FORM 10-Q


                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549


         [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934


                For the quarterly period ended October 26, 1996

                         Commission file number 0-6319


                             JACOBSON STORES INC.
            (Exact name of registrant as specified in its charter)



          Michigan                                   38-0686330
(State or other jurisdiction              (IRS Employer Identification Number)
   of incorporation or organization)

                  3333 Sargent Road, Jackson, Michigan 49201
         (Address of principal executive offices, including zip code)

                                (517) 764-6400
             (Registrant's telephone number, including area code)

                                Not Applicable
             (Former name, former address and former fiscal year,
                         if changed since last report)


            Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

                               Yes [X]   No [ ]

            Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

                         Common Stock ($1 Par Value):
            5,779,021-2/3 Shares outstanding as of October 26, 1996



<PAGE>


              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES


                                   FORM 10-Q

                      For Quarter Ended October 26, 1996


                                     INDEX


                                                                          Page
PART I:    FINANCIAL INFORMATION

   Item 1.  Financial Statements

            . Consolidated Balance Sheets - October 26, 1996 and
              January 27, 1996                                               1

            . Consolidated Statements of Earnings - Thirteen and 
              Thirty-Nine Week Periods Ended October 26, 1996 
              and October 28, 1995                                           2

            . Consolidated Statements of Cash Flows - Thirty-Nine Week
              Periods Ended October 26, 1996 and October 28, 1995            3

            . Notes to Consolidated Financial Statements                     4

            Review by Independent Public Accountants                         8

            Exhibit:

            . Report of Independent Public Accountants                       9

   Item 2.  Management's Discussion and Analysis of Financial
            Condition and Results of Operations                             10


PART II:   OTHER INFORMATION

   Item 6.  Exhibits and Reports on Form 8-K                                14

   All items except those set forth above are inapplicable and have been
   omitted.


SIGNATURES                                                                  15

INDEX OF EXHIBITS



<PAGE>

<TABLE>
<CAPTION>

              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES


                          CONSOLIDATED BALANCE SHEETS
                                (in thousands)
                                  (unaudited)

                                                       October 26,  January 27,
ASSETS                                                    1996         1996
                                                       -----------  -----------
<S>                                                    <C>           <C>      
CURRENT ASSETS:
   Cash and cash equivalents                           $   3,926     $   3,068
   Receivables from customers, net                        36,528        43,134
   Merchandise inventories                               106,794        89,249
   Prepaid expenses and other assets                       3,056         3,928
   Refundable income taxes                                 3,714         3,029
   Deferred taxes                                          2,363         2,363
                                                       ---------     ---------
           Total current assets                          156,381       144,771
                                                       ---------     ---------
PROPERTY AND EQUIPMENT, NET                               92,894        96,597
                                                       ---------     ---------
OTHER ASSETS                                              23,071        21,146
                                                       ---------     ---------
                                                       $ 272,346     $ 262,514
                                                       =========     =========


LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Current portion of long-term debt                   $   2,668     $   4,531
   Accounts payable                                       37,856        30,537
   Accrued expenses                                       13,802        14,612
                                                       ---------     ---------
           Total current liabilities                      54,326        49,680
                                                       ---------     ---------
LONG-TERM DEBT                                           137,787       119,727
                                                       ---------     ---------
DEFERRED TAXES                                             5,718         9,115
                                                       ---------     ---------
OTHER LIABILITIES                                          2,748         2,376
                                                       ---------     ---------
SHAREHOLDERS' EQUITY:
   Common stock                                            5,966         5,966
   Paid-in surplus                                         7,109         7,109
   Retained earnings                                      59,091        68,940
   Treasury stock                                           (399)         (399)
                                                       ---------     ---------
                                                          71,767        81,616
                                                       ---------     ---------
                                                       $ 272,346     $ 262,514
                                                       =========     =========
<FN>
       The accompanying notes are an integral part of these statements.
</TABLE>

                                     - 1 -



<PAGE>



<TABLE>
<CAPTION>

              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES


                      CONSOLIDATED STATEMENTS OF EARNINGS
               (in thousands except per share and dividend data)
                                  (unaudited)


                                                   Thirteen Weeks Ended     Thirty-Nine Weeks Ended
                                                 ------------------------  ------------------------
                                                 October 26,  October 28,  October 26,  October 28,
                                                    1996         1995         1996         1995
                                                 -----------  -----------  -----------  -----------

