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 DECEMBER 31, 1997

                                                         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.)

6111 BROKEN SOUND PARKWAY, N.W., BOCA RATON, FL                     33487-2799
(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 January 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) COMPETITIVE PRESSURE IN THE
COMPANY'S INDUSTRY INCREASES SIGNIFICANTLY; (2) GENERAL ECONOMIC CONDITIONS ARE
LESS FAVORABLE THAN EXPECTED; (3) CHANGES IN THE FINANCIAL MARKETS AFFECTING THE
COMPANY'S FINANCIAL STRUCTURE AND THE COMPANY'S COST OF CAPITAL AND BORROWED
MONEY; AND (4) THE UNCERTAINTIES INHERENT IN THE COMPANY'S OPERATIONS. THE
COMPANY 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
AND THE COMPANY DOES NOT INTEND TO PROVIDE SUCH UPDATES.

                  LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES

                                    FORM 10-Q

                                DECEMBER 31, 1997

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......................................  13

              Liquidity and Capital Resources...............................  16

PART II - OTHER INFORMATION.................................................  18

       Signatures   ........................................................  19

       Exhibit Index........................................................  20

                                       2

<PAGE>
<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION
ITEM 1.  Financial Statements

                  LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                             (Dollars in thousands)
                                                                  December 31,      March 31,
                                                                      1997             1997
                                                                   (Unaudited)
                                                                  ------------  -------------
<S>                                                                <C>              <C>
                         ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                                        $     7,231  $       9,267
  Receivables                                                           27,934         37,358
  Inventories                                                          134,340        169,488
  Deposits and prepaid expenses                                          5,661          3,514
  Deferred income taxes                                                  4,318            933
                                                                  ------------  -------------

    Total current assets                                               179,484        220,560
                                                                  ------------  -------------

PROPERTY AND EQUIPMENT, net                                            184,222        214,626
                                                                  ------------  -------------

PROPERTY UNDER CAPITAL LEASES, net                                     100,136        119,077
                                                                  ------------  -------------

OTHER ASSETS:
  Receivable under account purchase agreement                          591,854        327,000
  Intangible leasehold interests                                        14,698         15,613
  Deferred financial fees                                                2,613         11,975
  Goodwill                                                               2,836         18,177
  Other                                                                  3,953          4,947
                                                                  ------------  -------------
                                                                       615,954        377,712
                                                                  ------------  -------------
                                                                 $   1,079,796      $ 931,975
                                                                  ============  =============

         LIABILITIES AND STOCKHOLDER'S DEFICIT

LIABILITIES NOT SUBJECT TO COMPROMISE

CURRENT LIABILITIES:
  Outstanding checks and cash overdrafts                           $    12,405   $     19,524
  Current portion of long-term debt                                      1,734         11,193
  Current portion of obligations under capital leases                        -          3,398
  Accounts payable, trade                                               42,385         73,044
  Accrued expenses and other liabilities                                72,848         88,897
  Payable to parent                                                     13,391         10,304
  Senior Secured Facilities                                                  -         75,220
  DIP Facility                                                         128,338              -
                                                                  ------------  -------------
    Total current liabilities                                          271,101        281,580
                                                                  ------------  -------------

LONG-TERM LIABILITIES:
  Long-term debt, net of current portion                                 7,458        273,976
  Obligations under capital leases, net of current portion                   -         74,466
  Obligations under account purchase agreement                         591,854        327,000
  Other                                                                    684         24,424
  Deferred income taxes                                                 16,322         48,101
                                                                  ------------  -------------
    Total long-term liabilities                                        616,318        747,967
                                                                  ------------  -------------

LIABILITIES SUBJECT TO COMPROMISE                                      367,836              -
                                                                  ------------  -------------
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)                                         (233,913)      (155,389)
  Minimum pension liability                                                  -           (637)
                                                                  ------------  -------------

    Total stockholder's deficit                                       (175,459)       (97,572)
                                                                  ------------  -------------
                                                                   $ 1,079,796      $ 931,975
                                                                  ============  =============
The accompanying notes are an integral part of these condensed financial statements.
                                       3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                 LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                    (Dollars in thousands except share data)
                                   (Unaudited)

                                        Three Months Ended      Nine Months Ended
                                           December 31,            December 31,
                                         1997        1996        1997        1996
                                      -----------  ----------  ----------  ----------
<S>                                   <C>         <C>         <C>         <C>

Net sales                             $  232,592  $  272,007  $  651,217  $  737,281
                                      -----------  ----------  ----------  ----------

Costs and expenses:
  Cost of sales                          129,591     151,031     362,130     407,871
  Selling, general and administrative
    expenses                              98,903     102,949     283,617     290,172
  Unusual operating expenses (Note 5)          -           -       7,217           -
  Store closing charge (Note 5)                -           -           -       8,295
  Depreciation and amortization            5,883       6,698      18,840      20,386
  Interest expense, net                    6,125      13,994      32,223      40,635
                                      -----------  ----------  ----------  ----------

                                         240,502     274,672     704,027     767,359
                                      -----------  ----------  ----------  ----------

