SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                            ------------------------

                                    FORM 10-Q

(MARK ONE)

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

          For the quarterly period ended SEPTEMBER 30, 1998

                                    OR

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

          For the transition period from _________ to _________


Commission File Number 33-61534


                          LEVITZ FURNITURE CORPORATION
             (Exact name of registrant as specified in its charter)

          FLORIDA                                               23-1657490   
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                             Identification No.)

7887 NORTH FEDERAL HIGHWAY, BOCA RATON, FL                          33487-1613
(Address of Principal Executive Offices)                            (Zip Code)

                                 (561) 994-6006
              (Registrant's telephone number, including area code)



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

Yes   X                      No      


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

On October 31, 1998, there were 1,000 shares of Common Stock, par value $0.40
outstanding.

<PAGE>

THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD LOOKING STATEMENTS WITHIN
THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 WITH RESPECT
TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF THE COMPANY,
INCLUDING STATEMENTS UNDER THE CAPTION "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS". THESE FORWARD LOOKING STATEMENTS
INVOLVE CERTAIN RISKS AND UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN THAT ANY OF
SUCH MATTERS WILL BE REALIZED. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE,
AMONG OTHERS, THE FOLLOWING POSSIBILITIES: (1) BANKRUPTCY COURT ACTIONS OR
PROCEEDINGS RELATED TO THE BANKRUPTCY OF LEVITZ AND ITS SUBSIDIARIES; (2)
COMPETITIVE PRESSURE IN LEVITZ's INDUSTRY; (3) GENERAL ECONOMIC CONDITIONS; (4)
CHANGES IN THE FINANCIAL MARKETS AFFECTING LEVITZ's FINANCIAL STRUCTURE AND
LEVITZ's COST OF CAPITAL AND BORROWED MONEY; (5) INVENTORY RISKS DUE TO CHANGES
IN MARKET DEMAND OR LEVITZ'S BUSINESS STRATEGIES; (6) CHANGES IN EFFECTIVE TAX
RATES; (7) UNCERTAINTIES INHERENT IN LEVITZ'S OPERATIONS; AND (8) DIFFICULTIES
ENCOUNTERED BY LEVITZ OR OTHERS DEALING WITH THE YEAR 2000 ISSUE. LEVITZ HAS NO
DUTY UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 TO UPDATE THE
FORWARD LOOKING STATEMENTS IN THIS QUARTERLY REPORT ON FORM 10-Q.

                  LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES

                                    FORM 10-Q

                               SEPTEMBER 30, 1998

TABLE OF CONTENTS                                                           PAGE
-----------------                                                           ----

PART I - FINANCIAL INFORMATION

      Item 1.    Financial Statements

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

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

           Consolidated Condensed Statements of Cash Flows.................   5

           Notes to Consolidated Condensed Financial Statements............   6

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

           Comparison of Operations........................................  12

           Liquidity and Capital Resources.................................  15

PART II - OTHER INFORMATION

      Item 6.    Exhibits and Reports on Form 8-K..........................  19

      Signatures ..........................................................  20

      Exhibit Index........................................................  21



                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1.  Financial Statements

<TABLE>
<CAPTION>
                  LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                             (Dollars in thousands)

                                                       SEPTEMBER 30,       MARCH 31,
                                                          1998               1998
                                                       (UNAUDITED)
                                                       -----------       -----------
<S>                                                    <C>               <C>        
                           ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                            $     2,991       $     5,339
  Receivables                                               27,731            24,118
  Inventories                                              120,289           142,618
  Deposits and prepaid expenses                              5,438             3,442
  Deferred income taxes                                       --               3,418
                                                       -----------       -----------
    Total current assets                                   156,449           178,935
                                                       -----------       -----------
PROPERTY AND EQUIPMENT, net                                120,874           143,249
                                                       -----------       -----------
PROPERTY UNDER CAPITAL LEASES, net                          84,667            92,721
                                                       -----------       -----------
OTHER ASSETS:
  Receivable under account purchase agreement                 --             554,322
  Intangible leasehold interests                            12,998            14,151
  Deferred financing fees                                      956             2,061
  Property held for disposal                                33,593            17,766
  Other                                                      5,711             3,496
                                                       -----------       -----------
                                                            53,258           591,796
                                                       -----------       -----------
                                                       $   415,248       $ 1,006,701
                                                       ===========       ===========

            LIABILITIES AND STOCKHOLDER'S DEFICIT

CURRENT LIABILITIES:
  Cash overdrafts                                      $    10,319       $    16,395
  Current portion of long-term debt                          1,728             1,333
  Accounts payable, trade                                   33,353            30,511
  Accrued expenses and other liabilities                    78,595            55,847
  Deferred income taxes                                        355              --
  Payable to parent                                         13,859            13,633
  DIP Facility                                             151,335           148,381
                                                       -----------       -----------
    Total current liabilities                              289,544           266,100
                                                       -----------       -----------
LONG-TERM DEBT, net of current portion                       5,255             5,702
                                                       -----------       -----------
OBLIGATION UNDER ACCOUNT PURCHASE AGREEMENT                   --             554,322
                                                       -----------       -----------
OTHER NONCURRENT LIABILITIES                                   684               684
                                                       -----------       -----------
DEFERRED INCOME TAXES                                        5,013             8,825
                                                       -----------       -----------
LIABILITIES SUBJECT TO COMPROMISE                          356,663           360,975
                                                       -----------       -----------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDER'S DEFICIT:
  Common stock, at par value                                     1                 1
  Capital in excess of par                                  58,453            58,453
  Retained earnings (deficit)                             (300,365)         (248,361)
                                                       -----------       -----------
    Total stockholder's deficit                           (241,911)         (189,907)
                                                       -----------       -----------
                                                       $   415,248       $ 1,006,701
                                                       ===========       ===========
</TABLE>

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

                                       3
<PAGE>
<TABLE>
<CAPTION>
                  LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                    (Dollars in thousands except share data)
                                   (Unaudited)