<S>                                              <C>          <C>          <C>          <C>      
NET SALES, including leased departments          $  90,778    $  87,802    $ 291,293    $ 281,199
                                                 ---------    ---------    ---------    ---------

COSTS AND EXPENSES:
   Cost of merchandise sold, buying and
       occupancy expenses                           59,410       57,316      196,928      189,580
   Selling, general and administrative expenses     33,355       32,884       99,377       97,549
   Interest expense, net                             2,262        2,136        6,806        6,526
   Gain on sale of property                             --       (1,065)          --       (1,065)
                                                 ---------    ---------    ---------    ---------

             Total costs and expenses               95,027       91,271      303,111      292,590
                                                 ---------    ---------    ---------    ---------

LOSS BEFORE INCOME TAXES                            (4,249)      (3,469)     (11,818)     (11,391)

CREDIT FOR INCOME TAXES                             (1,486)      (1,214)      (4,136)      (3,987)
                                                 ---------    ---------    ---------    ---------

NET LOSS                                         $  (2,763)   $  (2,255)   $  (7,682)   $  (7,404)
                                                 =========    =========    =========    ========= 



LOSS PER COMMON SHARE:
   Primary and fully diluted                     $   (0.48)   $   (0.39)   $   (1.33)   $   (1.28)
                                                 =========    =========    =========    ========= 


CASH DIVIDENDS PER SHARE                         $0.12-1/2    $0.12-1/2    $0.37-1/2    $0.37-1/2
                                                 =========    =========    =========    ========= 
<FN>
       The accompanying notes are an integral part of these statements.
</TABLE>



                                     - 2 -



<PAGE>



<TABLE>
<CAPTION>

              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES


                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)
                                  (unaudited)

                                                                    Thirty-Nine Weeks Ended
                                                                    ------------------------
                                                                    October 26,   October 28,
                                                                        1996         1995
                                                                    -----------   ----------
<S>                                                                  <C>           <C>      
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                          $ (7,682)     $ (7,404)
   Adjustments to reconcile net loss to cash provided by
   (used in) operating activities:
      Depreciation and amortization                                     7,732         7,646
      Other liabilities                                                   372           647

      Change in:
         Receivables from customers, net                                6,606         8,528
         Merchandise inventories                                      (17,545)      (12,880)
         Prepaid expenses and other assets                                872         1,013
         Accounts payable and accrued expenses                          6,509         8,957
         Refundable income taxes                                       (4,082)       (4,290)
                                                                     --------      --------

              Net cash provided by (used in) operating activities      (7,218)        1,524
                                                                     --------      --------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sale of property, net of income tax                       --           827
   Additions to property and equipment                                 (4,029)       (5,809)
   Other non-current assets                                            (1,925)       (2,475)
                                                                     --------      --------

              Net cash used in investing activities                    (5,954)       (7,457)
                                                                     --------      --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Additions to long-term debt                                         19,600        11,100
   Reduction of long-term debt                                         (3,403)       (2,763)
   Cash dividends paid                                                 (2,167)       (2,167)
                                                                     --------      --------

              Net cash provided by financing activities                14,030         6,170
                                                                     --------      --------

INCREASE IN CASH AND CASH EQUIVALENTS                                     858           237

   Cash and cash equivalents, beginning of period                       3,068         3,558
                                                                     --------      --------

CASH AND CASH EQUIVALENTS, END OF PERIOD                             $  3,926      $  3,795
                                                                     ========      ========
<FN>
       The accompanying notes are an integral part of these statements.
</TABLE>



                                     - 3 -



<PAGE>




              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)


                      For Quarter Ended October 26, 1996




        The condensed financial statements included herein have been prepared
        by the Company without audit and reflect all adjustments which are, in
        the opinion of management, necessary to achieve a fair statement of
        results for the interim periods. All adjustments are of a normal and
        recurring nature.

        Because of the nature of the specialty department store business, the
        results for the thirty-nine week periods ended October 26, 1996 and
        October 28, 1995 (which do not include the Christmas holiday season)
        are not indicative of the results for the year as a whole.

        Certain information in footnote disclosures normally included in
        financial statements prepared in accordance with generally accepted
        accounting principles has been condensed or amended, although the
        Company believes that the disclosures are adequate to make the
        information presented not misleading. It is suggested that these
        condensed financial statements be read in conjunction with the
        financial statements and notes to consolidated financial statements
        included in the Company's latest annual report on Form 10-K.