Loss before reorganization items and
  income taxes                            (7,910)     (2,665)    (52,810)    (30,078)

  Reorganization items:  (Note 4)
    Loss on store closings                 7,735           -      33,649           -
    Acceleration of goodwill amortization 14,975           -      14,975           -
    Professional fees                      3,516           -       4,230           -
                                      -----------  ----------  ----------  ----------
      Total                               26,226           -      52,854           -

Loss before income taxes                 (34,136)     (2,665)   (105,664)    (30,078)

Income tax benefit                         7,738         939      32,945      10,598
                                      -----------  ----------  ----------  ----------

Loss before extraordinary items          (26,398)     (1,726)    (72,719)    (19,480)

Extraordinary item, net of tax benefit
  of $2,630 in 1997 and $1,090 in
  1996 (Note 7)                             (343)          -      (5,805)     (2,002)
                                      -----------  ----------  ----------  ----------

Net loss                               $ (26,741)  $   (1,72)  $ (78,524)  $ (21,482)
                                      ===========  ==========  ==========  ==========

Loss per common share (Notes 7 and 8):
  Loss before extraordinary item       $ (26,398)  $  (1,726)  $ (72,719)  $ (19,480)
  Extraordinary item                        (343)          -      (5,805)     (2,002)
                                      -----------  ----------  ----------  ----------

Net loss per common share              $ (26,741)  $  (1,726)  $ (78,524)  $ (21,482)
                                      ===========  ==========  ==========  ==========

Weighted average number of common
  shares outstanding                       1,000       1,000       1,000       1,000
                                      ===========  ==========  ==========  ==========

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

                                       4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                  LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
                                   (Unaudited)

                                                              Nine Months Ended December 31,
                                                              ------------------------------
                                                                 1997                1996
                                                              ------------        ----------
<S>                                                            <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                     $ (78,524)       $  (21,482)
                                                               ----------       -----------
Adjustments to reconcile net loss to net cash provided by
  (used in) operating activities:
  Depreciation                                                    11,273            11,823
  Amortization                                                     7,567             8,563
  Provision for deferred taxes                                   (35,575)          (10,135)
  Loss (gain) on disposal of property and equipment                  (50)               54
  Amortization of deferred financing fees                          1,766             1,877
  Pension expense                                                    930             1,377
  Other                                                              216               280
  Extraordinary loss related to early redemption of
    debt, before tax benefit                                       8,435             3,092
  Reorganization items, non-cash                                  47,501                 -

  Changes in operating assets and liabilities:
    Decrease (increase) in:
      Receivables                                                  8,480              (916)
      Inventories                                                 33,648           (19,326)
      Deposits and prepaid expenses                               (2,251)           (1,026)
      Other, net                                                     325                51
    Increase (decrease) in:
      Accounts payable, trade                                     10,190             4,396
      Accrued expenses and other liabilities                       9,505             9,397
      Payable to parent                                            3,106             5,871
      Other noncurrent liabilities                                  (347)            2,710
                                                              ------------        ----------

        Total adjustments                                        104,719            18,088
                                                              ------------        ----------

  NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES             26,195            (3,394)
                                                              ------------        ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                                            (9,749)           (7,596)
  Proceeds from sale of property and equipment and
    other assets                                                  22,138               184
                                                              ------------        ----------

   NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES            12,389            (7,412)
                                                              ------------        ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings under credit facilities                             729,305           822,606
  Repayments under credit facilities                            (750,766)         (800,376)
  Principal payments on long-term debt                            (6,347)           (3,530)
  Principal payments under capital lease obligations              (2,528)           (3,484)
  Increase (decrease) in cash overdrafts                          (7,119)            1,239
  Payment of deferred financing fees                              (3,165)          (10,866)
                                                              ------------        ----------

  NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES            (40,620)            5,589
                                                              ------------        ----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                         (2,036)           (5,217)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                     9,267            12,755

CASH AND CASH EQUIVALENTS, END OF PERIOD                       $   7,231       $     7,538
                                                              ============        ==========

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

                                       5
</TABLE>
<PAGE>

                  LEVITZ FURNITURE CORPORATION AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                                December 31, 1997

                                   (Unaudited)


1.       PROCEEDINGS UNDER CHAPTER 11 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, Levitz Furniture Corporation and 10 of its subsidiaries
         (the Debtors) filed petitions for relief under Chapter 11 of the United
         States Bankruptcy Code (Chapter 11) in the United States Bankruptcy
         Court in Wilmington, Delaware. The Debtors are presently operating
         their respective businesses as debtors-in-possession. A statutory
         Creditor's Committee has been appointed in the Chapter 11 cases. The
         Chapter 11 cases of the Debtors are being jointly administered for
         procedural purposes only.

         Certain subsidiaries were not included in the Chapter 11 filings. These
         subsidiaries are inactive and the results of their operations and
         financial position are not material to the consolidated financial
         statements.

         The accompanying unaudited financial statements 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 normal 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 creation of a plan of
         reorganization, since such reported amounts do not give effect to
         adjustments to the carrying value of the underlying assets or amounts
         of liabilities that may ultimately result.

