WICKES INC. AND SUBSIDIARIES
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


               SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C.  20549

                           FORM 10-Q

          QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
             OF THE SECURITIES EXCHANGE ACT OF 1934


                                                  Commission File
For the Quarterly Period Ended June 26, 1999      Number  0-22468
                               -------------              -------

                         WICKES INC.
                         -----------
     (Exact name of registrant as specified in its charter)


               Delaware                           36-3554758
               --------                           ----------
(State or other jurisdiction of                (I.R.S. Employer
incorporation or organization)                Identification No.)


706 North Deerpath Drive, Vernon Hills, Illinois         60061
------------------------------------------------         -----
(Address of principal executive offices)               (Zip Code)



                               847-367-3400
                               ------------
           (Registrant's telephone number, including area code)

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, and (2) has been subject to  such
filing requirements for the past 90 days.

                                   Yes   X        No
                                        ---           ---
As  of  July 31, 1999, the Registrant had 8,218,417 shares of Common Stock,
par value $.01 per share outstanding.




<PAGE> 2

                       WICKES INC. AND SUBSIDIARIES

                                   INDEX
<TABLE>
<CAPTION>
                                                            Page
                                                           Number
                                                           ------
<S>                                                        <C>
PART I.  FINANCIAL INFORMATION

   Item 1.  Financial Statements

      Condensed Consolidated Balance Sheets
       June 26, 1999 and December 26, 1998 (unaudited)        3

      Condensed Consolidated Statements of Operations
       For the three months and six months ended
       June 26, 1999 and June 27, 1998 (Unaudited)            4

      Condensed Consolidated Statements of Cash Flows
       For the six months ended June 26, 1999 and
       June 27, 1998 (Unaudited)                              5

      Notes to Condensed Consolidated
       Financial Statements (Unaudited)                       6

   Item 2.  Management's Discussion and Analysis of Financial
            Condition and Results of Operations              12

   Item 3.  Quantitative and Qualitative Disclosures about
            Market Risk                                      25


PART II.  OTHER INFORMATION

   Item 6.  Exhibits and Reports on Form 8-K                 26

</TABLE>

                                     2


<PAGE> 3

                       WICKES INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                                (UNAUDITED)
                     (in thousands except share data)

<TABLE>
<CAPTION>
                                                      June 26,    December 26,
                                                        1999          1998
                                                      -------       --------
               ASSETS
<S>                                                 <C>            <C>
Current assets:
 Cash                                               $      71      $      65
 Accounts receivable, less allowance for doubtful
     accounts of $4,128 in 1999 and $4,393 in 1998    125,461         92,926
 Notes receivable                                         835          1,095
 Inventory                                            133,637        103,716
 Deferred tax asset                                     8,857          8,857
 Prepaid expenses                                       3,784          3,652
                                                      -------        -------
  Total current assets                                272,645        210,311
                                                      -------        -------

 Property, plant and equipment, net                    48,591         45,830
 Trademark (net of accumulated amortization of
  $10,607 in 1999 and $10,496 in 1998)                  6,412          6,523
 Deferred tax asset                                    17,205         17,205
 Rental equipment (net of accumulated depreciation
  of $804 in 1999 and $572 in 1998)                     2,032          1,883
 Other assets (net of accumulated amortization of
  $10,414 in 1999 and $9,502 in 1998)                  15,334         10,998
                                                      -------        -------
    Total assets                                    $ 362,219      $ 292,750
                                                      =======        =======

   LIABILITIES & STOCKHOLDERS' EQUITY

Current liabilities:
 Current maturities of long-term debt               $       4      $      16
 Accounts payable                                      71,072         54,017
 Accrued liabilities                                   20,259         20,142
                                                      -------        -------
  Total current liabilities                            91,335         74,175
                                                      -------        -------

Long-term debt, less current maturities               243,856        191,961
Other long-term liabilities                             3,024          2,952
Commitments and contingencies (Note 4)

Stockholders' equity:
 Preferred stock (no shares issued)
 Common stock (8,214,776 shares issued and
  outstanding in 1999 and 8,207,268 shares
  issued and outstanding in 1998)                          82             82
 Additional paid-in capital                            86,818         86,787
 Accumulated deficit                                  (62,896)       (63,207)
                                                      -------        -------
    Total stockholders' equity                         24,004         23,662
                                                      -------        -------
Total liabilities & stockholders' equity            $ 362,219      $ 292,750
                                                      =======        =======
</TABLE>

  The accompanying notes are an integral part of the condensed consolidated
                          financial statements.

                                     3


<PAGE> 4

                       WICKES INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)
              (in thousands except share and per share data)

<TABLE>
<CAPTION>
                                                   Three Months Ended      Six Months Ended
                                                  --------------------   --------------------
                                                   June 26,   June 27,    June 26,    June 27,
                                                     1999       1998        1999        1998
                                                   -------    --------    --------    --------
<S>                                              <C>         <C>         <C>         <C>
Net sales                                        $ 288,750   $ 237,141   $ 479,860   $ 405,887
Cost of sales                                      222,425     181,052     367,628     308,815
                                                   -------     -------     -------     -------
  Gross profit                                      66,325      56,089     112,232      97,072
                                                   -------     -------     -------     -------

Selling, general and administrative expenses        54,780      45,824      99,423      86,419
Depreciation, goodwill and trademark amortization    1,616       1,284       3,048       2,550
Provision for doubtful accounts                        (42)       (124)        406       1,209
Restructuring and unusual items                          -           -           -       5,431
Other operating income                              (2,171)     (1,419)     (3,060)     (3,805)
                                                   -------     -------     -------     -------
                                                    54,183      45,565      99,817      91,804
                                                   -------     -------     -------     -------

  Income from operations                            12,142      10,524      12,415       5,268

Interest expense                                     5,958       5,489      11,260      10,911
                                                   -------     -------     -------     -------

Income (loss) before income taxes                    6,184       5,035       1,155      (5,643)

Provision (benefit) for income taxes                 2,597       2,249         844      (1,630)
                                                   -------     -------     -------     -------

  Net income (loss)                              $   3,587   $   2,786   $     311   $  (4,013)
                                                   =======     =======     =======     =======

Basic income (loss) per common share             $    0.44   $    0.34   $     .04   $   (0.49)
                                                   =======     =======     =======     =======
Diluted income (loss) per common share           $    0.43   $    0.33   $     .04   $   (0.49)
                                                   =======     =======     =======     =======
Weighted average common shares - for basic       8,214,397   8,192,806   8,212,288   8,187,328
                                                 =========   =========   =========   =========
Weighted average common shares - for diluted     8,266,817   8,333,938   8,263,784   8,240,533
                                                 =========   =========   =========   =========

</TABLE>

 The accompanying notes are an integral part of the condensed consolidated
                           financial statements.

