Exhibit 13


The following are the excerpted portions of the NS  Group,
Inc. Annual Report to Shareholders for the fiscal year ended
September 26, 1998 which are expressly incorporated by
reference into Form 10-K.


Management's Discussion and Analysis of Financial Condition
and Results of Operations

The following analysis of financial condition and results of
operations of the Company should be read in conjunction with
the audited Consolidated Financial Statements and related
Notes of the Company.

     The matters discussed or incorporated by reference in
this report that are forward-looking statements (as defined
in the Private Securities Litigation Reform Act of 1995)
involve risks and uncertainties.  Such risks and
uncertainties include, but are not limited to: (i) the level
and cyclicality of domestic as well as worldwide oil and
natural gas drilling activity; (ii) general economic
conditions; (iii) product demand, inventory levels, and
industry capacity; (iv) industry pricing; (v) the level of
imports and the presence or absence of governmentally
imposed trade restrictions; (vi) manufacturing efficiencies;
(vii) volatility in raw material costs, particularly steel
scrap; (viii) costs of compliance with environmental
regulations; and (ix) product liability or other claims. 
These risks and uncertainties may cause the actual results
or performance of the Company to differ materially from any
future results or performance expressed or implied by such
forward-looking statements.

General

     The Company operates in two business segments:
specialty steel and industrial adhesives.  Within the
specialty steel segment are the operations of Newport Steel
Corporation (Newport), a manufacturer of welded tubular
steel products and hot rolled coils, and Koppel Steel
Corporation (Koppel), a manufacturer of seamless tubular
steel products and special bar quality (SBQ) products.  The
Company's specialty steel products consist of: (i) welded
and seamless tubular goods used primarily in oil and natural
gas drilling and production operations (oil country tubular
goods, or OCTG); (ii) line pipe used in the transmission of
oil, gas and other fluids; (iii) SBQ products used primarily
in the manufacture of heavy industrial equipment; and (iv)
hot rolled coils which are sold to service centers and other
manufacturers for further processing.  Within the adhesives
segment are the operations of Imperial Adhesives, Inc.
(Imperial), a manufacturer of industrial adhesives products. 
See Note 13 to the Consolidated Financial Statements
included herein for selected financial information by
business segment.  

Results of Operations

Recent Results

     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 regarding 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.

     Demand for the Company's OCTG products began to soften
in the latter part of the fiscal 1998 second quarter and
continued to decline through the end of fiscal 1998.  The
decline in sales and shipments was attributable to a decline
in U.S. drilling activity coupled with excess industry-wide
OCTG and line pipe inventories.  The average number of oil
and natural gas drilling rigs in operation in the United
States (rig count) in the fourth quarter of fiscal 1998
declined 8.2% from the third quarter of fiscal 1998.  Rig
count in the fourth quarter of fiscal 1998 declined 19.8%
from  the fourth quarter of fiscal 1997.

     The fiscal 1998 fourth quarter gross losses and
operating losses of Newport and Koppel were due to lower
shipment volumes and declines in the average selling prices
of OCTG and line pipe products.  Fiscal 1998 fourth quarter
average tubular selling prices for Newport and Koppel
declined 9.6% and 6.7%, respectively, from the fourth
quarter of fiscal 1997.  Fiscal 1998 fourth quarter gross
margins were also negatively impacted by significantly
reduced operating levels at both Newport and Koppel, as
production was curtailed in response to lower market demand. 
Newport's melt shop and pipe mill capacity utilization was
32.4% and 32.7%, respectively, in the fourth quarter of
fiscal 1998 compared to 62.1% and 82.6%, respectively, for
the fourth quarter of fiscal 1997.  Koppel's melt shop and
tube mill capacity utilization was 48.1% and 29.5%,
respectively, in the fourth quarter of fiscal 1998 compared
to 83.4% and 81.3%, respectively, for the fourth quarter of
fiscal 1997.  The Company anticipates that, at least for the
first half of fiscal 1999, energy market conditions will
continue to be weak, resulting in continued low levels of
shipments and operations, particularly as compared to the
first half of fiscal 1998.

     The following table sets forth certain information with
respect to the Company and its Newport and Koppel operations
for the quarterly periods of fiscal 1998 and 1997. 
Reference is also made to Note 14:  Quarterly Financial Data
(Unaudited) of the Notes to Consolidated Financial
Statements for further quarterly data. 


                                  Fiscal 1998              
                     Fourth     Third    Second      First   
                    Quarter    Quarter  Quarter     Quarter 
(Dollars in thousands)
Net sales 
    Newport         $ 23,942  $32,638    $ 50,469  $ 54,781
    Koppel            30,837   53,565      63,633    59,428
                    $ 54,779  $86,203    $114,102  $114,209

Gross profit (loss)
    Newport         $ (7,869) $    84    $  5,315  $  8,053
    Koppel               454    6,616       8,472     7,114 
                   $  (7,415) $ 6,700    $ 13,787  $ 15,167

Operating income (loss)    
    Newport        $  (9,172) $(1,628)   $  3,162  $  6,262
    Koppel            (1,586)   4,571       6,825     5,465
                    $(10,758) $ 2,943    $  9,987  $ 11,727

Tons shipped
   Newport            51,000   67,600      98,800   104,600
   Koppel - tubular   19,500   39,100      46,900    46,500
   Koppel - SBQ       31,900   45,700      45,700    36,800
                     102,400  152,400     191,400   187,900

Rig count                794      865         966       997



                                  Fiscal 1997
                     Fourth     Third     Second     First
                     Quarter    Quarter   Quarter    Quarter
(Dollars in thousands)
Net sales 
    Newport          $ 60,199  $ 64,052  $ 48,244 $48,086
    Koppel             62,119    57,980    52,655  46,894
                     $122,318  $122,032  $100,899 $94,980


Gross profit (loss)
    Newport          $  9,466  $  8,225  $  7,050 $ 6,380
    Koppel              8,643     8,228     6,181   3,522
                     $ 18,109  $ 16,453  $ 13,231 $ 9,902

Operating income (loss)    
    Newport          $  7,420  $  6,503  $  5,281 $ 5,021
    Koppel              6,816     6,562     4,517   1,640
                     $ 14,236  $ 13,065  $  9,798 $ 6,661


Tons shipped
    Newport           117,300   127,900    97,800 101,500
    Koppel - tubular   50,900    47,200    40,400  33,600
    Koppel - SBQ       36,700    40,200    39,500  36,000
                      204,900   215,300   177,700 171,100

Rig count                 990       930       856     846 



     The Company's net sales, gross profit and operating
results by industry segment for each of the three fiscal
years in the period ended September 26, 1998 are summarized
below.

(In thousands)                    1998     1997       1996
Net sales:
 Specialty steel segment      
  Newport                       $161,830  $220,581  $173,615 
  Koppel                         207,463   219,648   195,851      
                                369,293   440,229   369,466 
  Adhesives segment              40,562    40,941    39,916 
                               $409,855  $481,170  $409,382 
Gross profit:
 Specialty steel segment           
   Newport                     $  5,583  $ 31,121  $  3,966
   Koppel                         22,656    26,574    26,251      
                                 28,239    57,695    30,217      
   Adhesives segment             11,004    10,630     9,580
                               $ 39,243  $ 68,325  $ 39,797 
Operating income (loss):
  Specialty steel segment          
    Newport                    $ (1,376) $ 24,225  $ (4,855) 
    Koppel                       15,275    19,535    19,741
                                 13,899    43,760    14,886 
    Adhesives segment             2,302     1,799     1,597
  Corporate allocations          (5,256)   (4,591)   (4,430) 
                               $ 10,945  $ 40,968  $ 12,053  


     Shipment and sales data for the Company's specialty
steel segment for each of the three fiscal years in the
period ended September 26, 1998 were as follows:

                                                             
                              1998       1997        1996         
       
Tons shipped:
 Newport
  Welded tubular products     298,400   418,300   348,900    
  Hot rolled coils and 
    other products             23,600    26,200    43,300
 Koppel
  Seamless tubular products   152,000   172,100   157,400    
  SBQ products                160,100   152,400   133,700
                              634,100   769,000   683,300
 Net sales ($000's):
 Newport
  Welded tubular products    $151,986  $210,245  $157,385  
  Hot rolled coils and 
   other products               9,844    10,336     16,230   
 Koppel     
  Seamless tubular products   134,860   152,146   133,446    
  SBQ products                  72,603    67,502    62,405        
                             $369,293  $440,229  $369,466
     

Fiscal Year Ended September 26, 1998 compared with Fiscal
Year Ended September 27, 1997

     Net sales in fiscal 1998 decreased $71.3 million, or
14.8%, from fiscal 1997.  Specialty steel segment net sales
decreased $70.9 million, or 16.1%, and the adhesives segment
net sales decreased $0.4 million, or 0.9%, from fiscal 1997. 
The overall decrease in specialty steel segment net sales
was primarily attributable to a decline in shipments of the
Company's tubular products as more fully discussed below.