                                                THREE MONTHS ENDED               SIX MONTHS ENDED
                                                  SEPTEMBER 30,                    SEPTEMBER 30,
                                            -------------------------       -------------------------
                                              1998             1997            1998            1997
                                            ---------       ---------       ---------       ---------
<S>                                         <C>             <C>             <C>             <C>      
Net sales                                   $ 174,490       $ 207,258       $ 350,971       $ 418,625
                                            ---------       ---------       ---------       ---------
Costs and expenses:
  Cost of sales                                95,982         116,772         193,164         232,539
  Selling, general and administrative
    expenses                                   78,837          97,730         160,663         184,714
  Unusual operating expenses                     --             3,400            --             7,217
  Depreciation and amortization                 4,725           6,444           9,917          12,957
  Interest expense, net                         7,288          12,303          14,789          26,098
                                            ---------       ---------       ---------       ---------
                                              186,832         236,649         378,533         463,525
                                            ---------       ---------       ---------       ---------
Loss before reorganization items and
  income taxes                                (12,342)        (29,391)        (27,562)        (44,900)
                                            ---------       ---------       ---------       ---------
Reorganization items:
  Loss on store closings                         --            25,914          21,135          25,914
  Professional fees                             1,695             714           3,307             714
                                            ---------       ---------       ---------       ---------
    Total                                       1,695          26,628          24,442          26,628
                                            ---------       ---------       ---------       ---------

Loss before income taxes                      (14,037)        (56,019)        (52,004)        (71,528)

Income tax benefit                               --            19,742            --            25,207
                                            ---------       ---------       ---------       ---------

Loss before extraordinary items               (14,037)        (36,277)        (52,004)        (46,321)

Extraordinary item, net of tax benefit
  of $2,973 in 1997                              --            (5,462)           --            (5,462)
                                            ---------       ---------       ---------       ---------

Net loss                                    $ (14,037)      $ (41,739)      $ (52,004)      $ (51,783)
                                            =========       =========       =========       =========

Loss per common share:
  Loss before extraordinary item            $ (14,037)      $ (36,277)      $ (52,004)      $ (46,321)
  Extraordinary item                             --            (5,462)           --            (5,462)
                                            ---------       ---------       ---------       ---------

Net loss per common share                   $ (14,037)      $ (41,739)      $ (52,004)      $ (51,783)
                                            =========       =========       =========       =========

Weighted average number of common
  shares outstanding                            1,000           1,000           1,000           1,000
                                            =========       =========       =========       =========
</TABLE>
              The accompanying notes are an integral part of these
                        condensed financial statements.

                                       4
<PAGE>
<TABLE>
<CAPTION>
                  LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
                                   (Unaudited)

                                                             SIX MONTHS ENDED SEPTEMBER 30,
                                                             ------------------------------
                                                                 1998             1997
                                                               ---------       ---------
<S>                                                            <C>             <C>       
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                     $ (52,004)      $ (51,783)
                                                               ---------       ---------
Adjustments to reconcile net loss to net cash provided by
  (used in) operating activities:
  Depreciation                                                     5,966           7,707
  Amortization                                                     3,951           5,250
  Provision for deferred taxes                                      --           (28,180)
  Loss (gain) on disposal of property and
    equipment                                                         (7)            136
  Amortization of deferred financing fees                          1,105           3,644
  Pension expense                                                    202             772
  Other                                                              213             177
  Reorganization items, non-cash                                  16,133          23,743
  Extraordinary loss related to early redemption
    of debt, before tax benefit                                     --             8,435

  Changes in operating assets and liabilities:
    Decrease (increase) in:
      Receivables                                                 (2,929)         11,052
      Inventories                                                 20,655          49,099
      Deposits and prepaid expenses                               (1,996)         (4,328)
      Other, net                                                      (9)            392
    Increase (decrease) in:
      Accounts payable, trade                                      1,366          21,241
      Accrued expenses and other liabilities                       3,715          (7,691)
      Payable to parent                                              188           3,118
      Other noncurrent liabilities                                    64            (402)
                                                               ---------       ---------
        Total adjustments                                         48,617          94,165
                                                               ---------       ---------
  NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES             (3,387)         42,382
                                                               ---------       ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                                            (2,994)         (6,874)
  Proceeds from sale of property and equipment and
    other assets                                                   8,722           2,343
                                                               ---------       ---------
   NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES             5,728          (4,531)
                                                               ---------       ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings under credit facilities                             441,498         454,273
  Repayments under credit facilities                            (438,757)       (473,921)
  Principal payments on long-term debt                               (52)         (6,355)
  Principal payments under capital lease obligations              (1,302)         (1,794)
  Decrease in cash overdrafts                                     (6,076)        (11,173)
  Payment of deferred financing fees                                --            (3,161)
                                                               ---------       ---------
  NET CASH USED IN FINANCING ACTIVITIES                           (4,689)        (42,131)
                                                               ---------       ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS                         (2,348)         (4,280)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                     5,339           9,267
                                                               ---------       ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD                       $   2,991       $   4,987
                                                               =========       =========
</TABLE>
              The accompanying notes are an integral part of these
                        condensed financial statements.

                                       5
<PAGE>
                  LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                               September 30, 1998

                                   (Unaudited)


1.      CHAPTER 11 PROCEEDINGS AND BASIS OF PRESENTATION:

        Levitz Furniture Corporation (Levitz), a Florida corporation, is a
        wholly-owned subsidiary of Levitz Furniture Incorporated (LFI).

        On September 5, 1997 (the "Petition Date"), Levitz Furniture
        Incorporated, a Delaware corporation ("LFI" or the "Company"), and 11 of
        its subsidiaries (collectively, the "Debtors"), including, Levitz
        Furniture Corporation, a Florida corporation and wholly-owned subsidiary
        of LFI ("Levitz"), filed voluntary petitions for relief under Chapter
        11, Title 11 of the United States Code (the "Bankruptcy Code") with the
        United States Bankruptcy Court for the District of Delaware, Wilmington,
        Delaware ("the Court"). The bankruptcy cases of LFI and Levitz and their
        affiliates are being jointly administered, for procedural purposes only,
        under Case No. 97-1842(MFW). Pursuant to Sections 1107 and 1108 of the
        Bankruptcy Code, Levitz, as debtor and debtor-in-possession, has
        continued to manage and operate its assets and businesses pending the
        confirmation of a reorganization plan or plans and subject to the
        supervision and orders of the Court.