                                     4


<PAGE> 5


                       WICKES INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                (UNAUDITED)
                              (in thousands)
<TABLE>
<CAPTION>
                                                               Six Months Ended
                                                               ----------------
                                                            June 26,      June 27,
                                                              1999          1998
                                                            -------       -------
<S>                                                       <C>          <C>
Cash flows from operating activities:
   Net income (loss)                                      $     311     $  (4,013)
 Adjustments to reconcile net income (loss) to
        net cash used in operating activities:
 Depreciation expense                                         2,779         2,316
 Amortization of trademark                                      111           111
 Amortization of goodwill                                       158           123
 Amortization of deferred financing costs                       729           833
 Provision for doubtful accounts                                406         1,209
 Gain on sale of assets                                      (1,427)       (1,501)
 Deferred tax benefit                                             -        (2,201)
 Changes in assets and liabilities:
  Increase in accounts receivable                           (31,185)      (18,338)
  Decrease in notes receivable                                  260         2,231
  Increase in inventory                                     (29,371)      (14,317)
  Increase in accounts payable and accrued liabilities       17,103        13,474
  Increase in other assets                                   (2,898)       (1,000)
                                                            -------       -------
NET CASH USED IN OPERATING ACTIVITIES                       (43,024)      (21,073)
                                                            -------       -------

Cash flows from investing activities:
 Purchases of property, plant and equipment                  (4,208)       (1,984)
 Payments for acquisitions                                   (7,214)            -
 Proceeds from sales of property, plant and equipment         2,538         3,549
                                                            -------       -------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES          (8,884)        1,565
                                                            -------       -------

Cash flows from financing activities:
 Net borrowing under revolving line of credit                51,895        19,463
 Reductions of notes payable                                    (12)          (29)
 Net proceeds from issuance of common stock                      31            63
                                                            -------       -------
NET CASH PROVIDED BY FINANCING ACTIVITIES                    51,914        19,497
                                                            -------       -------

NET INCREASE (DECREASE) IN CASH                                   6           (11)
Cash at beginning of period                                      65            79
                                                            -------       -------
CASH AT END OF PERIOD                                     $      71     $      68
                                                            =======       =======

Supplemental schedule of cash flow information:
 Interest paid                                            $   9,947     $  10,444
 Income taxes paid                                        $     577     $     422
Supplemental schedule of non-cash investing and financing activities:
 The Company purchased capital stock and assets in conjunction with
 acquisitions made during the period.  In connection with these
 acquisitions, liabilities were assumed as follows:
  Purchase price of assets acquired                       $   7,355     $       -
  Cash paid                                                  (7,214)            -
                                                            -------       -------
  Liabilities assumed                                     $     141     $       -
                                                            =======       =======
</TABLE>

 The accompanying notes are an integral part of the condensed consolidated
                           financial statements.


                                     5



<PAGE> 6
                      WICKES INC. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    ------------------------------------------

    Basis of Financial Statement Presentation
    -----------------------------------------

    The condensed consolidated financial statements present the results of
operations,  financial  position, and cash flows of  Wickes  Inc.  and  its
consolidated subsidiaries (the "Company").  The Company has determined that
it operates in one business segment, that being the supply and distribution
of  lumber  and  building  materials to building professionals  and  do-it-
yourself  customers, primarily in the Midwest, Northeast, and  South.   All
information  required by SFAS No. 131, "Disclosures about  Segments  of  an
Enterprise and Related Information", is included in the Company's financial
statements.

    The  condensed  consolidated balance sheet as of  June  26,  1999,  the
condensed   consolidated  statements  of  operations  and   the   condensed
consolidated  statements  of cash flows for the three-month  and  six-month
periods  ended  June 26, 1999 and June 27, 1998 have been prepared  by  the
Company  without  audit.   In  the opinion of management,  all  adjustments
(which  include  only  normal recurring adjustments) necessary  to  present
fairly the financial position, results of operations and cash flows at June
26,  1999 and for all periods presented have been made. The results for the
three-month  and six-month periods ended June 26, 1999 are not  necessarily
indicative  of  the results to be expected for the full  year  or  for  any
interim period.

    The year-end condensed consolidated balance sheet data was derived from
audited financial statements, but does not include all disclosures required
by  generally  accepted  accounting principles.   Certain  information  and
footnote disclosures normally included in financial statements prepared  in
accordance  with  generally  accepted  accounting  principles   have   been
condensed  or  omitted.  It is suggested that these condensed  consolidated
financial  statements be read in conjunction with the financial  statements
and  notes thereto included in the Company's Annual Report on Form 10-K for
the  year  ended December 26, 1998, filed with the Securities and  Exchange
Commission.

  Share Data
  ----------

   The Company issued 7,508 shares of Common Stock to members of its board
of directors as compensation during the six months ended June 26, 1999.


                                     6

<PAGE> 7

                      WICKES INC. AND SUBSIDIARIES
         NOTES TO CONDENSSED CONSOLLIDATED FINANCIAL STATEMENTS


2.   ACQUISITIONS
     ------------

    The  Company  has made two acquisitions during 1999,  both  component
facilities,  for  a  total cost of $7.2 million.  In  January  the  Company
acquired  to  assets  of a wall panel manufacturer located  in  Cookeville,
Tennessee and at the end of March the Company acquired the assets of Porter
Building  Products, a manufacturer of trusses and wall panels,  located  in
Bear, Delaware. The costs of these acquisitions have been allocated on  the
basis  of  the fair market value of the assets acquired and the liabilities
assumed.  The excess of the purchase price over the fair value of  the  net
assets acquired for one of the acquisitions resulted in goodwill, which  is
being  amortized  over  a  20-year period on a straight-line  basis.   Both
acquisitions  have  been  accounted for as purchases.   Operations  of  the
companies  acquired  have  been included in the  accompanying  consolidated
financial statements from their respective dates of acquisition.


3.   LONG-TERM DEBT
     --------------

    Long-term  debt  is comprised of the following at  June  26,  1999  (in
thousands):
<TABLE>
         <S>                                   <C>
         Revolving line of credit              $  143,856
         Senior subordinated notes                100,000
         Other                                          4
         Less current maturities                       (4)
                                                  -------

         Total long-term debt                  $  243,856
                                                  =======
</TABLE>

    Under  the  revolving line of credit, the Company  may  borrow  against
certain  levels  of accounts receivable and inventory.  The  unused  amount
available for borrowing at June 26, 1999 was $16.1 million.

    On  February  17, 1999 the Company entered into a new revolving  credit
agreement  with a group of financial institutions.  The new revolving  line
of  credit  provides for up to $160 million of revolving credit  loans  and
credits.  See Note 9. Subsequent Events.