         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 December 31, 1997, the results of operations and cash
         flows for the periods then ended. The results of operations for the
         period ended December 31, 1997, are not necessarily indicative of the
         results to be expected for the full year.

         Certain reclassifications to the prior periods' financial statements
         have been made to conform with classifications used in the current
         periods.

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and revenues and expenses during the reporting period.
         Actual amounts could differ from those estimates.

         Certain information and footnote disclosures normally included in
         financial statements prepared in accordance with generally accepted
         accounting principles have been omitted. It is suggested that these
         consolidated condensed financial statements be read in conjunction with
         the financial statements and notes thereto included in Levitz's audited
         financial statements for the year ended March 31, 1997, which is
         included in its Form 10K filed in July 1997.

                                       6

<PAGE>

2.       LIABILITIES UNDER CHAPTER 11:

         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 to be confirmed by the Bankruptcy Court after
         submission to any required vote by affected parties. For financial
         reporting purposes, those liabilities and obligations whose treatment
         and satisfaction is dependent on the outcome of the Chapter 11 cases
         have been segregated and classified as liabilities subject to
         compromise under reorganization proceedings in the consolidated
         condensed balance sheet. 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. Schedules have been
         filed by the Debtors with the Bankruptcy Court setting forth the assets
         and liabilities of the Debtors as of the Petition Date as reflected in
         the Debtor's accounting records. Levitz will notify all known claimants
         subject to the bar date of their need to file a proof of claim with the
         Bankruptcy Court. A bar date is the date by which claims against the
         company must be filed if the claimants wish to receive any distribution
         in the Chapter 11 cases. Differences between amounts shown by the
         Debtors and eventual claims filed by creditors will be investigated and
         will be either amicably resolved or adjudicated before the Bankruptcy
         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 prepetition executory contracts, subject to
         Bankruptcy 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. The Bankruptcy Court has
         approved an order on October 21, 1997 extending the time for which the
         Debtors may assume or reject unexpired leases of nonresidential real
         property to March 4, 1998. The liabilities subject to compromise
         include a reserve for an estimated amount that may be claimed by
         lessors for the stores that have been closed through January 8, 1998.
         The Debtors will continue to analyze their real estate leases and
         executory contracts and may assume or reject additional leases and
         contracts.

         The principal categories of obligations classified as liabilities
         subject to compromise under reorganization proceedings are identified
         below. The amounts below in total may vary significantly from the
         stated amount of proofs of claim that will be filed with the Bankruptcy
         Court and may be subject to future adjustment depending on Bankruptcy
         Court action, further developments with respect to potential disputed
         claims, 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.

                                       7
<PAGE>

                                                            December 31,
                                                                1997
                                                             (Dollars in
         Liabilities Subject to Compromise                   thousands)
         ---------------------------------                   -----------

Accounts payable, trade                                     $    39,904
Accrued expenses                                                 23,105
13 3/8% Senior Notes due 10/15/98                                96,031 (1)
9 5/8% Senior Subordinated Notes due 7/15/03                    101,337 (1)
Financing on store building                                       4,000
Obligations under capital leases                                 65,875
Reserve for lease rejection claims                               11,012
Deferred rent on operating leases                                 6,939
Supplemental executive retirement programs                       13,168
Employment agreement severance costs                              2,881
General liability claims                                            736
Reserve for previous store closings                               2,848
                                                            -----------
                                                            $   367,836
                                                            ===========

         (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 prepetition debt without Bankruptcy Court approval or until a plan
of reorganization providing for the repayment terms has been confirmed by the
court and becomes effective. Interest on prepetition 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
leases are rejected by the Debtors. Contractual interest expense of $7.1 million
was not recorded on certain prepetition debt totaled $1.9 million for the nine
month period ended December 31, 1997.

As of the Petition Date, Levitz's debt consisted of the following (dollars in
thousands):
                                               Maturity
             Description                         Date             Amount
             -----------                         ----             ------

Senior Secured Facilities                    July 1, 2001        $152,299
9 5/8% Senior Subordinated Notes            July 15, 2003         100,000
13 3/8% Senior Notes                       October 15, 1998        91,267
Mortgages                                      various             13,180
                                                                 --------
  Total                                                           356,746
                                                                 --------

Obligations under capital leases               various             76,678
                                                                 --------

  Total debt                                                     $433,424
                                                                 ========

Levitz had a senior secured facilities agreement with BT Commercial Corporation
("BTCC") for up to $190.0 million of availability (collectively, the "Senior
Secured Facilities"). The Senior Secured Facilities were comprised of $115.0
million of revolving notes, $35.0 million of term notes and $40.0 million of
other notes. The Senior Secured Facilities were due July 1, 2001.

