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 30, 2001                    Number  1-14967
                               -------------                           --------


                                   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, 2001, the Registrant  had 8,278,400  shares of Common Stock,  par
value $.01 per share outstanding.

<PAGE>1





                          WICKES INC. AND SUBSIDIARIES

                                      INDEX
                                      -----
<TABLE>


                                                                                                          Page
                                                                                                          Number

<S>                                                                                                       <C>

PART I.         FINANCIAL INFORMATION

       Item 1.  Financial Statements

           Condensed Consolidated Balance Sheets
            June 30, 2001 (Unaudited), December 30, 2000 and
            June 24, 2000 (Unaudited)                                                                        3

           Condensed Consolidated Statements of Operations (Unaudited)-
            For the three months and six months ended
            June 30, 2001 and June 24, 2000                                                                  4

           Condensed Consolidated Statements of Cash Flows (Unaudited)- For the
            six months ended June 30, 2001 and
            June 24, 2000                                                                                    5

           Notes to Condensed Consolidated
            Financial Statements (Unaudited)                                                                 6

       Item 2.  Management's Discussion and Analysis of Financial
                     Condition and Results of Operations                                                    14

       Item 3.  Quantitative and Qualitative Disclosures about
                     Market Risk                                                                            26


PART II.        OTHER INFORMATION

       Item 1.  Legal Proceedings                                                                           28

       Item 6.  Exhibits and Reports on Form 8-K                                                            28

</TABLE>
<PAGE>2







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

                                                                                 June 30,    December 30,      June 24,
                                                                                   2001           2000           2000
                                                                              -----------    -----------    -----------
                    ASSETS                                                    (UNAUDITED)                    (UNAUDITED)
<S>                                                                           <C>            <C>            <C>

Current assets:
   Cash                                                                     $       204    $       243    $       355
   Accounts receivable, less allowance for doubtful
     accounts of $2,174 at June 2001, $2,791 at December 2000
     and $3,173 at June 2000                                                    110,609         76,659        111,954
   Notes receivable from affiliate                                                  359            201            214
   Inventory                                                                    131,550        117,910        137,085
   Deferred income tax                                                            9,606          6,692          8,003
   Prepaid expenses                                                               4,661          3,405          3,820
                                                                            -----------    -----------    -----------
     Total current assets                                                       256,989        205,110        261,431

   Notes receivable from affiliate                                                  134            282            265
   Property, plant and equipment, net                                            57,250         54,384         53,301
   Trademark (net of accumulated amortization of
     $11,052 in 2001, $10,940 in December 2000
     and $10,830 in June 2000)                                                    5,968          6,079          6,190
   Deferred income tax                                                           12,990         12,990         14,695
   Rental equipment (net of accumulated depreciation
     of $1,945 in 2001, $1,582 in December 2000
     and $1,278 in June 2000)                                                     2,723          2,296          2,194
   Other assets (net of accumulated amortization of
     $13,486 in 2001, $12,440 in December 2000
     and $12,439 in June 2000)                                                   21,336         19,795         17,817
                                                                            -----------    -----------    -----------

     Total assets                                                           $   357,390    $   300,936    $   355,893
                                                                            ===========    ===========    ===========

       LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
   Current maturities of long-term debt                                     $     8,687    $     6,339    $      --
   Accounts payable                                                              63,402         35,294         53,941
   Accrued liabilities                                                           14,855         21,576         19,235
                                                                            -----------    -----------    -----------
Total current liabilities                                                        86,944         63,209         73,176

Long-term debt, less current maturities                                         238,132        200,403        249,847
Other long-term liabilities                                                       3,988          3,428          3,604
Commitments and contingencies (Note 6)

Stockholders' equity:
   Preferred stock (no shares issued)
   Common stock, $0.01 par (8,275,985, 8,271,313
    and 8,247,329 shares issued and
     outstanding, respectively)                                                      83             83             82
   Additional paid-in capital                                                    87,113         87,092         86,984
   Accumulated other comprehensive income                                           (89)          --             --
   Accumulated deficit                                                          (58,781)       (53,279)       (57,800)
                                                                            -----------    -----------    -----------
     Total stockholders' equity                                                  28,326         33,896         29,266
                                                                            -----------    -----------    -----------

      Total liabilities & stockholders' equity                              $   357,390    $   300,936    $   355,893
                                                                            ===========    ===========    ===========
</TABLE>

The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.
<PAGE>3


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


                                                          Three Months Ended             Six Months Ended
                                                          ------------------             ----------------
                                                        June 30,       June 24,         June 30,        June 24,
                                                          2001            2000           2001            2000
                                                          ----            ----           ----            ----
<S>                                                    <C>             <C>              <C>            <C>

Net sales                                            $   274,093     $   280,377      $   458,919     $  496,823
Cost of sales                                            215,456         220,253          358,351        390,713
                                                      ----------      ----------      -----------    -----------

     Gross profit                                         58,637          60,124          100,568        106,110

Selling, general and administrative expenses              50,239          50,275           94,869         94,222
Depreciation, goodwill and trademark amortization          1,602           1,453            3,105          2,875
Provision for doubtful accounts                               35              71              643            503
Other operating income                                      (723)           (721)          (1,113)        (1,368)
                                                    ------------       -----------   -------------   -------------

                                                          51,153          51,078           97,504         96,232

     Income from operations                                7,484           9,046            3,064          9,878

Interest expense                                           5,511           6,273           11,394         12,013
                                                    ------------    ------------      -----------   ------------

Income (loss) before income taxes                          1,973           2,773           (8,330)       (2,135)

Income tax expense (benefit)                                 991           1,241           (2,828)        ( 468)
                                                    ------------     -----------    ----------------------------

     Net income (loss)                            $          982   $       1,532    $      (5,502)$      (1,667)
                                                   =============    ============     ============= ==============

Basic income (loss) per common share (Note 8)     $         0.12  $         0.19   $        (0.66)$       (0.20)
                                                   =============   =============    ============== ===============

Diluted income (loss) per common share (Note 8)   $         0.12  $         0.18   $        (0.66)$       (0.20)
                                                   =============   =============    ============== ===============

Weighted average common shares - for basic             8,275,934       8,246,769        8,274,432     8,240,101
                                                       =========       =========        =========    ===========

Weighted average common shares - for diluted           8,430,362       8,506,004        8,274,432     8,240,101
                                                       =========       =========        =========    ===========
</TABLE>