4.   INCOME TAXES
     ------------

    The provision for income taxes for the six-month period ended June  26,
1999  was  $844,000 compared to a benefit of $1,630,000 for  the  six-month
period ended June 27, 1998.  An effective federal and state income tax rate
of  39.1%  was used to calculate income taxes for the first six months of 1999,

                                     7

<PAGE> 8

                      WICKES INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



compared with an effective rate of 39.0% for the first six months  of
1998.  In addition to the effective income tax rate, state franchise  taxes
were calculated separately and are included in the provision reported.


5.  COMMITMENTS AND CONTINGENCIES
    -----------------------------

    At  June  26,  1999,  the  Company had accrued  approximately  $129,000
(included  in  accrued  liabilities at June 26, 1999)  for  remediation  of
certain   environmental   and   product  liability   matters,   principally
underground storage tank removal.

    Many  of  the sales and distribution facilities presently and  formerly
operated by the Company contained underground petroleum storage tanks.  All
such tanks known to the Company located on facilities owned or operated  by
the  Company  have  been  filled or removed in accordance  with  applicable
environmental laws in effect at the time.  As a result of reviews  made  in
connection  with  the  sale  or possible sale of  certain  facilities,  the
Company  has  found  petroleum contamination of soil and  ground  water  on
several of these sites and has taken, and expects to take, remedial actions
with   respect   thereto.   In  addition,  it  is  possible  that   similar
contamination  may exist on properties no longer owned or operated  by  the
Company   the  remediation  of  which  the  Company  could  under   certain
circumstances  be held responsible.  Since 1988, the Company  has  incurred
approximately  $2.0  million  of costs, net  of  insurance  and  regulatory
recoveries, with respect to the filling or removing of underground  storage
tanks and related investigatory and remedial actions. Insignificant amounts
of  contamination have been found on excess properties sold over  the  past
four years.  The Company has currently reserved $47,500 for estimated clean-
up costs at 13 of its locations.

    The Company has been identified as having used two landfills which  are
now  Superfund clean-up sites, for which it has been requested to reimburse
a  portion  of  the clean-up costs.  Based on the amounts claimed  and  the
Company's  prior  experience,  the Company has  established  a  reserve  of
$28,000 for these matters.

    The Company is one of many defendants in two class action suits filed in
August of 1996 by approximately 200 claimants for unspecified damages as  a
result  of  health  problems claimed to have been caused by  inhalation  of
silica dust, a byproduct of concrete and mortar mix, allegedly generated by
a  cement  plant with which the Company has no connection other than  as  a
customer.  The Company has entered into a cost sharing agreement  with  its
insurers, and any liability is expected to be minimal.

    The Company is one of many defendants in approximately 110 actions, each
of  which  seeks  unspecified  damages, in various  Michigan  state  courts
against  manufacturers and building material retailers by  individuals  who
claim to have suffered injuries from products containing asbestos.  Each


                                      8

<PAGE> 9

                      WICKES INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



of the  plaintiffs  in these actions is represented by one of two law firms.
The  Company  is aggressively defending these actions and does not  believe
that  these  actions will have a material adverse effect  on  the  Company.
Since  1993,  the Company has settled 16 similar actions for  insignificant
amounts, and another 187 of these actions have been dismissed.  As of  July
31, 1999 none of these suits have made it to trial.

    Losses  in  excess  of the $129,000 reserved as of June  26,  1999  are
possible but an estimate of these amounts cannot be made.

    The  Company is involved in various other legal proceedings  which  are
incidental  to the conduct of its business.  The Company does  not  believe
that  any of these proceedings will have a material adverse effect  on  the
Company's financial position, results of operations or liquidity.

    The Company's assessment of the matters described in this note and other
forward-looking statements in this Form 10-Q are made pursuant to the  safe
harbor  provisions of the Private Securities Litigation Reform Act of  1995
("Forward-Looking Information") and are inherently subject to  uncertainty.
The  outcome  of  the matters described in this note may  differ  from  the
Company's  assessment of these matters as a result of a number  of  factors
including  but  not  limited to:  matters unknown to  the  Company  at  the
present time, development of losses materially different from the Company's
experience,  the  Company's ability to prevail against  its  insurers  with
respect to coverage issues to date, the financial ability of those insurers
and  other persons from whom the Company may be entitled to indemnity,  and
the unpredictability of matters in litigation.


6.  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
    -----------------------------------------

    Statement  of  Financial Accounting Standards No. 133, "Accounting  for
Derivative Instruments and Hedging Activities," standardizes the accounting
for  derivative instruments by requiring that all derivatives be recognized
as  assets  and liabilities and measured at fair value.  The  statement  is
effective  for  fiscal years beginning after June 15,  2000.   The  Company
believes adoption of the statement will not have a material effect  on  its
financial statements.


7.  EARNINGS PER SHARE
    ------------------

    The  Company calculates earnings per share in accordance with Statement
of   Financial  Accounting  Standards  No.  128.   The  following  is   the

                                      9

<PAGE> 10

                       WICKES INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


reconciliation of the numerators and denominators of the basic and  diluted
earnings per share:
<TABLE>
<CAPTION>
                                    Three Months Ended             Six Months Ended
                                    ------------------             ----------------
                                   June 26,     June 27,         June 26,     June 27,
                                     1999         1998             1999         1998
                                  ---------    ---------        ---------    ---------
<S>                             <C>          <C>             <C>          <C>
Numerators:
 Net income (loss)-for basic
     and diluted EPS             $3,587,000   $2,786,000      $   311,000  $(4,013,000)
                                  ---------    ---------        ---------    ---------
Denominators:
 Weighted average common
  shares - for basic EPS          8,214,397    8,192,806        8,212,288    8,187,328
 Common shares from options          52,420      141,132           51,496       53,205
                                  ---------    ---------        ---------    ---------
Weighted average common
 shares - for diluted EPS         8,266,817    8,333,938        8,263,784    8,240,533
                                  ---------    ---------        ---------    ---------
</TABLE>

    In  periods  where  net losses are incurred, diluted  weighted  average
common  shares are not used in the calculation of diluted EPS as  it  would
have  an  anti-dilutive effect on EPS.  In addition,  options  to  purchase
415,003  and  413,637 weighted average shares of common  stock  during  the
first half of 1999 and 1998, respectively, were not included in the diluted
EPS  as  the options' exercise prices were greater than the average  market
price.


8.  RESTRUCTURING
    -------------

    During the first quarter of 1998 the Company implemented a restructuring
plan  which  resulted in the closing or consolidation of  eight  sales  and
distribution and two manufacturing facilities in February, the sale of  two
sales  and  distribution  facilities in March, and  further  reductions  in
headquarters staffing.  As a result of the 1998 Plan, the Company  recorded
a  restructuring  charge of $5.4 million in the first  quarter.   The  $5.4
million charge included $3.7 million in estimated losses on the disposition
of  closed  facility assets and liabilities, $2.0 million in severance  and
postemployment benefits related to the 1998 plan, and a benefit of $300,000
for adjustments to prior years' restructuring accruals.