     Welded tubular net sales decreased $58.3 million, or
27.7%, on a volume decrease of 28.7%.  Average selling price
for all welded tubular products was $509 per ton, a 1.2%
increase from fiscal 1997.  The decline in shipments was
attributable to welded OCTG products, which was driven by a
decline in drilling activity as well as an increase in
industry inventory levels compared to fiscal 1997. 

     The rig count for fiscal 1998 was 905, virtually
unchanged from fiscal 1997.  While the quarterly rig count
increased throughout fiscal 1997, fiscal 1998 quarterly rig
count declined from a high of 997 in the first fiscal
quarter to a low of 794 in the fourth fiscal quarter.  

     Seamless tubular net sales decreased $17.3 million, or
11.4%, on a volume decrease of 11.7%.  Average selling price
for all seamless tubular products was $887 per ton,
virtually unchanged from fiscal 1997.  Like welded tubular
products, the decline in seamless tubular shipments was
attributable primarily to seamless OCTG products, caused by
the decline in drilling rig activity and an increase in
industry inventory levels.  

     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 primarily pertain to the import of
seamless OCTG products and are subject to annual review by
the U.S. Department of Commerce through 2000.  During fiscal
1998, imports of welded OCTG and line pipe  increased over
fiscal 1997, negatively affecting product pricing and
shipments.  The Company cannot predict the U.S. government's
future actions regarding import duties or other trade
restrictions on imports of OCTG and line pipe products.  

     SBQ product net sales increased $5.1 million, or 7.6%,
on a volume increase of 5.1%.  Fiscal 1998 average selling
price for SBQ products increased 2.5% from fiscal 1997. 
Other product shipments and sales for fiscal 1998 were
primarily attributable to sales of hot rolled coils.  The
demand for the Company's SBQ and hot rolled coil products is
cyclical in nature and is sensitive to general economic
conditions. 

     Gross profit for fiscal 1998 decreased $29.1 million
from fiscal 1997, for a gross profit margin of 9.6% in
fiscal 1998 compared to 14.2% in fiscal 1997.  The specialty
steel segment gross profit decreased $29.5 million from
fiscal 1997.  This segment had a gross profit margin of 7.6%
in fiscal 1998 versus 13.1% in fiscal 1997.

     Newport's gross profit margin for fiscal 1998 decreased
to 3.4% from 14.1% in fiscal 1997, and Koppel's margin
decreased to 10.9% from 12.1% in fiscal 1997.  The decreases
were due to lower OCTG product shipments which caused lower
operating efficiencies resulting from reduced production
levels.    Following the successful installation and
start-up of a new electric arc furnace, scheduled for
completion in the second quarter of fiscal 1999, Newport
will be abandoning its existing three electric arc furnaces,
together with related property and equipment.  See Note 1: 
Summary of Significant Accounting Policies - Property, Plant
and Equipment and Depreciation, to the Notes to the
Consolidated Financial Statements.  As such, in the fourth
quarter of fiscal 1998, Newport recorded to cost of products
sold a non-cash impairment loss of $3.2 million. 

     The adhesives segment gross profit increased $0.4
million from fiscal 1997 due to slightly lower raw material
costs, a streamlining of its manufacturing processes and a
change in product mix resulting from the elimination of
certain non-strategic, low margin product lines. Gross
profit margin for this segment was 27.1% in fiscal 1998
compared to 26.0% in fiscal 1997.

     Fiscal 1998 selling and administrative expenses
increased $0.9 million from 1997 and increased as a percent
of sales to 6.9% from 5.7% in fiscal 1997.

     As a result of the above factors, operating income
decreased $30.0 million to $10.9 million in fiscal 1998 from
$41.0 million in fiscal 1997.  The decrease was solely
attributable to the specialty steel segment and was
primarily due to decreased shipments of OCTG products as
well as reduced operating efficiencies.

     Investment income increased $7.3 million from fiscal
1997 and interest expense decreased $11.6 million for the
same period.  The increase in investment income and the
decrease in interest expense is the result of increased
average cash and investment balances and a decrease in
long-term debt obligations, respectively, which resulted
from the Company's September 1997 public offering and 
related retirement of long-term debt (see Notes 4 and 
6 to the Notes to Consolidated Financial Statements.)

     Other income, net was $0.5 million and $1.5 million for
fiscal 1998 and fiscal 1997, respectively.  Both years
included gains from the sale of certain development property
and settlement of insurance claims.

     The Company's combined federal and state effective tax
rate for fiscal 1998 was 36.4%.  This rate is lower than the
combined federal and state statutory rates primarily due to
the utilization of net operating loss carryforwards for
which certain deferred tax valuation allowances had been
previously recorded.  The Company is currently paying
federal taxes at the alternative minimum tax rate of 20%.

     As a result of the above factors, the Company reported
fiscal 1998 net income before extraordinary item of $4.5
million, or $.19 per basic and diluted share, compared to
net income before extraordinary item of $13.7 million, or
$.97 per basic share ($.92 diluted), in fiscal 1997.

     In connection with the favorable resolution of an
environmental contingency matter provided for as  an
extraordinary charge in previous years, the Company recorded
an extraordinary credit of $0.7 million, net of taxes of
$0.3 million, or $.03 per basic and diluted share, in fiscal
1998.  See Note 9 to the Notes to Consolidated Financial
Statements.
 
Fiscal Year Ended September 27, 1997 compared with Fiscal
Year Ended September 28, 1996

     Net sales in fiscal 1997 increased $71.8 million, or
17.5%, from fiscal 1996.  Specialty steel segment net sales
increased $70.8  million, or 19.2%, and the adhesives
segment net sales increased $1.0 million, or 
2.6%, from fiscal 1996.  The overall increase in specialty
steel segment net sales was primarily attributable to
increased shipments and average selling prices of the
Company's tubular products as more fully discussed below.

      Welded tubular net sales increased $52.9 million, or
33.6%, on a volume increase of 19.9%.  The increase in total
welded tubular net sales was primarily due to an increase in
shipments and average selling price of welded OCTG products. 
The increase in welded OCTG shipments and prices were the
result of increased drilling activity.  Average selling
price for all welded tubular products was $503 per ton, an
11.5% increase from fiscal 1996.

     Seamless tubular net sales increased $18.7 million, or
14.0%, on a volume increase of 9.3%.  The increase in total
seamless tubular net sales was primarily due to increased
shipments of seamless OCTG products, attributable to
increased domestic and international drilling activity,
including off-shore drilling.  Average selling price for all
seamless tubular products was $884 per ton, a 4.2% increase
from fiscal 1996, resulting primarily from changes in
product mix. 

     The average number of oil and natural gas drilling rigs
in operation in the United States was 906 in fiscal 1997, up
from 759 in fiscal 1996.

      SBQ product net sales increased $5.1 million, or 8.2%,
on a volume increase of 14.0%.  Fiscal  1997 average selling
price for SBQ products declined 5.1% from fiscal 1996. 
While shipments of SBQ products were above prior year
levels, market and competitive conditions resulted in lower
pricing.  Other product shipments and sales for fiscal 1997
were primarily attributable to sales of hot rolled coils.  

     Gross profit for fiscal 1997 increased $28.5 million
from fiscal 1996, for a gross profit margin of 14.2% in
fiscal 1997 compared to 9.7% in fiscal 1996.  The specialty
steel segment gross profit increased $27.5 million from
fiscal 1996.  This segment had a gross profit margin of
13.1% in fiscal 1997 versus 8.2% in fiscal 1996.  The
increase in specialty steel segment gross profit and margin
was attributable to Newport's welded tubular operations,
where gross profit margins rose from 2.3% in fiscal 1996 to
14.1% in fiscal 1997.  The increase was the result of
increased shipments of welded OCTG products, higher average
selling prices for all tubular products, improved operating
efficiencies and cost reduction initiatives.  Koppel's gross
profit margin decreased to 12.1% from 13.4% in fiscal 1996,
primarily due to a decrease in SBQ selling prices.

     The adhesives segment gross profit increased $1.1
million from fiscal 1996 due to slightly lower raw material
costs.  The gross profit margin was 26.0% compared to 24.0%
in fiscal 1996.
     
     Fiscal 1997 selling and administrative expenses
decreased $0.4 million from 1996 and decreased as a
percentage of sales from 6.8% in fiscal 1996 to 5.7% in
fiscal 1997.

     As a result of the above factors, operating income
increased $28.9 million, from $12.1 million in fiscal 1996
to $41.0 million in fiscal 1997.  The increase in operating
income was almost solely attributable to the specialty steel
segment and was primarily due to increases in Newport's
shipments and average selling prices for welded OCTG
products and improvements in Newport's operations.  

     Investment income increased $0.4 million from fiscal
1996 as a result of increased average invested cash and
short-term investment balances during fiscal 1997.  Interest
expense for fiscal 1997 was virtually unchanged from fiscal
1996 at $24.3 million.