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


<PAGE>4



                          WICKES INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
                                 (in thousands)
<TABLE>

                                                                                                       Six Months Ended
                                                                                                       ----------------
                                                                                                     June 30,    June 24,
                                                                                                       2001        2000
<S>                                                                                                 <C>         <C>
                                                                                                     --------    --------
Cash flows from operating activities:
   Net loss                                                                                         $ (5,502)   $ (1,667)
   Adjustments to reconcile net loss to
     net cash used in operating activities:
   Depreciation expense                                                                                3,650       3,193
   Amortization of trademark                                                                             111         111
   Amortization of goodwill                                                                              349         284
   Amortization of deferred financing costs                                                              677         667
   Provision for doubtful accounts                                                                       643         503
   Loss on sale of assets and other items                                                                 49          50
   Deferred income tax                                                                                (2,859)       (819)
   Changes in assets and liabilities, net of the effects of acquisitions:
     Increase in accounts receivable                                                                 (34,566)     (2,332)
     Increase in inventory                                                                           (13,465)    (16,380)
     Increase (decrease) in accounts payable and accrued liabilities                                  20,773      (6,295)
     Increase in prepaids and other assets                                                            (4,166)     (1,286)
                                                                                                     --------    --------

NET CASH USED IN OPERATING ACTIVITIES                                                                (34,306)    (23,971)
                                                                                                     --------    --------
Cash flows from investing activities:
   (Increase) decrease in notes receivable                                                               (10)          2
   Purchases of property, plant and equipment                                                         (5,058)     (4,631)
   Payments for acquisitions                                                                            (759)       (800)
   Proceeds from sales of property, plant and equipment                                                   17         200
                                                                                                     --------    --------

NET CASH USED IN INVESTING ACTIVITIES                                                                 (5,810)     (5,229)
                                                                                                     --------    --------

Cash flows from financing activities:
   Net borrowing under revolving line of credit                                                       40,077      29,105
                                                                                                     --------    --------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                                             40,077      29,105
                                                                                                     --------    --------

NET DECREASE IN CASH                                                                                     (39)        (95)
Cash at beginning of period                                                                              243         450
                                                                                                     --------    --------

CASH AT END OF PERIOD                                                                               $    204   $     355
                                                                                                     ========    ========

Supplemental schedule of cash flow information:
   Interest paid                                                                                    $ 10,412    $ 11,613
   Income taxes paid                                                                                $    491    $    759
Supplemental schedule of non-cash investing and financing activities: The
   Company purchased net assets in conjunction with acquisitions made during the
   period. In connection with these acquisitions, assets and liabilities were
   assumed as follows:
     Assets acquired                                                                                $  1,789    $    800
     Liabilities assumed                                                                            $  1,030    $     --
     Cash paid                                                                                      $    759    $    800
</TABLE>

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




<PAGE>5



                          WICKES INC. AND SUBSIDIARIES
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


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 condensed consolidated financial
statements  are  prepared  in  accordance  with  generally  accepted  accounting
principles,  which require  management to make  estimates and  assumptions  that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

     The  condensed   consolidated   financial  statements  should  be  read  in
conjunction  with the  Company's  consolidated  financial  statements  and notes
thereto  included in the Company's  Annual Report on Form 10-K (the "Form 10-K")
for the  fiscal  year  ended  December  30,  2000.  The  condensed  consolidated
financial  statements  reflect  all  adjustments   (consisting  only  of  normal
recurring  adjustments)  which are, in the opinion of management,  necessary for
the fair  statement  of the  results  for the  interim  period.  The  results of
operations for interim periods are not necessarily indicative of results for the
entire year.

     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,   principally  in  the  Midwest,
Northeast, and Southern United States. All information required by SFAS No. 131,
"Disclosures  about  Segments  of an  Enterprise  and Related  Information",  is
included in the Company's annual financial statements.

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

     The Company  issued 4,672 shares of Common Stock to members of its board of
directors as compensation during the six-months ended June 30, 2001.

     Reclassifications and Eliminations
     ----------------------------------

       Certain reclassifications have been made to prior year amounts to conform
to the current presentation. All material intercompany balances and transactions
have been eliminated.
<PAGE>6

                          WICKES INC. AND SUBSIDIARIES
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


2.  COMPREHENSIVE INCOME
    --------------------
<TABLE>

     The components of comprehensive income (loss) for the three months and
six months ended June 30, 2001 are as follows (in thousands):

                                         Three Months Ended                           Six Months Ended
                                         ------------------                           ----------------
                                        June 30,           June 24,              June 30,           June 24,
                                          2001              2000                  2001                 2000
                                          ----              ----                  ----                 ----
  <S>                                    <C>               <C>                   <C>                   <C>

     Net income (loss)               $      982    $         1,532           $    (5,502)         $     (1,667)
                                            ---              -----               -------               -------
     Change in fair value of interest
      rate swap, net of tax of $55          (89)                 -                   (89)                    -
     Effect on comprehensive income
      of the adoption of SFAS 133
      net of tax of $40                       -                  -                   (66)                    -
     Reclassification to earnings             -                  -                    66                     -
                                     ----------         ----------             ----------             ---------

     Comprehensive income (loss)     $      893       $      1,532         $      (5,591)         $     (1,667)
                                        -------              -----                 ------                ------

</TABLE>

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


     Long-term  debt  is  comprised  of the  following  at  June  30,  2001  (in
thousands):

              Revolving credit facility:
                 Revolving notes                          $  133,326
                 Term notes                                   49,537
              Senior subordinated notes                       63,956
              Less current maturities                         (8,687)
                                                            ---------
              Total long-term debt                        $  238,132
                                                           ==========

     Under the revolving line of credit,  the Company may borrow against certain
levels of accounts receivable and inventory. The unused availability at June 30,
2001 was $29.0  million.  On August  13,  2001 the  Company  amended  the credit
agreement to remove the net worth  covenant,  increase  the unused  availability
from $15 million to $25  million,  and to allow the  establishment  of a limited
partnership  for tax planning  purposes.  With this amendment the Company was in
compliance with all covenants as of June 30, 2001.

<PAGE>7




                          WICKES INC. AND SUBSIDIARIES
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


4.  RECLASSIFICATION OF MANUFACTURING EXPENSES
    ------------------------------------------

     One of the  Company's  strategic  goals is to increase  the sales volume of
manufactured building components (roof trusses, wall panels, floor joists, etc.)
and to continue to increase the sales of internally manufactured components.  In
response  to  increases,  over time,  in the volume of  internally  manufactured
building components sold, the Company has determined that certain  manufacturing
costs previously included in Selling,  General and Administrative expense should
be classified as Cost of Sales.