9.  SUBSEQUENT EVENTS
    -----------------

    On  July 8, 1999, the Company entered into a First Amendment to  Credit
Agreement  with  its  bank  lenders.   Pursuant  to  this  amendment,   the
definition of unused availability contained in the Company's revolving line
of  credit  agreement  was modified.  Formerly, "unused availability" was

                                     10

<PAGE> 11

                       WICKES INC. AND SUBSIDIARIES
         NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

defined as the lesser of $160 million or the borrowing base, less the total
of  outstanding  loans  and credits.   As modified,  "unused  availability"
means  the borrowing base less the total of outstanding loans and  credits.
As  a result, the maximum borrowing under the revolving credit agreement of
$160  million  can now be fully utilized.  Under the former definition  the
maximum was limited to $145 million.



                                    11

<PAGE> 12

    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
    ---------------------------------------------------------------
                         RESULTS OF OPERATIONS
                         ---------------------

    The  following  discussion  should be  read  in  conjunction  with  the
Condensed  Consolidated  Financial Statements and Notes  thereto  contained
elsewhere  herein  and  in  conjunction  with  the  Consolidated  Financial
Statements  and Notes thereto and Management's Discussion and  Analysis  of
Financial  Condition and Results of Operations contained in  the  Company's
Annual Report on Form 10-K for the year ended December 26, 1998.

                         RESULTS OF OPERATIONS

    The  following  table  sets  forth,  for  the  periods  indicated,  the
percentage  relationship to net sales of certain expense and income  items.
This  information includes the results from all sales and distribution  and
component manufacturing facilities operated by the Company, including those
closed or sold during the period.
<TABLE>
<CAPTION>
                           Three Months Ended         Six Months Ended
                           ------------------         ----------------
                          June 26     June 27,       June 26,  June 27,
                           1999        1998           1999      1998
                          ------      ------         ------    ------
<S>                        <C>         <C>            <C>       <C>
Net sales                  100.0%      100.0%         100.0%    100.0%
Gross profit                23.0%       23.6%          23.4%     23.9%
Selling, general and
administrative expense      19.0%       19.3%          20.7%     21.3%
Depreciation, goodwill
and trademark amortization   0.6%        0.5%           0.6%      0.6%
Provision for doubtful       0.0%        0.0%           0.1%      0.3%
accounts
Restructuring and            --          --             --        1.3%
unusual items
Other operating income      (0.8)%      (0.6)%         (0.6)%    (0.9)%
Income from operations       4.2%        4.4%           2.6%      1.3%

</TABLE>

Net Earnings
------------

    Weather  conditions during the first six months of 1999 were relatively
close  to  seasonal averages.  In the first quarter of 1998  the  Company's
largest  region, the Midwest, experienced a very mild winter, which allowed
for  favorable building conditions, which was partially offset by increased
precipitation  in  the Northeast and South.  The second quarter  and  first
half  of  1999 had favorable economic conditions for the building materials
supply  industry.  Single family housing starts in 1999 were 4.4% and  8.5%
higher  during the second quarter and first six months of 1999, than during
the comparable periods of 1998.


                                      12

<PAGE> 13

    Net  income  for the three months ended June 26, 1999 was $3.6  million
compared with a net income of $2.8 million for the three months ended  June
27,  1998.   The  increase  in  net income for the  three-month  period  is
primarily  the  result  of  increased sales and  gross  profit,  and  other
operating  income.   The  positive impact of these  changes  was  partially
offset  by  increases  in  selling, general  and  administrative  ("SG&A"),
interest and depreciation expenses.

    Net income for the first six months of 1999 was $311,000 compared with
a  loss of $4.0 million for the first six months of 1998.  The increase  in
net  income  for the six-month period is primarily the result of  increased
sales  and  gross profit, and reductions in restructuring charges  and  the
provision for doubtful accounts.  The positive impact of these changes  was
partially  offset by increases in SG&A, depreciation and interest  expenses
as well as a reduction in other operating income.


                 Three Months Ended June 26, 1999 Compared
                 -----------------------------------------
                 with the Three Months Ended June 27, 1998
                 -----------------------------------------

Net Sales
---------

    Net  sales  for  the second quarter of 1999 increased 21.8%  to  $288.8
million  from  $237.1 million for the second quarter of 1998.   Same  store
sales  increased 20.1% compared with the same period last year. Same  store
sales  to  the  Company's primary customers, building  professionals,  also
increased  22.0% when compared with the second quarter of  1998.   Consumer
same  store sales increased by 5.2% for the quarter.  As of June  26,  1999
the Company operated 101 sales and distribution facilities, the same number
it operated at the end of the second quarter of 1998.

    The  Company estimates that inflation in lumber prices increased  total
sales for the quarter by approximately $8.7 million, compared with the 1998
comparable period.

    The Company believes that the sales increase results primarily from its
recent   investments   in   its  target  major   markets,   re-merchandised
conventional  market sales and distribution facilities, recent acquisitions
of several component manufacturing facilities as well as favorable economic
conditions.  Same store sales increased 27.6% in the Company's nine  target
major  markets,  while  same  store sales increased  26.7%  in  the  eleven
conventional market building centers the Company remerchandised during 1997
and  1998.   Component manufacturing facilities acquired since  the  second
quarter  of 1998 account for $4.4 million of the second quarter 1999  sales
increase.   Single family housing starts were 4.4% higher,  nationally,  in
the  second quarter of 1999 than in the comparable period of 1998.  In  the
Company's  primary geographical market, the Midwest, single family  housing
starts were 7.8% higher.

                                     13

<PAGE>  14

Gross Profit
------------

    1999  second quarter gross profit increased to $66.3 million from $56.1
million for the second quarter of 1998, a 18.2% increase.  Gross profit  as
a  percentage  of sales decreased to 23.0% for the second quarter  of  1999
from  23.6% in 1998.  The decrease in gross profit as a percentage of sales
is  primarily attributable to rising lumber prices, increased percentage of
sales  to  building  professionals, and  the  expansion  of  the  Company's
installed  sales  programs, partially offset by increased sales  and  gross
profit margins on internally manufactured products.

    The Company believes that while inflation in lumber prices did increase
gross profit by approximately $1.2 million in the quarter, gross profit  as
a  percent  of sales decreased due to significant and rapid cost  increases
over  the  quarter,  which  cannot be passed on to  customers  as  quickly.
Lumber  and  related products accounted for 57.3% of sales  in  the  second
quarter of 1999, compared with 56.2% for the second quarter of 1998.  Sales
to  building professionals as a percentage of sales increased to  89.2%  in
the second quarter of 1999 compared with 87.7% in 1998.


