<PAGE>

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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(MARK ONE)
/X/   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      FOR THE QUARTERLY PERIOD ENDED MAY 1, 1999

                                       OR

/ /   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      FOR THE TRANSITION PERIOD FROM           TO

                         COMMISSION FILE NUMBER: 0-22834


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

                  ILLINOIS                                36-3760230
      (State or other jurisdiction of                  (I.R.S. Employer
      incorporation or organization)                   Identification No.)

              2520 DIEHL ROAD
              AURORA, ILLINOIS                               60504
   (Address of principal executive offices)                (Zip Code)


                                 (630) 820-7200
              (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 (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X  No
                                             ---   ---

       Registrant had 6,922,988 shares of common stock, $.01 par value,
outstanding as of May 28, 1999.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<PAGE>

                               SUCCESSORIES, INC.
                               INDEX TO FORM 10-Q
<TABLE>
<CAPTION>

PART I.      FINANCIAL INFORMATION
                                                                                Page Number
             <S>                                                                <C>
             Item 1.  Financial Statements

                      Consolidated Balance Sheets............................         3

                      Consolidated Statements of Operations..................         4

                      Consolidated Statement of Stockholders' Equity.........         5

                      Consolidated Statements of Cash Flows..................         6

                      Notes to Consolidated Financial Statements.............         7

             Item 2.  Management's Discussion and Analysis of
                      Financial Condition and Results of Operations..........        15

             Item 3.  Quantitative and Qualitative Disclosures
                      About Market Risk......................................        21


PART II.     OTHER INFORMATION

             Item 1.  Legal Proceedings......................................        22

             Item 6.  Exhibits and Reports on Form 8-K.......................        22

SIGNATURES...................................................................        23

INDEX TO EXHIBITS............................................................        24
</TABLE>
                                       2

<PAGE>

                          PART I. FINANCIAL INFORMATION

                                SUCCESSORIES, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                      May 1,               January 30,
                                                                       1999                    1999
                                                                   --------------          -------------
<S>                                                                <C>                     <C>
ASSETS
Current assets:
    Cash and cash equivalents                                      $    1,400,000          $   1,615,000
    Accounts and notes receivable, net of allowance                     3,305,000              3,706,000
      of $731,000 and $660,000, respectively
    Inventories, net                                                    9,634,000             10,618,000
    Prepaid catalog expenses                                            1,344,000              1,067,000
    Other prepaid expenses                                              1,171,000              1,011,000
                                                                    -------------           ------------
Total current assets                                                   16,854,000             18,017,000

Property and equipment, net                                             9,579,000              9,899,000
Notes receivable                                                          274,000                297,000
Deferred financing costs, net                                             377,000                400,000
Deferred income taxes                                                   5,476,000              5,476,000
Intangibles and other assets, net                                         868,000                888,000
                                                                   --------------          -------------

TOTAL ASSETS                                                       $   33,428,000          $  34,977,000
                                                                   --------------          -------------
                                                                   --------------          -------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Current portion of long-term debt                              $    5,450,000          $   6,035,000
    Accounts payable                                                    6,492,000              6,447,000
    Accrued expenses                                                    1,845,000              2,022,000
                                                                   --------------          -------------
Total current liabilities                                              13,787,000             14,504,000
Long-term debt                                                          4,301,000              5,049,000
                                                                   --------------          -------------
Total liabilities                                                      18,088,000             19,553,000
                                                                   --------------          -------------

Minority interest in subsidiaries                                              --                 51,000
                                                                   --------------          -------------

Stockholders' equity:
    Common stock, $.01 par value; 20,000,000 shares
      authorized; 6,922,988 and 6,913,293 shares issued
      and outstanding, respectively                                        69,000                 69,000
    Common stock warrants                                               2,291,000              1,788,000
    Notes receivable from stockholders                                   (273,000)              (273,000)
    Additional paid-in capital                                         26,209,000             26,188,000
    Accumulated deficit                                               (12,892,000)           (12,335,000)
    Accumulated other comprehensive loss                                  (64,000)               (64,000)
                                                                   --------------          -------------
Total stockholders' equity                                             15,340,000             15,373,000
                                                                   --------------          -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $   33,428,000          $  34,977,000
                                                                   --------------          -------------
                                                                   --------------          -------------
</TABLE>
             The accompanying notes are an integral part of these statements.

                                        3


<PAGE>

                               SUCCESSORIES, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            Three Months Ended
                                                                  ----------------------------------------
                                                                      May 1,                     May 2,
                                                                       1999                       1998
                                                                  --------------             -------------
<S>                                                               <C>                        <C>
Net product sales                                                   $12,056,000               $ 12,261,000
Cost of goods sold                                                    5,262,000                  5,177,000
                                                                  --------------             -------------

Gross profit on product sales                                         6,794,000                  7,084,000

Fees, royalties and other income                                        155,000                    318,000
                                                                  --------------             -------------

Gross margin                                                          6,949,000                  7,402,000

Operating expenses                                                    7,124,000                  8,410,000
                                                                  --------------             -------------

Loss from operations                                                   (175,000)                (1,008,000)
                                                                  --------------             -------------

Other income (expense):
   Interest expense                                                    (363,000)                  (341,000)
   Minority interests in subsidiaries                                   (30,000)                   (36,000)
   Interest income                                                        9,000                         --
   Other, net                                                             2,000                     10,000
                                                                  --------------             -------------

Total other expense                                                    (382,000)                  (367,000)
                                                                  --------------             -------------

Loss before income tax                                                 (557,000)                (1,375,000)

Income tax                                                                   --                         --
                                                                  --------------             -------------

Net loss                                                            $  (557,000)              $ (1,375,000)
                                                                  ==============             =============

Foreign currency translation adjustment                                      --                    1,000
                                                                  --------------             -------------

Comprehensive loss                                                  $  (557,000)              $ (1,374,000)
                                                                  ==============             =============

Loss per share:
   Basic and diluted                                                $     (0.08)              $       (.20)
                                                                  ==============             =============
</TABLE>



       The accompanying notes are an integral part of these statements.



                                       4
<PAGE>

                               SUCCESSORIES, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                 Notes                       Accumulated
                                 Common Stock        Additional     Common     Receivable                       Other
                              -------------------     Paid-In       Stock        From        Accumulated    Comprehensive
                               Shares     Amount      Capital      Warrants   Stockholders     Deficit          Loss
                              ---------   -------   -----------   ----------  ------------  -------------   -------------
<S>                           <C>         <C>       <C>           <C>         <C>           <C>             <C>
Balance at January 30, 1999   6,913,293   $69,000   $26,188,000   $1,788,000   $(273,000)   $(12,335,000)     $(64,000)

Net loss for the period              --        --            --           --          --        (557,000)           --

Stock Warrants                       --        --            --      503,000          --              --            --

Common stock transactions:
  Sales of common shares          9,695        --        21,000           --          --              --            --
                              ---------   -------   -----------   ----------  ------------  -------------   -------------

Balance at May 1, 1999        6,922,988   $69,000   $26,209,000   $2,291,000   $(273,000)   $(12,892,000)     $(64,000)
                              =========   =======   ===========   ==========  ============  =============   =============


<CAPTION>
                                  Total
                              Stockholders'
                                 Equity
                              ------------
<S>                           <C>
Balance at January 30, 1999   $ 15,373,000

Net loss for the period           (557,000)

Stock Warrants                     503,000

Common stock transactions:
  Sales of common shares            21,000
                              ------------

Balance at May 1, 1999         $15,340,000
                              ============
</TABLE>


        The accompanying notes are an integral part of these statements.