     Therefore,   elements  of  costs  directly  associated  with  manufacturing
processes  such as  manufacturing  labor  and  related  benefits,  manufacturing
supplies,  equipment  depreciation,  delivery  expenses and other overhead items
have been  reclassified  for the  current  and  prior  periods  presented.  This
reclassification  had no impact on income  from  operations,  net  income or net
assets. The table presented below summarizes the impact of this reclassification
(increase / (decrease) in thousands):
<TABLE>


                                                                   Three Months             Six Months
                                                                   ------------             ----------
                                                               June 30,    June 24,    June 30,    June 24,
                                                                  2001        2000        2001        2000
                                                              --------    --------    --------    --------
<S>                                                            <C>         <C>        <C>         <C>

Net sales                                                     $   --      $   --      $   --      $   --
Cost of sales                                                    9,802       9,365      18,456      17,641
                                                                 -----       -----      ------      ------


    Gross profit                                                (9,802)     (9,365)    (18,456)    (17,641)
                                                                ------      ------     -------     -------



Selling, general and administrative
expenses
                                                                (9,319)     (8,990)    (17,450)    (16,927)
Depreciation, goodwill and
trademark amortization                                            (483)       (375)     (1,006)       (714)
                                                                  ----        ----      ------        ----


                                                                (9,802)     (9,365)    (18,456)    (17,641)
                                                                ------      ------     -------     -------

    Income from operations                                     $   --      $   --      $   --      $   --
                                                               ========    ========    ========    ========
</TABLE>
<PAGE>8


                          WICKES INC. AND SUBSIDIARIES
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


5.   INCOME TAXES
     ------------

     The provision for income taxes for the  three-month  and six-month  periods
ended June 30,  2001 was an  expense  of  $991,000  and  benefit of  $2,828,000,
respectively, compared to an expense of $1,241,000 and a benefit of $468,000 for
the same  periods last year.  An effective  federal and state income tax rate of
38.1% and 38.7%  was used to  calculate  income  taxes for the  three-month  and
six-month periods ended June 30, 2001, respectively, compared to 38.6% and 38.8%
for the same periods last year.  In addition to the  effective  income tax rate,
state franchise taxes of $295,000 and $500,000 for the three-month and six-month
periods ended June 30, 2001,  respectively,  were calculated  separately and are
included in the provision reported.


6.  COMMITMENTS AND CONTINGENCIES
    -----------------------------

     At June 30,  2001,  the  Company  had  accrued  approximately  $96,000  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 five years.

     The Company  previously  had been  identified  as having used two landfills
which are now  Superfund  clean up sites.  Both of these items were  settled for
immaterial amounts.
<PAGE>9



                          WICKES INC. AND SUBSIDIARIES
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


     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 not expected to be material.

     The Company is one of many defendants in approximately 405 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 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 49 similar actions for insignificant  amounts,  and another 250 of these
actions have been dismissed. None of these suits have made it to trial.

     Losses in excess of the $96,000  reserved as of June 30, 2001 are possible,
but an estimate of these amounts cannot be made.

     The  Company  is a  defendant  in a lawsuit  arising  from a 1998  accident
involving an employee  truck driver that resulted in personal  injuries to other
parties.  Plaintiffs  sought  compensatory  damages  in an  unspecified  amount.
Plaintiffs amended their complaint to include a claim for punitive damages in an
unspecified  amount.  Recently,  a  settlement  agreement  was  reached  between
Plaintiffs and the Company's  insurance  carriers and  settlement  documents are
being processed.  The entire settlement will be paid by the Company's  insurance
carriers  and will  resolve  the  matter  in its  entirety,  including  punitive
damages.

     The  Company  is the  defendant  in an  arbitration  claim  filed  with the
American  Arbitration  Association  on July 17, 2001 by David T.  Krawczyk,  the
former President and Chief Operating Officer of the Company. Mr. Krawczyk claims
he was constructively terminated by the Company as the result of certain actions
and directions given to him which were  inconsistent  with his position,  duties
and  responsibilities.  Mr.  Krawczyk  claims  that as a result of this  alleged
constructive termination, he is entitled to receive a Special Severance Bonus of
$1,000,000  pursuant to the Company's Special Severance and Stay Incentive Bonus
Plan (the"Plan").

<PAGE>10

                          WICKES INC. AND SUBSIDIARIES
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


The Company has  investigated Mr. Krawcyk's claim and consulted with counsel and
believes that Mr. Krawczyk is not entitled to any Special  Severance  Bonus. The
Plan  requires  the  Company  to  reimburse  Mr.  Krawczyk  for  his  reasonable
attorney's fees and costs in this arbitration.

     The  Company  is  involved  in various  other  legal  proceedings  that are
incidental to the conduct of its business.  Certain of these proceedings involve
potential damages for which the Company's insurance coverage may be unavailable.
While the Company  does not believe  that any of these  proceedings  will have a
material adverse effect on the Company's financial  position,  annual results of
operations or liquidity, there can be no assurance of this.


7.  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
    -----------------------------------------

     On December 31, 2000,  the Company  adopted SFAS No. 133,  "Accounting  for
Derivative  Instruments and Hedging  Activities," as amended ("SFAS 133"), which
establishes  accounting and reporting  standards for derivative  instruments and
hedging  activities.  This standard  requires that all  derivative  instruments,
including  certain  derivative  instruments  embedded  in  other  contracts,  be
recognized  as assets or  liabilities  in the balance sheet and measured at fair
value. If a derivative is designated as a fair value hedge,  changes in the fair
value of the derivative and the hedged item will be recognized in earnings. If a
derivative is designated as a cash flow hedge,  changes in the fair value of the
derivative will be recorded in other comprehensive income and will be recognized
in the  statement of  operations  when the hedged item affects  earnings.  For a
derivative  that does not  qualify  as a hedge,  changes  in fair  value will be
recorded  in  earnings.  At June 30,  2001 the  Company's  interest  rate  hedge
qualified  under  SFAS  133  which  resulted  in  an  $89,000  charge  to  Other
Comprehensive  Income,  net of income  taxes of $55,000,  and $82,000  credit to
interest expense for the second quarter. The Company's commodities contracts did
not qualify for hedge accounting and were marked to market recognizing a gain of
$378,000 to Gross Profit.

