SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C.   20549
     
                           FORM 10-Q
     
     
         X     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) 
               OF THE SECURITIES EXCHANGE ACT OF 1934
     
               For the quarterly period ended December 28, 1996 
      
                                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     1-9838 
                                                                
                         NS GROUP, INC.                         
     Exact name of registrant as specified in its charter
     
             KENTUCKY                       61-0985936      
     (State or other jurisdiction of    (I.R.S. Employer
     incorporation or organization)     Identification Number)
        
       Ninth and Lowell Streets, Newport, Kentucky   41072      
            (Address of principal executive offices)
     
     Registrant's telephone number, including area code (606)
     292-6809
     
     Indicate by check mark whether the registrant (1) has
     filed all reports required to be filed by Section 13 or
     15(d) of the Securities Exchange Act of 1934 during the
     preceding 12 months (or for such shorter period that the
     registrant was required to file such reports), and (2) has
     been subject to such filing requirements for the past 90
     days.  YES   X      NO _____
     
     Indicate the number of shares outstanding of each of the
     issuer's classes of common stock, as of the latest
     practicable date.
     
      Common stock, no par value             13,812,663     (Class)            
          (Outstanding at        
         January 31, 1997)
     
     
                            NS GROUP, INC.
     
                               INDEX
     
     
     PART I    FINANCIAL INFORMATION                      PAGE
     
     
      Item 1     Financial Statements
     
       Condensed Consolidated Balance Sheets                  3
       Condensed Consolidated Statements of Operations        4
       Condensed Consolidated Statements of Cash Flows        5
       Notes to Condensed Consolidated Financial Statements   6
     
      Item 2     Management's Discussion and Analysis of        
          Financial Condition and Results of 
                 Operations                                  11
     
     PART II   OTHER INFORMATION
     
      Item 6     Exhibits and Reports on Form 8-K            19
     
     
     
     NS GROUP, INC. AND SUBSIDIARIES
     CONDENSED CONSOLIDATED BALANCE SHEETS
     AS OF DECEMBER 28, 1996 AND SEPTEMBER 28, 1996
     (Dollars in thousands) (Unaudited)
     
<TABLE>
<S>                                <C>           <C>
                                   December 28,  September 28,
     CURRENT ASSETS                  1 9 9 6         1 9 9 6    
      
       Cash and cash equivalents    $    2,881    $    3,442
       Short-term investments           25,910        13,855
       Accounts receivable, less 
       allowance for doubtful 
       accounts of $847 and $757, 
       respectively                     49,416        51,824
       Inventories                      52,461        53,317
       Other current assets             28,697       28,037
     
         Total current assets          159,365      150,475
       
     PROPERTY, PLANT AND EQUIPMENT     273,132      272,286
       Less - accumulated depreciation(142,875)    (138,512)    
     
                                       130,257      133,774    
     OTHER ASSETS                       14,792       15,785 
     
         Total assets                 $304,414     $300,034
              
     CURRENT LIABILITIES
       Notes payable                  $    443     $    879
       Accounts payable                                         
                                        41,810       41,847
       Other current liabilities        28,791       24,376
       Current portion of long-term 
       debt                              2,477        2,468
     
         Total current liabilities      73,521       69,570 
     
     LONG-TERM DEBT                    164,381      164,789
     
     DEFERRED TAXES                      9,415        8,559
     
     COMMON SHAREHOLDERS' EQUITY
       Common stock, no par value       49,004       49,004
       Common stock options and
        warrants                         2,781        2,774
       Unrealized loss on available 
       for sale securities              (1,562)      (1,287)
       Retained earnings                 6,874        6,625
     
         Total common shareholders' 
          equity                        57,097       57,116
     
         Total liabilities and 
         shareholders' equity         $304,414     $300,034
     
</TABLE>
     
     
     The accompanying notes to condensed consolidated financial
           statements are an integral part of these statements.
     