                                       5
<PAGE>

                               SUCCESSORIES, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                 Three Months Ended
                                                                       ------------------------------------
                                                                          May 1,                   May 2,
                                                                           1999                     1998
                                                                       ----------               -----------
<S>                                                                    <C>                      <C>
Cash flows from operating activities:
   Net loss                                                            $ (557,000)              $(1,375,000)
   Adjustments to reconcile net loss to net cash
    provided by operating activities:
       Depreciation and amortization                                      487,000                   674,000
       Amortization of debt discount                                       42,000                    31,000
                                                                       ----------               -----------
                                                                          (28,000)                 (670,000)
   Changes in operating assets and liabilities:
      Accounts and notes receivable                                       407,000                 1,850,000
      Inventories                                                         984,000                (1,410,000)
      Prepaid catalog expenses                                           (277,000)                   63,000
      Other prepaid expenses                                             (174,000)                 (235,000)
      Deferred financing costs                                             23,000                    16,000
      Accounts payable                                                     45,000                   923,000
      Accrued expenses                                                   (177,000)                  (63,000)
      Minority interest                                                   (51,000)                  (56,000)
      Other                                                               (27,000)                   65,000
                                                                       ----------               -----------
Net cash provided by operating activities                                 725,000                   483,000
                                                                       ----------               -----------

Cash flows from investing activities:
    Proceeds from notes receivable issued in connection
      with sale of property and equipment                                  17,000                        --
    Purchases of property and equipment                                  (106,000)                 (703,000)
                                                                       ----------               -----------
Net cash used in investing activities                                     (89,000)                 (703,000)
                                                                       ----------               -----------

Cash flows from financing activities:
    Proceeds from sales of common stock                                    21,000                    14,000
    Net repayments on revolving credit loan                              (528,000)                 (165,000)
    Repayments of long-term debt                                         (344,000)                 (152,000)
                                                                       ----------               -----------
Net cash used in financing activities                                    (851,000)                 (303,000)
                                                                       ----------               -----------

Net decrease in cash                                                     (215,000)                 (523,000)

Cash and cash equivalents, beginning of period                          1,615,000                 1,751,000
                                                                       ----------               -----------

Cash and cash equivalents, end of period                               $1,400,000               $ 1,228,000
                                                                       ==========               ===========
</TABLE>


        The accompanying notes are an integral part of these statements.



                                       6
<PAGE>

                               SUCCESSORIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1.  DESCRIPTION OF THE BUSINESS

Successories, Inc. and its subsidiaries (collectively the "Company") design,
manufacture, and market proprietary and licensed products for business, personal
motivation and for golf enthusiasts. The Company considers itself a single line
of business with products that are marketed primarily under the SUCCESSORIES,
WINNERS Collection, BRITISH LINKS and THE GOLF COMPANY FROM GOLF DIGEST trade
names through direct marketing (catalog, electronic commerce and telemarketing),
retail (Company-owned stores) and wholesale distribution (including sales to
franchisees) channels. The Company operates a chain of Successories retail
stores located primarily in the United States. The Company also operates a
franchising program whereby it sells franchises to market the Company's products
under the SUCCESSORIES trademark.

NOTE 2.  BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared, without
audit, in accordance with generally accepted accounting principles for interim
financial information and in conjunction with the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring matters) considered necessary for a fair
presentation have been included. Certain prior year amounts have been
reclassified to conform with the current year presentation.

The Company's fiscal year ends on the Saturday closest to January 31. References
to the three months ended May 1, 1999 and May 2, 1998 refer to the thirteen
weeks ended on the dates indicated.

The results of operations for the three months ended May 1, 1999 are not
necessarily indicative of the results to be expected for the full year. These
financial statements should be read in conjunction with the Company's financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the fiscal year ended January 30, 1999.

NOTE 3.  INVENTORIES

Inventories are comprised of the following:

<TABLE>
<CAPTION>
                                             May 1,         January 30,
                                             1999              1999
                                          -----------      -----------
     <S>                                  <C>              <C>
     Finished goods                       $ 7,354,000      $ 8,199,000
     Raw materials                          2,499,000        2,638,000
                                          -----------      -----------

                                            9,853,000       10,837,000
     Less reserve for obsolescence           (219,000)        (219,000)
                                          -----------      -----------
                                          $ 9,634,000      $10,618,000
                                          ===========      ===========
</TABLE>

                                       7
<PAGE>

NOTE 4.  DEBT

Debt consists of the following:

<TABLE>
<CAPTION>
                                                          May 1,       January 30,
                                                          1999             1999
                                                      -----------      -----------
     <S>                                              <C>              <C>
     Bank borrowings:
       Term loan, net of debt discount of
          $953,000 and $477,000                       $ 5,012,000      $ 5,800,000
       Revolving credit loan                            4,346,000        4,874,000
       Fixed rate loan, net of debt discount of
          $245,000 and $260,000                           255,000          240,000
     Capital lease obligations                            138,000          170,000
                                                      -----------      -----------
                                                        9,751,000       11,084,000
     Less current portion                              (5,450,000)      (6,035,000)
                                                      -----------      -----------
     Long-term debt                                   $ 4,301,000      $ 5,049,000
                                                      ===========      ===========
</TABLE>

On June 20, 1997, the Company entered into a credit facility agreement with a
bank. Per the agreement, as amended most recently on April 28, 1999, the
facility is comprised of a $7.5 million term loan and a revolving credit loan.
The revolving credit loan provides for maximum borrowings of $9 million through
May 1, 2000 and for each succeeding July 1 through December 31; the maximum
borrowings at all other times is $6 million. Borrowings under the revolving
credit loan are limited to 85% of eligible receivables plus 50% of eligible
inventory, as defined, provided that from February through April eligible
inventory is limited to $5 million through the year 2000 and $3 million in years
thereafter. A commitment fee of 0.5% is payable on the daily unused amount of
the maximum revolving credit commitment. The facility expires in June 2003, and
borrowings under the facility are secured by substantially all the assets of the
Company. The interest rates on the term loan and revolving credit loan
borrowings generally fluctuate based on the margin ratio, as defined, from a
minimum of prime plus 0.50% to a maximum of prime plus 3.00% on the term loan,
and a minimum of prime to a maximum of prime plus 3.00% on the revolving credit
loan. Interest is payable monthly. The interest rates on the term loan and
revolving credit loan were 9.00% and 8.50%, respectively, at May 1, 1999. The
term loan is payable in quarterly installments of $125,000 through June 1, 1998,
$312,500 from September 1, 1998 through June 1, 2000, and $375,000 thereafter.
Prepayments on the loans are required in certain cases including, among others,
equity offerings and asset dispositions. Further, the Company must annually
prepay the loans in an amount equal to 60% of excess cash flow, as defined. As
of May 1, 1999, available borrowings on the revolving credit loan was $698,000.
On June 20, 1997, warrants to purchase 150,000 shares of the Company's common
stock were issued to the bank as part of this agreement. Initially these
warrants had exercise prices ranging from $6.19 to $9.73 and expiration dates in
June 2001; however, the exercise prices were subsequently adjusted to $2.00 and
the expiration dates were extended to June 2005.

In July 1997, the agreement for the credit facility was amended to include an
additional $500,000 fixed rate loan. The loan bears interest at 12% and is due
in June 2003. Warrants to purchase an additional 72,464 shares were issued to
the bank in connection with this amendment and initially had an exercise price
of $6.90 and an expiration date of July 2003; however, the exercise price was
subsequently adjusted to $2.00 and the expiration date was extended to July
2005.

On April 28, 1999, the agreement was amended to waive the earnings before
interest, taxes, depreciation and amortization ("EBITDA"), interest coverage
ratio, fixed charge coverage, debt to EBITDA ratio, and capital expenditure
limitation covenants for the year ended January 30, 1999, and adjust certain
other covenants prospectively. The amended agreement requires that (i) adjusted
EBITDA, as defined, which is

                                       8
<PAGE>

based on a rolling four quarter period, may not be less than a loss of
$1,565,000 for the four quarters ended May 1, 1999, and increases each
subsequent quarter to $6.8 million for the four quarters ended November 4,
2000; and for each quarter thereafter; (ii) the interest coverage ratio, as
defined, may not be less than 0.75 to 1.0 at October 30, 1999, and increases
each subsequent quarter to 5.0 to 1.0 for the quarter ended April 29, 2000
and for each quarter thereafter; (iii) the fixed charge coverage ratio, as
defined, may not be less than 2.6 to 1.0 at January 29, 2000, and 1.5 to 1.0
thereafter; and (iv) the debt to EBITDA ratio, as defined, may not be greater
than 3.0 to 1.0 at January 29, 2000 and thereafter. Also, in certain cases
where prepayments on the loans are made in connection with equity offerings,
the amendment provides that certain quarterly installments on the term loan
will be deferred and the limits on borrowings relating to eligible inventory
under the revolving credit loan will be increased.