     Other income, net was $1.5 million and $0.6 million for
fiscal 1997 and fiscal 1996, respectively.  Fiscal 1997
includes gains from the sale of certain development property
and settlement of insurance claims, while fiscal 1996 also
includes gains from insurance claims, offset by a loss on
the sale of a non-steel segment fixed asset.

     The Company's combined federal and state effective tax
rate for fiscal 1997 was 28.6% and was lower than the 
combined federal and state statutory rates primarily due to
the utilization of net operating loss carryforwards for
which certain deferred tax valuation allowances had been
previously recorded.  

     As a result of the above factors, the Company reported
fiscal 1997 net income before extraordinary item of $13.7
million, or $.97 per basic share ($.92 diluted), compared to
a net loss of $10.5 million, or a $.76 loss per basic and
diluted share, in fiscal 1996.

     In connection with a fiscal 1997 fourth quarter
refinancing, the Company incurred prepayment costs and wrote
off unamortized debt discount and debt issuance costs which
resulted in an extraordinary charge of $9.3 million, net of
applicable income tax benefit of $2.3 million, or $.65 per
basic share and $.62  per diluted share.  See  Note 4 to the
Notes to Consolidated Financial Statements.

Liquidity and Capital Resources

     Working capital at September 26, 1998 was $147.0
million compared to $226.9 million at September 27, 1997. 
The decline in working capital was largely attributable to
the use of cash and short-term investments to make net
investments of $73.2 million in long-term investments.  The
current ratio at September 26, 1998 was 3.79 to 1 compared
to 2.64 to 1 at September 27, 1997.  At September 26, 1998,
the Company had cash and investments totaling $142.1
million, including $75.6 million in long-term investments. 
At September 26, 1998, the Company had no outstanding
advances against its $50.0 million revolving credit facility
(Credit Facility); however, $1.4 million of the Credit
Facility was utilized to collateralize various letters of
credit.

     Net cash flows provided by operating activities totaled
$30.6 million in fiscal 1998.  The Company recorded net
income of $5.2 million in fiscal 1998.  Major sources of
cash from operating activities in fiscal 1998 included $19.2
million in non-cash depreciation and amortization charges
and $3.2 million in a non-cash writedown of assets to be
disposed; and decreases of $25.3 million and $8.0 million in
accounts receivable and inventory, respectively, resulting
from a decline in business activity.  The major uses of cash
in operating activities included a $7.1 million reduction in
accrued debt prepayment fees, and a $26.4 million decrease
in accounts payable and accrued liabilities resulting
primarily from a decline in business activity.   

     Net cash flows provided by operating activities totaled
$9.7 million in fiscal 1997.  The Company recorded net
income of $4.4 million in fiscal 1997.  Major sources of
cash from operating activities in fiscal 1997 included $23.8
million in non-cash depreciation and amortization charges; a
$7.1 million accrual for debt prepayment penalty; a $4.5
million increase in long-term deferred taxes and a $9.6
million increase in accounts payable and accrued liabilities
due to increased business activity.  The major uses of cash
in operating activities included increases of $11.3 million
and $21.0 million in accounts receivable and inventory,
respectively, resulting from an increase in business
activity related primarily to improvements in the OCTG
marketplace.  Additional uses of cash in operating
activities include a $7.6 million increase in other current
assets primarily related to increases in the Company's
current deferred tax asset and receivables recorded in
connection with certain insurance claims.

     Net cash flows provided by operating activities totaled
$11.5 million in fiscal 1996.  The Company recorded a net
loss of $10.5 million in fiscal 1996.  Major uses of cash in
operating activities in fiscal 1996 included increases of
$6.0 million and $8.6 million in accounts receivable and
inventories, respectively, resulting from an increase in
business activity.  Offsetting these uses were $20.9 million
in non-cash depreciation and amortization charges; a 

$2.5 million increase in long-term deferred taxes; a $2.5
million decrease in operating supplies and other current
assets resulting primarily from a decrease in refundable
income taxes and the collection of previously filed
insurance claims; a $9.0 million increase in accounts
payable primarily resulting from the purchase of steel slabs
and a general increase in business activity; and a $2.2
million increase in accrued liabilities primarily related to
an increase in accrued interest.  Included in the fiscal
1996 net loss was a $1.2 million non-cash gain recorded in
connection with the settlement of certain warranty claims
made by the Company related to the acquisition of Koppel.

     The Company invested $32.6 million, $7.1 million and
$6.5 million in capital expenditures during fiscal 1998,
1997 and 1996, respectively.  Such capital expenditures were
primarily related to improvements to and acquisitions of
machinery and equipment in the specialty steel segment.  Of
the total spending in fiscal 1998, $8.9 million pertained to
the purchase and installation of a new AC electric arc
furnace at Newport.  Capital spending for fiscal 1998, 1997
and 1996 related to the Company's environmental control
facilities was not material.  The Company currently
estimates that fiscal 1999 capital spending will approximate
$31.0 million.  Approximately $16.4 million of fiscal 1999
capital expenditures will be used to complete the furnace
project at Newport, which is scheduled for start-up in the
second quarter of fiscal 1999.  Sources for funding capital
expenditures include cash flows from operations, available
cash and investments, as well as available borrowing
sources.  

     The Company also used cash and short-term investments
to make net investments of $73.2 million in long-term
investments, primarily government and corporate bonds.  The
Company's long-term investments and long-term debt, all of
which are for other than trading purposes, are subject to
interest rate risk.  Information concerning the maturities
and fair value of the Company's  interest rate sensitive
investments and debt is included in Notes 3, 4 and 5 to the
Consolidated Financial Statements.  The Company utilizes
professional investment advisors and considers its net
interest rate risk when selecting the type and maturity of
securities to purchase for its portfolio.  Other factors
considered include, but are not limited to, the timing of
the expected need for the funds invested and the repricing
and credit risks of the securities.

     The Company also generated $4.1 million in cash in
fiscal 1997 from the sale of certain development
property.

     In September 1997, the Company completed a public
offering (Offering) of the Company's common stock.  The
Company sold six million shares for net proceeds, after
expenses, of $169.8 million.  In connection with the
Offering, an additional 2.2 million shares of common stock
were issued upon the conversion of the Company's $28.3
million principal amount 11% Convertible Debentures and the
exercise of certain warrants.  In October 1997, the
underwriters' overallotment was exercised in full, resulting
in the issuance of an additional 0.5 million shares of
common stock with net proceeds to the Company of $15.4
million.  The Company used a portion of the proceeds to
retire $9.6 million principal amount of long-term debt and
called for redemption $52.4 million principal amount of its
outstanding 13.5% Senior Secured Notes (Notes).  The
redemption was made in October and included a prepayment
penalty of $7.1 million, plus accrued interest.  Reference
is made to Note 4 and Note 6 to the Notes to Consolidated
Financial Statements for further information concerning
these transactions.

     During fiscal 1998, the board of directors authorized
the repurchase, at management's discretion, of up to three
million shares of the Company's common stock through June of
1999.  During fiscal 1998, the Company repurchased 1.4
million shares of the Company's common stock for $17.1
million.

     The Company's annual long-term debt maturities are $0.7
million in fiscal 1999, $0.2 million in fiscal 2000, $0.2
million in fiscal 2001, $0.1 million in fiscal 2002 and
$78.7 million in fiscal 2003.

     Reference is made to Note 4 to the Notes to 
Consolidated Financial Statements for further information
concerning the Company's long-term debt and Credit Facility. 
 
     Earnings before interest expense, taxes, depreciation
and amortization (EBITDA) was $41.1 million for fiscal 1998,
$61.1 million for fiscal 1997 and $32.6 million for fiscal
1996.  EBITDA is calculated as income before extraordinary
items plus interest expense, taxes, depreciation and
amortization.  EBITDA provides additional information for
determining the Company's ability to meet debt service
requirements.  EBITDA does not represent and should not be
considered as an alternative to net income, any other
measure of performance as determined by generally accepted
accounting principles, as an indicator of operating
performance, as an alternative to cash flows from 
operating, investing or financing activities or as a measure
of liquidity.

     The Company believes that its current available cash
and investments, its cash flow from operations and borrowing
sources will be sufficient to meet its anticipated operating
cash requirements, including capital expenditures, for at
least the next twelve months.

Inflation

     The Company believes that inflation has not had a
material effect on its results of operations to date. 
Generally, the Company experiences inflationary increases in
its costs of raw materials, energy, supplies, salaries and
benefits and selling and administrative expenses.  The
Company has generally been able to pass these inflationary
increases through to its customers.

Impact of Year 2000 Issue

     The Year 2000 issue results from date sensitive
computer programs that use only the last two digits to refer
to a year.  Such computer programs do not properly recognize
a year that begins with "20" instead of "19".  This issue
impacts the Company and virtually every business that relies
on a computer.  If not corrected, system failures or
miscalculation could occur causing disruption of the
Company's operations, including, among other things, a
temporary inability to process transactions, manufacture
products or engage in similar normal business activities.