     SFAS 142,  "Goodwill and Other  Intangible  Assets",  issued July 20, 2001,
requires  companies to assess impairment of goodwill and other intangible assets
on at least  an  annual  basis  to  determine  whether  the fair  value of those
intangible  assets continues to exceed the book value.  Instead of amortization,
companies are required to record an impairment charge if the fair value is below
book value. The standard becomes  effective for the Company in fiscal year 2002.
The  Company is in the process of  evaluating  the  adoption of this  statement.
Goodwill  amortization  for the six months ended June 30, 2001 and June 24, 2000
was $349,000 and $284,000, respectively.
<PAGE>11

                          WICKES INC. AND SUBSIDIARIES
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


8.  EARNINGS PER SHARE
    ------------------

     The Company  calculates  earnings per share in accordance with Statement of
Financial  Accounting  Standards  No.  128.  In  periods  where net  losses  are
incurred,  dilutive common stock  equivalents are not used in the calculation of
diluted  EPS as  they  would  have  an  anti-dilutive  effect  on  EPS.  For the
three-month  periods  ended  June  30,  2001  and June  24,  2000  common  stock
equivalents of 154,000 shares and 259,000 shares, respectively, were included in
calculating  diluted  weighted  average  shares  outstanding.  For the six-month
periods  ended June 30,  2001 and June 24,  2000  common  stock  equivalents  of
155,000  shares and  274,000,  respectively  shares  were  excluded as they were
antidilutive.  In  addition,  options to purchase  589,000 and 236,000  weighted
average  shares  of  common  stock  during  the six  months  of 2001  and  2000,
respectively, had an exercise price greater than the average market price.


9.  RELATED PARTY TRANSACTIONS
    --------------------------

     Approximately 35% of the Company's  outstanding  shares of common stock are
owned by Riverside Group, Inc.

     In March 2000, the Company entered into an agreement with Buildscape, Inc.,
an entity  controlled by Riverside Group,  Inc. and Imagine  Investments,  Inc.,
each of which  may be deemed  an  affiliate  of the  Company.  Pursuant  to this
agreement,  the Company and  Buildscape,  Inc.  are jointly  conducting  a pilot
Internet distribution program.

     In March 2000, the Company  extended the terms of its note  receivable from
Riverside Group,  Inc. Under the revised terms, all previously  accrued interest
was paid by Riverside  Group,  Inc. to the Company on March 31,  2000.  Interest
accruing  thereafter is to be paid on a quarterly basis. In addition,  repayment
of the remaining  principal  balance was deferred for one year,  with  quarterly
principal  payments  commencing on April 1, 2001. As of June 30, 2001  principal
payments  are current and accrued  interest  of  approximately  $11,100  remains
outstanding for the second quarter.
<PAGE>12








                          WICKES INC. AND SUBSIDIARIES
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


10.  ACQUISITIONS
     ------------

     In April 2001,  the Company  acquired the real estate and other assets of a
local lumber  distributor in Kenvil,  New Jersey for approximately $1.6 million,
of which  $650,000 was paid in cash and $950,000 in a three-year  purchase money
mortgage.  The purpose of the  acquistion is to relocate an existing  lumber and
distribution  center from a nearby leased  location.  In April 2001, the Company
acquired  JWatt   Construction,   a  framing   contractor  for  construction  of
residential and commercial real property,  for an immaterial purchase price. The
Company  has  accrued a  liability  for  contingent  payments  to be paid over a
three-year  period.  Preliminary  accounting  for  these  acquisitions  has been
recorded using the purchase method.

<PAGE>13













                          WICKES INC. AND SUBSIDIARIES

Item 2. 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 fiscal
year ended December 30, 2000.

     This Discussion and Analysis contains  statements which, to the extent that
they  are  not  recitations  of  historical  fact,  constitute  Forward  Looking
Statements  that are made pursuant to the safe harbor  provisions of the Private
Securities  Litigation  Reform  Act  of  1995  and  are  inherently  subject  to
uncertainty.  A number of important  factors could cause the Company's  business
and financial  results and financial  condition to be materially  different from
those stated in the Forward Looking Statements.

     Among the factors that could cause actual results to differ  materially are
the following:  effects of seasonality and cyclicality;  effects of competition;
interest rates and the Company's ability to service and comply with the terms of
its debt; lumber prices; the success of the Company's  operational  initiatives;
and the  outcome  of the  contingencies  discussed  in  Note 6 of the  Company's
Consolidated Financial Statements included elsewhere herein.

                                  INTRODUCTION

     Wickes Inc.  ("Wickes" or the "Company") is a leading  supplier of building
materials and  manufacturer  of building  components in the United  States.  The
Company sells its products and services  primarily to residential and commercial
building  professionals,  repair and  remodeling  contractors  and,  to a lesser
extent,  project  do-it-yourself  consumers  involved in major home  improvement
projects.  At June 30, 2001,  the Company  operated  100 sales and  distribution
facilities  and  27  component  manufacturing  facilities  in 24  states  in the
Midwest, Northeast, and South.

     The Company's  mission is to be the premier provider of building  materials
and  services  and  manufacturer  of  value-added  building  components  to  the
professional segments of the building and construction industry.
<PAGE>14





     The Company focuses on the professional  builder and contractor market. The
Company  targets five customer  groups:  the production or volume  builder;  the
custom  builder;  the tradesman;  the repair and  remodeler;  and the commercial
developer.  Its marketing  approach  encompasses three channels of distribution:
Major  Markets,  Conventional  Markets,  and Wickes  Direct.  These channels are
supported  by  the  Company's  network  of  building   component   manufacturing
facilities.  In Major Markets,  the Company serves the national,  regional,  and
large  local  builder in larger  markets  with a total  solutions  approach  and
specialized  services. In Conventional Markets, the Company provides the smaller
building  professional  in  less-populous  markets  with  tailored  products and
services.  Wickes  Direct  provides  materials  flow  and  logistics  management
services to commercial customers. The Company also serves building professionals
through  its  network of 27  component  manufacturing  facilities  that  produce
value-added, wood framed wall panels, roof and floor truss systems, and pre-hung
interior and exterior doors.