The Senior Secured Facilities were secured by substantially all of the assets of
Levitz and its subsidiaries and a perfected pledge of stock of all Levitz's
subsidiaries. LFI and Levitz were subject to certain covenants and restrictions
and cross-default provisions as described in the Senior Secured Facilities or

                                       8

<PAGE>

         debt indentures of Levitz, including among other restrictions the
         following: provisions which require certain financial tests be met,
         restrictions with respect to the sale of assets, annual capital
         expenditures, ability to enter into sale-leaseback transactions or
         mortgage loans, ability to redeem certain indebtedness, and limitations
         on the ability to incur additional indebtedness, requirements to
         repurchase certain indebtedness if a change in control occurs and
         limitations on the ability to pay dividends or make certain other
         restricted payments.

         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 BTCC as agent.
         The DIP Facility has been approved by the Bankruptcy Court and provides
         for up to $260.0 million of availability. The DIP Facility contains
         revolving notes of $223.6 million and a term note of $36.4 million.
         Letter of Credit obligations under 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.

         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 1.50% or BTCC's LIBOR rate plus 3.75%. The term
         note bears interest at 16%. Levitz is required to pay an unused line
         fee of 0.50%, and a letter of credit fee of 2.0%. Levitz paid financing
         fees of $3.2 million on the closing date. These financing fees have
         been deferred and are being amortized over the life of the DIP
         Facility.

         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 will be permanently reduced by the sale of fixed assets
         and leasehold interests. The maximum borrowings at January 31, 1998
         were $223.6 million. Availability under the DIP Facility at January 31,
         1998 reduced by $14.5 million of stand-by letters of credit was $85.8
         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, sale of assets, capital expenditures and
         a prohibition on paying dividends. On October 9 and December 30, 1997,
         the DIP Facility was amended to include, among other things, a decrease
         in the minimum EBITDA requirements through March 1998 and an increase
         in the capital expenditures limit through March 1998. Levitz and LFI
         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 estate of the Debtors. The DIP Facility
         expires on March 5, 1999.

         In order to comply with the Emerging Issues Task Force EITF 95-22
         regarding classification of certain debt instruments, borrowings
         outstanding under the DIP Facility are classified as current
         liabilities.

3.       TRANSFER AND SERVICING OF FINANCIAL ASSETS:

         On September 5, 1997 Levitz and General Electric Capital Corporation
         (GECC) entered into a Second Amended and Restated Account Purchase and
         Credit Card Program Agreement (the "GECC Agreement"), whereby GECC is
         required to purchase Levitz's customer credit obligations, subject to
         certain restrictions, without recourse up to a maximum investment of
         $900.0 million. The GECC Agreement expires October 31, 1999 and
         requires a termination fee of $3.5 million. The Bankruptcy Court
         approved the GECC Agreement and granted a perfected security

                                       9

<PAGE>

         interest and lien to GECC for any purchased customer credit obligation
         and gave administrative expense status to any obligation of Levitz
         arising from the GECC Agreement.

         Effective January 1, 1997, Levitz was required to account for the
         transactions under the previous GECC Agreement in accordance with the
         Financial Accounting Standards Board, "Statement of Financial
         Accounting Standards (SFAS) No. 125". Prior to January 1, 1997 Levitz
         accounted for these transactions under SFAS No. 77. The GECC Agreement
         expires on October 31, 1999 and requires Levitz to repurchase the
         outstanding customer credit obligations at the expiration date. There
         is significant doubt as to Levitz's ability to repurchase the
         outstanding customer credit obligations due to the Chapter 11 filing
         and current financial condition. The maturity date (on a contractual
         basis) of substantially all of the customer credit obligations is now
         beyond the GECC Agreement expiration date of October 31, 1999.
         Consequently, Levitz is required to account for these transactions as a
         secured borrowing with a pledge of collateral rather than as a sale for
         financial reporting purposes. Levitz has recorded $591.9 million as a
         Receivable under Account Purchase Agreement and an offsetting
         obligation under Account Purchase Agreement in its current financial
         statements. See Note 5.

         Levitz is exposed to market risks under the terms of the GECC
         Agreement. Levitz may pay a fee or may receive income, based on the
         relationship among the interest earned on the portfolio, the amount of
         the promotional discount fees, the amount of the servicing fee, the
         prime rate, and to a limited extent, credit losses. For the nine month
         periods ended December 31, 1997 and 1996, Levitz recorded income under
         the GECC Agreement of $9.6 million and $10.1 million, respectively.
         These amounts are included in selling, general and administrative
         expenses.

4.       REORGANIZATION ITEMS:

         Reorganization items for the period ended December 31, 1997 were as
         follows (dollars in thousands):

                                                           December 31,
         Reorganization items                                  1997
         --------------------                              ------------

         Estimated loss on store closings                   $    33,649
         Acceleration of goodwill amortization                   14,975
         Professional fees                                        4,230
                                                            -----------
                                                            $    52,854
                                                            ===========

         During October, 1997, Levitz closed eighteen stores in under-performing
         markets. An estimated loss was recognized which includes the writedown
         of property, capital lease assets, furniture and fixtures to their net
         realizable values and provisions for continuing expenses and severance
         pay.