  (1)   EARNINGS PER SHARE

        Primary earnings per share are computed by dividing net earnings by
        the weighted average number of shares of common stock and common stock
        equivalents outstanding during the periods. Weighted average shares
        outstanding were 5,781,000 and 5,779,000 for the quarters ended
        October 26, 1996 and October 28, 1995, respectively, and 5,788,000 and
        5,781,000 for the thirty-nine week periods ended October 26, 1996 and
        October 28, 1995, respectively.

        Fully diluted earnings per share are computed based on the additional
        assumption that the Company's 6-3/4% Convertible Subordinated
        Debentures due 2011 were converted to common stock at the date of
        issuance with a corresponding increase in net earnings to reflect a
        reduction in related interest expense, net of income taxes. Weighted
        average shares outstanding used in the computation of fully diluted
        earnings per share were 6,837,000 and 6,835,000 for the quarters ended
        October 26, 1996 and October 28, 1995, respectively, and 6,837,000 for
        the thirty-nine week periods ended October 26, 1996 and October 28,
        1995.



                                     - 4 -



<PAGE>


              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)


                      For Quarter Ended October 26, 1996





  (2)   CUSTOMER CREDIT AND RECEIVABLES

        Receivables from customers were as follows:
<TABLE>
<CAPTION>
                                                        October 26,   January 27,
                (in thousands)                             1996          1996
                -----------------------------------------------------------------
                <S>                                      <C>          <C>      
                Receivables from customers               $  37,229    $  43,907
                Less reserve for doubtful accounts             701          773
                                                         ---------    ---------
                                                         $  36,528    $  43,134
                                                         =========    =========
</TABLE>


  (3)   MERCHANDISE INVENTORIES

        Merchandise inventories were as follows:
<TABLE>
<CAPTION>
                                                         October 26,   January 27,
                (in thousands)                              1996          1996
                ------------------------------------------------------------------
                <S>                                      <C>          <C>      
                Inventories at first-in, first out
                    (FIFO) cost                          $ 124,476    $ 106,061
                Less LIFO reserves                          17,682       16,812
                                                         ---------    ---------
                                                         $ 106,794    $  89,249
                                                         =========    =========
</TABLE>


  (4)   PROPERTY AND EQUIPMENT

        Property and equipment are set forth below:
<TABLE>
<CAPTION>
                                                        October 26,   January 27,
                (in thousands)                              1996         1996
                -----------------------------------------------------------------
                <S>                                      <C>          <C>      
                Property and equipment                   $ 171,879    $ 172,525
                Less accumulated depreciation
                    and amortization                        78,985       75,928
                                                         ---------    ---------
                                                         $  92,894    $  96,597
                                                         =========    =========
</TABLE>




                                     - 5 -

<PAGE>

                       JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)


                      For Quarter Ended October 26, 1996



  (5)   CREDIT AGREEMENT

        The Company has a Revolving Credit and Term Loan facility under a
        Credit Agreement with two banks. The Revolving Credit portion of the
        Agreement provides for borrowings of up to $45,000,000, subject to a
        borrowing base limitation. Borrowings under the Revolving Credit line
        mature on June 30, 1998, with one year renewals subject to approval by
        both banks each year. The Company had requested renewal of the line
        for an additional year through June 30, 1999. For 1996 only, the
        Company and the banks had agreed to extend to November 30, 1996, the
        due date for the banks' decision whether to renew the Revolving Credit
        line for this additional year. The Company has withdrawn its request
        pending a complete review of the Company's operations by its new CEO.
        At October 26, 1996, borrowings under the Revolving Credit portion of
        the Agreement totalled $36,800,000.

  (6)   SUPPLEMENTARY CASH FLOW INFORMATION

        The Company considers all short-term investments with a maturity at
        date of purchase of three months or less to be cash equivalents.

        Interest paid (net of interest capitalized) totalled $6,323,000 and
        $5,881,000 in the thirty-nine week periods ended October 26, 1996 and
        October 28, 1995, respectively. The Company received income tax
        refunds of $44,000 for the thirty-nine week period ended October 26,
        1996 and paid $64,000 in income taxes for the thirty-nine week period
        ended October 28, 1995.