Selling, General and Administrative Expense
-------------------------------------------

    SG&A  expense decreased to 19.0% of net sales in the second quarter  of
1999  compared with 19.3% of net sales in the second quarter of 1998.  Much
of  the  decrease  is attributable to operating leverage  achieved  through
increased  sales  volume  and reduced spending on  major  market  expansion
programs in 1999.

    Decreases  as  a percentage of sales in salaries, wages  and  benefits,
equipment  rental  and headquarters administrative expense  were  partially
offset   by  increases  in  professional  fees  and  maintenance   expense.
Salaries, wages and employee benefits decreased as a percentage of sales by
0.3%.   As of June 26, 1999, the Company had 4,380 full time and part  time
employees, an increase of 13.3% from June 27, 1998.


Depreciation, Goodwill and Trademark Amortization
-------------------------------------------------

    Depreciation,  goodwill and trademark amortization  increased  to  $1.6
million  for the second quarter of 1999 compared with $1.3 million for  the
same  period  in  1998.  This increase is primarily due to depreciation  on
three  component manufacturing facilities acquired since the second quarter
of 1998 as well as capital additions as a result of the Company's  major
market program.
                                     14

<PAGE> 15

Provision for Doubtful Accounts
-------------------------------

    The provision for doubtful accounts was relatively unchanged between the
second  quarters of 1999 and 1998.  The Company recorded a $42,000  benefit
from  the  provision for doubtful accounts in the second quarter  of  1999,
compared with a benefit of $124,000 in the second quarter of 1998.


Other Operating Income
----------------------

    Other  operating income for the second quarter of 1999 was $2.2 million
compared  with  $1.4 million for the second quarter of  1998.   During  the
second  quarter of 1999 the Company sold four pieces of excess real  estate
and  recorded  gains of $1.4 million.  There were no sales of  excess  real
estate  in the second quarter of 1998.  The Company also recorded  $347,000
in  expenses related to casualty losses during the second quarter of  1999,
including a fire at one of its component manufacturing facilities.  In  the
second  quarter  of  1998  the Company recorded  a  gain  of  approximately
$180,000 on the difference between insured replacement cost and book  value
of  inventory,  as a result of a fire at one of its sales and  distribution
facilities.


Interest Expense
----------------

   In the second quarter of 1999 interest expense increased to $6.0 million
from  $5.5  million during the second quarter of 1998, resulting  primarily
from  an  increase  in average total long term debt of approximately  $23.0
million.   This  was  partially  offset by  a  decrease  in  the  effective
borrowing  rate on total long term debt of approximately 33  basis  points.
The  decrease  in  the  effective borrowing rate  is  primarily  due  to  a
reduction in interest rate on the Company's revolving line of credit  as  a
result  of decreases in the average prime and LIBOR rates as well as  a  25
basis  point  reduction in the Company's borrowing spreads, effective  with
the   Company's  new  revolving  credit  agreement  in  February  of  1999.
Approximately 92% of the Company's second quarter average borrowings on its
revolving credit facility were LIBOR-based.


Provision for Income Tax Benefit
--------------------------------

    The  Company recorded income tax expense of $2.6 million for the second
quarter of 1999 compared with expense of $2.2 million in the second quarter
of  1998.  An effective federal and state income tax rate of 38.2% was used
to  calculate income taxes for the second quarter of 1999, compared with an
effective rate of 39.0% for the second quarter of 1998.  In addition to the
effective income tax rate, state franchise taxes were calculated separately
and are included in the provision reported for both years.


                                    15
<PAGE> 16

    The Company continues to review future earnings projections to determine
that  there is sufficient support for its deferred tax assets and valuation
allowance.   In  spite of the losses incurred during 1995, 1997,  and  1998
management  believes that it is more likely than not that the Company  will
receive  full  benefit  of its deferred tax asset and  that  the  valuation
allowance  is properly stated.  This assessment constitutes Forward-Looking
Information  made  pursuant to the safe harbor provisions  of  the  Private
Securities  Litigation  Reform Act of 1995 and  is  inherently  subject  to
uncertainty and dependent upon the Company's future profitability, which in
turn  depends  upon  a number of important risk factors including  but  not
limited  to:  the  effectiveness  of  the  Company's  operational  efforts,
cyclicality and seasonality of the Company's business, the effects  of  the
Company's substantial leverage and competition.


                  Six Months Ended June 26, 1999 Compared
                  ---------------------------------------
                  with the Six Months Ended June 27, 1998
                  ---------------------------------------

Net Sales
---------

    Net  sales for the first six months of 1999 increased 18.2%  to  $479.9
million  from $405.9 million for the first six months of 1998.  Same  store
sales  increased 18.1% compared with the same period last year. Same  store
sales to the Company's primary customers, building professionals, increased
19.7% when compared with the first six months of 1998.  Consumer same store
sales  increased 2.2% for the same period.  As of June 26, 1999 the Company
operated 101 sales and distribution facilities, the same number it operated
at  the  end of the first six months of 1998.  Sales of approximately  $4.0
million  were recorded, in the first quarter of 1998, for the 10 sales  and
distribution facilities that were sold or closed during that quarter.

    The  Company estimates that inflation in lumber prices increased  total
sales for the first six months by approximately $7.7 million, compared with
the 1998 comparable period.

    The Company believes that the sales increase results primarily from its
recent investments in its target major market, re-merchandised conventional
market  sales and distribution facilities, recent acquisitions  of  several
component   manufacturing  facilities  as  well   as   favorable   economic
conditions.  Same store sales increased 22.8% in the Company's nine  target
major  markets,  while  same  store sales increased  21.9%  in  the  eleven
conventional market building centers the Company remerchandised during 1997
and  1998.   Component manufacturing facilities acquired since  the  second
quarter  of  1998  account for $5.4 million of the  six  month  1999  sales
increase.   Single family housing starts were 8.5% higher,  nationally,  in
the first six months of 1999 than in the comparable period of 1998.  In the
Company's  primary geographical market, the Midwest, single family  housing
starts were 8.8% higher.

                                     16

<PAGE> 17

Gross Profit
------------

    Gross  profit for to the first six months of 1999 increased  to  $112.2
million  from  $97.1  million for the first six months  of  1998,  a  15.6%
increase.  Gross profit as a percentage of sales decreased to 23.4% for the
first  six months of 1999 from 23.9% in 1998.  The decrease in gross profit
as a percentage of sales is primarily attributable to rising lumber prices,
increased  percentage of sales to building professionals, and the expansion
of  the  Company's installed sales programs, partially offset by  increased
sales and gross profit margins on internally manufactured products.

    The Company believes that while inflation in lumber prices did increase
gross profit by approximately $1.1 million in the first six months of 1999,
gross  profit as a percent of sales decreased due to significant and  rapid
cost  increases, primarily during the second quarter, which  could  not  be
passed  on  to customers as quickly.  Lumber and related products accounted
for 55.6% of sales in the first six months of 1999, compared with 54.4% for
the  same  period in 1998.  Sales to building professionals as a percentage
of  sales increased to 90.2% in the first six months of 1999 compared  with
88.5% in 1998.