         On January 9, 1998, Levitz sold substantially all of the assets of the
         John M. Smyth Company, a wholly-owned subsidiary of Levitz, which
         operated five store locations in the Chicago, Illinois vicinity. The
         gross proceeds from the sale which includes reimbursed amounts were
         approximately $35.6 million. The proceeds were used to pay mortgages,
         accounts payable, accrued liabilities and reduce borrowings under the
         DIP Facilities. In December 1997, Levitz recognized a loss of $18.0
         million on the sale of the assets which also included the write-off of
         plant, property and equipment, lease rejection claims, continuing
         expenses, severance costs and the acceleration of goodwill
         amortization.

         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.

                                       10

<PAGE>

5.       UNUSUAL OPERATING EXPENSES AND STORE CLOSING CHARGE:

         During the nine month period ended December 31, 1997, Levitz accrued a
         charge for future payroll and employee benefit costs of $1.3 million in
         connection with an employment agreement upon the resignation of an
         officer. Additionally, Levitz recorded a $5.9 million write-off of the
         future service revenue receivable under the GECC Agreement since Levitz
         is 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.

         During the nine month period ended December 31, 1996, Levitz closed
         five satellite stores. The store closing charge of $8.3 million
         includes the reduction of the carrying value of the store assets to
         their estimated fair value net of selling expenses as well as reserves
         for future rental payments under operating lease agreements.

6.       INCOME TAXES:

         Levitz has recorded a deferred tax asset (benefit) for its cumulative
         net operating loss (NOL) for the nine month period ended December 31,
         1997. The cumulative NOL benefit at December 31, 1997, which is
         exclusively provided for Federal tax purposes, is supported by deferred
         tax credits which are projected to turn during the Federal carryforward
         period. Levitz is limited to the amount of future NOL's it can benefit
         and may have to start providing offsetting allowances. Additionally, if
         Levitz has any NOL carryforwards when it emerges from bankruptcy, there
         could be limitations placed on the realization of these NOL's.

         Levitz files a consolidated Federal income tax return and certain state
         returns with LFI. Levitz records its share of the consolidated Federal
         and state income tax provision or benefit by multiplying its separate
         taxable income or loss for the year by the corporate income tax rates
         applicable to such year.

7.       EXTRAORDINARY ITEM:

         On September 5, 1997, Levitz incurred a before-tax extraordinary loss
         of $8.4 million on the write-off of deferred financing fees related to
         the termination of the Senior Secured Facilities. The after-tax loss
         was $5.8 million or $5,805 per share. In the period ended September 30,
         1996, Levitz incurred a before-tax extraordinary loss of $3.1 million
         on the write-off of deferred financing fees related to the termination
         of the previous bank credit agreement, the after-tax loss was $2.0
         million or $2,002 per share.

8.       EARNINGS PER COMMON SHARE:

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

         The implementation of the Financial Accounting Standards Board issued
         Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings
         per Share" had no affect on Levitz's consolidated financial statements.

                                       11

<PAGE>

9.       CONSOLIDATED STATEMENTS OF CASH FLOWS:

         Supplemental disclosures of cash flow information (dollars in
         thousands):

                                               Nine Months Ended
                                                  September 30,
                                            ----------------------------
                                              1997              1996
                                            ----------        -----------
         Interest paid, net                 $   32,105        $   39,347
                                            ==========        ===========

         Income tax refunds, net            $   (2,427)       $   (6,968)
                                            ==========        ===========

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

                                       12

<PAGE>

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

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   NINE MONTHS ENDED
                                              December 31,         December 31,
                                          -------------------- -------------------
                                           1997         1996     1997       1996
                                          --------    --------  -------   -------
<S>                                        <C>         <C>      <C>         <C>    

Net sales                                  100.0 %     100.0 %  100.0 %     100.0 %

Cost of sales                               55.7        55.5     55.6        55.3
                                          --------    --------  -------   -------

Gross profit                                44.3        44.5     44.4        44.7

Selling, general and administrative
  expenses                                  42.5        37.8     43.6        39.4

Unusual operating expenses                     -           -      1.1           -

Store closing charge                           -           -        -         1.1

Depreciation and amortization                2.6         2.5      2.9         2.8

Interest expense                             2.6         5.2      5.0         5.5
                                          --------    --------  -------   -------

Loss before reorganization items
  and income taxes                          (3.4)       (1.0)    (8.2)       (4.1)

Reorganization items                       (11.3)          -     (8.1)          -
                                          --------    --------  -------   -------

Loss before income taxes                   (14.7)       (1.0)   (16.3)       (4.1)

Income tax benefit                           3.3         0.3      5.1         1.5
                                          --------    --------  -------   -------

Loss before extraordinary items            (11.4)       (0.7)   (11.2)       (2.6)

Extraordinary items, net of tax             (0.1)          -     (0.9)       (0.3)
                                          --------    --------  -------   -------

Net loss                                   (11.5)%      (0.7)%  (12.1)%      (2.9)%
                                          ========    ========  =======   =======

Comparable store sales                      (6.7)%       2.0 %   (8.0)%      (3.0)%
                                          ========    ========  =======   =======
</TABLE>

THREE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO THREE MONTHS ENDED DECEMBER
31, 1996


Net sales of $232.6 million for the three month period ended December 31, 1997
decreased $39.4 million or 14.5% over net sales of $272.0 million in the same
period for the prior year. Sales on a comparable store basis decreased 6.7%. The
decrease in net sales of 14.5% is primarily attributable to the closing of
eighteen stores in under-performing markets during October 1997. Management is
in the process of implementing a new merchandise and advertising strategy which
includes improving the product mix, the

                                      13
<PAGE>

implementation of a mechanized re-order system, a shift in the media mix
towards radio and television as the most effective media of competitive
response and increased emphasis on direct mail due to its ability to target the
core customer. The implementation of this strategy is intended to stabilize and
improve comparable store sale performance.