        The Debtors expect to reorganize their affairs under the protection of
        Chapter 11 and to propose a Chapter 11 plan of reorganization for
        themselves. Although management expects to file a plan of reorganization
        during 1999 which would contemplate emergence in 1999, there can be no
        assurance at this time that a plan of reorganization proposed by the
        Debtors will be approved or confirmed by the Court, or that such plan
        will be consummated. The Court approved a motion on November 12, 1998
        granting the Debtors' request to extend its exclusive right to file a
        plan of reorganization through March 1, 1999. There can be no assurance
        that the Court will grant a further extension should the Debtors request
        a further extension past March 1, 1999. After the expiration of the
        exclusivity period, creditors would have the right to propose
        alternative plans of reorganization.

        The consolidated condensed financial statements have been presented in
        accordance with the American Institute of Certified Public Accountants
        Statement of Position 90-7, "Financial Reporting by Entities in
        Reorganization under the Bankruptcy Code" (SOP 90-7) and have been
        prepared in accordance with generally accepted accounting principles
        applicable to a going concern, which principles, except as otherwise
        disclosed, assume that assets will be realized and liabilities will be
        discharged in the ordinary course of business. As a result of the
        Chapter 11 cases and circumstances relating to this event, including
        Levitz's debt structure, its recurring losses, and current economic
        conditions, such realization of assets and liquidation of liabilities
        are subject to significant uncertainty. Additionally, the amounts
        reported on the consolidated condensed balance sheet could materially
        change because of changes in business strategies and the effects of any
        proposed plan of reorganization.

        The Debtors' ability to continue as a going concern is dependent upon,
        among other things, confirmation of a plan of reorganization, future
        profitable operations, the ability to comply with the terms of the DIP
        Facility and the ability to generate sufficient cash from operations and
        to extend or replace current financing arrangements to meet obligations.
        No assurances can be given that the Debtors will be able to meet these
        objectives.

                                       6
<PAGE>

        In the Chapter 11 cases, substantially all unsecured liabilities as of
        the Petition Date are subject to compromise or other treatment under a
        plan of reorganization which must be confirmed by the Bankruptcy Court
        after submission to any required vote by affected parties. For financial
        reporting purposes, those liabilities and obligations have been
        segregated and classified as "liabilities subject to compromise" in the
        consolidated condensed balance sheets. Generally, all actions to enforce
        or otherwise effect repayment of pre-Chapter 11 liabilities as well as
        all pending litigation against the Debtors are stayed while the Debtors
        continue their business operations as debtors-in-possession. Unaudited
        schedules have been filed by the Debtors with the Court setting forth
        the assets and liabilities of the Debtors as of the Petition Date as
        reflected in the Debtor's accounting records. Levitz has notified all
        known claimants subject to the August 10, 1998 bar date of their need to
        file a proof of claim with the Court. Differences between amounts shown
        by the Debtors and claims filed by creditors are being investigated and
        will be either amicably resolved or adjudicated before a court. The
        ultimate amount of and settlement terms for such liabilities are subject
        to an approved plan of reorganization and accordingly are not presently
        determinable.

        Under the Bankruptcy Code, the Debtors may elect to assume or reject
        real estate leases, employment contracts, personal property leases,
        service contracts and other pre-petition executory contracts, subject to
        Court approval. Claims for damages resulting from the rejection of real
        estate leases and other executory contracts will be subject to separate
        bar dates. The Debtors have not reviewed all real estate leases for
        assumption or rejection. As of September 30, 1998, the Debtors had
        rejected leases for fourteen store locations, reached agreement with the
        landlords on two store locations to terminate without liability and
        assumed and assigned to a third party leases on two store locations. The
        Court has extended the time for which the Debtors may assume or reject
        unexpired leases of nonresidential real property to March 31, 1999.
        Accrued expenses and other liabilities and liabilities subject to
        compromise include reserves for an estimated amount that may be claimed
        by lessors for the stores that have been closed through September 30,
        1998. The Debtors will continue to analyze their real estate leases and
        executory contracts and may assume or reject additional leases and
        contracts. Such rejections could result in additional liabilities
        subject to compromise.

        In the opinion of Management, the accompanying unaudited consolidated
        condensed financial statements contain all adjustments consisting of
        normal recurring accruals necessary to present fairly the financial
        position as of September 30, 1998, the results of operations and cash
        flows for the periods then ended. The results of operations for the
        period ended September 30, 1998, are not necessarily indicative of the
        results to be expected for the full year.

        Certain information and footnote disclosures normally included in
        financial statements prepared in accordance with generally accepted
        accounting principles have been omitted. These consolidated condensed
        financial statements should be read in conjunction with the financial
        statements and notes thereto included in Levitz's audited financial
        statements for the year ended March 31, 1998, which is included in its
        Form 10K filed for that period.

        Certain amounts in the prior year's consolidated condensed financial
        statements have been reclassified to conform to the current year's
        presentation.

2.      DEBT:

        LFI, Levitz and substantially all of its subsidiaries, as
        debtors-in-possession, are parties to a Postpetition Credit Agreement
        dated as of September 5, 1997 (the "DIP Facility") with BT Commercial
        Corporation ("BTCC") as agent. The DIP Facility has been approved by the
        Court and originally provided for a total commitment of $260.0 million
        that is comprised of revolving notes of $223.6 million and a term note
        of $36.4 million. Letter of Credit obligations under the revolver
        portion of the DIP Facility are limited to $25.0 million. The DIP
        Facility was amended on September 4 and September 18, 1998. The minimum
        EBITDA covenants, as defined below, for the quarters ending September 30
        and December 31, 1998 were reduced and a new term loan was extended in


                                       7
<PAGE>

        the principal amount of $22.0 million under a second term note. The
        proceeds from the second term note of $22.0 million were used to pay
        down the revolving notes. This increased excess availability under the
        revolving notes by $22.0 million at the time of the transaction. On
        September 15, 1998 the total commitment under the revolver portion of
        the DIP Facility was reduced from $223.6 million to $193.6 million. This
        reduced the total commitment under the DIP Facility to $252.0 million.
        The DIP Facility is intended to provide Levitz with the cash and
        liquidity to conduct its operations and pay for merchandise shipments at
        normal levels during the course of the Chapter 11 proceedings.