                              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>

                                                     Three Months Ended                      Six Months Ended

                                                  June 30,        June 24,                June 30,        June 24,
                                                    2001            2000                    2001            2000
                                                    ----            ----                    ----            ----
<S>                                              <C>              <C>                     <C>             <C>

Net sales                                          100.0%           100.0%                  100.0%          100.0%
Gross profit                                        21.4%            21.4%                   21.9%           21.4%
Selling, general and
  administrative expense                            18.3%            17.9%                   20.7%           19.0%
Depreciation, goodwill and
  trademark amortization                             0.6%             0.5%                    0.7%            0.6%
Provision for doubtful accounts                      0.0%             0.0%                    0.1%            0.1%

Other operating income                              (0.3)%           (0.3)%                  (0.2)%          (0.3)%
Income from operations                               2.7%             3.2%                    0.7%            2.0%
</TABLE>

     Certain  reclassifications  have been made to prior year amounts to conform
to the current presentation. All material intercompany balances and transactions
have  been  eliminated.  See also  Notes 1 and 4 to the  Consolidated  Financial
Statements regarding the reclassification of certain manufacturing  expenses and
other items.
<PAGE>15



     The  Company's   results  of   operations   during  the  first  six  months
historically are affected by, among other factors, weather conditions,  interest
rates,  lumber prices,  and housing starts.  Weather conditions during the first
six months of 2001 were  relatively  comparable to those of the first six months
of 2000, however the Midwest and South experienced very wet conditions in second
quarter which adversely impacts sales. The first half of 2001 has seen continued
reductions in the prime lending and mortgage interest rates over the same period
last  year.  Lumber  prices  have been  volatile  during the first half of 2001.
During the first quarter of 2001 framing lumber  composite  prices  decreased to
$285 per 1000  board  feet,  down 26% from $385 per 1000 board feet for the same
period last year.  The second quarter of 2001 framing  lumber  composite  prices
increased to $366 per 1000 board feet, down 8% from $340 per 1000 board feet for
the same period  last year.  Housing  starts  compared to the first half of 2000
were flat in the Midwest,  however in the  Northeast and South,  housing  starts
were down 4.3% and 0.8%, respectively, contributing to the decline in net sales.
During the first half of 2001,  the Company  experienced  increases  in selling,
general and administrative ("SG&A") expense, depreciation expense, provision for
doubtful accounts and a decrease in other income, partially offset by a decrease
in interest expense. In the first quarter of 2001 interest expense increased due
to the  implementation of a new accounting rule that required a decline in value
of an interest rate swap be charged to interest expense.

     Net income for the three-month periods ended June 30, 2001 and June 24,
2000 was $982,000 and $1,532,000, respectively. Net loss for the six-month
periods ended June 30, 2001 and June 24, 2000 was $5,502,000 and $1,667,000,
respectively.



                    Three Months Ended June 30, 2001 Compared
                    with the Three Months Ended June 24, 2000


Net Sales
---------

     Net sales for the second  quarter of 2001  decreased 2.2% to $274.1 million
from $280.4 million for the second quarter of 2000.  Same store sales  decreased
2.6% compared with the same period last year.  Same store sales to the Company's
primary customers,  building professionals,  decreased 1.3% and same store sales
to consumers  decreased  12.3% when compared with the second quarter of 2000. As
of June 30, 2001 the Company  operated  100 sales and  distribution  facilities,
compared to 101 at the end of the second quarter of 2000.

     Sales to building professionals as a percentage of total sales increased to
88.5% in the second  quarter of 2001 compared  with 87.8% in the second  quarter
2000.  Lumber and building  materials  accounted for 85.6% of total sales in the
second quarter of 2001 compared with 87.0% in the second quarter of 2000.
<PAGE>16

     Products  that  exhibited  the  greatest  change in sales  dollars  for the
quarter ended June 30, 2001 versus the comparable quarter in the prior year were
lumber and plywood  (down 11.7%),  drywall (down 39.5%),  panels and trusses (up
5.4%), and roofing and roofing materials (up 11.9%).


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

     Gross profit  decreased to $58.6 million in the second quarter of 2001 from
$60.1 million in the second quarter of 2000, a 2.5% decrease.  Gross profit as a
percentage of sales remained constant quarter over quarter at 21.4%. The Company
believes  that the  decrease in gross profit  dollars  resulted  primarily  from
decreased net sales. The Company continues to expand its internally manufactured
products such as roof trusses,  wall panels and pre-hung  doors,  which generate
higher profit  margins.  In the second  quarter of 2001,  the Company  increased
production  of  building  components  to  approximately  60% of  total  sales of
manufactured components from approximately 56% in the second quarter of 2000.


Selling, General and Administrative Expense ("SG&A")
----------------------------------------------------

     SG&A expense is down  slightly  and  increased to 18.3% of net sales in the
second quarter of 2001 compared with 17.9% of net sales in the second quarter of
2000. Total salaries,  taxes and benefits increased 3.6%, property and equipment
rent  increased  11.55% and marketing  increased  61.0%,  offset by decreases in
travel of 11.7%,  banking and credit of 15.4% and increased  manufacturing costs
reclassified to cost of sales of 4.7%.


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

     Depreciation, goodwill and trademark amortization increased to $1.6 million
for the second quarter of 2001 compared with $1.5 million for the same period in
2000.  The increase in  depreciation  primarily is due to equipment and building
expenditures  related to the Company's  strategic goal to increase the volume of
internally manufactured building components.


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

     The  provision for doubtful  accounts was $35,000 in the second  quarter of
2001, compared with $71,000 in the second quarter of 2000.
<PAGE>17


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

     Other operating income for the second quarter of 2001 was $723,000 compared
with $721,000 for the second quarter of 2000. There were no sales of real estate
in the second quarter of 2001 or second quarter of 2000.


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

     In the second quarter of 2001,  interest expense  decreased to $5.5 million
from $6.3  million  during the  second  quarter  of 2000.  At June 30,  2001 the
Company's  interest  rate swap  qualified for hedge  accounting  under SFAS 133,
which resulted in an $82,000 credit to interest expense for the second quarter.

     Due in part to the Company's  repurchase of 36% of its Senior  Subordinated
Debt in December of 2000,  the second  quarter of 2001  effective  interest rate
decreased to 9.0%  compared to 9.9% for the same period last year  excluding the
effect of the  amortization  of debt issue costs. In addition to the decrease in
interest rates that  contributed to the overall decrease in interest expense for
the second  quarter,  the Company's  average debt levels  decreased by 3.5% over
that of the comparable period in 2000. The Company continues to maximize its use
of LIBOR  contracts  to minimize  its overall  interest  expense.  In the second
quarter of 2001,  approximately  95.0% of the Company's average borrowing on its
revolving  credit  facility was  LIBOR-based  as compared  with 90.0% during the
second quarter of 2000.