     The Company's subsidiaries operate autonomously and are
not dependent on an integrated or centralized corporate-wide
data processing system.  As such, project teams have been
formed at each subsidiary to address the respective
subsidiaries' Year 2000 readiness.  Information technology
(IT) systems, such as any hardware or software used to
process daily operational data and information, as well as
non-IT systems, such as microcontrollers contained in
various manufacturing equipment, are being assessed for Year
2000 compliance.  

     The Company is addressing the Year 2000 issue in a four
phase process.  The first phase is one of awareness and
involves the inventorying of all IT and non-IT systems.  The
Company is approximately 100% complete in identifying all of
its IT and non-IT systems. The second phase of the Company's
process is an assessment stage, where it is determined
whether each of its identified systems are Year 2000
compliant.  The Company is approximately 85% complete in
assessing its IT systems and approximately 80% complete in
assessing its non-IT systems.  Assessment of all systems,
together with plans of remediation for those systems found
to be Year 2000 non-compliant, is scheduled to be completed
by January 1999.  The remediation and testing phases of the
Company's systems are in various stages of completion. 
Remediation efforts may include modifications or replacement
of its software and certain hardware so that those systems
will properly utilize dates beyond December 31, 1999. 
Approximately 60% of the Company's IT systems have been
remediated while remediation on its non-IT systems
approximates 50% completion.  The Company currently
anticipates completion of all remediation and testing of its
systems by October 1999.  

     The Company also faces certain risks to the extent that
its customers or suppliers of products and services do not
become Year 2000 compliant.  The Company is evaluating the
status of significant customers and suppliers to determine
the extent to which the Company is vulnerable to these third
parties.  Ongoing evaluation will continue through 1999;
however, the Company believes its broad customer base and
availability of alternative suppliers will mitigate the
risks associated with these third parties.

     The Company has not yet developed a formal contingency
plan in the event its Year 2000 efforts are not completed in
a timely manner; however, back-up measures are being
identified as systems are assessed to determine the most
likely contingency plan for each system requiring
remediation.  For example, the contingency plan for many IT
systems would be to revert to a manual record system and,
for many non-IT systems, internal clocks could be reset to
an earlier  date.  A formal contingency plan will be
developed, as required, as remediation and testing
procedures are completed in 1999.

     Costs associated with the Company's Year 2000 efforts
were approximately $1.4 million in fiscal 1998 and estimated
costs to complete are $1.9 million.  Costs pertain primarily
to system software and hardware replacements and upgrades
for both its IT and non-IT systems.

     Although the Company has not yet completed all the
necessary phases of its Year 2000 program, it believes that
with modifications to existing software and conversions to
new software, the Year 2000 issue will not pose significant
operational problems for its computer systems. However, if
such modifications and conversions are not made or are not
completed in time, or if a material third party fails to
properly remediate its Year 2000 issues, or if the costs are
higher than expected, the Year 2000 issue could have a
material effect on the Company's operations.  While the
Company is not currently aware of any significant exposure,
there can be no assurance that the Year 2000 issue will not
have a material impact on the business and operations of the
Company.


Other Matters

     See Note 9 to the Notes to Consolidated Financial
Statements, "Commitments and Contingencies".

     See Note 1 to the Notes to Consolidated Financial
Statements, "Summary of Significant Accounting Policies -
Recently Issued Accounting Standards".


Consolidated Statements of Operations

For the years ended September 26, 1998, September 27, 1997,
and September 28, 1996
 (In thousands, except per share amounts)
                                   

                                                             
                            1998         1997       1996     
    

Net sales                $409,855     $481,170    $409,382
Cost of products sold     370,612      412,845     369,585
Selling and administra-
 tive expenses             28,298       27,357      27,744
   Operating income        10,945       40,968      12,053
Investment income           8,358        1,010         637
Interest expense          (12,653)     (24,261)    (24,375)
Other income, net             501        1,465         644
  Income (loss) before 
   income taxes and 
   extraordinary items      7,151       19,182     (11,041)
Provision (credit) for 
  income taxes              2,604        5,478        (584)
  Income (loss) before 
  extraordinary items       4,547       13,704     (10,457)
Extraordinary items, 
 net of income taxes          659       (9,256)          -
  Net income (loss)      $  5,206     $  4,448    $(10,457)

Per common share (basic)
     Income (loss) before 
     extraordinary items     $.19        $ .97       $(.76)
     Extraordinary items, 
     net of income taxes      .03         (.65)          - 
     Net income (loss)       $.22        $ .31       $(.76)

Per common share (diluted)
     Income (loss) before 
     extraordinary items     $.19        $ .92       $(.76)
     Extraordinary items, 
     net of income taxes      .03         (.62)          - 
     Net income (loss)       $.21        $ .30       $(.76)
Weighted average shares
  outstanding        
       Basic               23,684       14,141       13,809
       Diluted             24,511       14,969       13,809

See notes to consolidated financial statements

Consolidated Balance Sheets

September 26, 1998 and September 27, 1997 
(In thousands)

 
                                          1998      1997
ASSETS   
Current assets                                               
     Cash                              $ 1,783    $  6,998 
Short-term investments                  64,689     128,828  
Funds held for debt called 
      for redemption                         -      59,517
     Accounts receivable, less 
     allowance for doubtful 
     accounts of $752 and $712, 
     respectively                       37,840      63,151 
Inventories                             65,462      73,474 
Operating supplies                      14,211      15,657
     Deferred tax assets                 8,256      10,884  
Other current assets                     7,341       6,412   
Total current assets                   199,582     364,921
Property, plant and equipment
  -- at cost 
     Land and buildings                 31,570      30,113 
Machinery and equipment                261,441     245,362 
Construction in progress                13,889       3,304  
Less -- accumulated
      depreciation                    (171,700)   (154,962)   
Net property, plant and 
         equipment                     135,200     123,817
Long-term investments                   75,626       2,800
Other assets                             7,800       8,778
          Total assets                $418,208    $500,316


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
     Accounts and notes payable       $ 28,305    $ 48,389
     Payments due on debt called 
       for redemption                        -      59,517
     Accrued liabilities                23,608      28,126
     Current portion of long-term debt     678       1,958     
Total current liabilities               52,591     137,990
Long-term debt                          76,325      76,424
Deferred taxes                          11,706      13,087
Common shareholders' equity
     Common stock, no par value, 
     40,000 shares authorized,
     24,334 and 23,310 shares issued, 
     respectively                      279,886     261,368 
Treasury stock, 1,354 and 0 
       shares, respectively            (15,992)          - 
     Common stock options and warrants     898       1,612
     Unrealized loss on available 
     for sale securities                (2,834)     (1,238)  
Retained earnings                       15,628     11,073      
Common shareholders' equity            277,586    272,815
          Total liabilities and 
          shareholders' equity        $418,208   $500,316

See notes to consolidated financial statements



Consolidated Statements of Cash Flows


For the years ended September 26, 1998, September 27, 1997
and September 28, 1996
(In thousands)

                          1998         1997         1996 
Cash flows from 
operating activities:                        
                          
    Net income (loss)  $   5,206     $  4,448    $ (10,457) 

    Adjustments to 
    reconcile net income 
    (loss) to net cash 
    flows from operating
    activities:     
    Depreciation and 
     amortization         18,066       17,609       19,260
    Write-down of assets 
     to be disposed        3,215            -             -       
    Amortization of debt 
     discount and finance 
     costs                 1,172        6,219        1,642
    Increase (decrease)
     in long-term 
     deferred taxes          (49)       4,488        2,496
    Non-cash gain on
    settlement of claims       -            -       (1,172)
    Loss on disposal of
     equipment                55          206          642  
    Loss on sales of
     investments             282            -            -
   (Increase) decrease 
    in accounts
     receivable           25,311      (11,327)      (5,966)   
   (Increase) decrease
     in inventories        8,012      (20,992)      (8,601)   
   (Increase) decrease 
     in operating
     supplies and other
     current assets        2,901       (7,641)        2,543     
    Increase (decrease)
    in accrued prepayment
     fees on debt 
     called for
     redemption           (7,079)        7,079             -
   Increase (decrease)
    in accounts payable  (21,929)        5,820         8,950     
   Increase (decrease)
    in accrued 
    liabilities           (4,518)        3,750         2,209
   Net cash flows 
   from operating
    activities            30,645         9,659        11,546

Cash flows from investing activities:

  Purchases of property,
   plant and equipment   (32,576)       (7,139)       (6,510)   
  Proceeds from sale
  of equipment               152           382         1,729     
 Purchases of available
  for sale securities   (112,102)            -             -
 Sales of available for 
  sale securities         22,019             -             -
 Maturities of available
 for sale securities      16,931             -             -
(Increase) decrease in
 other assets                120         4,053           (474)    
    
Net cash flows from 
investing activities    (105,456)       (2,704)       (5,255)