Gross profit as a percentage of net sales decreased to 44.3% for the three month
period ended December 31, 1997 compared to 44.5% in the same period for the
prior year. The decrease reflects an increase in sales of clearance merchandise
and percentage-off sales due to the current process of changing the merchandise
assortment and product mix.

Selling, general and administrative (SG&A) expenses decreased $4.1 million for
the three month period ended December 31, 1997 as compared to the same period
for the prior year. As a percentage of net sales, SG&A expenses increased to
42.5% from 37.8%, respectively. SG&A expenses decreased by approximately $7.8
million due to the closing of eighteen store locations during October 1997. This
was offset by an increase in advertising expense of $3.7 million. The percentage
increase in SG&A was caused by the decline in net sales as previously noted.

Depreciation and amortization expense decreased $0.8 million for the three month
period ended December 31, 1997 from the same period for the prior year primarily
due to the store closings.

Interest expense for the three month period ended December 31, 1997 decreased
$7.9 million or 56.2% from the same period for the prior year. As a percentage
of net sales, interest expense decreased to 2.6% from 5.2%, respectively. As a
result of the Chapter 11 filing, Levitz did not record contractual interest
expense of $5.5 million.

As a result of the aforementioned factors, loss before reorganization items and
income taxes for the three month period ended December 31, 1997 amounted to $7.9
million or 3.4% of net sales as compared to a loss of $2.7 million or 1.0% of
net sales for the same period of the prior year.

Reorganization items for the three month period ended December 31, 1997 included
a loss of approximately $18.0 million from the sale of substantially all the
assets of John M. Smyth Company, a wholly-owned subsidiary, on January 9, 1998.
The loss included the write-off of plant, property and equipment, lease
rejection claims, continuing expenses, severance costs and the acceleration of
goodwill amortization. Also, included were professional fees of $3.5 million for
accounting, legal and consulting services provided to Levitz and the Creditors'
Committee while Levitz is in Chapter 11.

Income tax benefit for the three month period ended December 31, 1997 was $7.7
million or 3.3% of net sales as compared to an income tax benefit of $0.9
million or 0.3% of net sales for the same period of the prior year. The
effective tax rate was 24.6% for the three month period ended December 31, 1997
as compared to a 35.2% effective tax rate for the same period of the prior year.
The decrease in the rate is attributable to permanent differences for the
acceleration of goodwill amortization and professional fees provided to Levitz
and the Creditors' Committee while Levitz is in Chapter 11. Levitz has been able
to record a benefit for its current NOL since there are sufficient deferred tax
credits that are projected to turn during the Federal carryforward period.
However, future NOL benefits may have to be offset by allowances. Additionally,
if Levitz has any NOL carryforwards when it emerges from bankruptcy, there could
be limitations placed on the realization of these NOL's.

The extraordinary loss of $0.3 million for the three month period ended December
31, 1997 was a result of an adjustment to the effective tax rate as a result of
the permanent differences discussed above.

Net loss for the three month period ended December 31, 1997 was $26.4 million or
11.5% of net sales as compared to a net loss of $1.7 million or 0.7% of net
sales for the same period of the prior year.

                                       14

<PAGE>

NINE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO NINE MONTHS ENDED DECEMBER 31,
1996

Net sales of $651.2 million for the nine month period ended December 31, 1997
decreased $86.1 million or 11.7% over net sales of $737.3 million in the same
period for the prior year. Sales on a comparable store basis decreased 8.0%. The
decrease in net sales is attributable to the slow-down in shipments by
merchandise vendors prior to the Petition Date and the closing of eighteen store
locations during October 1997. Management is in the process of implementing a
new merchandise and advertising strategy which includes improving the product
mix, the implementation of a mechanized re-order system, a shift in the media
mix towards radio and television as the most effective media of competitive
response and increased emphasis on direct mail due to its ability to target the
core customer. The implementation of this strategy is intended to stabilize and
improve comparable store sale performance.

Gross profit as a percentage of net sales decreased to 44.4% for the nine month
period ended December 31, 1997 compared to 44.7% in the same period for the
prior year. The decrease reflects an increase in sales of clearance merchandise
and percentage-off sales due to the slow-down in shipments of merchandise prior
to the Petition Date and the current process of changing the merchandise
assortment.