Selling, General and Administrative Expense
-------------------------------------------

    SG&A expense decreased to 20.7% of net sales in the first six months of
1999  compared  with 21.3% of net sales in the first six  months  of  1998.
Much of the decrease is attributable to operating leverage achieved through
increased sales volume, expense reductions achieved as a result of the 1998
first  quarter restructuring and reduced spending on major market expansion
programs in 1999.

    Decreases  as  a percentage of sales in salaries, wages  and  benefits,
employee  relocation,  equipment  rental  and  headquarters  administrative
expense  were partially offset by increases in professional fees, marketing
and maintenance expense. Salaries, wages and employee benefits decreased as
a percentage of sales by 0.5%.


Depreciation, Goodwill and Trademark Amortization
-------------------------------------------------

    Depreciation,  goodwill and trademark amortization  increased  to  $3.0
million for the first six months of 1999 compared with $2.6 million for the
same  period  in  1998.  This increase is primarily due to depreciation  on
three  component manufacturing facilities acquired since the second quarter
of  1998  as  well as capital additions as a result of the Company's  major
market program.

                                       17

<PAGE> 18

Provision for Doubtful Accounts
-------------------------------

    The  provision for doubtful accounts decreased to $0.4 million for  the
first six months of 1999 from $1.2 million in the first six months of 1998.
The  primary  reasons  for the decrease are improved  delinquency  on  1999
outstanding accounts and increased expense in the first quarter of 1998  as
a result of the delinquency of a major account.


Restructuring and Unusual Items
-------------------------------

    In  February of 1998, the Company announced and completed  a  plan  for
additional   restructuring  activities,  which  included  the  closing   or
consolidation  of  eight  building centers and two component  manufacturing
facilities  in  February, the sale of two additional  building  centers  in
March,  and  further  reductions  in  headquarters  staffing.  The  Company
recorded  a  restructuring  charge of $5.4  million,  which  included  $3.7
million  in  anticipated losses on the disposition of closed center  assets
and  liabilities,  $2.0 million in severance and post  employment  benefits
related  to  the  1998 Plan, and a benefit of $300,000 for  adjustments  to
prior  years'  restructuring accruals.  No restructuring or  unusual  items
were recorded in the first six months of 1999.


Other Operating Income
----------------------

    Other operating income for the first six months of 1999 was $3.1 million
compared  with $3.8 million for the first six months of 1998.  In  both  of
the  first  six  months  of  1999 and 1998 the Company  recorded  gains  of
approximately $1.6 million on the sale of excess real estate and equipment.
In  1999,  the  Company recorded costs of $269,000 for  carrying  costs  of
closed operations and $317,000 for casualty losses, including a fire at one
of its component manufacturing facilities.  In 1998 the Company recorded no
closed  operation  carrying  costs and recorded  a  gain  of  $118,000  for
casualty  losses. The gain on casualty losses was a result  of  a  $180,000
gain  on the difference between insured replacement cost and book value  of
inventory,  as  a  result  of a fire at one of its sales  and  distribution
facilities.


Interest Expense
----------------

    In  the  first six months of 1999 interest expense increased  to  $11.3
million  from $10.9 million during the first six months of 1998,  resulting
primarily from an increase in average total long term debt of approximately
$15.4  million.  This was partially offset by a decrease in  the  effective
borrowing  rate on total long term debt of approximately 29  basis  points.
The  decrease  in  the  effective borrowing rate  is  primarily  due  to  a

                                     18


<PAGE> 19

reduction in interest rate on the Company's revolving line of credit  as  a
result  of decreases in the average prime and LIBOR rates as well as  a  25
basis  point  reduction in the Company's borrowing spreads, effective  with
the   Company's  new  revolving  credit  agreement  in  February  of  1999.
Approximately  90%  of the Company's average borrowings  on  its  revolving
credit facility, during the first six months of 1999, were LIBOR-based.


Provision for Income Tax Benefit
--------------------------------

    The  Company recorded income tax expense of $844,000 for the first  six
months  of  1999 compared with a benefit of $1.6 million in the  first  six
months  of 1998.  An effective federal and state income tax rate  of  39.1%
was  used  to  calculate income taxes for the first  six  months  of  1999,
compared with an effective rate of 39.0% for the first six months of  1998.
In  addition to the effective income tax rate, state franchise  taxes  were
calculated separately and are included in the provision reported  for  both
years.

    For  a  discussion of the Company's deferred tax assets  and  valuation
allowance,  see "Provision for Income Tax Benefit" in the discussion  above
of the comparative results for the three months.


Recently Issued Accounting Pronouncements
-----------------------------------------

    Statement  of  Financial Accounting Standards No. 133, "Accounting  for
Derivative Instruments and Hedging Activities," standardizes the accounting
for  derivative instruments by requiring that all derivatives be recognized
as  assets  and liabilities and measured at fair value.  The  statement  is
effective  for  fiscal years beginning after June 15,  2000.   The  Company
believes adoption of the statement will not have a material effect  on  its
financial statements.

Year 2000
---------

    The  Year  2000  problem relates to the inability of  certain  computer
programs and computer hardware to properly handle dates after December  31,
1999.   As  a  result  businesses may be at risk  for  miscalculations  and
systems failures.

    In response to the Year 2000 issue, the Company initiated a project  in
early  1997  to  identify, evaluate and implement changes to  its  existing
computerized business systems. An inventory was developed of all  items  of
concern  including vehicles, manufacturing equipment, and security, heating
and  electrical  systems.   Upon completion of the  inventory  a  plan  was
developed  to  evaluate  the  importance  of  each  item,  the  remediation
necessary  to make the item compliant (either modification or replacement),

                                     19

<PAGE> 20

the  resources necessary to complete the remediation, and a time frame  for
completion.   The  plan  was  then  reviewed  by  an  outside   party   for
completeness.  The plan also includes the steps the Company  is  taking  to
ensure  it  is not at risk for problems that may occur at its suppliers  or
customers.  The  Company has surveyed its customers, suppliers,  and  other
service  providers  to  determine whether they  are  actively  involved  in
projects  to ensure that their products and business systems will  be  Year
2000  compliant.   Management is currently reviewing  their  responses  and
evaluating alternatives for those that are not sufficiently addressing  the
Year 2000 issue.

    The  Company is addressing its software, hardware, and equipment issues
through a combination of modifications to existing programs and conversions
to  Year 2000 compliant software and equipment.  The Company believes  that
it   is   currently  95%  complete  with  hardware  and  equipment  related
remediation   or  replacement  efforts,  and  90%  complete   in   software
remediation or replacement.  The Company's plan is to be totally  compliant
by  September of 1999.  Certain systems, which have critical dates prior to
September,  are  scheduled  for  earlier  completion  dates  or  have  been
completed.   At  the present time the remediation process is proceeding  as
planned  and  there are no significant delays expected.  The  company  also
expects  to  spend  significant amounts to implement pre-event  contingency
plans as well as post-event testing.