        Loans made under the DIP Facility revolving notes bear interest, at
        Levitz's option, at a rate equal to either Bankers Trust Company's prime
        lending rate plus 1.5% or BTCC's LIBOR rate plus 3.75%. The term notes
        bear interest at 16%. Levitz is required to pay an unused line fee of
        0.5%, and a letter of credit fee of 2.0%.

        The maximum borrowings, excluding the term notes, under the DIP Facility
        are limited to 85% of eligible accounts receivable, 75% of eligible
        inventory (as defined in the DIP Facility) and a fixed asset sublimit
        which is permanently reduced on each date on which an asset disposition,
        as defined, occurs. Qualification of accounts receivable and inventory
        items as "eligible" is subject to unilateral change at the discretion of
        the lenders. Excess availability under the DIP Facility at September 30,
        1998 was $38.5 million.

        The DIP Facility is secured by substantially all of the assets of Levitz
        and its subsidiaries and a perfected pledge of stock of all Levitz's
        subsidiaries. The DIP Facility contains restrictive covenants including,
        among other things, the maintenance of minimum earnings before interest,
        taxes, depreciation and amortization as defined (EBITDA), limitations on
        the incurrence of additional indebtedness, liens, contingent
        obligations, sales of assets, capital expenditures and a prohibition on
        paying dividends. LFI and Levitz are currently in compliance with the
        DIP Facility covenants as amended.

        The lenders under the DIP Facility have a super-priority administrative
        expense claim against the estates of the Debtors. Management intends to
        seek an extension or refinancing of the DIP Facility, now scheduled to
        expire on March 5, 1999. However, no assurance can be given that this
        objective will be met.



                                       8
<PAGE>

3.      LIABILITIES SUBJECT TO COMPROMISE:

        The principal categories of obligations classified as liabilities
        subject to compromise under reorganization proceedings are identified
        below. The amounts below in total vary significantly from the stated
        amount of proofs of claim that were filed with the Court and may be
        subject to future adjustment depending on Court action, further
        developments with respect to potential disputed claims, and
        determination as to the value of any collateral securing claims, or
        other events. Additional claims may arise from the rejection of
        additional real estate leases and executory contracts by the Debtors.
<TABLE>
<CAPTION>
                                                                        SEPTEMBER 30,
                                                                            1998
                                                                         (DOLLARS IN
                  LIABILITIES SUBJECT TO COMPROMISE                       THOUSANDS)
                                                                        -------------
        <S>                                                                <C>     
        Accounts payable, trade                                            $ 38,477
        Accrued expenses                                                     15,736
        13.375% Senior Notes due 10/15/98                                    96,031 (1)
        9.625% Senior Subordinated Notes due 7/15/03                        101,337 (1)
        Financing on store building                                           4,000
        Obligations under capital leases                                     62,728
        Reserve for lease rejection claims                                   11,011
        Deferred rent on operating leases                                     2,669
        Deferred gain on sale leasebacks                                      1,643
        Supplemental executive retirement programs                           13,405
        Employment agreement severance costs                                  2,851
        General liability claims                                                736
        Reserve for previous store closings                                   2,817
        Real estate taxes                                                     2,644
        Personal property taxes                                                 578
                                                                          --------- 
                                                                          $ 356,663
                                                                          ========= 
</TABLE>


        (1) Includes accrued interest at September 4, 1997.

        As a result of the Chapter 11 filing, no principal or interest payments
        will be made on most pre-petition debt without Court approval or until a
        plan of reorganization providing for the repayment terms has been
        confirmed by the Court and becomes effective. Interest on pre-petition
        unsecured obligations has not been accrued after the Petition Date
        except that interest expense and principal payments will continue to be
        recorded on capital lease obligations unless the Debtors reject the
        leases. If a capital lease is rejected the obligation will be limited to
        the lease rejection claim. Contractual interest expense of $10.9 million
        was not recorded on certain pre-petition debt for the period ended
        September 30, 1998.

4.      PRIVATE-LABEL CREDIT CARD PROGRAM:

        On September 4, 1998 Levitz and its operating subsidiaries entered into
        an agreement ("Merchant Agreement") with Household Bank (SB), N.A.
        ("Household") whereby Household would provide financing to individual
        consumers purchasing merchandise from Levitz ("Private-Label Credit Card
        Program"). The Court approved the Merchant Agreement and granted a first
        priority and security interest and lien to Household on certain reserves
        retained or accumulated by Household, totaling $17.2 million at
        September 30, 1998, and gave administrative expense status to
        substantially all obligations of Levitz arising under the Merchant
        Agreement.

        Also on September 4, 1998, General Electric Capital Corporation ("GECC")
        and Levitz terminated the Second Amended and Restated Account Purchase
        and Credit Card Agreement (the "GECC Agreement") which was replaced by
        the Merchant Agreement. 


                                       9
<PAGE>

        Levitz and GECC jointly released each other from substantially all
        obligations under the GECC Agreement. At the same time GECC sold the
        majority of the portfolio under the GECC Agreement, approximately 
        $561.0 million, to Household.

        As a result of the transfer of the GECC portfolio to Household, the
        Company determined that the transaction qualified for sale treatment
        under Financial Accounting Standards Board, Statement of Accounting
        Standards No. 125, "Accounting for Transfer and Servicing of Financial
        Assets and Extinguishments of Liabilities". As a result, the Receivable
        under Account Purchase Agreement and the offsetting Obligation Under
        Account Purchase Agreement were removed from the consolidated condensed
        balance sheet for September 30, 1998.

        Levitz is exposed to market risk under the terms of the Household
        Agreement. Levitz may pay a fee or may receive income, based upon the
        relationship among the interest earned on the portfolio, the amount of
        the servicing fee, the cost of capital, promotional discount fees and
        credit losses. Levitz is generally obligated for all credit losses
        under the portfolio, including the GECC portfolio transferred to 
        Household, up to a maximum of 15% and for 50% of all credit
        losses above 15%. Levitz is also required under the Merchant Agreement
        to fund a portfolio risk reserve of 2.5% for the first year and 3.5%
        thereafter of all amounts financed up to a stipulated amount.

