pursuant to various indemnity provisions in agreements
entered into at the time of the Company's acquisition of the
Koppel facilities, certain parties have agreed to indemnify
the Company against various known and unknown environmental
matters.  To date the Company has been fully indemnified
against all matters pertaining to the Consent Order and the
Company believes that the indemnity provisions provide for
it to be fully indemnified against all matters covered by
the Consent Order, including all associated costs, claims
and liabilities.


     In two separate incidents occurring in fiscal 1993 and
1992, radioactive substances were accidentally melted at
Newport, resulting in the contamination of a quantity of
electric arc furnace dust.  The Company has entered into a
contract with a company to dispose of the dust at an EPA -
approved facility.  Completion of the project is expected by
the second quarter of fiscal 1999.  The Company expects to
recover and has recorded a $1.2 million receivable relating
to insurance claims for the recovery of disposal costs which
will be filed with the applicable insurance carrier at the
time such disposal costs are incurred.  The Company believes
the recorded gross reserves of $2.4 million for disposal
costs pertaining to these incidents are adequate.

     Subject to the uncertainties concerning the storage of
the radiation contaminated dust, the Company believes that
it is currently in compliance in all material respects with
all applicable environmental regulations.  The Company
cannot predict the level of required capital expenditures or
operating costs that may result from future environmental
regulations.  

     Capital expenditures for the next twelve months
relating to environmental control facilities are expected to
be approximately $2.5 million; however, such expenditures
could be influenced by new or revised environmental
regulations and laws or new information or developments with
respect to the Company's operating facilities.

     As of September 26, 1998, the Company had environmental
remediation reserves of $2.7 million, which pertain
primarily to the accrued disposal costs for radiation
contaminated dust.  Based upon its evaluation of available
information, management does not believe that any of the
environmental contingency matters discussed above are
likely, individually or in the aggregate, to have a material
adverse effect upon the Company's consolidated financial
position, results of operations or cash flows.  However, the
Company cannot predict with certainty that new information
or developments with respect to its environmental
contingency matters, individually or in the aggregate, will
not have a material adverse effect on the Company's
consolidated financial position, results of operations or
cash flows.

Employees

     As of September 26, 1998, the Company had 1,801
employees, of whom 444 were salaried and           1,359
were hourly.  Substantially all of the Company's hourly
employees are represented by the United Steelworkers of
America under contracts expiring in 1999 for Newport and
Koppel; 2000 for Erlanger; and 2001 for Imperial.

ITEM 2.   PROPERTIES

     The Company's principal operating properties are listed
below.  The Company believes its facilities are adequate and
suitable for its present level of operations.  Also, see
"Manufacturing Facilities and Processes - Specialty Steel
Segment - Newport Facilities and - Koppel Facilities"
contained herein for a description of facilities together
with rated capacities and utilization rates.

Location and Properties

     Specialty Steel Segment:

     Newport, Kentucky - Newport owns approximately 250
acres of real estate upon which is located a melt shop, hot
strip mill, two welded pipe mills, a barge facility, machine
and fabricating shops and storage and repair facilities
aggregating approximately 675,000 square feet, as well as
administrative offices.  The facilities are also located
adjacent to rail lines.

     Tulsa, Oklahoma - Erlanger leases approximately 36
acres of real estate upon which is located a tubular
processing facility.  The facility is located at the Tulsa
Port of Catoosa where barge facilities are in close
proximity.  Located on this property are six buildings
aggregating approximately 119,000 square feet which house
the various finishing operations.

     Koppel, Pennsylvania - Koppel owns approximately 227
acres of real estate upon which are located a melt shop, bar
mill, machine and fabricating shops, storage and repair
facilities and administrative offices aggregating
approximately 900,000 square feet.  The facilities are
located adjacent to rail lines.

     Ambridge, Pennsylvania - Koppel owns approximately 45
acres of real estate upon which are located a seamless tube
making facility and seamless tube finishing facilities
aggregating approximately 659,000 square feet.  The
facilities are located adjacent to rail lines and river
barge facilities.

     Baytown, Texas - Koppel owns approximately 55 acres of
real estate upon which are located a tubular processing
facility and barge facilities.  Located on the property are
eight buildings aggregating approximately 82,000 square feet
which house the various finishing operations.

     Adhesives Segment:

     Cincinnati, Ohio; Lynchburg, Virginia; Nashville,
Tennessee - Imperial owns approximately seven acres of
property in Cincinnati, Ohio; 1.5 acres of property in
Lynchburg, Virginia and 3.1 acres in Nashville, Tennessee
for use in its adhesives and finishes operations.  The
Cincinnati properties contain five buildings aggregating
approximately 150,000 square feet; the Lynchburg property
consists of one 10,000 square foot building and the
Nashville property contains one building aggregating
approximately 60,000 square feet.