  (7)   SUBSEQUENT EVENTS

        Subsequent to the close of the quarter covered by this report,
        effective October 31, 1996, the Company replaced its Chairman and
        Chief Executive Officer. In the fiscal fourth quarter, the Company
        will include a charge of approximately $1,100,000 to selling, general
        and administrative expenses to recognize a contractual severance
        obligation to its former Chairman.


                                     - 6 -


<PAGE>


              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)


                      For Quarter Ended October 26, 1996






        On October 31, 1996, the Board of Directors approved an amendment to
        the stock option plan adopted in 1994, subject to approval by the
        Company's shareholders, to increase the aggregate number of shares of
        the Company's common stock which may be issued on exercise of options
        from 400,000 shares to 900,000 shares. Including 1996 employee and
        director option grants, options outstanding under the 1994 Plan as of
        October 31, 1996, totalled 361,750 shares, with 38,250 shares
        available for grant to directors and employees. In addition, 200,000
        employee options were granted on October 31, 1996, which are
        contingent on shareholder approval of the amendment to the stock
        option plan.








                                     - 7 -



<PAGE>


              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES


                         PART I: FINANCIAL INFORMATION

                      For Quarter Ended October 26, 1996






        REVIEW BY INDEPENDENT PUBLIC ACCOUNTANTS

        Arthur Andersen LLP, independent public accountants, have performed a
        limited review of the condensed consolidated financial statements for
        the thirty-nine week period ended October 26, 1996. Since they did not
        perform an audit, they express no opinion on the financial statements
        referred to above.











                                     - 8 -



<PAGE>





                              ARTHUR ANDERSEN LLP




                   Report of Independent Public Accountants




To Jacobson Stores Inc.:

We have reviewed the accompanying condensed consolidated balance sheet of
JACOBSON STORES INC. (a Michigan corporation) and subsidiaries as of October
26, 1996 and the related condensed consolidated statements of earnings for the
thirteen week and thirty-nine week periods ended October 26, 1996, and October
28, 1995, and the condensed consolidated statement of cash flows for the
thirty-nine week periods ended October 26, 1996, and October 28, 1995. These
financial statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that
should be made to the consolidated financial statements referred to above for
them to be in conformity with generally accepted accounting principles.

We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Jacobson Stores Inc. and
subsidiaries as of January 27, 1996 (not presented herein), and, in our report
dated March 4, 1996, we expressed an unqualified opinion on that statement. In
our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of January 27, 1996, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.



                                              /s/  ARTHUR ANDERSEN LLP

Detroit, Michigan
November 11, 1996




                                     - 9 -



<PAGE>


              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES


                         PART I: FINANCIAL INFORMATION

                      For Quarter Ended October 26, 1996




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

The registrant, Jacobson Stores Inc., a Michigan corporation and successor to
a business founded in 1868, operates specialty department stores catering to
discerning customers with preferences for quality merchandise. The Company
emphasizes quality merchandise, fully staffed stores, personalized customer
service and attractive, comfortable shopping surroundings. Each store features
fashion apparel and accessories for the family, and most offer decorative
accents for the home.

The Company owns a substantial portion of the real property used in its
business, primarily through its consolidated, wholly-owned real estate
subsidiary, Jacobson Stores Realty Company ("Jacobson Realty"). As used in
this report, the terms "registrant", "Company" and "Jacobson's" refer to
Jacobson Stores Inc. and its subsidiaries unless the context indicates
otherwise.

a.   OPERATING RESULTS: THIRTEEN WEEKS ENDED OCTOBER 26, 1996 COMPARED TO
     THIRTEEN WEEKS ENDED OCTOBER 28, 1995

     Sales for the quarter ended October 26, 1996, totalled $90,778,000, an
     increase of 3.4% from 1995. The thirteen weeks this year include sales in
     a new store in Leawood, Kansas, which opened in March 1996. Comparable
     store sales decreased 1.5% (8.3% increase in Florida; 4.3% decrease in
     Midwest). Sales in the metropolitan Detroit stores have been pressured as
     a result of increased competition, including an additional 950,000
     square feet of retail space opened in the market in August 1996. The
     Company expects difficult overall comparable store sales comparisons
     to continue in the fourth quarter.