As a result, pursuant to the terms of the bank credit agreement, $1,000,000 of
proceeds from the sale of convertible preferred stock by the Company in May 1999
were used to make a prepayment on the next three quarterly installments through
December 1, 1999, on the term loan. Also, per the agreement the limitation on
borrowings against eligible inventory, as defined, under the Company's revolving
credit loan was increased from 50% to 54%. For further information on the sale
of convertible preferred stock by the Company, see Note 11.

In conjunction with the April 28, 1999 amendment, warrants to purchase an
additional 300,000 shares were issued to the bank at an exercise price of $2.50
that expire in 2005, the expiration dates of the 150,000 warrants previously
issued to the bank on June 20, 1997 were extended an additional two years and
the Company paid the bank a fee equal to 0.5% of the aggregate commitments under
the facility. The bank fee of $69,000 is included in interest expense in the
accompanying financial statements for the three months ended May 1, 1999.

The credit facility agreement contains, among other provisions, requirements for
maintaining certain earnings levels and financial ratios, limits on capital
expenditures and additional indebtedness, and restrictions on the payment of
dividends. At May 1, 1999, the Company was in compliance with the debt covenant
requirements of the credit facility agreement.

On May 14, 1998, the agreement was amended to waive the earnings before
interest, taxes, depreciation and amortization ("EBITDA") and interest coverage
ratio covenants for the year ended January 31, 1998, and adjust certain other
covenants. The amended agreement required that (i) EBITDA, which is based on a
rolling four quarter period, may not be less than $4 million for the four
quarters ended May 2, 1998, and increases each subsequent quarter to $6.8
million for the four quarters ended February 3, 2001 and each quarter thereafter
and (ii) the interest coverage ratio, as defined, not be less than 3.0 to 1.0
from May 2, 1998 through October 31, 1998, 4.0 to 1.0 at January 30, 1999, 4.5
to 1.0 at May 1, 1999 and July 31, 1999, and 5.0 to 1.0 thereafter. In addition,
on September 1, 1998, the agreement was again amended to waive the EBITDA
covenant, the interest charge coverage ratio and other related covenants for the
second quarter of fiscal 1998 provided that EBITDA for the third quarter of
fiscal 1998 was not less than $1.6 million. On December 11, 1998, the Company
obtained a waiver from the bank for the EBITDA and interest coverage covenants
for the third quarter ended October 31, 1998.

In conjunction with the May 14, 1998 amendment, the exercise prices of the
warrants to purchase 222,464 shares of common stock previously issued to the
bank were reduced to $5.85 and their expiration dates were extended for one
year. In conjunction with the September 1, 1998 amendment, the exercise prices
of these warrants were reduced to $3.00 and their expiration dates were extended
for another year. In conjunction with the waiver obtained on December 11, 1998,
the exercise prices of these warrants were reduced to $2.00.

                                       9
<PAGE>

The stock warrants issued in conjunction with the credit facility and certain
other financing transactions were assigned a fair value using the Black-Scholes
option pricing model. The fair value of the warrants have been reflected as a
discount on the debt and are being amortized as interest expense over the terms
of the related debt. Interest expense related to these warrants amounted to
$42,000 and $31,000 for the three months ended May 1, 1999 and May 2, 1998,
respectively.

The weighted average interest rate on borrowings outstanding as of May 1, 1999
and January 30, 1999 were 9.1% and 9.9%, respectively.

NOTE 5.  INCOME TAXES

Management believes that it is more likely than not that the net deferred tax
asset will be realized. Realization of the net deferred tax asset is largely
dependent upon the Company generating sufficient taxable income prior to the
expiration of the net operating loss carryforwards. However, the amount of such
realization could be reduced in the near term if estimates of future taxable
income during the carryforward period are changed. To the extent the net
operating loss carryforwards and existing deductible temporary differences are
not offset by the existing taxable temporary differences reversing within the
carryforward period, the remaining loss carryforwards are expected to be
realized by achieving future profitable operations. See Note 9.

NOTE 6.  SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental disclosures to the statements of cash flows are as follows:

<TABLE>
<CAPTION>
                                                    Three Months Ended
                                                ---------------------------
                                                  May 1,           May 2,
                                                   1999             1998
                                                -----------      ----------
<S>                                             <C>              <C>
Cash paid during the period for:
    Income taxes                                $    40,000      $   19,000
    Interest                                        312,000         294,000
</TABLE>

NOTE 7.  LOSS PER SHARE

<TABLE>
<CAPTION>
                                                    Three Months Ended
                                                ---------------------------
                                                  May 1,           May 2,
                                                   1999             1998
                                                -----------     -----------
<S>                                             <C>             <C>
Basic and diluted loss per share:

    Net loss                                    $    (557,000)   $(1,375,000)
                                                =============    ===========
    Weighted-average shares                         6,921,923      6,763,473
                                                =============    ===========

    Basic and diluted loss per share            $       (0.08)   $     (0.20)
                                                =============    ===========
</TABLE>

The diluted computations did not assume the exercise of stock options and
warrants, nor the conversion of preferred stock due to their antidilutive effect
on the loss per share.

                                      10
<PAGE>

NOTE 8.  SEGMENT AND RELATED INFORMATION

The Company adopted SFAS No. 131, "Disclosures About Segments of an Enterprise
and Related Information" as of January 30, 1999. This Statement establishes
standards for the way public business enterprises report information about
operating segments in annual financial statements and in interim financial
reports issued to shareholders.

The Company's reportable segments are the various distribution channels used to
market its products. The Company's products have similar purposes and uses in
each channel of distribution, but profitability varies among the channels. The
Company considers itself a single line of business with products that are
marketed through direct marketing (catalog, electronic commerce and
telemarketing), retail (Company- owned stores), wholesale and franchise
channels. The Company has five reportable segments - Direct Marketing -
Successories, Direct Marketing - Golf, Retail Company-owned stores, Wholesale
and Sales to Franchisees.

The accounting policies of the reportable segments are the same as those
described in Note 2 of Notes to Consolidated Financial Statements in the
Company's 10-K. The Company evaluates the performance of its operating segments
based on income (loss) before other income (expense) and income taxes.

Summarized financial information concerning the Company's reportable segments is
shown in the following table. The "Other" row includes corporate related items
not allocated to reportable segments.

<TABLE>
<CAPTION>
                                        Net           Segment          Total           Capital         Depreciation
                                       Sales       Profit (Loss)       Assets        Expenditures    and Amortization
----------------------------------------------------------------------------------------------------------------------
<S>                                 <C>            <C>               <C>             <C>             <C>
THREE MONTHS ENDED MAY 1, 1999:
Direct Marketing Successories       $ 7,318,000     $   994,000      $ 2,308,000     $        --       $        --
Direct Marketing Golf                   257,000          64,000          784,000              --                --
Retail Company-owned stores           3,004,000        (110,000)       5,585,000           8,000           163,000
Wholesale                               373,000         (23,000)         781,000              --                --
Sales to Franchisees                  1,104,000         262,000        1,508,000              --             5,000
Other                                        --      (1,744,000)      22,462,000          98,000           319,000
  CONSOLIDATED                      $12,056,000     $  (557,000)     $33,428,000     $   106,000       $   487,000

----------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED MAY 2, 1998:

Direct Marketing Successories       $ 6,761,000     $ 1,091,000      $ 3,422,000     $        --       $        --
Direct Marketing Golf                   674,000        (149,000)       2,335,000              --             7,000
Retail Company-owned stores           3,284,000        (263,000)       6,447,000         141,000           206,000
Wholesale                               645,000         133,000        1,295,000              --                --
Sales to Franchisees                    897,000         237,000        1,353,000              --             5,000
Other                                        --      (2,424,000)      24,871,000         562,000           456,000
  CONSOLIDATED                      $12,261,000     $(1,375,000)     $39,723,000     $   703,000       $   674,000
</TABLE>

The Company utilizes its facilities and the majority of its assets
interchangeably among each distribution channel. Assets that relate specifically
to a reportable segment have been included in the above table. Assets identified
to the reportable segments are primarily cash, receivables, inventory, prepaid
catalog expenses, property and equipment, and intangibles.