               Other:

     Newport, Kentucky - The Company owns approximately 20
acres of partially developed land near Newport, Kentucky,
which is held as investment property and is listed for sale. 


     Information regarding encumbrances on the Company's
properties is included in Note 4 to the Consolidated
Financial Statements of the 1998 Annual Report to
Shareholders, and is incorporated herein by reference.


ITEM 3.   LEGAL PROCEEDINGS

     See Item 1, Business, "Environmental Matters" regarding
the Consent Order entered into by Koppel and the EPA  in
March 1995, the NOV received by Koppel from the EPA in
November 1996, and the NOV's received by Newport from the
Commonwealth of Kentucky in August 1998.

     The Company is subject to various claims, lawsuits and
administrative proceedings arising in the ordinary course of
business with respect to workers compensation, health care
and product liability coverages (each of which is
self-insured to certain levels), as well as commercial and
other matters.  Based upon its evaluation of available
information, management does not believe that any such
matters are likely, individually or in the aggregate, to
have a material adverse effect upon the Company's
consolidated financial position, results of operations or
cash flows.


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

     None.

PART II


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

     Incorporated herein by reference from the 1998 Annual
Report to Shareholders, "Corporate Information - Stock
Market Information" and "Corporate Information - Stock
Price" and Note 4 to the Consolidated Financial Statements.

     As of November 30, 1998 there were approximately 217
record holders of Common Stock.  
     

ITEM 6.   SELECTED CONSOLIDATED FINANCIAL DATA

     Incorporated herein by reference from the 1998 Annual
Report to Shareholders, "Consolidated  Historical Summary".

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

     Incorporated herein by reference from the 1998 Annual
Report to Shareholders, "Management's Discussion and
Analysis of Financial Condition and Results of Operations".

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT          
            
MARKET RISK

     Incorporated herein by reference from the 1998 Annual
Report to Shareholders, "Management's Discussion and
Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources" and Notes 3, 4 and 5 to the
Consolidated Financial Statements.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Incorporated herein by reference from the 1998 Annual
Report to Shareholders, "Consolidated Statements of
Operations"; "Consolidated Balance Sheets"; "Consolidated
Statements of Cash Flows"; Consolidated Statements of Common
Shareholders' Equity"; "Notes to Consolidated Financial
Statements"; "Report of Management" and "Report of
Independent Public Accountants".


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

     None.

PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Incorporated herein by reference from the Company's
Proxy Statement dated December 21, 1998 for the Annual
Meeting of Shareholders on February 11, 1999, under the
caption "Election of Directors - Nominees for Election as
Directors"; "Share Ownership of Certain Beneficial Owners
and Management - footnote (5)"; "Information Regarding
Meetings and Committees of the Board of Directors -
Committees of the Board ";  and "Section 16(a) Beneficial
Ownership Reporting Compliance".

ITEM 11. EXECUTIVE COMPENSATION

     Incorporated herein by reference from the Company's
Proxy Statement dated December 21, 1998 for the Annual
Meeting of Shareholders on February 11, 1999, under the
caption "Information Regarding Meetings and Committees of
the Board of Directors - Director Compensation"; "Executive
Compensation"; and  "Compensation Committee Interlocks and
Insider Participation".


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

     Incorporated herein by reference from the Company's
Proxy Statement dated December 21, 1998 for the Annual
Meeting of Shareholders on February 11, 1999, "Share
Ownership of Certain Beneficial Owners and Management".

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Incorporated herein by reference from the Company's
Proxy Statement dated December 21, 1998 for the Annual
Meeting of Shareholders on February 11, 1999, under the
caption "Compensation Committee Interlocks and Insider
Participation" and "Certain Transactions".

PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES,  AND
REPORTS ON FORM  8-K

       (a)   1.  Consolidated Financial Statements - Audited
consolidated financial statements required by this item are
incorporated by reference and listed in Part II, Item 8.
                              
           2.  Consolidated Financial Statement Schedule -
The financial statement schedule required to be filed as a
part of this report is included herein:
     - Report of Independent Public Accountants on Financial
Statement Schedule
     - Schedule II - Valuation and Qualifying Accounts

        3.     Exhibits - Reference is made to the Index to
Exhibits, which is included herein as part of this report.

      (b)      Reports on Form 8-K - None.