Cash flows from financing activities:
Increase (decrease)
 in notes payable           (480)         (157)          370  
Proceeds from issuance
 of long-term debt            55           340         1,277    
Repayments on long-term 
 debt                    (54,397)      (11,994)       (1,892)   
Proceeds from issuance 
of common stock           17,843        182,902            - 
Purchases of treasury
   stock                 (17,081)            -             -
Net cash flows from 
 financing activities    (54,060)      171,091          (245)
Net increase (decrease)
 in cash and short-
 term investments       (128,871)      178,046          6,046
Cash and short-term 
investments at beginning
  of year                195,343        17,297         11,251
Cash and short-term 
investments at end
  of year              $  66,472      $195,343       $ 17,297
Cash paid during the
 year for:
   Interest            $ 12,738      $  23,231        $ 22,179
  Income taxes, net
 of refunds received   $  4,493      $   1,463        $ (4,234) 

See notes to consolidated financial statements



Consolidated Statements of Common Shareholders' Equity

For the years ended September 26, 1998, September 27, 1997
and September 28, 1996 
(In thousands)
 
                                                             
                                      
                                     
                                                          Options 
                        Common Stock    Treasury Stock      and   
                      Shares   Amount  Shares   Amount   Warrants

Balance,
 September 30, 1995   13,809  $ 49,004      -   $    -    $ 2,737 
Stock option plans                                            37
Unrealized loss on
 investments    
Net loss

Balance, 
September 28, 1996    13,809    49,004      -        -      2,774 
Issuance of common
 stock                 6,000   169,823
Conversion of 11% 
  subordinated
  debentures           1,665    28,300
Stock option plans       645     6,327                       (12)
Exercise of common
 stock warrants        1,191     7,914                    (1,150)
Unrealized gain on 
investments                                 
Net income             
                             

Balance,
 September 27, 1997    23,310  261,368     -        -       1,612
Issuance of common
  stock                   540   15,340
Purchase of treasury 
 stock                                  1,437  (17,081)
Stock option plans         94    1,007    (83)   1,089      (102)
Exercise of common 
 stock warrants           390    2,171                      (612)
Unrealized loss on
 investments         
Net income               
Balance,
 September 26, 1998   24,334 $279,886   1,354  $(15,992)  $  898


Consolidated Statements of Common Shareholders' Equity
(continued)
For the years ended September 26, 1998, September 27, 1997 and
September 29, 1996
(In thousands)
                                Unrealized 
                                Gain(Loss)
                                on Available
                                for Sale      Retained
                                Securities    Earnings   Total

Balance, September 30, 1995      $(713)      $17,082    $68,110
Stock option plans                                           37
Unrealized loss on investments    (574)                    (574)
Net loss                                     (10,457)   (10,457)

Balance, September 28, 1996     (1,287)        6,625     57,116
Issuance of common stock                                169,823
Conversion of 11% 
  subordinated debentures                                28,300
Stock option plans                                        6,315
Exercise of common stock
 warrants                                                 6,764
Unrealized gain on 
 investments                        49                       49
Net income                                     4,448      4,448

Balance, September 27, 1997     (1,238)       11,073    272,815
Issuance of common stock                                 15,340
Purchase of treasury stock                              (17,081)
Stock option plans                              (651)     1,343
Exercise of common stock
 warrants                                                 1,559
Unrealized loss on
 investments                    (1,596)                  (1,596)
Net income                                     5,206      5,206

Balance, September 26, 1998    $(2,834)      $15,628   $277,586


See notes to consolidated financial statements

Notes to Consolidated Financial Statements

Note 1:  Summary of Significant Accounting Policies

Principles of Consolidation

     The consolidated financial statements include the
accounts of NS Group, Inc. and its wholly-owned subsidiaries
(the Company):  Newport Steel Corporation (Newport), Koppel
Steel Corporation (Koppel), Erlanger Tubular Corporation
(Erlanger), Imperial Adhesives, Inc. (Imperial) and Northern
Kentucky Management, Inc.  All significant intercompany
accounts and transactions have been eliminated.

Use of Estimates

     The preparation of financial statements in conformity
with generally accepted accounting principles requires that
management make certain estimates and assumptions that
affect the amounts reported in the consolidated financial
statements and accompanying notes.  Actual results could
differ from those estimates. 

Cash 

     Cash includes currency on hand and demand deposits with
financial institutions. 

Investments

     Short-term investments consist primarily of money
market mutual funds, commercial paper and U.S. treasury
securities, for which market value approximates cost. 
Long-term investments consist primarily of corporate and
government bonds which are classified as "available for
sale" and carried at fair value, based on quoted market
prices.  Unrealized gains and losses on available for sale
securities are included, net of tax, in common shareholders'
equity until disposition.  Realized gains and losses are
included in investment income.  The cost of securities sold
is based on the specific identification method.

Inventories

   At September 26, 1998 and September 27, 1997, inventories
stated at the lower of LIFO (last-in, first-out) cost or
market represent approximately 49% and  53% of total
inventories before the LIFO reserve, respectively.  All
other inventories are stated at the lower of average cost or
market, or the lower of FIFO cost or market.  Inventory
costs include labor, material and manufacturing overhead. 
During fiscal 1998, certain inventory quantity reductions
caused a liquidation of LIFO inventory values.  This
liquidation increased net income by $0.3 million, or $.01
per diluted share.  Inventories consist of the following:

(In thousands)                          1998       1997      
 
Raw materials                       $  7,921     $10,300
Semi-finished and finished goods      58,120      66,005
                                      66,041      76,305
LIFO reserve                            (579)     (2,831)
Total inventories                    $65,462     $73,474


Property, Plant and Equipment and Depreciation

     For financial reporting purposes, plant and equipment
are depreciated on a straight-line method over the estimated
useful lives of the assets.  Expenditures for maintenance
and repairs are charged to expense as incurred. Expenditures
for equipment renewals which extend the life or increase the
productivity or capacity of an asset are capitalized.

     Following the successful installation and start-up of a
new electric arc furnace scheduled for completion in the
second quarter of fiscal 1999,  Newport will be abandoning
its existing three electric arc furnaces together with
related property and equipment.  As such, in the fourth
quarter of fiscal 1998, the Company recorded to cost of
products sold a non-cash impairment loss of $3.2 million.   
The impaired assets were written down to a fair value of
$0.2 million based on the estimated salvage value of the
assets.  The write-down negatively impacted fiscal 1998
income before extraordinary items by $2.0 million, or $.08
per diluted share.

Treasury Stock

     During fiscal 1998 the board of directors authorized
the repurchase, at management's discretion, of up to three
million shares of the Company's common stock through June of
1999.  The Company's repurchases of shares of common stock
are recorded as treasury stock at cost and result in a
reduction of common shareholders' equity.  When treasury
shares are reissued, the Company uses average cost to value
treasury shares and any excess of average cost over
reissuance price is treated as a reduction of retained
earnings.

Income Taxes     

     Deferred income tax balances represent the estimated
future tax effects of temporary differences between the
financial reporting basis and the tax basis of certain
assets and liabilities.  A valuation allowance is
established to reduce deferred tax assets to amounts that
are more likely than not realizable.

Environmental Remediation and Compliance     

     Environmental remediation costs are accrued, except to
the extent capitalizable, when incurrence of such costs are
probable and the costs can be reasonably estimated. 
Environmental compliance costs include maintenance and
operating costs associated with pollution control
facilities, costs of ongoing monitoring programs, permit
costs and other similar costs.  Such costs are expensed as
incurred.

Recently Issued Accounting Standards

     In March 1998, the American Institute of Certified
Public Accountants issued Statement of Position (SOP 98-1)
which addresses the recognition, measurement and disclosure
issues for costs of computer software developed for internal
use.  SOP 98-1 requires companies to capitalize certain
costs related to software developed or obtained for internal
use.  The Company adopted SOP 98-1 in the third quarter of
fiscal 1998 and the impact was not material.  

Fiscal Year-End

     The Company's fiscal year ends on the last Saturday of
September.  

Earnings Per Share

     Basic earnings per share is computed by dividing net
income by the weighted - average number of common shares
outstanding for the period.  Diluted earnings per share
reflects the potential dilution from  securities that could
result in additional common shares being issued which, for
the Company, includes stock options and warrants only.  

     Securities that could potentially result in dilution of
basic EPS through the issuance of 1.1 million and 5.6
million shares of the Company's common stock in fiscal 1998
and 1996, respectively, were not included in the computation
of diluted EPS because they were antidilutive.