                                      11
<PAGE>

The following table presents the details for "Other":

<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED
                                                 ---------------------------
                                                    MAY 1           MAY 2
                                                    1999            1998
                                                 -----------     -----------
                                                 <S>             <C>
Corporate expenses                               $ 1,043,000     $ 1,601,000
Unallocated depreciation and
  amortization expense                               319,000         456,000
Other expenses                                       382,000         367,000
                                                 -----------     -----------

                                                 $ 1,744,000     $ 2,424,000
                                                 ===========     ===========
</TABLE>

Corporate expenses are primarily charges for those functions not specifically
attributable to any specific segment; these functions include the merchandising,
information systems, accounting, legal, human resource and executive
departments. Included in the expenses associated with these functions are
payroll and related costs, professional fees, information system maintenance
costs, office occupancy costs, and property and casualty insurance.

The Company's operations are principally in the United States. Operations
outside of the United States are primarily in United Kingdom, Australia and
Europe. No single foreign country or geographic area is significant to the
consolidated operations. Foreign operations' net sales were $55,000 and
$225,000, respectively, for the three months ended May 1, 1999 and May 2, 1998.
Long-lived assets are all located in the United States.

The Company's products include distinctive lines of wall decor, desktop art,
books and greeting cards, computer and audio products, personalized gifts and
awards, and mugs. In addition, the Company sells other motivational products
supplied by third parties. At May 1, 1999, sales by product categories comprised
of approximately 44% wall decor, 23% desktop art, 17% books and greeting cards,
4% computer and audio products, 9% personalized gifts and awards and 3% other
products. Information pertaining to sales by product categories as of May 2,
1998 was not available due to system limitations.

For the three months ended May 1, 1999 and May 2, 1998, no single customer or
group under common control represented 10% or more of the Company's sales.

NOTE 9: RISKS AND UNCERTAINTIES

ABSENCE OF OPERATING PROFITS

The Company has incurred a loss from operations in two of the past three years,
and has an accumulated deficit of $12,892,000 as of May 1, 1999. While
management does not expect to incur an operating loss in future years, its
ability to achieve profitability will depend on many factors including the
Company's ability to develop, manufacture, and introduce and market commercially
acceptable products while controlling operating costs.

On September 3, 1998, the Company announced that it would focus its future
growth on its core motivational products business and its two most profitable
distribution channels: direct marketing of SUCCESSORIES products and franchised
retail stores. As a result, management developed plans, which are in progress as
of May 1, 1999, to divest its golf catalog business and to convert its
Company-owned retail stores to franchise owner-operators. The Company has hired
a consultant with experience in marketing

                                     12
<PAGE>

franchises to assist with the conversion of the Company-owned retail stores.
The Company has not yet sold the golf catalog business. As of May 1, 1999,
the Company has converted five of its Company-owned retail stores to
franchised stores. In addition, the Company has reduced overhead expenses and
management expects to continue cost reductions.

The Company's operating results for the three months ended May 1, 1999 showed an
improvement compared to the three months ended May 2, 1998. The operating loss
of $175,000 for the three months ended May 1, 1999, an 83% improvement over the
operating loss of $1,008,000 incurred for the three months ended May 2, 1998,
was on plan. The improvement in operating results can be attributed to a
reduction in selling, general and administrative expenses of over 15% as
compared to the same period in the prior year. It should be noted that due to
seasonality, the projection for the full year indicates a net profit. However,
there can be no assurance that the Company will achieve a profitable level of
operations in fiscal 1999 or that once profitability is achieved, that it can be
sustained.

FINANCING CONSIDERATIONS

Based on current projections, management believes that there will be sufficient
cash generated from operations and borrowings under its credit facility to
enable the Company to operate for the foreseeable future.

In addition, the Company is discussing possible equity infusions with various
parties. Any additional equity obtained would provide additional working capital
in the event the Company does not achieve its projection. In May 1999, the
company received $1,220,000 in proceeds from the sale of convertible preferred
stock. Pursuant to the terms of the bank credit agreement, $1,000,000 of
proceeds were used to make a prepayment on the next three quarterly installments
through December 1, 1999, on the term loan. For further information on the sale
of convertible preferred stock by the Company, see Note 11.

NOTE 10.  COMMITMENTS AND CONTINGENCIES

LEGAL MATTERS

In August 1998, James M. Beltrame, the Company's former president and chief
executive officer ("Claimant"), filed a Demand for Arbitration dated August 11,
1998 with the American Arbitration Association (Case No. 51-160-00347-98).
Claimant was separated from employment with the Company on June 26, 1998 and
sought arbitration pursuant to an Employment Agreement dated June 1, 1996
between the Company and Claimant. Claimant alleged and sought lost compensation
and benefits due and owing to him from the Company in an amount claimed to be in
excess of $400,000. The Company responded to the claim with what the Company
believed to be a meritorious defense. On May 26, 1999, the parties entered into
a settlement agreement to effectuate a final resolution of all matters relating
to Mr. Beltrame's employment and termination thereof. The settlement payment
made to Mr. Beltrame was included in accrued expenses as of January 30, 1999 and
May 1, 1999. The Company and Mr. Beltrame dismissed the arbitration hearing with
prejudice.

In a related matter, the Company filed a complaint on December 9, 1998, against
James M. Beltrame in the Circuit Court of the Eighteenth Judicial Circuit in
DuPage County, Wheaton, Illinois (Case No. 98L01282). The Company alleged
non-payment of principal and interest due on a promissory note executed by Mr.
Beltrame. The Company sought judgment against Mr. Beltrame in the principal
amount of $107,625 plus interest at a rate of 7% through June 30, 1998, and
thereafter at a rate of 10%, together

                                     13
<PAGE>

with costs and attorney fees. The case was dismissed with prejudice as part
of the above-mentioned settlement agreement.

In May 1998, Wascher Corporation ("Wascher"), a franchisee of the Company, filed
a Demand for Arbitration dated May 26, 1998 with the American Arbitration
Association (Case No. 51-114-00227-98). Wascher alleges the following causes of
action against the Company: breach of contract, breach of good faith and fair
dealing, common law fraud, unfair competition, Robinson-Patman Act violation,
tortious interference with contract and violation of the Wisconsin Fair
Dealership Act. Wascher alleges and seeks an award in an amount in excess of
$250,000 plus costs, disbursements and attorney's fees, an award of both treble
and punitive damages, and such other relief deemed just and equitable.

The hearing dates for Wascher were originally scheduled for January 20, 21, 22
and 25, 1999. The Company and Wascher have postponed the hearing and are
involved in settlement negotiations. If a settlement is not reached with
Wascher, the Company intends to vigorously defend itself against the claims.
Given the phase of this proceeding, the Company has determined that a reasonable
assessment with respect to the financial impact, if any, cannot be made at this
point in time.

Except as noted above, there are no other material pending legal proceedings
against the Company. The Company is, however, involved in routine litigation
arising in the ordinary course of its business and, while the results of the
proceedings cannot be predicted with certainty, the Company believes that the
final outcome of such matters will not have a materially adverse effect on the
Company's consolidated financial position or results of operations.