5.      REORGANIZATION ITEMS:

        Store Closings

        In June 1998 Management finalized a plan to close fifteen stores in
        under-performing markets. Thirteen stores were closed at the end of June
        1998, one store was closed in July 1998 and one store was closed in
        September 1998. The plan also included the elimination of certain
        support functions and the closing of warehouses in certain locations.
        The majority of the support functions were eliminated in July 1998. The
        specific warehouses are expected to be closed by the end of the fiscal
        year. The pre-tax charge for the store closings and other charges of
        $21.1 million includes non-cash charges of $10.0 million for the
        write-down of assets to their net realizable values, $1.8 million loss
        on the sale of inventory to a liquidator and anticipated lease rejection
        claims of $4.3 million. Cash charges include severance pay of $1.1
        million and continuing expenses of $3.9 million.

        Professional fees

        Professional fees include accounting, legal and consulting services
        provided to Levitz and the Creditors' Committee which, subject to Court
        approval, are required to be paid by Levitz while it is in Chapter 11.

6.      UNUSUAL OPERATING EXPENSES:

        In July 1997, the former President-Merchandising/Marketing resigned.
        Levitz accrued a charge for future payroll and employee benefit costs of
        $1.3 million in connection with the Officer's employment agreement.
        Also, Levitz recorded a $2.5 million reduction for the partial write-off
        of future service revenue receivable under the GECC Agreement. The
        write-off occurred since Levitz was required to account for the transfer
        of assets under the GECC Agreement as a secured borrowing with a pledge
        of collateral rather than as a sale for financial reporting purposes.

7.      INCOME TAXES:

        Income taxes are provided based on the asset and liability method of
        accounting pursuant to Statement of Financial Accounting Standards
        ("SFAS") No. 109, "Accounting for Income Taxes". Levitz had generated
        net operating loss ("NOL") carryforwards of $62.4 million at March 31,
        1998 as a result of net losses incurred in fiscal years 1998 and 1997.
        The cumulative NOL benefit at March 31, 1998 was supported by deferred
        tax credits that are projected to turn during the carryforward periods.
        Levitz has not recorded any tax benefits for the loss incurred during
        the period ended September 30, 1998 and expects not to record any tax
        benefits for the remainder of fiscal 1999.

                                       10
<PAGE>

8.      LOSS PER SHARE:

        Loss per common share is based on the weighted average number of common
        shares outstanding during each period of 1,000 shares.

9.      CONSOLIDATED STATEMENTS OF CASH FLOWS:

        Supplemental disclosures of cash flow information (dollars in
        thousands):
<TABLE>
<CAPTION>
                                                       SIX MONTHS ENDED
                                                         SEPTEMBER 30,
                                                ------------------------------
                                                  1998                   1997
                                                -------                -------     
        <S>                                     <C>                    <C>    
        Interest paid                           $13,407                $25,964
                                                =======                =======     

        Income tax paid (refunded), net         $    47                $(2,451)
                                                =======                =======     
</TABLE>

        In June 1997 Levitz exercised its option to issue additional term notes,
        under the previous credit agreement, of approximately $1.4 million in
        lieu of paying interest in cash.

10.     NEW ACCOUNTING PRONOUNCEMENT:

        The Financial Accounting Standards Board issued SFAS No. 130, "Reporting
        Comprehensive Income," in June 1997. SFAS No. 130 establishes standards
        for reporting and disclosure of comprehensive income. Levitz adopted
        this statement effective April 1, 1998. For the periods ended September
        30, 1998 and 1997, there were no differences between comprehensive loss
        and net loss.

                                       11
<PAGE>

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

GENERAL

On September 5, 1997 (the "Petition Date"), Levitz Furniture Incorporated, a
Delaware corporation ("LFI"), and 11 of its subsidiaries (collectively, the
"Debtors"), including, Levitz Furniture Corporation, a Florida corporation and
wholly-owned subsidiary of LFI ("Levitz"), filed voluntary petitions for relief
under Chapter 11, Title 11 of the United States Code (the "Bankruptcy Code")
with the United States Bankruptcy Court for the District of Delaware,
Wilmington, Delaware ("the Court"). The bankruptcy cases of LFI and Levitz and
their affiliates are being jointly administered, for procedural purposes only,
under Case No. 97-1842(MFW). Pursuant to Sections 1107 and 1108 of the
Bankruptcy Code, Levitz, as debtor and debtor-in-possession, has continued to
manage and operate its assets and businesses pending the confirmation of a
reorganization plan or plans and subject to the supervision and orders of the
Court.

                                       12
<PAGE>

COMPARISON OF OPERATIONS

The following table sets forth Levitz's results of operations expressed as a
percentage of net sales for the periods indicated:
<TABLE>
<CAPTION>
                                                   PERCENTAGE OF NET SALEs
                                          -----------------------------------------  
                                          THREE MONTHS ENDED       SIX MONTHS ENDED
                                            September 30,            September 30,
                                          -----------------       -----------------  
                                           1998        1997        1998        1997
                                          -----       -----       -----       -----  
<S>                                       <C>         <C>         <C>         <C>    
Net sales                                 100.0 %     100.0 %     100.0 %     100.0 %

Cost of sales                              55.0        56.3        55.0        55.6
                                          -----       -----       -----       -----  

Gross profit                               45.0        43.7        45.0        44.4

Selling, general and administrative
  expenses                                 45.2        47.2        45.8        44.1

Unusual operating expenses                  --          1.6         --          1.7

Depreciation and amortization               2.7         3.1         2.8         3.1

Interest expense                            4.2         6.0         4.2         6.2
                                          -----       -----       -----       -----  
Loss before reorganization items
  and income taxes                         (7.1)      (14.2)       (7.8)      (10.7)

Reorganization items                       (1.0)      (12.8)       (7.0)       (6.4)
                                          -----       -----       -----       -----  
Loss before income taxes                   (8.1)      (27.0)      (14.8)      (17.1)

Income tax benefit                          --          9.5         --          6.0
                                          -----       -----       -----       -----  
Loss before extraordinary items            (8.1)      (17.5)      (14.8)      (11.1)