Selling, general and administrative (SG&A) expenses decreased $6.6 million for
the nine month period ended December 31, 1997 as compared to the same period for
the prior year. SG&A expenses decreased by approximately $7.8 million due to the
closing of eighteen store locations in October 1997 and a decrease of other
expenses of approximately $2.7 million. This was offset by an increase in
advertising expense of $3.9 million. As a percentage of net sales, SG&A expenses
increased to 43.6% from 39.4%, respectively. The percentage increase in SG&A was
caused by the decline in net sales.

During the nine month period ended December 31, 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 is now 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.

The store closing charge of $8.3 million for the nine month period ended
December 31, 1996 includes the reduction of the carrying value of the store
assets to the estimated fair value net of selling expenses as well as reserves
for future rental payments under operating lease agreements. Five satellite
stores were closed in October 1996.

Interest expense for the nine month period ended December 31, 1997 decreased
$8.4 million or 20.7% from the same period for the prior year. As a percentage
of net sales, interest expense decreased to 5.0% from 5.5%, respectively. As a
result of the Chapter 11 filing, Levitz did not record contractual interest
expense of $7.1 million.

As a result of the aforementioned factors, loss before reorganization items and
income taxes for the nine month period ended December 31, 1997 amounted to $52.8
million or 8.2% of net sales as compared to a loss of $30.1 million or 4.1% of
net sales for the same period of the prior year.

Reorganization items for the nine month period ended December 31, 1997 included
an estimated reserve for store closings of $23.4 million for the closing of
eighteen stores, an estimated loss of $7.7 million on the sale of substantially
all the assets of JMS, the acceleration of goodwill amortization of $15.0
million, professional fees of $3.8 million for accounting, legal and consulting
services provided to Levitz and the Creditors' Committee while Levitz is in
Chapter 11 and $2.9 million of other expenses related to the bankruptcy. The
store closing reserve and loss on the sale of JMS assets include the writedown
of property, capital lease assets, furniture and fixtures to their net
realizable values and includes provisions for lease rejection claims, continuing
expenses and severance pay.

                                       15

<PAGE>

Income tax benefit for the nine month period ended December 31, 1997 was $32.9
million or 5.1% of net sales as compared to an income tax benefit of $10.6
million or 1.5% of net sales for the same period of the prior year. The
effective tax rate was 31.2% for the nine month period ended December 31, 1997
as compared to 35.2% for the same period of the prior year. The decrease in the
rate is attributable to permanent differences for the acceleration of goodwill
amortization and professional fees provided to Levitz and the Creditors'
Committee while Levitz is in Chapter 11. Levitz has been able to record a
benefit for its current NOL since there are sufficient deferred tax credits that
are projected to turn during the Federal carryforward period. However, future
NOL benefits may have to be offset by allowances. Additionally, if Levitz has
any NOL carryforwards when it emerges from bankruptcy, there could be
limitations placed on the realization of these NOL's.

The extraordinary loss net of tax benefit was $5.8 million or 0.9% of net sales
for the nine month period ended December 31, 1997. The extraordinary loss was
due to the write-off of deferred financing fees related to the Senior Secured
Facilities. The extraordinary loss for the same period of the prior year net of
tax benefit was $2.0 million. The extraordinary loss was due to the write-off of
deferred financing fees related to the previous bank credit agreement.

Net loss for the nine month period ended December 31, 1997 was $78.5 million or
12.1% of net sales as compared to a net loss of $21.5 million or 2.9% 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 transfer of customer credit obligations to GECC) and
borrowings under the DIP Facility.

On September 5, 1997, LFI, Levitz and 10 of its subsidiaries filed petitions for
reorganization under Chapter 11 of the United States Bankruptcy Code. Levitz
will continue to conduct business in the ordinary course as debtor-in-possession
under the protection of the Bankruptcy Court while a plan of reorganization is
developed.

Levitz's net cash from operations during the nine month period ended December
31, 1997 increased $29.7 million over the same period of the prior year due to
the Chapter 11 filing. Requirements for the payment of unsecured debt, accounts
payable and other liabilities that arose prior to the Chapter 11 filing are in
most cases stayed while Levitz is under the protection of the Bankruptcy Court.
The Bankruptcy Court has issued orders authorizing the payment of prepetition
wages, employee benefits and other payments that are essential to the daily
operations of Levitz. The remaining prepetition liabilities of $367.8 million
have been classified as liabilities subject to compromise under the
reorganization proceedings in the consolidated condensed balance sheet as of
December 31, 1997.

Receivables other than receivables under account purchase agreement decreased
$8.5 million from March 31, 1997 to December 31, 1997. Trade receivables
declined $2.6 million primarily due to the reduction in net sales and the day of
the week in which the month ends. The write-off of the future service revenue
receivable due to the loss of sale accounting treatment under the GECC Agreement
was $5.9 million. Inventory decreased $33.6 million due to a planned reduction
in the first three months of the current fiscal year and the sale of inventory
to a liquidator on the closing of eighteen store locations.