NOTE 11.  SUBSEQUENT EVENTS

On May 28, 1999, the Company sold 503,092 shares of Series A convertible
preferred stock to a group of investors, pursuant to Regulation D of the
Securities Act of 1933. The Series A preferred stock has a par value of $0.01
per share and a purchase price of $2.425 per share. Dividends on the preferred
stock are accrued and payable quarterly in either cash or common stock at the
rate of 8% per annum, commencing on the date of issuance. Accrued and unpaid
dividends shall be paid on (1) April 30, July 31, October 31, and January 31
of each year commencing on July 31, 2000, to the holders of record as they
appear on the books and records of the Company 10 days preceding each payment
date, and (2) the date certificates representing common stock of the Company
are required to be delivered following any conversion of Series A convertible
preferred stock. Holders of the preferred stock have the right to convert
their shares, in whole or in part, into the Company's common stock. The
preferred stock also has certain other rights including pre-emptive rights,
voting rights, board representation, registration rights, and liquidation
preference. At any time commencing one year after the date of issuance of the
preferred stock, the holders of a majority of the preferred stock may require
the Company to file a registration statement covering the conversion of
preferred stock to common stock.

                                     14
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The following discussion should be read in conjunction with, and is qualified in
its entirety by, the Consolidated Financial Statements and Notes thereto
included elsewhere in this Report.

Successories, Inc. is a direct mail catalog company, specialty retailer and
wholesaler that designs, assembles and markets a diverse range of motivational
and self-improvement products, many of which are the Company's own proprietary
designs. The Company's products include distinctive lines of wall decor, desktop
art, books, audio tapes, personalized gifts and awards, greeting cards and mugs.
In addition, the Company sells other motivational products supplied by third
parties. In-house designers create proprietary art work and designs that can be
used in conjunction with a wide variety of products. The Company will also
customize its products to fulfill customers' special needs.

The Company's products are marketed primarily under its SUCCESSORIES and WINNERS
Collection trade names through direct marketing (catalog, electronic commerce
and telemarketing), retail (Company-owned stores) and wholesale distribution
(including sales to franchisees) channels. In October 1996, the Company acquired
the stock of British Links Golf Classics, Inc., a catalog company selling
golf-related gifts, art, wall decor and other collectibles. In November 1997,
the Company executed a license agreement with The New York Times Company
Magazine Group, Inc. to use the names GOLF DIGEST, THE GOLF COMPANY, and THE
GOLF COMPANY FROM GOLF DIGEST in connection with development of retail locations
and a direct mail catalog featuring golf-related wall decor, gifts and other
collectibles.

Although the Company utilizes multiple distribution channels for its products,
the Company's products have similar purposes and uses in each channel of
distribution and similar opportunities for growth. The profitability varies
among products and distribution channels. The Company utilizes its facilities
interchangeably for each distribution channel. Furthermore, the marketing
channels are directed at a single customer base located primarily in the United
States.

On September 3, 1998, the Company announced that it would focus its future
growth on its core motivational and self-improvement products and its two most
profitable distribution channels: direct marketing of SUCCESSORIES products and
franchised retail stores. As a result, the Company began plans, which are in
progress as of May 1, 1999, to divest its golf catalog business and to convert
its Company-owned retail stores to franchise owner-operators. As of May 1, 1999,
the Company has converted five of its Company-owned retail stores to franchised
stores.

For the three months ended May 1, 1999 and May 2, 1998, net product sales for
the various distribution channels were as follows:

<TABLE>
<CAPTION>
                                                 Three Months Ended
                                        -------------------------------------
                                            May 1,                May 2,
                                             1999                  1998
                                        ---------------       ---------------
<S>                                     <C>                   <C>
Direct marketing - Successories               61%                   56%
Direct marketing - Golf                        2%                    5%
Retail Company-owned stores                   25%                   27%
Wholesale distribution                         3%                    5%
Sales to franchisees                           9%                    7%
</TABLE>


                                     15
<PAGE>

The gross profit margins for retail sales attributable to Company-owned stores
are slightly lower than for direct marketing due to more non-proprietary
products being sold in the retail stores. The gross profit margin for wholesale
distribution sales, including sales to franchisees, is lower than the other
channels since these sales are generally made at a significant discount from
retail price.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MAY 1, 1999, COMPARED TO THREE MONTHS ENDED MAY 2, 1998

Net product sales were $12,056,000 for the three months ended May 1, 1999,
compared to $12,261,000 for the corresponding three months ended May 2, 1998.
The $205,000, or 1.7%, decrease in sales was comprised of direct marketing-golf
sales of $417,000, or 61.9%, retail Company-owned store sales of $280,000, or
8.5%, and wholesale sales of $272,000, or 42.2%, offset by an increase in direct
marketing-Successories sales of $557,000, or 8.2%, and franchise sales of
$207,000 or 23.1%.

The 8.2% increase in direct marketing-Successories sales was attributable to
planned increases in circulation of SUCCESSORIES catalogs. The 23.1% increase in
franchise sales was due to new products and higher sales volume from the
conversion of five Company-owned retail stores to franchised stores. The
decrease in direct marketing-golf sales was due to planned reductions in
circulation of the Company's golf catalogs. Retail Company-owned store sales
decreased by 8.5% due to fewer stores in operation in the current year, offset
by an increase in same-store sales of 2.3% as compared to the same prior year
three months ended May 2, 1998. There were 33 Company-owned and operated retail
stores at May 1, 1999 as compared to 40 stores at May 2, 1998.

Gross margin, as a percent of net product sales, was 57.6% for the three months
ended May 1, 1999, compared to 60.4% for the corresponding three months ended
May 2, 1998. The decrease in gross margin is due to lower gross profit on
product sales and royalty income. The decrease in gross profit on product sales
was due to planned product promotions resulting from market testing in the
direct marketing and retail distribution channels. Royalty income decreased from
the prior year primarily as a result of a decrease in wholesale sales.

Operating expenses decreased for the three months ended May 1, 1999 to
$7,124,000 from $8,410,000 for the three months ended May 2, 1998. The 15.3%
decrease in current year operating expenses can be attributed to reducing
expenses related to the Company's golf catalog business and exiting its European
expansion, which had significant costs in the corresponding prior year three
months ended May 2, 1998. Also in the current year, corporate and administrative
expenses decreased as a result of focusing on the two core channels; direct
marketing of SUCCESSORIES products and sales to franchise owner-operators.

Interest expense was $363,000 for the three months ended May 1, 1999, compared
to $341,000 for the three months ended May 2, 1998. The current year interest
expense includes a bank amendment fee of $69,000. Included in interest expense
is the non-cash interest related to the amortization of the debt discount. This
non-cash interest amounted to $42,000 and $31,000 for the three months ended May
1, 1999 and May 2, 1998, respectively.

The net loss of $557,000 for the three months ended May 1, 1999 was less than
the net loss of $1,375,000 for the three months ended May 2, 1998, primarily due
to a decrease in operating expenses offset by a decrease in net sales and gross
margin. As a percentage of net product sales, the net loss decreased to


                                     16
<PAGE>

4.6% for the three months ended May 1, 1999, as compared to a net loss of
11.2% for the three months ended May 2, 1998.

LIQUIDITY AND CAPITAL RESOURCES

The Company's ongoing cash requirements are for working capital, capital
expenditures and debt service. The Company expects to rely on cash generated
from its operations, supplemented by borrowings available on the revolving
credit loan, to fund its cash requirements.

Operating activities provided cash of $725,000 for the three months ended May 1,
1999, compared to $483,000 for the three months ended May 2, 1998. The
improvement in cash flows from operating activities can be primarily
attributable to a decrease in the net loss and inventory, offset by a decrease
in depreciation and amortization, the change in accounts receivable and an
increase in prepaid catalog expenses. The decrease in inventory can be
attributed to management's planned efforts to reduce inventory expenses. The
decrease in accounts receivable can be attributed to improved collections.

Investing activities used cash of $89,000 for the three months ended May 1,
1999, compared to $703,000 for the three months ended May 2, 1998. Capital
expenditures were the principal use of cash. During the three months ended May
1, 1999, the Company expended funds for computer equipment related to addressing
Year 2000 compliance. In the prior year three months ended May 2, 1998, the
Company expended funds primarily for the new point-of-sale computer systems for
its Company-owned retail stores. The Company's current credit facility limits
capital expenditures to $1 million for each fiscal year.