Provision for Income Taxes
--------------------------

     The Company  recorded income tax expense of $991,000 for the second quarter
of 2001 compared with expense of $1.2 million in the second  quarter of 2000. An
effective  federal  and state  income  tax rate of 38.1%  was used to  calculate
income taxes for the second quarter of 2001,  compared with an effective rate of
38.6% for the second  quarter of 2000. In addition to the  effective  income tax
rate,  state  franchise taxes of $295,000 and $280,000 for the second quarter of
2001 and 2000, respectively,  were calculated separately and are included in the
provision reported.

<PAGE>18

     The Company  continues to review future  earnings  projections to determine
that there is  sufficient  support  for its  deferred  tax assets and  valuation
allowance.  Management believes that it is more likely than not that the Company
will receive  full benefit of its net 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 30, 2001 Compared
                     with the Six Months Ended June 24, 2000

Net Sales
---------

     Net sales for the first six months of 2001 decreased 7.6% to $458.9 million
from $496.8 million for the first six months of 2000. Same store sales decreased
8.1% compared with the same period last year.  Same store sales to the Company's
primary  customers,  building  professionals,  decreased 7.4% when compared with
such sales for the first six months of 2000. Consumer same store sales decreased
13.8% for the same  period.  For the six months  ended June 30, 2001 the Company
operated 100 sales and distribution facilities, compared to 101 in 2000.

     The Company  believes that the sales decrease for the six months ended June
30, 2001 primarily results from lumber deflation and housing start declines. The
Company  estimates  that the net  effect of lumber  deflation  for the first six
months of 2001 decreased  total sales by  approximately  $15.7 million  compared
with the same period last year.  Housing  starts in the first six months of 2001
compared  to  2000  were  relatively  flat  in the  Midwest,  down  4.3%  in the
Northeast, and down 0.8% in the South.

     Sales to building  professionals  as a percentage  of total sales  remained
unchanged  at 89.1% in the first six months of 2001  compared  2000.  Lumber and
building materials  accounted for 85.0% of total sales in the first half of 2001
compared with 86.5% in 2000.

     Products that exhibited the greatest  change in sales dollars for the first
six months of 2001  versus the  comparable  period in the prior year were lumber
and  plywood  (down  18.8%),  drywall  (down  39.8%),  and  roofing  and roofing
materials (up 9.3%).
<PAGE>19


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

     Gross profit for the first six months of 2001  decreased to $100.6  million
from $106.1  million for the first six months of 2000,  a 5.2%  decrease.  Gross
profit as a percentage  of sales  increased to 21.9% for the first six months of
2001 from 21.4% in 2000. The Company  believes that the decrease in gross profit
dollars resulted  primarily from decreased net sales due to lumber deflation and
a decline in housing starts.  The Company  estimates that deflation in commodity
prices  decreased gross profit for the first six months of 2001 by approximately
$3.5 million when compared with commodity  price levels  experienced  during the
first six months of 2000.

     The  increase in gross  profit as a  percentage  of net sales  primarily is
attributable to expansion of the Company's internally manufactured products such
as roof trusses,  wall panels and pre-hung  doors,  which generate higher profit
margins.  In the first six months of 2001, the Company  increased  production of
building  components  to  approximately  60%  of  total  sales  of  manufactured
components from approximately 57% in the first six months of 2000.


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

     SG&A  expense  increased  to 20.7% of net sales in the first six  months of
2001  compared  with  19.0% of net sales in the first six  months of 2000.  SG&A
dollars  increased  $0.7  million  over the  first  six  months  of 2000.  Total
salaries, taxes and benefits increased 1.6%, marketing increased 49.0%, property
and equipment rent increased 15.4%, partially offset by increased  manufacturing
costs reclassified to cost of sales 4.7%.


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

     Depreciation, goodwill and trademark amortization increased to $3.1 million
for the first six months of 2001  compared with $2.9 million for the same period
in 2000. The increase in depreciation primarily is due to equipment and building
expenditures  related to the Company's  strategic goal to increase the volume of
internally manufactured building components.

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

     The provision for doubtful accounts was approximately $0.6 million, or 0.1%
of net sales for the first six  months of 2001  which  increased  slightly  when
compared to  approximately  $0.5 million,  or 0.1% of net sales in the first six
months of 2000.
<PAGE>20



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

     Other  operating  income for the first six months of 2001 was $1.1  million
compared with $1.4 million for the first six months of 2000. There were no sales
of real estate in the first six months of 2001 or 2000.


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

     In the  first six  months  of 2001,  interest  expense  decreased  to $11.4
million from $12.0  million  during the first six months of 2000.  This decrease
includes  a charge to  interest  expense  in the first  quarter  for a  $447,000
decline  in the fair value of an  interest  rate swap that did not  qualify  for
hedge accounting  under SFAS 133. At June 30, 2001, the Company's  interest rate
swap qualified for hedge accounting under SFAS 133, which resulted in an $82,000
credit to interest expense for the second quarter.

     Due in part to the Company's  repurchase of 36% of its Senior  Subordinated
Debt in December of 2000, the effective  interest rate decreased to 9.3% for the
first six months  compared to 9.7% for the same period last year,  excluding the
effect of the  amortization  of debt issue costs. In addition to the decrease in
interest rates that  contributed to the overall decrease in interest expense for
the first six months,  the Company's  average debt levels decreased by 4.9% over
that of the comparable period in 2000. The Company continues to maximize its use
of LIBOR contracts to minimize its overall  interest  expense.  In the first six
months of 2001,  approximately  95.3% of the Company's  average borrowing on its
revolving  credit  facility was  LIBOR-based  as compared  with 80.0% during the
first six months of 2000.


Provision for Income Taxes
--------------------------

     The Company  recorded  an income tax benefit of $2.8  million for the first
six  months of 2001  compared  with a benefit  of $0.5  million in the first six
months of 2000. An effective federal and state income tax rate of 38.7% was used
to calculate  income  taxes for the first six months of 2000,  compared to 38.8%
for the first six months of 2000. In addition to the effective  income tax rate,
state  franchise taxes of $0.5 million and $0.5 million for the first six months
of 2001 and 2000,  respectively,  were calculated separately and are included in
the provision reported.