Note 2:  Accrued Liabilities


     Accrued liabilities consist of the following:

(In thousands)                       1998        1997 
Accrued payroll and payroll 
 related items                      $10,554     $11,352
Workers' compensation                 3,242       3,530
Accrued interest                      2,186       3,742
Accrued environmental remediation     2,675       4,394
Other                                 4,951       5,108
                                    $23,608     $28,126

Note 3:  Long-term Investments

     At September 26, 1998 and September 27, 1997, the
Company's long-term investments, which are all classified as
available for sale, consists of the following:

1998              Amortized   Gross Unrealized     Market
(In thousands)      Cost      Gains      Losses    Value
Corporate bonds   $46,945     $163    $ (1,393)   $45,715
U.S. government-
backed securities  20,337      176         (10)    20,503
Other debt 
securities          7,997       11           -      8,008
                  $75,279     $350     $(1,403)   $74,226   
Equity securities $ 4,800     $  -     $(3,400)   $ 1,400

1997
(In thousands)
Equity securities $ 4,800     $  -     $(2,000)   $ 2,800   

     At September 26, 1998, scheduled maturities of the
Company's investments in long-term debt securities were as
follows:  
(In thousands)      Average Year    Amortized     Market  
                      End Rate        Cost        Value
One year or less       5.55%         $28,141      $28,154
One year through 
 five years            6.12%          22,998       23,176
After five years       8.95%          24,140       22,896
                                     $75,279      $74,226

     Gross gains and losses of $0.1 million and $0.4
million, respectively, were realized during fiscal 1998. 
There were no realized gains or losses on available for sale
securities in fiscal 1997 and 1996.  The Company recorded a
net unrealized loss of $1.6 million, net of taxes in fiscal
1998 on its available for sale securities.  Net unrealized
gains, net of taxes, were not material in fiscal 1997.

Note 4:  Long-term Debt and Credit Facility

     Long-term debt of the Company consists of the
following: 

(In thousands)                     1998            1997 
13.5% Senior Secured Notes 
due July 15, 2003, interest 
due semi-annually, secured 
by property, plant and 
equipment (net of unamortized 
discount of $3,712 and $4,237, 
respectively)                      $74,946         $74,421
13.5% Senior Secured Notes 
called for redemption                    -          52,438

Other                                2,057           3,961
                                    77,003         130,820
Less: 
  Current portion                     (678)         (1,958)
  13.5% Senior Secured Notes 
  called for redemption                  -         (52,438)
                                   $76,325         $76,424


     In September 1997, the Company called for redemption
$52.4 million principal amount of its outstanding 13.5%
Senior Secured Notes due 2003 (Notes).  The redemption was
made in October 1997 from the proceeds of a public offering
(see Note 6) and included a prepayment penalty of $7.1
million, plus accrued interest.  The remaining Notes may be
redeemed at the option of the Company, at any time, in whole
or in part, beginning in 2000, initially at a price of
103.86%, declining to 100% in 2002.  

     The Notes are unconditionally guaranteed in full,
jointly and severally, by each of the Company's subsidiaries
and are secured by the property, plant and equipment of the
Company's steel-making operations.  The indenture relating
to the Notes contains a number of restrictive covenants
including, among other things, limitations on the ability of
the Company to incur additional indebtedness; create liens;
make certain restricted payments, including dividends;
engage in certain transactions with affiliates; engage in
sale and leaseback transactions; dispose of assets; issue or
sell stock of its subsidiaries; enter into agreements that
restrict the ability of its subsidiaries to pay dividends
and make distributions; engage in mergers, consolidations
and transfers of substantially all of the Company's assets;
and make certain investments, loans and advances.  

     In July 1998, the Company entered into a new $50.0
million revolving credit agreement.  Interest rates range
from the prime rate to prime plus .25% with respect to
domestic rate loans, and interest rates on offshore rate
loans (based on LIBOR) range from the offshore rate plus
 .375% to the offshore rate plus .875%.  The credit facility
contains certain financial covenants including a maximum
ratio of debt to cash flow, a minimum interest coverage
ratio, a maximum outstanding loans under the line to working
capital and a minimum net worth.  The credit facility also
has restrictions on capital expenditures and the sale of
certain assets.  At September 26, 1998 approximately $1.4
million of the credit facility was utilized to collateralize
letters of credit and $48.6 million was available for
borrowing.  The credit facility expires in fiscal 2003.

     In connection with the retirement of long-term
indebtedness in the fourth quarter of fiscal 1997, the
Company incurred prepayment costs and wrote off unamortized
debt discount and debt issuance costs which resulted in an
extraordinary charge of $9.3 million, net of applicable
income tax benefit of $2.3 million, or $.65 and $.62 per
basic and diluted share, respectively.  

     Annual long-term debt maturities are $0.7 million in
fiscal 1999, $0.2 million in fiscal 2000, $0.2 million in
fiscal 2001, $0.1 million in fiscal 2002 and $78.7 million
in fiscal 2003.
          
     As of September 26, 1998 and September 27, 1997 the
weighted-average interest rate on outstanding notes payable
was 6.1%.

Note 5:  Fair Value of Financial Instruments

     The following methods and assumptions were used to
estimate the fair value of financial instruments:
      
     Cash and short-term investments  -   The carrying
amount approximates fair value because of the short maturity
of these instruments.

     Long-term investments - The carrying amount is recorded
at fair value which is based upon quoted market prices.
                      
     Notes payable  -   The carrying amount approximates
fair value because of the short maturity.
     
     Long-term debt   -   The fair value of the Company's
Senior Secured Notes is based upon their trading price as of
fiscal year-end.  The fair value of other long-term debt was
estimated by calculating the present value of the remaining
interest and principal payments on the debt to maturity. 
The present value computation uses a discount rate based
upon current market rates.

     The carrying amount and fair value of the Company's
financial instruments are as follows:

                         1998                   1997
                   Carrying    Fair        Carrying   Fair  
(In thousands)      Amount     Value        Amount    Value  
Cash and short-
term investments    $66,472   $66,472     $195,343  $195,343
Long-term 
investments          75,626    75,626        2,800     2,800
Notes payable           242       242          722       722
Long-term debt       76,325    87,012      130,820   153,856


Note 6:  Common Stock Offering

     In September 1997, the Company completed a public
offering (Offering) of the Company's common stock.  The
Company issued and sold 6.0  million shares, which resulted
in net proceeds to the Company of $169.8 million after the
underwriters' discount and other Offering expenses.  In
connection with the Offering, an additional 2.2 million
shares of common stock were issued upon the conversion of
the Company's 11% Convertible Debentures and the exercise of
certain warrants, a substantial portion of which were sold
in the Offering.

     In the first quarter of fiscal 1998, the underwriters'
over-allotment option was exercised in full, resulting in
the issuance and sale of an additional 0.5 million shares of
common stock by the Company and net proceeds to the Company
of $15.3 million.

Note 7:  Preferred Stock

     The Company's authorized stock includes two million
shares of Class A Preferred Stock, issuable in one or more
series.  The rights, preferences, privileges and
restrictions of any series of Class A Preferred Stock, the
number of shares constituting any such series and the
designation thereof, are subject to determination by the
Board of Directors.

     One million shares of the Class A Preferred Stock has
been designated as Series B  Junior Participating Preferred
Stock, par value $10 per share, in connection with a
Shareholder Rights Plan (Plan) adopted in November, 1998. 
Pursuant to the Plan, one Preferred Stock Purchase Right
(Right) is attached to each outstanding share of common
stock of the Company.

     The Plan includes provisions which are intended to
protect shareholders against certain unfair and abusive
takeover attempts by anyone acquiring or tendering for 20%
or more of the Company's common stock.  The Company may
redeem the Rights for one-half cent per Right at any time
before a 20% position has been acquired.  The Rights expire
in November 2008.

Note 8:  Stock Options and Warrants

     The Company has various stock option plans under which
the Company may grant incentive and nonqualified stock
options and stock appreciation rights to purchase shares of
the Company's common stock.  All incentive stock options
were granted at the fair market value on the date of grant. 
Incentive stock options generally become exercisable
beginning one to three years after the grant date and expire
after ten years.  Nonqualified stock options become
exercisable according to a vesting schedule determined at
the grant date and expire no later than ten years after
grant.  During fiscal 1998, nonqualified stock options were
granted at exercise prices approximating the market price on
the date of grant.  For fiscal 1998 and 1996, the
weighted-average fair value of options granted was $9.29 and
$1.20, respectively.

     A summary of transactions in the plans follows:

                     1998           1997          1996
                         Average       Average       Average 
                        Exercise       Exercise     Exercise
               Shares   Price   Shares Price Shares  Price
Outstanding,
beginning
of year        896,755  $ 6.73 1,629,330  $7.22  1,667,055  $7.36
Granted        851,950   14.37         -      -     60,000   2.63
Expired       (170,132)  13.56   (87,395)  8.01    (97,725)  6.87
Exercised     (200,459)   6.32  (645,180)  7.78          -      -
Outstanding,
 end of
 year        1,378,114  $10.67   896,755  $6.73  1,629,330  $7.22
Exercisable,
 end of
 year          445,549  $ 6.32   489,504  $7.73    951,428  $8.42
Available for grant        333,440      1,153,230      1,093,825  

     The Company accounts for these plans in accordance with
the intrinsic value method.  Pro forma compensation cost,
net income (loss) and per share amounts computed as if the
Company had accounted for the fiscal 1998 option grants on
the fair value method would have been $0.8 million, $4.4
million and $.19  (basic) $.18 (diluted), respectively. 
Amounts for fiscal 1997 and fiscal 1996 would not have been
materially different from reported amounts.