Financing activities used cash of $851,000 for the three months ended May 1,
1999, compared to $303,000 for the three months ended May 2, 1998. Scheduled
debt repayments on term notes and capital leases, and net repayments on the
revolving credit loan were the principal uses of cash.

On June 20, 1997, the Company entered into a credit facility agreement with a
bank. Per the agreement, as amended most recently on April 28, 1999, the
facility is comprised of a $7.5 million term loan and a revolving credit loan.
The revolving credit loan provides for maximum borrowings of $9 million through
May 1, 2000 and for each succeeding July 1 through December 31; the maximum
borrowings at all other times is $6 million. Borrowings under the revolving
credit loan are limited to 85% of eligible receivables plus 50% of eligible
inventory, as defined, provided that from February through April eligible
inventory is limited to $5 million through the year 2000 and $3 million in years
thereafter. A commitment fee of 0.5% is payable on the daily unused amount of
the maximum revolving credit commitment. The facility expires in June 2003, and
borrowings under the facility are secured by substantially all the assets of the
Company. The interest rates on the term loan and revolving credit loan
borrowings generally fluctuate based on the margin ratio, as defined, from a
minimum of prime plus 0.50% to a maximum of prime plus 3.00% on the term loan,
and a minimum of prime to a maximum of prime plus 3.00% on the revolving credit
loan. Interest is payable monthly. The interest rates on the term loan and
revolving credit loan were 9.00% and 8.50%, respectively, at May 1, 1999. The
term loan is payable in quarterly installments of $125,000 through June 1, 1998,
$312,500 from September 1, 1998 through June 1, 2000, and $375,000 thereafter.
Prepayments on the loans are required in certain cases including, among others,
equity offerings and asset dispositions. Further, the Company must annually
prepay the loans in an amount equal to 60% of excess cash flow, as defined. On
June 20, 1997, warrants to purchase 150,000 shares of the Company's common stock
were issued to the bank as part of this agreement. Initially these warrants had
exercise prices ranging from $6.19 to $9.73 and expiration dates in June 2001;
however, the exercise prices were subsequently adjusted to $2.00 and the
expiration dates were extended to June 2005.


                                     17
<PAGE>

In July 1997, the agreement for the credit facility was amended to include an
additional $500,000 fixed rate loan. The loan bears interest at 12% and is due
in June 2003. Warrants to purchase an additional 72,464 shares were issued to
the bank in connection with this amendment and initially had an exercise price
of $6.90 and an expiration date of July 2003; however, the exercise price was
subsequently adjusted to $2.00 and the expiration date was extended to July
2005.

On April 28, 1999, the agreement was amended to waive the earnings before
interest, taxes, depreciation and amortization ("EBITDA"), interest coverage
ratio, fixed charge coverage, debt to EBITDA ratio, and capital expenditure
limitation covenants for the year ended January 30, 1999, and adjust certain
other covenants prospectively. The amended agreement requires that (i) adjusted
EBITDA, as defined, which is based on a rolling four quarter period, may not be
less than a loss of $1,565,000 for the four quarters ended May 1, 1999, and
increases each subsequent quarter to $6.8 million for the four quarters ended
November 4, 2000 and for each quarter thereafter; (ii) the interest coverage
ratio, as defined, may not be less than 0.75 to 1.0 at October 30, 1999, and
increases each subsequent quarter to 5.0 to 1.0 for the quarter ended April 29,
2000 and for each quarter thereafter; (iii) the fixed charge coverage ratio, as
defined, may not be less than 2.6 to 1.0 at January 29, 2000, and 1.5 to 1.0
thereafter; and (iv) the debt to EBITDA ratio, as defined, may not be greater
than 3.0 to 1.0 at January 29, 2000 and thereafter. Also, in certain cases where
prepayments on the loans are made in connection with equity offerings, the
amendment provides that certain quarterly installments on the term loan will be
deferred and the limits on borrowings relating to eligible inventory under the
revolving credit loan will be increased.

In conjunction with the April 28, 1999 amendment, warrants to purchase an
additional 300,000 shares were issued to the bank at an exercise price of $2.50
that expire in 2005, the expiration dates of the 150,000 warrants previously
issued to the bank on June 20, 1997 were extended an additional two years to
June 2005, and the Company paid the bank a fee equal to 0.5% of the aggregate
commitments under the facility. The bank fee of $69,000 is included in interest
expense in the accompanying financial statements for the three months ended May
1, 1999.

The credit facility agreement contains, among other provisions, requirements for
maintaining certain earnings levels and financial ratios, limits on capital
expenditures and additional indebtedness, and restrictions on the payment of
dividends. At May 1, 1999, the Company was in compliance with the debt covenant
requirements of the credit facility agreement.

On May 14, 1998, the agreement was amended to waive the earnings before
interest, taxes, depreciation and amortization ("EBITDA") and interest coverage
ratio covenants for the year ended January 31, 1998, and adjust certain other
covenants. The amended agreement required that (i) EBITDA, which is based on a
rolling four quarter period, may not be less than $4 million for the four
quarters ended May 2, 1998, and increases each subsequent quarter to $6.8
million for the four quarters ended February 3, 2001 and each quarter thereafter
and (ii) the interest coverage ratio, as defined, not be less than 3.0 to 1.0
from May 2, 1998 through October 31, 1998, 4.0 to 1.0 at January 30, 1999, 4.5
to 1.0 at May 1, 1999 and July 31, 1999, and 5.0 to 1.0 thereafter. In addition,
on September 1, 1998, the agreement was again amended to waive the EBITDA
covenant, the interest charge coverage ratio and other related covenants for the
second quarter of fiscal 1998 provided that EBITDA for the third quarter of
fiscal 1998 was not less than $1.6 million. On December 11, 1998, the Company
obtained a waiver from the bank for the EBITDA and interest coverage covenants
for the third quarter ended October 31, 1998.

In conjunction with the May 14, 1998 amendment, the exercise prices of the
warrants to purchase 222,464 shares of common stock previously issued to the
bank were reduced to $5.85 and their expiration dates were extended for one
year. In conjunction with the September 1, 1998 amendment, the exercise prices


                                     18
<PAGE>

of these warrants were reduced to $3.00 and their expiration dates were extended
for another year. In conjunction with the waiver obtained on December 11, 1998,
the exercise prices of these warrants were reduced to $2.00.

At May 1, 1999 available borrowings on the revolving credit loan was $698,000.
The Company believes that internally generated funds and the credit facility
will be sufficient to meet its current operating needs and fund debt service and
anticipated capital expenditures.

In addition, the Company is discussing possible equity infusions with various
parties. Any additional equity obtained would provide additional working capital
in the event the Company does not achieve its projection. In May 1999, the
Company received $1,220,000 in proceeds from the sale of convertible preferred
stock. Pursuant to the terms of the bank credit agreement, $1,000,000 of
proceeds were used to make a prepayment on the next three quarterly installments
through December 1, 1999, on the term loan. Also, per the agreement the
limitation on borrowings against eligible inventory, as defined under the
Company's revolving credit loan was increased from 50% to 54%. For further
information on the sale of convertible preferred stock by the Company, see Note
11.

YEAR 2000 COMPLIANCE

Many computer systems in use today were designed and developed using two digits,
rather than four, to specify years. As a result, such systems will recognize the
year 2000 as "00." This could cause many computer applications to fail
completely or to create erroneous results unless corrective measures are taken.
The Company has conducted a review of its information technology ("IT") to
identify those areas that could be affected by the Year 2000 issue. The Company
has developed a comprehensive risk-based plan. The plan addresses IT and non-IT
systems and products, as well as dependencies on those with whom the Company
does significant business.