     The Company  continues to review future  earnings  projections to determine
that there is  sufficient  support  for its  deferred  tax assets and  valuation
allowance.  Management believes that it is more likely than not that the Company
will receive  full benefit of its net 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

<PAGE>21

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.


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


     On December 31, 2000,  the Company  adopted SFAS No. 133,  "Accounting  for
Derivative  Instruments and Hedging  Activities," as amended ("SFAS 133"), which
establishes  accounting and reporting  standards for derivative  instruments and
hedging  activities.  This standard  requires that all  derivative  instruments,
including  certain  derivative  instruments  embedded  in  other  contracts,  be
recognized  as assets or  liabilities  in the balance sheet and measured at fair
value. If a derivative is designated as a fair value hedge,  changes in the fair
value of the derivative and the hedged item will be recognized in earnings. If a
derivative is designated as a cash flow hedge,  changes in the fair value of the
derivative will be recorded in other comprehensive income and will be recognized
in the  statement of  operations  when the hedged item affects  earnings.  For a
derivative  that does not  qualify  as a hedge,  changes  in fair  value will be
recorded  in  earnings.  At June 30,  2001 the  Company's  interest  rate  hedge
qualified  under  SFAS  133  which  resulted  in  a  $144,000  charge  to  Other
Comprehensive  Income and  $82,000  credit to  interest  expense  for the second
quarter of 2001. The Company's  commodities  contracts did not qualify for hedge
accounting  and were  marked to market  recognizing  a gain of $378,000 to Gross
Profit.


     SFAS 142,  "Goodwill and Other  Intangible  Assets",  issued July 20, 2001,
requires  companies to assess impairment of goodwill and other intangible assets
on at least  an  annual  basis  to  determine  whether  the fair  value of those
intangible  assets continues to exceed the book value.  Instead of amortization,
companies are required to record an impairment charge if the fair value is below
book value. The standard becomes  effective for the Company in fiscal year 2002.
The  Company is in the process of  evaluating  the  adoption of this  statement.
Goodwill  amortization  for the six months ended June 30, 2001 and June 24, 2000
was $349,000 and $284,000, respectively.



<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 2001 net cash used by  operating  activities
was $34.3  million,  $10.3 million more than the $24.0 million used in the first
six months of 2000. 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 2001 decreased $1.3 million when compared to the end of the second quarter of
2000, a decrease of 1%. This difference primarily results from the overall sales
decrease in the first six months of 2001.

     Inventory at the end of the first six months of 2001 was $5.5  million,  or
4.0%,  lower than at the end of the first six months of 2000.  This  decrease is
largely  attributable to the Company's ability to manage inventory levels to the
current  rate of sales.  Accounts  payable at the end of the first six months of
2001 increased approximately $9.5 million, or 17.5% from the first six months of
2000. The increase primarily is attributable to an improvement in vendor terms.

     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  also may 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 2001 the Company spent $5.1 million on
capital expenditures,  excluding  acquisitions,  as compared to $4.6 million for
the same period in 2000. In April 2001, the Company acquired the real estate and
other  assets  of  a  local  lumber   distributor  in  Kenvil,  New  Jersey  for
approximately  $1.6  million,  of which $0.7  million  was paid in cash and $1.0
million in a three-year  purchase money mortgage.  The purpose of the acquistion
is to relocate an existing lumber and  distribution  center from a nearby leased
location.   Under  the  Company's  bank  revolving  credit  agreement,   capital
expenditures  during 2001 are currently limited to $9.0 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.

<PAGE>23

     The Company  maintained  excess  availability  under its revolving  line of
credit  throughout  the  first six  months of 2001.  At the end of the first six
months of 2001 total  borrowings  under the revolving  line of credit were $16.5
million lower than at the end of the first six months of 2000. Under the current
terms of the Company's bank revolving credit agreement the Company believes that
it will  continue  to  have  sufficient  funds  available  for  its  anticipated
operations  and  capital  expenditures.  At June 30,  2001,  $133.3  million was
outstanding  under  the  Company's  revolving  line of  credit,  and the  unused
availability was  approximately  $29.0 million.  Covenants under the amended and
restated credit agreement require, among other things, that the Company maintain
unused availability under the revolving line of credit of at least $15.0 million
(subject to increase in certain  circumstances)  and maintain  certain levels of
net worth, as defined in the agreement.  In addition,  the agreement  restricts,
among other things,  capital  expenditures,  the incurrence of additional  debt,
asset sales, dividends, investments, and acquisitions.  Furthermore, the amended
and restated credit agreement  considers a change in control,  as defined, as an
event of default.  On May 14, 2001, the Company amended the credit  agreement to
reduce the level of net worth required on March 31, 2001. On August 13, 2001 the
Company amended the credit agreement to remove the net worth covenant,  increase
the  unused  availability  from $15  million  to $25  million,  and to allow the
establishment  of a limited  partnership  for tax planning  purposes.  With this
amendment the Company was in compliance  with all covenants as of June 30, 2001.
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 Taxes".


     On November  21,  2000,  the Company  commenced a cash tender offer for its
outstanding  11-5/8%  Senior  Subordinated  Notes  due  2003,  at a  substantial
discount  from face  value.  The offer  expired on  December  20,  2000,  and on
December 26, 2000 the Company  redeemed  $36.0  million of notes  tendered  (the
"Redemption").

     To provide the funds  necessary  to complete  the  Redemption,  the Company
entered into an amended and restated  credit  agreement  with its existing  bank
group on December 13, 2000.  The amended and restated  credit  agreement,  among
other things,  increased the total  commitment  to $251.7  million,  removed the
seasonal  reduction in borrowing  capacity  provided for in the previous  credit
agreement,  increased both the base rate and LIBOR based borrowing spreads,  and
extended the final maturity of the revolving  credit agreement to June 30, 2005.
A portion of the credit  facility  was  provided as a one-time  term loan in the
principal  amount of $51.7 million that requires  quarterly  principal  payments
beginning on March 31, 2001.  The term loan  contains  provisions  for mandatory
principal  prepayments in the event that the Company receives cash in connection
with certain transactions, as defined.