Report of Independent Public Accountants on Financial
Statement Schedule

To NS Group, Inc.:

     We have audited in accordance with generally accepted
auditing standards the consolidated financial statements
included in NS Group, Inc. and subsidiaries annual report to
shareholders incorporated by reference in this Form 10-K,
and have issued our report thereon dated November 2, 1998.  
Our audit was made for the purpose of forming an opinion on
the basic financial statements taken as a whole.  The
schedule listed in Item 14(a) 2 is the responsibility of the
Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's
rules and is not part of the basic financial statements. 
This schedule has been subjected to the auditing procedures
applied in the audit of the basic financial statements and,
in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation
to the basic financial statements taken as a whole.




                                   
Cincinnati, Ohio             ARTHUR ANDERSEN LLP
November 2, 1998


               SCHEDULE II


NS GROUP, INC. AND SUBSIDIARIES


VALUATION AND QUALIFYING ACCOUNTS

 (Dollars in thousands)


                         Reserves Deducted from        
                         Assets in Balance Sheets   
                         Allowance
                            for          Allowance          
                          Doubtful       for Cash         
                          Accounts(1)   Discounts(1)     
BALANCE, 
September 30, 1995          $1,021        $    529           
    Additions:
    Charged to costs
     and expenses              744           3,487      
        Deductions:
     Net charges of nature 
     for which reserves
     were created           (1,008)         (3,675)    

BALANCE, 
September 28, 1996          $  757        $    341
     Additions:
     Charged to costs 
      and expenses           1,050           7,414
     Deductions:
     Net charges of 
     nature for which
     reserves were created  (1,095)         (7,124)

BALANCE, 
September 27, 1997          $  712        $    631           
                   
     Additions: 
     Charged to costs 
     and expenses            1,319            5,143
        Deductions:
     Net charges of 
     nature for which
     reserves were 
     created                (1,279)          (5,622) 

BALANCE, 
September 26, 1998          $  752          $   152



(1)  Deducted from accounts receivable


SIGNATURES


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

Date: December 11, 1998       By:   /s/John R. Parker        
                              John R. Parker, Vice 
                              President, Treasurer and 
                              Chief Financial Officer


     KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Clifford R.
Borland and John R. Parker, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities to sign any and
all amendments to this Annual Report on Form 10-K and any
other documents and instruments incidental thereto, and to
file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said
attorneys-in-fact and agents and/or any of them, or their or
his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.

     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 Registrant and in the
capacities and on the dates indicated.




Date: December 11, 1998  /s/Clifford R. Borland              
                         Clifford R. Borland, President,          
       
                         Chief Executive Officer, Chief 
                         Operating Officer and Director




Date: December 11, 1998  /s/John R. Parker                   
                         John R. Parker, Vice President,
                         Treasurer and Chief Financial 
                         Officer
                         (Principal Financial Officer)





Date: December 11,1998   /s/Thomas J. Depenbrock             
                         Thomas J. Depenbrock
                         Vice President and Corporate 
                          Controller
                          (Principal Accounting Officer)



Date: December 11, 1998   /s/Ronald R. Noel                  
                         Ronald R. Noel  
                         Vice President and Director


Date: December 11, 1998  /s/Paul C. Borland, Jr.             
                         Paul C. Borland, Jr., Director

                       
Date: December 11, 1998  /s/John B. Lally                    
                         John B. Lally, Director

Date: December 11, 1998   /s/Patrick J. B. Donnelly          
                         Patrick J. B. Donnelly, Director 



Date: December 11, 1998  /s/R. Glen Mayfield                 
                         R. Glen Mayfield, Director



INDEX TO EXHIBITS


Number    Description

3.1       Amended and Restated Articles of Incorporation of
Registrant, filed as Exhibit 3.1 to Amendment No. 1 to
Registrants' Form S-1 dated January 17, 1995, File No.
33-56637, and incorporated herein by this reference

3.2       Amended and restated By-Laws of Registrant, dated
December 4, 1995, filed as Exhibit 3.2to Company's Form 10-K
for the fiscal year ended September 30, 1995, File No.
1-9838, and incorporated herein by this reference

         Exhibit 4.1 through 4.17 were filed as exhibits
under their respective Exhibit numbers to Company's Form
10-Q for the quarterly period ended July 1, 1995, File No.
1-9838, and are incorporated herein by this reference

4.1      Indenture (including form of Senior Secured Note)
between the Company and The Huntington National Bank, as
trustee (the "Trustee")

4.2     Leasehold and Fee Mortgage, Assignment of Rents and
Leases and Security Agreement from Newport to the Trustee
(Kentucky)

4.3     Mortgage, Assignment of Rents and Leases and
Security Agreement from Koppel to the Trustee (Pennsylvania)

4.4     Deed of Trust, Assignment of Rents and Leases and
Security Agreement from Koppel to the Trustee (Texas)

4.5     Leasehold Mortgage, Assignment of Rents and Leases
and Security Agreement  from Erlanger to the Trustee
(Oklahoma)