The following table reflects the methodology and the completion status of each
phase as it applies to the key IT and non-IT systems and products:

<TABLE>
<CAPTION>
                              PREPARATION    SURVEYING     PLANNING            IMPLEMENTATION
                              -----------    ---------     --------            --------------
<S>                           <C>            <C>           <C>                 <C>
FINANCIAL AND INVENTORY        Complete      Complete      Complete            Est. Q2 - 1999
SYSTEMS
ORDER ENTRY AND                Complete      Complete      Complete            Est. Q2 - 1999
FULFILLMENT
TELECOMMUNICATIONS             Complete      Complete      Complete            Complete
LAN/WAN                        Complete      Complete      Est. Q2 - 1999      Est. Q3 - 1999
ANCILLARY SOFTWARE             Complete      Complete      Est. Q2 - 1999      Est. Q2 - 1999
PC SOFTWARE                    Complete      Complete      Est. Q2 - 1999      Est. Q3 - 1999
(NON-FINANCIAL)
MANUFACTURING                  Complete      Complete      Est. Q2 - 1999      Est. Q3 - 1999
EQUIPMENT
THIRD PARTY VENDORS            Complete      Complete      Est. Q2 - 1999      Est. Q3 - 1999
</TABLE>

The new order entry, inventory control, manufacturing, fulfillment, financial
and point-of-sale systems are all Year 2000 compatible. The majority of the work
to be completed relates to vendor compliance issues.

Even with the above phases, the Company can not guarantee that its compliant
systems will not encounter difficulties when attempting to interface or
interconnect with third party systems, whether or not those


                                     19
<PAGE>

systems are claimed to be "compliant", and the Company can not guarantee that
such failure to interface or interconnect will not have a materially adverse
effect on the Company's operations. The Company expects to identify any
significant vendors compliance problems by the second quarter of 1999, and to
resolve those issues by the end of the third quarter 1999. Despite this
approach, there can be no guarantee that the systems of other companies on
which the Company is reliant will be converted timely, or that a failure by
another company to convert would not have a materially adverse effect on the
Company.

The Company presently believes, with the modifications made to existing
software, the Year 2000 problem will not pose significant operational risk.
While the Company cannot accurately predict a "worst case scenario" with regard
to its Year 2000 issues, the failure by the Company and/or vendors to complete
Year 2000 compliance work in a timely manner could have a materially adverse
effect on the Company's operations. The Company is in the process of assessing
these risks and uncertainties and finalizing appropriate contingency plans and
procedures in an attempt to minimize the effects of such a scenario. The cost of
addressing potential Year 2000 problems are not currently expected to have a
material impact on the Company's consolidated financial position or results of
operations, and the Company expects to incur approximately $250,000 or less in
related capital expenditures in fiscal 1999.

SEASONALITY

The Company generally experiences peak sales in the fourth quarter of its fiscal
year (November through January) due to the holiday season, and its lowest sales
levels in its first and second fiscal quarters (February through July). The
effects of seasonality are greater in the Company's retail operations than in
its direct marketing operations. Most operating expenses are incurred evenly
throughout the year, although some selling and administrative expenses are
variable with sales, and direct marketing catalog advertising expenses as a
percentage of sales are higher in the first calendar quarter. The Company's
quarterly operating results may also vary depending upon such factors as the
opening of new stores, converting Company-owned to franchise stores, new catalog
mailings, the timing of new product introductions and promotions by the Company.
The Company's cash requirements generally reach a seasonal peak in the fall to
finance increased inventory levels needed to meet third and fourth quarter sales
demand.

INFLATION

The Company does not believe that inflation has had a material impact on its
operations.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. Such
forward-looking statements may be deemed to include, among other things,
statements relating to anticipated financial performance, the management team,
management's long-term performance goals, plans to divest the Company's golf
catalog business and convert retail locations to franchised stores, programs to
reduce the Company's costs and enhance asset utilization, efficiencies realized
from new systems, the Company's generation of funds sufficient to meet its
current operating needs and to fund anticipated capital expenditures,
realization of deferred tax assets, costs associated with potential year 2000
problems, as well as statements relating to the Company's operational and growth
strategies. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to be accurate, and actual results could differ
materially from those addressed in forward-looking statements contained in this
Form 10-Q.


                                     20
<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to market risk associated with adverse changes in
interest rate and foreign currency exchange rates, but does not hold any market
risk sensitive instruments for trading purposes. Principal exposed to interest
rate risk is limited to $10,311,000 in variable rate debt. The Company measures
its interest rate risk by estimating the net amount by which potential future
net earnings would be impacted by hypothetical changes in market interest rates
related to all interest rate sensitive assets and liabilities. The Company's
exposure to foreign currency exchange rate risk relates primarily to the
financial position and results of operations in Canada, United Kingdom and
Australia. The Company's exposure to foreign currency exchange rate risk is
difficult to estimate due to factors such as balance sheet accounts and the
existing economic uncertainty and future economic conditions in the
international marketplace.



                                     21
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

In August 1998, James M. Beltrame, the Company's former president and chief
executive officer ("Claimant"), filed a Demand for Arbitration dated August 11,
1998 with the American Arbitration Association (Case No. 51-160-00347-98).
Claimant was separated from employment with the Company on June 26, 1998 and
sought arbitration pursuant to an Employment Agreement dated June 1, 1996
between the Company and Claimant. Claimant alleged and sought lost compensation
and benefits due and owing to him from the Company in an amount claimed to be in
excess of $400,000. The Company responded to the claim with what the Company
believed to be a meritorious defense. On May 26, 1999 the parties entered into a
settlement agreement to effectuate a final resolution of all matters relating to
Mr. Beltrame's employment and termination thereof. The settlement made to Mr.
Beltrame was included in accrued expenses at January 30, 1999 and May 1, 1999.
The Company and Mr. Beltrame dismissed the arbitration hearing with prejudice.

In a related matter, the Company filed a complaint on December 9, 1998, against
James M. Beltrame in the Circuit Court of the Eighteenth Judicial Circuit in
DuPage County, Wheaton, Illinois (Case No. 98L01282). The Company alleged
non-payment of principal and interest due on a promissory note executed by Mr.
Beltrame. The Company sought judgment against Mr. Beltrame in the principal
amount of $107,625 plus interest at a rate of 7% through June 30, 1998, and
thereafter at a rate of 10%, together with costs and attorney fees. The case was
dismissed with prejudice as part of the above-mentioned settlement agreement.

In May 1998, Wascher Corporation ("Wascher"), a franchisee of the Company, filed
a Demand for Arbitration dated May 26, 1998 with the American Arbitration
Association (Case No. 51-114-00227-98). Wascher alleges the following causes of
action against the Company: breach of contract, breach of good faith and fair
dealing, common law fraud, unfair competition, Robinson-Patman Act violation,
tortious interference with contract and violation of the Wisconsin Fair
Dealership Act. Wascher alleges and seeks an award in an amount in excess of
$250,000 plus costs, disbursements and attorney's fees, an award of both treble
and punitive damages, and such other relief deemed just and equitable.

The hearing dates for Wascher were originally scheduled for January 20, 21, 22
and 25, 1999. The Company and Wascher have postponed the hearing and are
involved in settlement negotiations. If a settlement is not reached with
Wascher, the Company intends to vigorously defend itself against the claims.
Given the phase of this proceeding, the Company has determined that a reasonable
assessment with respect to the financial impact, if any, cannot be made at this
point in time.

Except as noted above, there are no other material pending legal proceedings
against the Company. The Company is, however, involved in routine litigation
arising in the ordinary course of its business and, while the results of the
proceedings cannot be predicted with certainty, the Company believes that the
final outcome of such matters will not have a materially adverse effect on the
Company's consolidated financial position or results of operations.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      See Index to Exhibits immediately following the Signatures page.

(b)      No reports on Form 8-K have been filed during the three months ended
         May 1, 1999.