    The estimated total cost of the project is expected to be $2.7 million.
$600,000 of this cost is for the replacement of systems and equipment which
was accelerated due to the Year 2000 problem, and which will be capitalized
over  the systems estimated useful life.  Through June of 1999 the  Company
has expended a total of $1.7 million on Year 2000 remediation.

    If  modifications and conversions, by the Company and those it conducts
business  with,  are not made in a timely manner, the Year 2000  issue  may
have  a  material  adverse  effect  on the  Company's  business,  financial
condition, and results of operations.  The Company's greatest risk at  this
time  is  with its store operating and accounts receivable systems and  its
inventory  suppliers.   If  the store operating  system  has  problems  the
Company  could experience disruption in its basic distribution  operations.
A  problem  with the Company's accounts receivable system could cause  some
short  term  working  capital and cash flow problems  until  the  issue  is
resolved.   While  the Company has extended efforts to  receive  assurances
that  its  product  suppliers  are adequately addressing  this  issue,  the
Company  expects there will be some minimal interruptions in  replenishment
from  some  suppliers,  but  these  should  be  addressed  quickly  through
alternative sources.

    The  Company  has  evaluated each problem area for various  contingency
responses to mitigate any disruption should remediation be incomplete.   At
present senior management is reviewing critical items to ensure there is at
least  one  workable  alternative to each of its  key  processes  including
inventory  replenishment,  sales  and  accounts  receivable,  payroll,  and
manufacturing  and  delivery  equipment.   Milestones  for  completion   of

                                     20

<PAGE> 21

critical systems are being closely monitored to minimize the chances  of  a
Year  2000  failure in the key processes.  In addition,  a  plan  is  being
developed to produce backup documents and reports, of critical information,
at December 31, 1999 and for process and system testing to occur on January
1 and 2, to identify and address any unforeseen issues prior to the opening
of business on January 3.

    The  most reasonably likely worst case scenario for a Year 2000 failure
would  involve a brief interruption of the Company's primary field  systems
application.  Given the high level of in-house expertise in the development
and  maintenance of this system, the expectation is that any  such  failure
would  involve  at worst a several day delay in processing.    The  Company
has,  and  will continue to spend a great deal of resources to ensure  that
this  system is compliant and will not be impacted by a Year 2000  failure.
As  a  contingency for a failure scenario, though, the Company has arranged
for  the  printing of key documents (sales orders scheduled  for  the  next
week,  special  orders  placed with suppliers, pricing  masters,  etc.)  on
December 31, at each location, which would allow the operations to continue
to operate, on a manual basis, for at least two weeks before there would be
a  serious  impairment  to  the business.  In  addition,  key  systems  and
operating  staff will be brought in on January 1 and 2, days on  which  the
operating facilities are scheduled to be closed, to perform system  testing
of  the  field  applications and check operating equipment,  utilities  and
other systems. The Company can and has applied program changes to all sales
and distribution facilities in a matter of hours.

                                     21


<PAGE> 22


                      LIQUIDITY AND CAPITAL RESOURCES
                      -------------------------------

    The  Company's principal sources of working capital and  liquidity  are
earnings and borrowings under its revolving credit facility.  The Company's
primary  need  for capital resources is to finance inventory  and  accounts
receivable.

    During  the  first  six  months of 1999  net  cash  used  in  operating
activities  was  $43.0 million, $21.9 million more than the  $21.1  million
used  in  the first six months of 1998.  The first six months of  the  year
historically have generated negative cash flows from operating  activities.
With  the  peak  building season historically occurring in the  second  and
third quarters, the Company normally experiences increases in its inventory
levels  during the first quarter to meet the anticipated increase in sales,
and  in  the  second quarter increases in accounts receivable  occur  as  a
result of the increased sales activity.

    The  Company's  accounts receivable balance at the end  of  the  second
quarter  of  1999 increased $26.6 million when compared to the end  of  the
second  quarter of 1998, an increase of 26.8%.  This increase is the result
of increased credit sales in June of 1999, when compared with June 1998.

    Inventory at the end of the second quarter of 1999 was $16.6 million, or
14.2%, higher than at the end of the second quarter of 1998.  This increase
is  largely  attributable to the additional inventory necessary to  support
the  21.8%  increase  in  second quarter sales.  Significant  inflation  in
lumber,  drywall  and  insulation has also  had  a  significant  impact  on
increasing  inventory in 1999.  Accounts payable at the end of  the  second
quarter  of 1999 increased approximately $12.3 million, or 20.8%  from  the
second  quarter  of  1998.  The increase is primarily attributable  to  the
increase in total inventory.

    The Company's capital expenditures consist primarily of the construction
of  storage  facilities,  the  remodeling and  reformatting  of  sales  and
distribution  facilities and component manufacturing  facilities,  and  the
purchase of vehicles, equipment and management information systems for both
existing  and new operations.  The Company may also from time to time  make
expenditures to establish or acquire operations to expand or complement its
existing  operations, especially in its major markets.  In  the  first  six
months  of 1999 the Company spent $4.2 million on capital expenditures  for
existing  operations as compared to $2.0 million for  the  same  period  in
1998.  The Company expects to spend approximately $7.0 million for  all  of
1999.    In  addition,  $7.2 million was spent for the acquisition  of  two
component  manufacturing facilities. Under the Company's new bank revolving
credit  agreement,  capital expenditures during 1999 are  limited  to  $8.5
million.   In  addition  to  capital expenditures,  this  revolving  credit
agreement allows the Company to spend up to $30 million, subject to certain
restrictions,  for  acquisitions.   The Company  expects  to  fund  capital
expenditures through borrowings and its internally generated cash flow.