     The Company's gross profit percentage decreased to 34.6% for the thirteen
     weeks this year from 34.7% in 1995, reflecting incentive discounts
     offered to new charge customers, partially offset by lower markdowns,
     lower buying costs and a lower LIFO provision.

     Selling, general and administrative expenses, expressed as a percentage
     of sales, decreased to 36.7% in the quarter from 37.5% one year ago. The
     decrease is due primarily to lower health care, advertising and store
     pre-opening expenses, as well as to a reduction in comparable location
     payroll expense.

     In the fiscal fourth quarter, the Company will recognize a one-time
     charge of approximately $1,100,000 to selling, general and administrative
     expenses due to a contractual severance obligation to its former
     Chairman.




                                    - 10 -



<PAGE>


              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES


                         PART I: FINANCIAL INFORMATION

                      For Quarter Ended October 26, 1996





     Interest expense, expressed as a percentage of sales, increased to 2.5%
     for the quarter from 2.4% one year ago due to higher revolving credit
     borrowings.

     1996 net loss for the thirteen weeks totalled $2,763,000, or 48 cents per
     common share, compared to $2,255,000, or 39 cents per share, last year.
     As a percentage of sales, net loss was 3.0% in 1996 compared to 2.6% one
     year ago. Last year's results included a gain on sale of property
     totalling $693,000 after-tax, or 12 cents per share.

b.   OPERATING RESULTS: THIRTY-NINE WEEKS ENDED OCTOBER 26, 1996 COMPARED TO
     THIRTY-NINE WEEKS ENDED OCTOBER 28, 1995

     Sales for the thirty-nine weeks ended October 26, 1996, totalled
     $291,293,000, an increase of 3.6% from 1995. The thirty-nine weeks this
     year include sales in a new store in Leawood, Kansas, which opened in
     March 1996. Comparable store sales decreased 0.8% (7.1% increase in
     Florida; 3.9% decrease in Midwest). Sales in the Metropolitan Detroit
     stores have been pressured as a result of increased competition,
     including an additional 950,000 square feet of retail space opened in
     the market in August 1996. The Company expects difficult overall
     comparable store sales comparisons to continue in the fourth quarter.

     The Company's gross profit percentage decreased to 32.4% from 32.6% in
     1995, reflecting incentive discounts offered to new charge customers,
     partially offset by lower markdowns, lower buying costs and a lower LIFO
     provision.

     Selling, general and administrative expenses, expressed as a percentage
     of sales, decreased to 34.1% year-to-date from 34.7% one year ago. The
     decrease is due primarily to lower health care, advertising and store
     pre-opening expenses.

     In the fiscal fourth quarter, the Company will recognize a one-time
     charge of approximately $1,100,000 to selling, general and administrative
     expenses due to a contractual severance obligation to its former
     Chairman.

     Interest expense, expressed as a percentage of sales, totalled 2.3% in
     both years.

     1996 net loss for the thirty-nine weeks totalled $7,682,000, or $1.33 per
     common share, compared to $7,404,000, or $1.28 per share, in 1995. As a
     percentage of sales, net loss was 2.6% in both years. Last year's results
     included a gain on sale of property totalling $693,000 after-tax, or 12
     cents per share.




                                    - 11 -



<PAGE>


              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES


                         PART I: FINANCIAL INFORMATION

                      For Quarter Ended October 26, 1996





c.   LIQUIDITY AND CAPITAL RESOURCES

     At October 26, 1996, the Company's current ratio was 2.88 to 1 and
     working capital totalled $102,055,000, including $3,926,000 of cash and
     cash equivalents. At January 27, 1996, the current ratio was 2.91 to 1
     and working capital totalled $95,091,000, including $3,068,000 of cash
     and cash equivalents.

     The Company utilizes cash flows from operations and revolving credit line
     borrowings to fund its seasonal working capital needs. To support its
     present and planned working capital requirements, including working
     capital requirements for the two stores opened in 1996, the Company has a
     $65,000,000 Revolving Credit and Term Loan facility under a Credit
     Agreement with two banks. At October 26, 1996, Revolving Credit
     borrowings totalled $36,800,000, leaving $8,200,000 available under the
     line, and Term Loan borrowings totalled $20,000,000. For the quarter
     ended October 26, 1996, the daily weighted average interest rate on
     borrowings under the Revolving Credit line was 7.31%.

 d.  CASH FLOWS

     Cash and cash equivalents increased $858,000 in the thirty-nine weeks
     ended October 26, 1996 compared to an increase of $237,000 in the
     thirty-nine weeks ended October 28, 1995. Cash flows are impacted by
     operating, investing and financing activities. In the thirty-nine weeks
     this year, operating activities used $7,218,000 of cash, compared to
     $1,524,000 of cash provided in 1995. The decrease in 1996 versus 1995
     reflects primarily inventory of the new Leawood, Kansas, and Boca Raton,
     Florida, stores.