                                       22

<PAGE>

                                   SIGNATURES

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

                                  SUCCESSORIES, INC.
                                  (Registrant)

Date:  June 11, 1999              By:    /s/ Arnold M. Anderson
                                         -------------------------------------
                                         Arnold M. Anderson
                                         Chief Executive Officer, Chairman
                                         of the Board and Director
                                         (Principal Executive Officer)

Date:  June 11, 1999              By:    /s/ Gary Rovansek
                                         -------------------------------------
                                         Gary Rovansek
                                         President, Chief Operating Officer
                                         and Director

Date:  June 11, 1999              By:    /s/ Steven D. Kuptsis
                                         -------------------------------------
                                         Steven D. Kuptsis
                                         Senior Vice President, Administration
                                         and Chief Financial Officer
                                         (Principal Financial and Accounting
                                         Officer)

                                       23

<PAGE>

                                INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No.                        Description
----------                         -----------
<S>                                <C>
3.1       Articles of Incorporation of Registrant (1)

3.2       Articles of Amendment to the Company's Articles of Incorporation
          changing the Company's name to Successories, Inc. (2)

3.3       Certificate of Designation creating the Company's Series A Cumulative
          Convertible Preferred Stock (2)

3.4       Certificate of Designation creating the Company's Series B Cumulative
          Convertible Preferred Stock (2)

3.5       By-laws of Registrant (1)

4.1       Specimen Common Stock Certificate (1)

4.2       Specimen Series A Cumulative Convertible Preferred Stock
          Certificate (2)

4.3       Specimen Series B Cumulative Convertible Preferred Stock
          Certificate (2)

10.1      Form of Franchising Agreement (3)

10.4      Credit Agreement and Guaranty between the Company and NBD Bank (5)

10.5      First Forbearance Agreement between the Company and NBD Bank (6)

10.6      Amended and Restated Credit Agreement between the Company and NBD Bank
          dated as of July 31, 1995 (7)

10.7      Lease Agreements between LaSalle National Trust Bank as Trustee under
          Trust No. 107739 and Celebrating Excellence (4)

10.8      Stock Option Instrument for Arnold M. Anderson dated November 19,
          1991 (1)

10.9      Celex Group, Inc. Stock Option Plan (1)

10.10     Joint Venture Agreement with Morrison DFW, Inc. and related
          documents (4)

10.11     Indemnification Agreement dated April 7, 1999 between the Company and
          Arnold M. Anderson (filed herewith)

          Indemnification Agreements in the form filed were also entered into by
          the Messrs, Seamas T. Coyle, Timothy C. Dillon, C. Joseph LaBonte,
          Steven B. Larrick, Michael H. McKee, Mervyn C. Phillips, Jr., Guy E.
          Snyder, Gary Rovansek, Scott R. Morrison, Jr., and Jack Miller

                                       24

<PAGE>

10.12     First Amendment to the Credit Agreement between the Company and NBD
          Bank dated as of September 25, 1995 (8)

10.13     Second Amendment to the Credit Agreement between the Company and NBD
          Bank dated as of February 7, 1996 (9)

10.14     Form of Subordinated Note, Common Stock Purchase Warrant and
          Subordination Agreement relating to issuance of $1,500,000
          Subordinated Notes and Warrants to purchase 120,000 shares of the
          Company's Common Stock (9)

10.15     Common Stock Option Agreement granted to Arnold M. Anderson and
          Incentive Stock Option Agreement granted to Arnold M. Anderson (9)

10.16     Common Stock Option Agreement granted to James M. Beltrame and
          Incentive Stock Option Agreement granted to James M. Beltrame (9)

10.17     Third Amendment to the Credit Agreement between the Company and NBD
          Bank dated as of May 2, 1996 (9)

10.18     Employment Agreement with Arnold M. Anderson dated March 1, 1996 (10)

10.19     Employment Agreement with James M. Beltrame dated June 1, 1996 (10)

10.20     Employment Agreement with Michael H. McKee dated June 1, 1996 (10)

10.21     Common Stock Option Agreement granted to James M. Beltrame dated June
          17, 1996 (10)

10.22     Agreement and Plan of Merger among Successories, Inc., British Links
          Acquisition Corp., British Links Golf Classics, Inc., David J. Houston
          and Michael McArthur dated October 1, 1996 (11)

10.23     Regulations S Securities Subscription Agreement between Successories,
          Inc. and Seacrest Capital Limited and Farring Capital Limited dated
          September 16, 1996 (2)

10.24     Registration Rights Agreement dated as of December 17, 1996, by and
          among Successories, Inc., Infinity Investors Limited and Seacrest
          Capital Limited (2)

10.25     Form of Subordinated Note Extensions, Stock Options and Subordination
          Agreement relating to the extension of $1,250,000 of Subordinated
          Notes, and options to purchase 125,000 shares of the Company's Common
          Stock (2)

10.26     Fourth Amendment to the Credit Agreement between the Company and
          American National Bank & Trust Company of Chicago dated as of December
          16, 1996 (12)

10.27     Fifth Amendment to the Credit Agreement between the Company and
          American National Bank & Trust Company of Chicago dated as of December
          17, 1996 (12)

                                       25

<PAGE>

10.28     Sixth Amendment to the Credit Agreement between the Company and
          American National Bank & Trust Company of Chicago dated as of January
          30, 1997 (12)

10.29     Credit Agreement between the Company and The Provident Bank dated as
          of June 20, 1997 (13)

10.30     First Amendment to Credit Agreement between the Company and The
          Provident Bank dated as of July 16, 1997 (13)

10.31     Lease Agreement between LaSalle National Trust, N.A. as Trustee under
          Trust No. 120358 and Celex, Group, Inc. (14)

10.32     Second Amendment to Credit Agreement between the Company and the
          Provident Bank dated as of May 14, 1998 (14)

10.33     Third Amendment to Credit Agreement between the Company and the
          Provident Bank dated as of September 1, 1998 (15)

10.34     Employment Agreement with Gary Rovansek dated October 29, 1998 (15)

10.35     Fourth Amendment to Credit Agreement between the Company and the
          Provident Bank dated as of April 28, 1999 (filed herewith)

10.36     Warrants to Purchase Common Stock of the Company granted to Provident
          Bank and dated as of April 29, 1999 (filed herewith)

10.37     Preferred Stock Purchase Agreement dated as of May 28, 1999 by and
          among the Company and the investors (16)

21.1      Subsidiaries (4)

27.1      Financial Data Schedule (filed herewith)

-----------------------------
</TABLE>

(1)  Previously filed with Registration Statement on Form SB-2, No. 33-76530C
     filed on August 17, 1993, and incorporated herein by reference.

(2)  Previously filed with Registration Statement of Form S-3, No. 333-19313,
     and incorporated herein by reference.

(3)  Previously filed with Post-effective Amendment Number 1 to the Registration
     Statement of Form SB-2, No. 33-67530C filed on January 19, 1994, and
     incorporated herein by reference.

(4)  Previously filed with the Annual Report on Form 10-K for the year ended
     April 30, 1994 and incorporated herein by reference.

(5)  Previously filed with the Company's Form 10-Q/A-1 for the quarter ended
     July 31, 1995 and incorporated herein by reference.

                                       26

<PAGE>

(6)  Previously filed with the Company's Form 8-K on June 7, 1995, reporting
     Date of Event May 26, 1995, and incorporated herein by reference.

(7)  Previously filed with the Annual Report on Form 10-K for the year ended
     April 30, 1995, and incorporated herein by reference.

(8)  Previously filed with the Company's Form 10-Q for the quarter ended October
     28, 1995, and incorporated herein by reference.

(9)  Previously filed with the Company's Annual Report on Form 10-K for the year
     ended February 3, 1996, and incorporated herein by reference.

(10) Previously filed with the Company's Form 10-Q for the quarter ended August
     3, 1996 and incorporated herein by reference.

(11) Previously filed with the Company's Form 10-Q for the quarter ended
     November 2, 1996 and incorporated herein by reference.

(12) Previously filed with the Company's Annual Report on Form 10-K for the year
     ended February 1, 1997, and incorporated herein by reference.

(13) Previously filed with the Company's Form 10-Q for the quarter ended August
     2, 1997, and incorporated herein by reference.

(14) Previously filed with the Company's Form 10-Q for the quarter ended May 2,
     1998, and incorporated herein by reference.

(15) Previously filed with the Company's Form 10-Q for the quarter ended October
     31, 1998, and incorporated herein by reference.

(16) Filed with the Company's Form 8-K on June 10, 1999, and incorporated herein
     by reference.

                                       27