Extraordinary items, net of tax             --         (2.6)        --         (1.3)
                                          -----       -----       -----       -----  

Net loss                                   (8.1)%     (20.1)%     (14.8)%     (12.4)%
                                          =====       =====       =====       =====  

Comparable store sales increase/
  (decrease)                                8.7 %     (11.1)%       2.8 %      (8.8)%
                                          =====       =====       =====       =====  
</TABLE>


THREE MONTHS ENDED SEPTEMBER 30, 1998 
COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1997

Net sales of $174.5 million for the period ended September 30, 1998 decreased
$32.8 million or 15.8% from net sales of $207.3 million in the same period for
the prior year. The decrease in net sales was due to the closing of forty-four
stores from October 1997 through September 1998. Sales on a comparable store
basis increased 8.7% from the same period of the prior year. The increase in
comparable store sales was significantly impacted by the decline in comparable
store sales for the same period of the prior year which was primarily due to the
slow-down in shipments from trade vendors starting in August 1997 and continuing
during September 1997 when the Company filed for reorganization under Chapter 11
of the Bankruptcy Code.

                                       13
<PAGE>

Gross profit as a percentage of net sales increased to 45.0% from 43.7% for the
three month periods ended September 30, 1998 and 1997, respectively. The
increase in gross profit as a percentage of net sales reflects normal product
advertising as compared to percentage-off advertising used during the same
period of the prior year.

Selling, general and administrative (SG&A) expenses of $78.8 million for the
three month period ended September 30, 1998 decreased $18.9 million or 19.3%
from SG&A expenses of $97.7 million in the same period for the prior year. As a
percentage of net sales, SG&A expenses decreased to 45.2% from 47.2% for the
periods ended September 30, 1998 and 1997, respectively. The dollar decrease in
SG&A expenses is primarily due to the store closings as noted above which
contributed to a reduction in advertising expense of $7.3 million, a reduction
in salaries, employee benefits and payroll taxes of $6.3, a reduction in
property related expenses of $3.5 million and other expenses of $1.8 million.
SG&A expenses as a percentage of net sales decreased primarily due to a
reduction in advertising expense of 1.3%. The decrease in advertising expense
as a percentage of net sales was partially offset by a reduction of service fee
income under the Company's private-label credit card program of 0.7%.

During the quarter ended September 30, 1997, Levitz incurred a $3.4 million
charge as an unusual operating expense for write-off of a receivable due to the
loss of sale accounting treatment under the GECC Agreement.

Interest expense for the three month period ended September 30, 1998 decreased
to $7.3 million from $12.3 million for the same period of the prior year. As a
result of the Chapter 11 filing, no principal or interest payments are being
made on most pre-petition debt without Court approval or until a plan of
reorganization providing for the repayment terms has been confirmed by the Court
and becomes effective. Interest on pre-petition unsecured obligations has not
been accrued after the Petition Date except that interest expense and principal
payments are continuing to be recorded on capital lease obligations unless the
Debtors reject the leases. Contractual interest expense of $5.5 million was not
recorded on certain pre-petition debt for the three month period ended September
30, 1998.

Reorganization items include professional fees for accounting, legal and
consulting services provided to Levitz and the Creditors' Committee which,
subject to Court approval, are required to be paid by Levitz while it is in
Chapter 11. Reorganization items for the three month period ended September 30,
1997 included an estimated reserve for eighteen store closings of $25.9 million.

Levitz has not recorded any tax benefits for the loss incurred during the three
month period ended September 30, 1998 and expects not to record any tax benefits
for the remainder of fiscal 1999.

As a result of the aforementioned factors, net loss for the three month period
ended September 30, 1998 amounted to $14.0 million or 8.1% of net sales as
compared to net loss of $41.7 million or 20.1% of net sales for the same period
of the prior year.

SIX MONTHS ENDED SEPTEMBER 30, 1998 
COMPARED TO SIX MONTHS ENDED SEPTEMBER 30, 1997

Net sales of $351.0 million for the six month period ended September 30, 1998
decreased $67.8 million or 16.2% over net sales of $418.6 million in the same
period for the prior year. Sales on a comparable store basis increased 2.8%. The
decrease in net sales was due to the closing of forty-four stores from October
1997 through September 1998. The increase in comparable store sales was
significantly impacted by the decline in comparable store sales for the same
period of the prior year which was primarily due to the slow-down in shipments
from trade vendors starting in August 1997 and continuing during September 1997
when the Company filed for reorganization under Chapter 11 of the Bankruptcy
Code.

Gross profit as a percentage of net sales increased to 45.0% for the six month
period ended September 30, 1998 compared to 44.4% in the same period for the
prior year. The gross profit increase reflects a reduction in the frequency of
percentage-off advertising compared to the same period of the prior year.

                                       14
<PAGE>

Selling, general and administrative ("SG&A") expenses decreased $24.1 million
for the six month period ended September 30, 1998 as compared to the same period
for the prior year. As a percentage of net sales, SG&A expenses increased to
45.8% from 44.1%. The dollar decrease in SG&A expenses is primarily due to the
store closings as noted above which contributed to a reduction in advertising
expense of $6.9 million, a reduction in salaries, employee benefits and payroll
taxes of $10.4 million, a reduction in property related expenses of $5.8
million. In addition, SG&A was affected by a reduction in the service fee income
under the private-label credit card program of $4.8 million.

During the six month period ended September 30, 1997, Levitz recorded a $5.9
million charge as an unusual operating expense for the write-off of the future
service revenue receivable under the GECC Agreement since Levitz was required to
account for the transfers of assets under the GECC Agreement as a secured
borrowing with a pledge of collateral rather than as a sale for financing
reporting purposes. Also, Levitz recorded a $1.3 million charge for the
settlement of an employment agreement upon resignation of an officer.

Interest expense for the six month period ended September 30, 1998 decreased to
$14.8 million from $26.1 million for the same period of the prior year. As a
result of the Chapter 11 filing, no principal or interest payments are being
made on most pre-petition debt without Court approval or until a plan of
reorganization providing for the repayment terms has been confirmed by the Court
and becomes effective. Interest on pre-petition unsecured obligations has not
been accrued after the Petition Date except that interest expense and principal
payments are continuing to be recorded on capital lease obligations unless the
Debtors reject the leases. Contractual interest expense of $10.9 million was not
recorded on certain pre-petition debt for the six month period ended September
30, 1998.