     The fair value of the granted options were determined
using the Black-Scholes option pricing model with the
following assumptions for fiscal 1998 and 1996,
respectively:  no common stock dividends; expected
volatility of 59% and 40%; risk-free interest rates of 5.5%
and 5.7%; and expected life of 7 years and 8 years.
  
     A summary of information about stock options
outstanding at September 26, 1998 follows:

               Options Outstanding      Options Exercisable  
Range of           Average  Average                Average
Exercise           Exercise Remaining              Exercise
Prices     Shares  Price    Life        Shares     Price
$2.63 -
 $5.94    287,104   $ 4.21    6.4       218,368   $  4.19
$6.125 -
 $9.75    308,085     7.29    4.3       197,706      7.51
$13.25 - 
 $14.38   782,925    14.37    9.3        29,475     14.20
        1,378,114   $10.67    7.6       445,549   $  6.32

     At September 26, 1998, the Company had common stock
warrants outstanding, exercisable for approximately 272,000
shares of the Company's common stock at a price of $8.00 per
share and 453,000 shares at a price of $4.00 per share.  The
warrants expire October 4, 2000 and July 15, 2003,
respectively.  

Note 9:  Commitments and Contingencies

     The Company has various commitments for the purchase of
materials, supplies and energy arising in the ordinary
course of business.  In connection with its capital
expenditure program, the Company will spend approximately
$16.4 million in fiscal 1999 to complete the purchase and
installation of a new AC electric arc furnace at Newport. 
The furnace is scheduled for start-up in the second quarter
of fiscal 1999.

     The Company has change of control severance agreements
with certain of its key employees.  The agreements contain
provisions that would entitle each officer to receive an
amount ranging from two to three times his base salary plus
two to three times his five year average bonus, and
continuation of certain benefits, if there is a change of
control (as defined) of the Company and a termination of his
employment.

     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.  The Company accrues for the cost of such
matters when the incurrence of such costs is probable and
can be reasonably estimated.  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.

     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 related to a
release of oil into the Licking River and certain related
actions taken by Newport in connection therewith.  The
Company 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.  In the fourth quarter of fiscal
1998, the Company entered into a contract with a company to
dispose of the dust at an EPA - approved facility.  The
project is expected to be completed by the second quarter of
fiscal 1999.  Pursuant to the contract, the Company expects
disposal costs to approximate $2.4 million and further,
expects to receive $1.2 million in insurance claims which
will be filed as disposal costs are incurred.  As such, the
Company adjusted its reserves and receivable to such amounts
and recorded an extraordinary credit of $0.7 million, net of
taxes of $0.3 million, or $.03 per basic and diluted share.  


     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 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.

Note 10:  Employee Benefit Plans

     The Company has established various profit sharing
plans at the operating companies which are based on the
earnings of the respective companies.  Generally, the plans
require mandatory contributions at a specified percentage of
pretax profits (with a guaranteed minimum based on hours
worked) for the bargaining unit employees, and discretionary
contributions for salaried employees.  The Company also has
several defined contribution plans covering substantially
all of its employees and a non-qualified deferred
compensation plan covering certain employees.  Expense for
these plans was approximately $3.3 million, $2.8 million and
$1.9 million in fiscal years 1998, 1997, and 1996,
respectively.


Note 11:  Income Taxes

The provision (credit) for income taxes, including $0.3
million and ($2.3) million allocated to extraordinary items
in fiscal 1998 and fiscal 1997, respectively, consists of
the following:

(In thousands)            1998        1997         1996
Current                 $1,235     $  2,780     $(2,112) 
Deferred                 1,247         (897)      1,528
Tax benefit of employee
stock option exercises 
allocated to equity        474        1,281           -
Provision (credit) for 
income taxes            $2,956     $  3,164     $  (584)

     The income tax provision (credit) differs from the
amount computed by applying the statutory federal income tax
rate to income (loss), including extraordinary items, before
income taxes for the following reasons:

(In thousands)           1998         1997          1996
Income tax provision 
(credit) at statutory 
tax rate of 35%          $2,857      $2,664       $(3,864)
Change in taxes 
resulting from:
 State income taxes, 
 net of federal effect      471          95          (926)       
 Change in valuation
  allowance                (139)        542         4,156
     Other, net            (233)       (137)           50
Provision (credit) for 
 income taxes            $2,956      $3,164       $  (584)


     The following represents the components of deferred tax
liabilities and assets at September 26, 1998 and September
27, 1997: 

(In thousands)                         1998      1997
Deferred tax liabilities:          
  Property, plant and equipment      $28,862    $30,517
      Other items                        152        671
                                      29,014     31,188
Deferred tax assets:
     Reserves and accruals             7,913      6,327
     Net operating tax loss 
     carryforward                     14,076     16,730
     Alternative minimum tax 
     and other tax credit
     carryforwards                     5,933      6,122
     Deferred financing costs              -      1,641
     Unrealized loss on investments    1,663        700
     Other items                         538      2,163
                                      30,123     33,683
     Valuation allowance              (4,559)    (4,698)
        Net deferred tax assets       25,564     28,985
Net deferred tax liability           $ 3,450   $  2,203


     For federal income tax purposes, the Company has
alternative minimum tax credit carryforwards of
approximately $5.8 million, which are not limited by
expiration dates, and net operating tax loss carryforwards
of approximately $40.2 million, which expire beginning in
2008.  The Company has recorded deferred tax assets related
to these carryforwards, net of a deferred tax asset
valuation allowance.  In estimating the amount of the 
valuation allowance required, the Company has considered
future taxable income related to the reversal of temporary
differences in the tax and financial reporting basis of
assets and liabilities.

Note 12:  Related Party Transactions

     One of the Company's directors has a controlling
interest in a company which purchases secondary and limited
service tubular products from Newport.  Sales to this
customer were approximately $13.2 million, $15.6 million and
$16.8 million for fiscal years 1998, 1997 and 1996,
respectively.  Trade receivables from this customer were
$1.0 million at the end of fiscal 1998 and 1997.

Note 13:  Business Segment Information

     The Company operates in two business segments: 
specialty steel and industrial adhesives.  Within the
specialty steel segment are the operations of Newport, a
manufacturer of welded tubular steel products and hot rolled
coils and Koppel, a manufacturer of seamless tubular steel
products and special bar quality (SBQ) products.  The
Company's specialty steel products consist of: (i) welded
and seamless tubular goods used primarily in oil and natural
gas drilling and production operations (oil country tubular
goods, or OCTG); (ii) line pipe used in the transmission of
oil, gas and other fluids; (iii) SBQ products used primarily
in the manufacture of heavy industrial equipment and (iv)
hot rolled coils which are sold to service centers and other
manufacturers for further processing.  Within the adhesives
segment are the operations of Imperial, a manufacturer of
industrial adhesives products and footwear finishes
products.

     The operations of both segments are conducted
principally in the United States.  The Company grants trade
credit to customers, the most significant of which are
distributors serving the oil and natural gas exploration and
production industries which purchase tubular steel products
from the specialty steel products segment.  In fiscal 1997,
one customer accounted for 10.3% of net sales.  The
following table sets forth selected financial information by
business segment for fiscal 1998, 1997 and 1996.  



(In thousands)                        Depre-
                                       ciation               
                   Oper-     Identi-  and       Capital
1998       Net     ating     fiable   Amorti-   Expen-
           Sales   Income    Assets   zation    ditures


Specialty 
steel 
segment   $369,293  $13,899   $242,244  $17,484   $31,996
Adhesives 
segment     40,562    2,302     14,570      582       580
Corporate 
assets and
allocations      -   (5,256)   161,394        -         -

Total
consoli-
dated     $409,855  $10,945   $418,208  $18,066   $32,576

1997
Specialty 
steel 
segment   $440,229  $43,760   $271,510  $16,954   $ 6,589 
Adhesives
segment     40,941    1,799     13,505      655       550
Corporate 
assets and
allocations      -   (4,591)   215,301        -         -

Total 
consoli-
dated     $481,170  $40,968   $500,316  $17,609   $ 7,139

1996
Specialty 
steel 
segment   $369,466  $14,886   $245,642  $18,595   $ 6,279
Adhesives 
segment     39,916    1,597     15,338      665       231   
Corporate 
assets and  
alloca-
tions            -   (4,430)    39,054        -         -

Total consol-
idated    $409,382  $12,053   $300,034  $19,260   $ 6,510


Note 14:  Quarterly Financial Data (Unaudited)

     Quarterly results of operations for fiscal 1998 and
1997 are as follows:  
       