Capital expenditures for the nine month period ended December 31, 1997 were for
the renovation and maintenance of existing store facilities. The reduction in
property and equipment and property under capital leases was due to the
write-off to net realizable value of the 18 stores which were closed during
October 1997. Levitz has no plans to open any new stores during the fiscal year
ending March 31, 1998. Proceeds from the sale of property and equipment includes
$2.3 million for the sale of two idle facilities that were sold prior to the
Petition Date and $19.8 million for the sale of the North Avenue, Chicago,
Illinois store and the corporate offices in Boca Raton, Florida.

                                       16


<PAGE>

Net cash used in financing activities of $40.7 million included repayments of
debt under the Senior Secured Facilities and the DIP Facility of $21.5 million,
$8.9 million of principal payments on mortgages and capital lease obligations
and a $3.2 million payment for deferred financing fees relating to the DIP
Facility. The decrease in outstanding checks of $7.1 million is primarily due to
the Chapter 11 filings and the timing of payments.

Liquidity

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"). the DIP Facility has been approved by the Bankruptcy Court
and provides for up to $260.0 million of availability. The DIP Facility contains
revolving notes of $223.6 million and a term note of $36.4 million. Letter of
credit obligations under 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 maximum borrowings, excluding the term note, 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 will be
permanently reduced by the sale of fixed assets and leasehold interests. The
maximum borrowings at January 31, 1998 were $223.6 million. Availability under
the DIP Facility at January 31, 1998 reduced by $14.5 million in stand-by
letters of credit was $85.8 million. On October 9 and December 30, 1997, the DIP
Facility was amended to include, among other things, a decrease in the minimum
EBITDA requirements through March 1998 and an increase in the capital
expenditure limit through March 1998. LFI and Levitz are currently in compliance
with the DIP Facility covenants as amended.

On September 5, 1997 Levitz and General Electric Capital Corporation ("GECC")
entered into a Second Amended and Restated Account Purchase and Credit Card
Program Agreement (the "GECC Agreement"), whereby GECC is required to purchase
Levitz's customer credit obligations, subject to certain restrictions, without
recourse up to a maximum investment of $900.0 million. The GECC Agreement
expires on October 31, 1999 and may require Levitz to repurchase the outstanding
customer credit obligations at the expiration date. There is significant doubt
as to Levitz's ability to repurchase the outstanding customer credit obligations
due to the Chapter 11 filing and current financial condition.

Levitz is exposed to market risks under the terms of the GECC Agreement. Levitz
may pay a fee or may receive income, based on the relationship among the
interest earned on the portfolio, the amount of the promotional discount fees,
the amount of the servicing fee, the prime rate, and to a limited extent, credit
losses. For the nine month periods ended December 31, 1997 and 1996, Levitz
recorded income under the GECC Agreement of $9.6 million and $10.1 million,
respectively. These amounts are included in selling, general and administrative
expenses.

In accordance with the GECC Agreement, Levitz and GECC are in the process of
negotiating substantive changes to the GECC Agreement. Levitz is also engaged in
discussions with another party to finance and service its customer credit
obligations. The outcome of these discussions and negotiations are not
predictable, consequently the impact on the financial statements are not known.

                                       17

<PAGE>

PART II OTHER INFORMATION:

Item 1.  Legal Proceedings.

         See the Registrant's Quarterly Report on Form 10-Q for the period ended
         September 30, 1997 for information concerning the filing by the
         Registrant and several of its subsidiaries of voluntary petitions for
         relief under Chapter 11, Title 11 of the United States Code.

Item 3.  Default Upon Senior Securities.

         See the Registrant's Quarterly Report on Form 10-Q for the period ended
         September 30, 1997 for information concerning a default on Levitz
         Furniture Corporation's ("Levitz's") 13 3/8% Senior Notes due October
         15, 1998, Levitz's 9 5/8% Senior Subordinated Notes due July 15, 2003
         and Levitz Furniture Incorporated's Senior Deferred Coupon Debentures
         due June 15, 2002.

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

         (a)  Exhibit 10.49: Amendment No. 2 dated as of December 30, 1997 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:

          On January 20, 1998, the registrant filed a report on Form 8-K
          reporting under Item 5. "Other Events" the consummation of the
          sale by Levitz Furniture Corporation and its wholly-owned
          subsidiary John M. Smyth Company (JMS) of substantially all of
          the assets of JMS to Heilig-Meyers Company.

                                       18

<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:  February 13, 1997              /S/    LAWRENCE R. MCDEVITT
                                          ---------------------------
                                                 Lawrence R. McDevitt
                                              Vice President/Controller
                                               Chief Accounting Officer

                                       19

<PAGE>
<TABLE>
<CAPTION>

                                  EXHIBIT INDEX

                              Exhibits to Form 10-Q

           NUMBER
       EXHIBIT TABLE                                                 EXHIBIT
       -------------                                                 -------
         <S>                  <C>
         10.49                Amendment No. 2 dated as of December 30, 1997 to the Postpetition Credit Agreement
                              among Levitz Furniture Incorporated, et al. and BT Commercial Corporation, as agent.

         27                   Financial Data Schedule.
</TABLE>
                                       20