Reorganization items for the six month period ended September 30, 1998 included
professional fees of $1.7 million for accounting, legal and consulting services
provided to Levitz and the Creditors' Committee while Levitz is in Chapter 11.
Reorganization items for the six month period ended September 30, 1997 included
an estimated reserve of $25.9 million for the closing of eighteen stores. The
reserve included the writedown of property, capital lease assets, furniture and
fixtures to their net realizable values and included provisions for continuing
expenses and severance pay.

Levitz has not recorded any tax benefits for the loss incurred during the six
month period ended September 30, 1998 and expects not to record any tax benefits
for the remainder of fiscal 1999.

The extraordinary loss net of tax benefit was $5.5 million or 1.3% of net sales
for the six month period ended September 30, 1997. The extraordinary loss was
due to the write-off of deferred financing fees related to the previous bank
credit agreement.

Net loss for the six month period ended September 30, 1998 was $52.0 million or
14.8% of net sales as compared to a net loss of $51.8 million or 12.4% of net
sales for the same period of the prior year.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

Levitz's primary sources of liquidity are cash flow from operations (including
the proceeds from the financing of customer credit card obligations by
Household), trade credit and borrowings under the DIP Facility. During the six
month period ended September 30, 1998, Levitz used approximately $24.2 million
of net cash flow in operations before changes in operating assets and
liabilities. Changes in operating assets and liabilities increased net cash flow
from operations by $20.8 million. Management is attempting to increase cash flow
from operations by pursuing initiatives intended to increase sales in comparable
stores, closing stores in under-performing markets, eliminating certain support
function positions and by eliminating the cost of warehouse operations in
markets where it is determined that fewer warehouses can service the market.

                                       15
<PAGE>

Cash provided by investing activities for the six month period ended September
30, 1998 includes $8.7 million of proceeds from asset sales of closed
facilities. All of these proceeds were applied as repayments to the DIP Facility
as required by the agreement. Management is continuing to market all property
held for disposal and leasehold interests where rents are below market values
to reduce current borrowings and increase availability under the DIP Facility.

Levitz's total capital expenditures were approximately $3.0 million during the
period ended September 30, 1998. Capital expenditures were for existing store
improvements and equipment. Management estimates that approximately $5.0 million
to $7.0 million is required annually to adequately maintain and/or improve its
existing stores. Levitz closed fifteen stores during the six month period ended
September 1998 and may open up to three new stores during the fiscal year ending
March 31, 1999.

Net cash used in financing activities amounted to $4.7 million in the six month
period ended September 30, 1998 and includes increased borrowings under the DIP
Facility of $2.7 million less principal payments under long-term obligations of
$1.3 million and decrease in outstanding checks and cash overdrafts of $6.1
million which fluctuates based on the timing of payments.

Debt

LFI, Levitz and substantially all of its subsidiaries, as debtors-in-possession,
are parties to a Postpetition Credit Agreement dated as of September 5, 1997
(the "DIP Facility") as amended with BT Commercial Corporation ("BTCC") as
agent. The DIP Facility has been approved by the Court and includes  a total
commitment of $252.0 million that is comprised of revolving notes of
$193.6 million and a term note of $58.4 million. Letter of Credit obligations
under the revolver portion of the DIP Facility are limited to $25.0 million. The
DIP Facility is intended to provide Levitz with the cash and liquidity to
conduct its operations and pay for merchandise shipments at normal levels during
the course of the Chapter 11 proceedings.

The DIP Facility was amended on September 4 and September 18, 1998. The minimum
EBITDA covenants for the quarter ending September 30 and December 31, 1998 were
reduced and a new term loan was extended in the principal amount of $22.0
million under a second term note. The proceeds from the second term note of
$22.0 million were used to pay down the revolving notes. This increased excess
availability under the revolving notes by $22.0 million at the time of the
transaction. On September 15, 1998 the total commitment under the revolver
portion of the DIP Facility was reduced from $223.6 million to $193.6 million.
This reduced the total commitment of the DIP Facility to $252.0 million.

Loans made under the DIP Facility revolving notes bear interest, at Levitz's
option, at a rate equal to either Bankers Trust Company's prime lending rate
plus 1.5% or BTCC's LIBOR rate plus 3.75%. The term notes bear interest at 16%.
Levitz is required to pay an unused line fee of 0.5%, and a letter of credit fee
of 2.0%.

The maximum borrowings, excluding the term commitments, under the DIP Facility
are limited to 85% of eligible accounts receivable, 75% of eligible inventory
(as defined in the DIP Facility) and a fixed asset sublimit which is permanently
reduced on each date on which an asset disposition, as defined, occurs.
Qualification of accounts receivable and inventory items as "eligible" is
subject to unilateral change at the discretion of the lenders. Excess
availability under the DIP Facility at September 30, 1998 was $38.5 million.

The DIP Facility is secured by substantially all of the assets of Levitz and its
subsidiaries and a perfected pledge of stock of all Levitz's subsidiaries. The
DIP Facility contains restrictive covenants including, among other things, the
maintenance of minimum earnings before interest, taxes, depreciation and
amortization as defined (EBITDA), limitations on the incurrence of additional
indebtedness, liens, contingent obligations, sales of assets, capital
expenditures and a prohibition on paying dividends. Although LFI and Levitz are
currently in compliance with the DIP Facility covenants as amended, no
assurances can be given that LFI and Levitz will be able to meet their EBITDA
covenants in the future. In the event that LFI and Levitz will not meet future
covenants, the Company would seek a waiver or amendment from the lenders under
the DIP Facility. No assurances can be given that such lenders will grant LFI
and Levitz such a waiver or amendment.

                                       16
<PAGE>

The lenders under the DIP Facility have a super-priority administrative expense
claim against the estate of the Debtors. Management intends to seek an extension
or refinancing of the DIP Facility, now scheduled to expire March 5, 1999.
However, no assurances can be given that this objective will be met.