4.6    Junior Leasehold and Fee Mortgage, Assignment of
Rents and Leases and Security Agreement from Newport to the
Company (Kentucky)

4.7   Junior Mortgage, Assignment of Rents and Leases and
Security Agreement from  Koppel to the Company
(Pennsylvania)

4.8    Junior Deed of Trust, Assignment of Rents and Leases
and Security Agreement  from Koppel to the Company (Texas)

4.9    Junior Leasehold Mortgage, Assignment of Rents and
Leases and Security Agreement from Erlanger to the Company
(Oklahoma)

4.10   Subsidiary Security Agreement between Newport and the
Trustee

4.11   Subsidiary Security Agreement between Koppel and the
Trustee

4.12   Subsidiary Security Agreement between Erlanger and
the Trustee

4.13   ICN Security Agreement between Newport and the
Company


4.14   ICN Security Agreement between Koppel and the Company

4.15   ICN Security Agreement between Erlanger and the
Company

4.16   Pledge and Security Agreement between the Company and
the Trustee

4.17   Subsidiary Guarantee

4.18   Agreement between the Trustee, Koppel and the
Commonwealth of Pennsylvania, Department of Commerce, filed
as exhibit 4.19 to the Company's Form 10-Q for the quarterly
period ended   July 1, 1995, File No. 1-9838, and
incorporated herein by this reference

4.19   Warrant Agreement between the Company and The
Huntington National Bank, as warrant agent, filed as Exhibit
4.22 to Company's Form 10-Q for the quarterly period ended
July 1, 1995, File No. 1-9838, and incorporated herein by
this reference

4.20   Credit Agreement between the Company and Bank of
America National Trust and Savings Association, dated July
31, 1998, filed herewith

10.1   Company's Amended Employee Incentive Stock Option
Plan, filed as Exhibit 10(a) to Company's Form 10-K for the
fiscal year ended September 30, 1989, File No. 1-9838, and 
incorporated herein by this reference*

10.2   Company's Executive Bonus Plan, filed as Schedule B
to Exhibit 10.4 to  Company's Registration   Statement on
Form S-18, File No. 2-90643, and incorporated herein by this
reference*

10.3   Company's Non-Qualified Stock Option and Stock
Appreciation Rights Plan of  1988, filed as Exhibit 1 to
Company's Proxy Statement dated January 13, 1989, File No.
1-9838, and incorporated herein by this reference*

10.4   Rights Agreement dated November 17, 1998 between
Company and  Registrar and Transfer Company, filed as
Exhibit 1 to Company's Form 8-K dated  November 5, 1998, 
File No. 1-9838, and incorporated herein by this reference 

10.5   Company's 1993 Incentive Stock Option Plan, filed as
Exhibit 1 to Company's Proxy Statement dated December 22,
1992, File No. 1-9838, and incorporated herein by this
reference*

10.6   Registration Rights Agreement dated October 6, 1993
among Kentucky Electric Steel, Inc., NS Group, Inc. and NSub
I, Inc. (formerly Kentucky Electric Steel Corporation),
filed as Exhibit 10(i) to Company's Form 10-K for fiscal
year ended September 25, 1993, File No. 1-9383, and 
incorporated herein by this reference

10.7   Form of Warrant dated October 4, 1990, filed as
Exhibit 4.2 to Company's Form 8-K dated October 18, 1990,
File No. 1-9838, and incorporated herein by reference; and
First Amendment to Warrant dated September 26, 1992, filed
as Exhibit  4(c) to Company's Form 10-K for the fiscal year
ended September 26, 1992, File  No. 1-9838, and incorporated
herein by this reference

10.8   Company's Amended and Restated 1995 Stock Option and
Stock Appreciation Rights Plan, filed as Exhibit A to
Company's Proxy Statement dated December 21, 1998, File No.
1-9838, and incorporated herein by this reference*

10.9   Form of Change of Control Severance Agreement, filed
herewith*

10.10     Form of Salary Continuation Agreement, filed
herewith*

10.11     Consulting Agreement between the Company and Paul
C. Borland, Jr. dated June 16, 1998, filed herewith*

13     1998 Annual Report to Shareholders (not deemed
"filed" except for portions which are expressly     
   incorporated by reference), filed herewith

21    Subsidiaries of Registrant

23    Consent of Independent Public Accountants

24    Power of Attorney (contained on Signature Page)

27    Financial Data Schedule


*  Indicates management contracts or compensatory plans or
arrangements in which one or more directors or executive
officers of the Company participates or is a party.