                                     22

<PAGE> 23

    In  January  of 1999, the Company acquired the assets of a  wall  panel
manufacturer located in Cookeville, Tennessee and at the end of  March  the
Company acquired the assets of Porter Building Products, a manufacturer  of
trusses  and  wall panels, located in Bear, Delaware. In 1999, the  Company
began,  or significantly expanded, the manufacturing of wall components  at
seven  manufacturing  facilities  located  with  the  Company's  sales  and
distribution facilities in Hopedale, MA, Elyria, OH, Lexington, KY, Denton,
NC,  Ellettsville, IN, Grand Rapids, MI and Jackson, TN.  At August 1,  1999
the  Company  operated 101 sales and distribution centers and 21  component
manufacturing   facilities  compared  with  101  sales   and   distribution
facilities and 10 component manufacturing facilities at August 1, 1998.  In
addition,  the Company does a small amount of door and window assembly  out
of three sales and distribution facilities.  The following table reconciles
the number of sales and distribution facilities and component manufacturing
facilities operated by the Company, through August 1, 1999:
<TABLE>
<CAPTION>
                                  Sales and        Component
                                 Distribution    Manufacturing
                                  Facilities       Facilities
                                  ----------       ----------
<S>                               <C>              <C>
As of December 26, 1998              101               12

   Expansion                           -                7
   Acquisition                         -                2
   Closings                            -                -
   Consolidation                       -                -
                                     ---              ---
As of August 1, 1999                 101               21
                                     ===              ===
</TABLE>

    The Company maintained excess availability under its revolving line  of
credit  throughout the first six months of 1999.  At the end of the  second
quarter  total  borrowings under the revolving line of  credit  were  $31.4
million  higher than at the end of the second quarter of 1998.  Because of the
significant increase in the Company's sales during the second quarter and
continuing into the third quarter of 1999, the Company anticipates that it
may from time to time during the remainder of 1999 utilize all the borrowing
availability under the current terms of the Company's bank revolving credit
agreement.  Nevertheless, the Company believes that it will be able to manage
its liquidity during this time period and that it will continue to have
sufficient funds available for its anticipated operations and capital
expenditures.  To support is sales growth and the related increase in working
asset levels, the Company may consider obtaining an increase in the maximum
permitted borrowing under its bank revolving credit agreement.  At June 26,
1999, $143.9 million was outstanding under the Company's revolving line of
credit, and the unused availability was approximately $16.1 million.  The
Company's assessment of its future funds availability constitutes Forward-
Looking Information made pursuant to the Private Securities Litigation Reform
Act of 1995 and is inherently subject to uncertainty resulting from, among
other things, the factors discussed under "Results of Operations - Provision
for Income Tax Benefit".

    On  February  17, 1999 the Company entered into a new revolving  credit
agreement  and  repaid  all  indebtedness  under  and  terminated  its  old
revolving  credit agreement.  Among other things, the changes  between  the
old  agreement and this new agreement include (i) an initial 25 basis point
reduction  in  the Company's LIBOR and prime borrowing rates to  200  basis
points  over  LIBOR and 50 basis points over prime, and further  provisions

                                     23

<PAGE> 24

for additional decreases in the borrowing rate if certain interest coverage
levels are achieved, (ii) an increase in the maximum credit line from  $130
million  to $160 million, (iii) a decrease in the unused line fee  from  50
basis  points  to  25 basis points, (iv) elimination of  the  fixed  charge
coverage requirement, (v) extension of the term of the agreement to June of
2003, (vi) increases, subject to the permitted discretion of the agent  for
the lenders,  in the percent of eligible accounts receivable to 85% from  a
range between 80% and 85% and the percent of eligible inventory to 60% from
a range between 50% and 60%.  Covenants under the new agreement do require,
among  other things, that the Company maintain unused availability (defined
as  the  amount by which the borrowing base exceeds outstanding  loans  and
credits)  under  the new revolving line of credit of at least  $15  million
(subject to increase in certain circumstances) and maintain certain  levels
of tangible capital funds.

    In  conjunction  with the new revolving credit agreement,  the  Company
terminated its interest rate swap agreement and entered into a new interest
rate swap agreement. This new agreement effectively fixed the interest rate
at  7.75%, reduced from 8.11% under the old agreement, for three years,  on
$40  million of the Company's borrowings under its floating rate  revolving
line of credit.  Unlike the prior agreement, this interest rate swap has no
provisions  for termination based on changes in the 30-day LIBOR  borrowing
rate.

                                     24


<PAGE> 25


        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
        ----------------------------------------------------------

    The Company is subject to market risk associated with changes in interest
rates  and  lumber  futures contracts.  The following  discussion  includes
"forward-looking  statements" that involve risk and uncertainties.   Actual
results could differ materially from those projected in the forward-looking
statements.

    The  Company's revolving line of credit provides for, subject to certain
restrictions, up to $160 million of revolving credit loans and the issuance
of  up  to $10 million of letters of credit.  Depending upon the Company's
rolling four-quarter interest coverage ratio, amounts outstanding under the
new revolving line of credit will bear interest at a spread above the base
rate of from 0% to 0.75% or from 1.50% to 2.25% above the applicable LIBOR
rate.  The rate is adjusted quarterly upon delivery to the lenders of the
Company's most recent quarterly financial statements.  Interest  on amounts
outstanding under the new revolving line of credit will bear interest, during
the third quarter of 1999, at a spread above the base rate of BankBoston, N.A.
of 0.50%, or 2.00% above the  applicable LIBOR rate.  This is unchanged from
the rate that has been in effect since the inception of the line of credit in
February of 1999.  Based on the Company's average borrowings for the first six
months of 1999 under it's revolving credit agreement, subject to the effect of
the interest rate swap agreement described below,  a 25 basis  point  movement
in the base rate or LIBOR rate would result in an approximate $195,000
annualized increase or decrease in interest expense.

   In  conjunction  with  the  Company's  revolving  credit  agreement,  the
Company  entered  into  an  interest rate swap  agreement.  This  agreement
effectively  fixed  the interest rate at 7.75% (subject to  adjustments  in
certain  circumstances) for three years, on $40 million  of  the  Company's
borrowings under its floating rate revolving line of credit.  At August  1,
1999 the 30-day LIBOR borrowing rate was 5.19%.

   The  Company  enters into lumber futures contracts as  a  hedge  against
future  lumber price fluctuations.  All futures contracts are purchased  to
protect   long-term  pricing  commitments  on  specific   future   customer
purchases.  While lumber futures contracts are entered on a risk management
basis,  the  Company's  hedge positions could  show  a  net  gain  or  loss
depending  on prevailing market conditions.  At June 26, 1999  the  Company
had  72  lumber futures contracts outstanding with a total market value  of
$2,198,454  and a net unrealized gain of $121,141.  These contracts  mature
at various times through March of 2000.

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<PAGE> 26

                            PART II
                       OTHER INFORMATION




Item 6.   Exhibits and Reports on Form 8-K

     (a)  Exhibits

          4.1  First Amendment to the Credit Agreement dated July  8,
               1999  among  the Company, Bank Boston, N.A. and Nationsbank,
               N.A. as agents, and the lenders set forth therein.

          27.1 Financial data schedule (SEC use only).

     (b)  Reports on Form 8-K

          None.






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<PAGE> 27


                           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.

                              WICKES INC.




                         By:  /s/ J. Steven Wilson
                              --------------------
                              J. Steven Wilson
                              Chairman and Chief Executive Officer
                              (Principal Executive and Financial Officer)



                         By:  /s/ John M. Lawrence
                              --------------------
                              John M. Lawrence
                              Controller and Principal Accounting
                              Officer


Date:  August 9, 1999




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