       A commitment fee of 0.38% is payable on the unused amount of the amended
and restated revolving line of credit. Interest on amounts outstanding under the
amended and restated revolving line of credit bear interest at a spread of 0.75%

<PAGE>24

above the base rate of Fleet  National  Bank  (7.50% at June 30,  2001) or 2.75%
above the  applicable  LIBOR rate (6.50% at June 30, 2001).  Depending  upon the
Company's rolling four-quarter  interest coverage ratio and unused availability,
as defined,  amounts  outstanding  will bear interest at a spread above the base
rate from 0.0% to 0.75% or from 2.00% to 2.75% above the applicable  LIBOR rate.
At June 30, 2001, the Company had designated  $7.3 million and $126.0 million as
base rate and LIBOR borrowings,  respectively.  The amount outstanding under the
term loan portion,  $49.5 million, bears interest at a spread of 3.00% above the
applicable LIBOR rate. Interest is generally payable monthly.

     The  Company  has  entered  into  an  interest  rate  swap  agreement  that
effectively fixes the Company's borrowing cost at 5.75% plus the Company's LIBOR
borrowing spread on $40.0 million of the Company's  amended and restated line of
credit borrowings. The interest rate swap agreement expires in February 2002.


     Substantially  all of the  Company's  accounts  receivable,  inventory  and
general  intangibles  are pledged as  collateral  for the  amended and  restated
revolving line of credit. In addition,  substantially all of the Company's owned
real estate assets were provided as additional collateral in connection with the
term loan. Availability is limited to 85.0% of eligible accounts receivable plus
60.0% of eligible  inventory,  with these  percentages  subject to change at the
permitted discretion of the agent for the lenders.







<PAGE>



                          WICKES INC. AND SUBSIDIARIES

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------


     The Company is subject to market risk primarily  associated with changes in
interest rates and lumber futures contracts.

Interest Rate Risk
------------------

     On  December  13,  2000 the Company  entered  into an amended and  restated
credit  agreement with its existing bank group to provide the funds necessary to
complete  the   redemption  of  a  portion  of  the  Company's   11-5/8%  Senior
Subordinated  Notes due 2003. The amended and restated credit  agreement,  among
other things,  increased the total  commitment  to $251.7  million,  removed the
seasonal  reduction in borrowing  capacity  provided for in the previous  credit
agreement,  increased both the base rate and LIBOR based borrowing spreads,  and
extended the final maturity of the revolving  credit agreement to June 30, 2005.
A portion of the credit  facility  was  provided as a one-time  term loan in the
principal  amount of $51.7 million that requires  quarterly  principal  payments
beginning on March 31, 2001.  Interest on amounts  outstanding under the amended
and restated  revolving  line of credit bear interest at a spread of 0.75% above
the base  rate of Fleet  National  (7.50% at June 30,  2001) or 2.75%  above the
applicable  LIBOR rate (6.5% at June 30,  2001).  Depending  upon the  Company's
rolling  four-quarter  interest  coverage  ratio  and  unused  availability,  as
defined,  amounts outstanding will bear interest at a spread above the base rate
from 0.0% to 0.75% or from 2.00% to 2.75% above the  applicable  LIBOR rate.  At
June 30, 2001,  the Company had  designated  $7.3 million and $126.0  million as
base rate and LIBOR borrowings,  respectively.  The amount outstanding under the
term loan portion,  $49.5 million, bears interest at a spread of 3.00% above the
applicable LIBOR rate.

     The  Company  has  entered  into  an  interest  rate  swap  agreement  that
effectively fixes the Company's borrowing cost at 5.75% plus the Company's LIBOR
borrowing  spread on $40.0  million of the  Company's  term loan  portion of its
borrowings. The interest rate swap agreement expires in February 2002.

     Based on the  Company's  average  borrowings  under  its  revolving  credit
agreements  during  2001,  including  amounts  outstanding  under  the term loan
portion  and net of the impact of the  interest  rate swap  agreement  described
above,  a  hypothetical  25 basis point  movement in the base rate or LIBOR rate
would result in an approximate $0.3 million  annualized  increase or decrease in
interest expense.

     The fair value of the  Company's  outstanding  11 5/8% Senior  Subordinated
Notes was $46.7  million at June 30, 2001 and $38.3  million  December 30, 2000.
Assuming a hypothetical 100 basis point decrease in the yield to maturity of the
outstanding  notes at June 30, 2001, the fair value of the fixed rate debt would
have increased by $0.8 million.
<PAGE>26


Commodity Price Risk
--------------------

     The Company  uses  financial  instruments  from time to time hedge  against
future lumber price  fluctuations.  These  instruments  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 30, 2001 the Company  had 5 swap  arrangements  outstanding
with an unrealized  gain of  approximately  $0.4 million which was recognized in
Company's Statement of Operations.

     For additional  discussion,  reference is made to information  contained in
Item 7A,  Quantitative and Qualitative  Disclosures  About Market Risk, filed as
part of the Company's Form 10-K as of December 30, 2000.
<PAGE>27


                                     PART II
                                OTHER INFORMATION

Item 1. Legal  Proceedings
--------------------------

     The  Company  is the  defendant  in an  arbitration  claim  filed  with the
American  Arbitration  Association  on July 17, 2001 by David T.  Krawczyk,  the
former President and Chief Operating Officer of the Company. Mr. Krawczyk claims
he was constructively terminated by the Company as the result of certain actions
and directions given to him which were  inconsistent  with his position,  duties
and  responsibilities.  Mr.  Krawczyk  claims  that as a result of this  alleged
constructive termination, he is entitled to receive a Special Severance Bonus of
$1,000,000  pursuant to the Company's Special Severance and Stay Incentive Bonus
Plan  (the  "Plan").  The  Company  has  investigated  Mr.  Krawcyk's  claim and
consulted  with  counsel and believes  that Mr.  Krawczyk is not entitled to any
Special Severance Bonus. The Plan requires the Company to reimburse Mr. Krawczyk
for his reasonable attorney's fees and costs in this arbitration.



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

          (a)  Exhibits

               4.1 Second Amendment to the Amended and Restated Credit Agreement
               dated  December  13,  2000  among the  Registrant,  Fleet  Retail
               Financial  Inc,  and Bank of  America,  N.A.  as  agents  and the
               lenders set forth therein.





<PAGE>28



                                   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.

                                   WICKES INC.




                          By:      /s/ J. Steven Wilson
                                   ------------------------------------
                                   J. Steven Wilson
                                   Chairman and Chief Executive Officer



                          By:      /s/ James A. Hopwood
                                   ------------------------------
                                   James A. Hopwood
                                   Chief Financial Officer


Date:  August 14, 2001