On September 4, 1998 Levitz and its operating subsidiaries entered into an
agreement ("Merchant Agreement") with Household Bank (SB), N.A. ("Household")
whereby Household would provide financing to individual consumers purchasing
merchandise from Levitz ("Private-Label Credit Card Program"). The Court
approved the Merchant Agreement and granted a first priority and security
interest and lien to Household on certain reserves retained or accumulated by
Household, totaling $17.2 million at September 30, 1998, and gave administrative
expense status to substantially all obligations of Levitz arising under the
Merchant Agreement.

Also on September 4, 1998, General Electric Capital Corporation ("GECC") and
Levitz terminated the Second Amended and Restated Account Purchase and Credit
Card Agreement (the "GECC Agreement") which was replaced by the Merchants
Agreement. Levitz and GECC jointly released each other from substantially all
obligations under the GECC Agreement. At the same time GECC sold the majority of
the portfolio under the GECC Agreement, approximately $561.0 million, to 
Household.

As a result of the transfer of the GECC portfolio to Household, the Company
determined that the transaction qualified for sale treatment under Financial
Accounting Standards Board, Statement of Accounting Standards No. 125,
"Accounting for Transfer and Servicing of Financial Assets and Extinguishments
of Liabilities". As a result, the Receivable under Account Purchase Agreement
and the offsetting Obligation Under Account Purchase Agreement were removed from
the consolidated condensed balance sheet for September 30, 1998.

Levitz is exposed to market risk under the terms of the Household Agreement.
Levitz may pay a fee or may receive income, based upon the relationship among
the interest earned on the portfolio, the amount of the servicing fee, the cost
of capital, promotional discount fees and credit losses. Levitz is generally
obligated for all credit losses under the portfolio, including the GECC 
portfolio transferred to Household,  up to a maximum of 15% and
for 50% of all credit losses above 15%. Levitz is also required under the
Merchant Agreement to fund a portfolio risk reserve of 2.5% for the first year
and 3.5% thereafter of all amounts financed up to a stipulated dollar amount.

Going Concern

The Company believes that cash on hand, amounts available under the DIP
Facility, as amended, and funds from operations (including proceeds from the
financing of customer credit card obligations by Household) will enable the
Company to meet its immediate liquidity and capital expenditure requirements.
Continued availability under the DIP Facility is dependent upon LFI and Levitz
meeting the covenants thereunder or obtaining a waiver or amendment from the
lenders under the DIP Facility if necessary and extending or replacing the DIP
Facility which is scheduled to expire on March 5, 1999. Until a plan or
reorganization is approved, the Company's long-term liquidity and the adequacy
of its capital resources cannot be determined.

Inherent in a successful plan of reorganization is a capital structure that
permits the Company to generate sufficient cash flow after reorganization to
meet its restructured obligations and fund the current obligations of the
Company. Under the Bankruptcy Code, the rights and treatment of pre-petition
creditors and stockholders may be substantially altered. At this time it is not
possible to predict the outcome of the Chapter 11 case, in general, or the
effects of such case on the business of the Company or on the interests of
creditors.

                                       17
<PAGE>

Year 2000

There have been no significant changes to the Company's Year 2000 project as
reported in its Form 10-K for the fiscal year ended March 31, 1998. Levitz is in
the process of assessing the risk to the availability and integrity of financial
systems and the reliability of operational systems. The Company is also
communicating with vendors, financial institutions and others with which it does
business to coordinate year 2000 conversion. The cost of achieving Year 2000
compliance, excluding in-house salaries, wages and benefits, has been estimated
at approximately $0.3 million for software maintenance and development and $0.3
million for other operational systems. The Company expects to spend $2.4 million
in capital expenditures for the enhancement of operational and financial
software and hardware systems as needed for current changes in business strategy
which will eliminate the need for achieving Year 2000 compliance on some
existing software. Most of the software has been purchased and is currently
being installed. However, there can be no guarantee that these estimates will be
achieved and actual results could differ materially from those plans.


During 1999, the Company intends to develop contingency plans to address
potential disruptions due to internal systems and business disruption at
third parties. However, it is unlikely that any contingency plan can fully
mitigate the impact of significant business disruptions.

                                       18
<PAGE>

PART II OTHER INFORMATION:

Item 6.        Exhibits and Reports on Form 8-K

               (a)    Exhibit 10.56: Merchant Agreement by and among Levitz
                      Furniture Corporation, certain other subsidiaries and
                      Household Bank (SB) N.A., dated September 4, 1998.

                      Exhibit 10.57: Amendment No. 7 dated as of September 4,
                      1998 to the Postpetition Credit Agreement among Levitz
                      Furniture Incorporated, et al. and BT Commercial
                      Corporation, as agent.

                      Exhibit 10.58: Amendment No. 8 dated as of September 18,
                      1998 to the Postpetition Credit Agreement among Levitz
                      Furniture Incorporated, et al. and BT Commercial
                      Corporation, as agent.

                      Exhibit 27: Financial Data Schedule

               (b)    Report on Form 8-K: None.


                                       19
<PAGE>

                                   SIGNATURES

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

                                        LEVITZ FURNITURE CORPORATION
                                                 (Registrant)




Date:  November 16, 1998                /s/ MICHAEL MCCREERY
                                        --------------------------------------
                                            Michael McCreery
                                            Senior Vice President and
                                            Chief Financial Officer

                                       20
<PAGE>

                                  EXHIBIT INDEX

                              Exhibits to Form 10-Q
<TABLE>
<CAPTION>
         NUMBER
     EXHIBIT TABLE                              EXHIBIT
     -------------                              -------
     <S>              <C>
         10.56        Merchant Agreement by and among Levitz Furniture
                      Corporation, certain other subsidiaries and Household Bank
                      (SB) N.A., dated September 4, 1998.

         10.57        Amendment No. 7 dated as of September 4, 1998 to the
                      Postpetition Credit Agreement among Levitz Furniture
                      Incorporated, et al. and BT Commercial Corporation, as
                      agent.

         10.58        Amendment No. 8 dated as of September 18, 1998 to the
                      Postpetition Credit Agreement among Levitz Furniture
                      Incorporated, et al. and BT Commercial Corporation, as
                      agent.

           27         Financial Data Schedule.
</TABLE>