(In thousands, except per share amounts)    
                          First     Second     Third     Fourth
1998                     Quarter    Quarter    Quarter   Quarter
Net sales               $123,733   $123,566   $96,882   $65,674
Gross profit (loss)       17,591      16,179    9,753    (4,280)
Income (loss) before 
extraordinary item         6,537       5,736    1,189    (8,915)
Net income (loss)          6,537       5,736    1,189    (8,256)
Net income (loss) 
per common share      
before extraordinary
 item  
    Basic                    .27         .24      .05      (.39)
    Diluted                  .26         .23      .05      (.39)
Net income (loss) 
per common share
    Basic                    .27         .24      .05      (.36)
    Diluted                  .26         .23      .05      (.36)

1997
Net sales               $105,167    $111,110  $132,853  $132,040
Gross profit              12,343      15,737    19,354    20,891
Income before extra-
ordinary item                249       2,169     4,930     6,356
Net income (loss)            249       2,169     4,930    (2,900)
Net income per common 
 share before extra-
 ordinary item  
    Basic                    .02         .16       .36       .42
    Diluted                  .02         .15       .33       .37
Net income (loss) 
 per common share
    Basic                    .02         .16       .36      (.19)
    Diluted                  .02         .15       .33      (.13)


     Reference is made to Note 1:  Summary of  Significant
Accounting Policies - Property, Plant and Equipment and
Depreciation regarding a fiscal 1998 fourth quarter
impairment loss.  Also, reference is made to Notes 4 and 9
to the Consolidated Financial Statements for a discussion of
extraordinary items in fiscal 1997 and 1998, respectively.

Note 15:  Summarized Financial Information

     The Company's Senior Secured Notes are unconditionally
guaranteed in full, jointly and severally, by each of the
Company's subsidiaries (Subsidiary Guarantors), each of
which is wholly-owned.  Separate financial statements of the
Subsidiary Guarantors are not presented because they are not
deemed material to investors.  The following is summarized
financial information of the Subsidiary Guarantors as of
September 26, 1998 and September 27, 1997 and for each of
the three years in the period ended September 26, 1998.  All
significant intercompany accounts and transactions between
the Subsidiary Guarantors have been eliminated.
 
(In thousands)                  September      September
                                 26,1998       27, 1997
Current assets                  $130,129       $168,412        
Noncurrent assets                140,942        131,526  

Current liabilities               43,990         70,871

Payable to parent               $174,316       $174,495        
Other noncurrent liabilities       1,379          2,003     
 Total noncurrent liabilities   $175,695       $176,498  



                                                             
                      Fiscal Year Ended
(In thousands)                    1998        1997        1996    
              
Net sales                       $409,855    $481,170    $409,382  
Gross profit                     39,243      68,325      39,797 
Income (loss) before extra-
ordinary items                     3,320      8,209       (5,816) 
Net income (loss)                 3,979      8,209       (5,816)
                    


Report of Management


     The accompanying consolidated financial statements have
been prepared by the management of NS Group, Inc., in
conformity with generally accepted accounting principles
and, in the judgment of management, present fairly and
consistently the Company's consolidated financial position
and results of operations.  These statements necessarily
include amounts that are based on management's best
estimates and judgments.  The financial information
contained elsewhere in this report is consistent with that
contained in the consolidated financial statements.

     In fulfilling its responsibilities for the integrity of
financial information, management maintains accounting
systems and related controls.  These controls provide
reasonable assurance, at appropriate costs, that assets are
safeguarded against losses and that financial records are
reliable for use in preparing financial statements.  These
systems are enhanced by written policies, an organizational
structure that provides division of responsibilities and
careful selection and training of qualified people.

     In connection with their annual audit, independent
public accountants perform an examination in accordance with
generally accepted auditing standards, which includes a
review of the system of internal accounting control and an
expression of an opinion that the consolidated financial
statements are fairly presented in all material respects. 

     The Board of Directors, through its Audit Committee
composed solely of non-employee directors, reviews the
Company's financial reporting and accounting practices.  The
independent public accountants meet regularly with and have
access to this Committee, with or without management
present, to discuss the results of their audit work.


Clifford R. Borland        
Chairman, President
and Chief Executive Officer                                  
          

John R. Parker
Vice President, Treasurer and Chief Financial Officer


Report of Independent Public Accountants

To  NS Group, Inc.

     We have audited the accompanying consolidated balance
sheets of NS Group, Inc. (a Kentucky corporation) and
subsidiaries as of September 26, 1998 and September 27,
1997, and the related consolidated statements of operations,
common shareholders' equity and cash flows for each of the
three years in the period ended September 26, 1998.  These
financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on
these financial statements based on our audits.

     We conducted our audits in accordance with generally
accepted auditing standards.  Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide
a reasonable basis for our opinion.

     In our opinion, the financial statements referred to
above present fairly, in all material respects, the
financial position of NS Group, Inc. and subsidiaries as of
September 26, 1998 and September 27, 1997, and the results
of their operations and their cash flows for each of the
three years in the period ended September 26, 1998 in
conformity with generally accepted accounting principles.



                              ARTHUR ANDERSEN  LLP
Cincinnati, Ohio
November 2, 1998                                             
                

Consolidated Historical Summary


(Dollars in thousands, except per share amounts)

                                                             
                             1998     1997       1996       1995  
                 
Summary of Operations
Net sales                 $409,855  $481,170  $409,382  $371,352
Operating income (loss)     10,945    40,968    12,053     7,806 
Operating income margin       2.7%      8.5%      2.9%      2.1%
Income (loss) before 
extraordinary items          4,547    13,704   (10,457)   (5,056)
Net income (loss)            5,206     4,448   (10,457)  (10,256)
Income (loss) per diluted 
share before extraordinary
 items                         .19       .92      (.76)     (.36)
Net income (loss) per 
diluted share                  .21       .30      (.76)     (.74)
Dividends per common share                    
Weighted average shares 
outstanding  
diluted (000's)             24,511    14,969    13,809    13,809



Other Financial and Statistical Data    

Working capital           $146,991  $226,931  $ 80,905 $ 72,854
Total assets               418,208   500,316   300,034  298,497
Long-term debt              76,325    76,424   164,789  166,528
Common shareholders'
 equity                    277,586   272,815    57,116   68,110
Capital expenditures        32,576     7,139     6,510   12,233
Depreciation and 
amortization                19,238    23,828    20,902   21,311
EBITDA                      41,085    61,052    32,594   31,141
Current ratio                 3.79      2.64      2.16     2.27
Debt-to-equity ratio           .28       .29      2.93     2.47 
Book value per 
outstanding share            12.08     11.70      4.14     4.93
Steel product
  shipments (tons)
 Tubular products           450,000   590,000   506,000   440,000 
 
 Special bar quality
 products and other         184,000   179,000  177,000   216,000
Employees                     1,803     1,948    1,774     1,728


   * Includes the impact of the sale of Kentucky Electric
     Steel Corporation
  ** Assets of Koppel Steel Corporation acquired   



       1994*     1993      1992     1991**     1990      1989   
     $303,380  $353,082  $281,242  $212,471  $249,871  $219,414
          689    11,672     1,401   (18,177)   19,370    18,469
          .2%      3.3%       .5%     (8.6)%     7.8%      8.4%
       13,208    (5,896)  (13,358)  (20,603)   13,047    12,773
       13,208    (6,991)  (15,900)  (20,603)   13,047    12,773
          .95      (.44)     (.99)    (1.53)      .96       .94
          .95      (.52)    (1.18)    (1.53)      .96       .94
            -         -       .06       .12       .11       .05
       13,843    13,553    13,483    13,449    13,589    13,535


     
    $  50,682  $ 43,174  $ 44,198  $ 48,411  $ 64,858  $ 55,714
      315,327   317,242   319,079   329,889   220,856   177,292
      138,110   156,056   164,180   168,822    65,884    24,958
       76,464    62,622    68,574    85,149   107,226    95,490
       10,394     5,488     4,148   112,573    45,011    28,081
       18,789    19,093    18,711     5,725     6,879     6,080
       21,566    30,355    20,515    (1,360)   28,852    27,514
         1.56      1.49      1.60      1.79      2.90      2.30
         2.01      2.64      2.52      2.11       .65       .31
         5.54      4.57      5.08      6.33      7.98      7.13

      370,000  385,000    292,000   215,000   285,000   209,000
      191,000  363,000    299,000   212,000   239,000   262,000
        1,568    1,995      1,770     1,705     1,479     1,457


Corporate and Shareholder Information

Stock Market Information
    NS Group, Inc. is listed on the New York Stock Exchange,
trading symbol, NSS.  

Stock Price 
     Fiscal 1998        High           Low           
     1st  Quarter       $41 1/4       $13 1/4
     2nd Quarter         18            12 5/8  
     3rd Quarter         15 7/16        8 5/16
     4th Quarter         10 1/4         5 1/2

     Fiscal 1997        High           Low
     1st  Quarter       $   4 3/8     $ 3
     2nd Quarter            5 5/8       4 1/8
     3rd Quarter           11 7/8       4 3/4
     4th Quarter           34 1/4      11 1/2