     Investing activities used cash of $5,954,000 in the thirty-nine weeks
     this year compared to $7,457,000 in 1995. Investing activities include
     capital expenditures for new stores and modernization and refixturing of
     existing stores and support facilities totalling $4,029,000 in the first
     thirty-nine weeks of 1996 compared to $5,809,000 last year.



                                    - 12 -



<PAGE>


              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES


                         PART I: FINANCIAL INFORMATION

                      For Quarter Ended October 26, 1996


     Financing activities provided cash of $14,030,000 in the thirty-nine
     weeks this year compared to $6,170,000 last year. In the first
     thirty-nine weeks this year, the Company borrowed $19,600,000 under the
     Revolving Credit portion of its Credit Agreement compared to $11,100,000
     under its former revolving credit facility in the first thirty-nine weeks
     of 1995. In the first thirty-nine weeks this year, the Company used
     $3,403,000 to service current maturities of long-term debt, including the
     $1,725,000 annual sinking fund payment on its 6 3/4% Convertible
     Subordinated Debentures which is due in December 1996. The Company used
     $2,763,000 to service current maturities of long-term debt in 1995. The
     Company paid common stock dividends of $2,167,000 in each thirty-nine
     week period in 1996 and 1995.

     Subsequent to the close of the quarter covered by this report, on
     November 16, 1996, the Company's Board of Directors discontinued the
     Company's quarterly dividend, effective in the fourth quarter.

     The Company believes its cash flows from operations, along with its
     borrowing capacity and access to financial markets are adequate to fund
     its operations, debt maturities and 1996 store openings.

e.   CORPORATE DEVELOPMENT

     The Company opened a 120,000 square foot leased store in the Town Center
     Plaza, a shopping center in Leawood, Kansas, a suburb of Kansas City, in
     March 1996.

     Subsequent to the close of the quarter covered by this report, in
     November 1996, the Company opened an 80,000 square foot store in Mizner
     Park, a mixed-use retail, residential and office development in Boca
     Raton, Florida.

     The Company has no commitments for any new store locations at the 
     present time. The Company reviews the performance of its less profitable 
     existing stores from time to time to determine whether it would be in the 
     Company's best interest to close any of these stores. Store openings and 
     closings could have a significant impact on the Company's sales, expenses 
     and capital requirements. In addition, store closings would likely entail 
     significant one-time charges to effect the closing and to recognize any 
     impairment of assets resulting from the closing decision.




                                    - 13 -



<PAGE>


              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES


                          PART II: OTHER INFORMATION

                      For Quarter Ended October 26, 1996





ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

      (a)   Exhibits

            11      Computation of Earnings Per Share

            15      Letter from Independent Public Accountants

            27      Financial Data Schedule


      (b)   Reports on Form 8-K

            The Company did not file any reports on Form 8-K during its fiscal
            quarter ended October 26, 1996.


All exhibits except as set forth above have been omitted as not applicable or
not required.


                                    - 14 -



<PAGE>


              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES


                      For Quarter Ended October 26, 1996





                                  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.









                                              JACOBSON STORES INC.
                                              --------------------
                                                  (Registrant)



Date:  December 9,  1996       BY:     /s/  P. Gerald Mills
     ------------------              -------------------------------
                                     P. GERALD MILLS
                                     Chairman of the Board and Chief
                                     Executive Officer



Date: December 9,  1996        BY:   /s/  Paul W. Gilbert
     ------------------              -------------------------------
                                     PAUL W. GILBERT
                                     Vice Chairman of the Board
                                     (Principal Financial Officer)





                                    - 15 -



<PAGE>


              JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES


                               INDEX OF EXHIBITS




            11      Computation of Earnings Per Share

            15      Letter from Independent Public Accountants

            27      Financial Data Schedule


   All exhibits except as set forth above have been omitted as not applicable
or not required.