     NS GROUP, INC. AND SUBSIDIARIES
     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
     FOR THE THREE MONTH PERIODS ENDED
     DECEMBER 28, 1996 AND DECEMBER 30, 1995
     (In thousands, except per share amounts)
     (Unaudited)
     
<TABLE>
<S>                            <C>                <C>
     
                               December 28,       December 30,             
                                1 9 9 6             1 9 9 5    
       
     
     NET SALES                  $105,167            $  89,295    
     COST AND EXPENSES
       Cost of products sold      92,824               82,402
       Selling and administrative 
       expenses                    6,398                6,286  
           
     
       Operating income            5,945                  607    
     
     OTHER INCOME (EXPENSE)   
       Interest expense           (6,063)              (6,055)
       Interest income               307                  125
       Other, net                     83                  698
     
       Income (loss) before 
       income taxes                  272               (4,625)
     
     PROVISION (CREDIT) FOR 
       INCOME TAXES                   23               (1,421) 
     
       Net income (loss)        $    249             $ (3,204)   
     
     NET INCOME (LOSS) PER
       COMMON SHARE                 $.02                $(.23)  
      
     WEIGHTED AVERAGE SHARES 
      OUTSTANDING                 13,809               13,809
     
</TABLE>

     The accompanying notes to condensed consolidated financial
           statements are an integral part of these statements.
     
     NS GROUP, INC. AND SUBSIDIARIES              
     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
     FOR THE THREE MONTH PERIODS ENDED
     DECEMBER 28, 1996 AND DECEMBER 30, 1995 
     (Dollars in thousands)   (Unaudited)
     
<TABLE>
<S>                              <C>               <C>
     
                                                           
                                 December 28,      December 30,
                                   1 9 9 6            1 9 9 5   
       
     CASH FLOWS FROM OPERATING 
     ACTIVITIES
      Net income (loss)          $     249           $(3,204)
      Adjustments to reconcile 
      net income (loss)
      to net cash flows from 
      operating activities:
      Depreciation and
      amortization                   4,452             4,725       
        Amortization of debt 
      discount and finance costs       418               409 
        Increase (decrease) in 
        long-term deferred taxes     1,005            (1,746)
        Decrease in accounts
        receivable, net              2,408             3,842        
        (Increase) decrease in 
         inventories                   856            (9,682)    
        (Increase) decrease in 
         other current assets       (1,115)            3,374      
        Increase (decrease) in
        accounts payable               (37)            4,256      
        Increase in accrued 
        liabilities                  4,415             4,161 
       
           Net cash flows from 
           operating activities     12,651             6,135  
          
     CASH FLOWS FROM INVESTING ACTIVITIES
        Increase in property, 
        plant and equipment, net      (835)           (1,844)     
        (Increase) decrease in 
         other assets                 682               (304)     
            Net cash flows from 
           investing activities      (153)            (2,148)     
     
     CASH FLOWS FROM FINANCING ACTIVITIES
        Decrease in notes payable    (436)               (255)  
          
        Repayments on long-term debt (568)              (175)    
             
           Net cash flows from 
           financing activities    (1,004)              (430)     
     
           Net increase in cash 
           and short-term 
           investments             11,494               3,557   
           
     
     CASH AND SHORT-TERM 
      INVESTMENTS AT
      BEGINNING OF YEAR            17,297             11,251      
     
     CASH AND SHORT-TERM 
     INVESTMENTS AT 
     END OF PERIOD                $28,791            $14,808        
     
       Cash paid during the period for:
         Interest                $  1,133           $  1,190     
         Income taxes, net 
         of refunds              $      3           $   (650)       
</TABLE>
     
     The accompanying notes to condensed consolidated financial
     statements are an integral part of these statements.
     
     NS GROUP, INC. AND SUBSIDIARIES
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     (Unaudited)
     
     
     Note 1:  Principles of Consolidation
     
          The condensed consolidated financial statements
     include the accounts of NS Group, Inc. and its
     wholly-owned subsidiaries (the Company):  Newport Steel
     Corporation (Newport), Koppel Steel Corporation (Koppel),
     Erlanger Tubular Corporation (Erlanger), Imperial
     Adhesives, Inc. (Imperial) and Northern Kentucky
     Management, Inc.  All significant intercompany balances
     and transactions have been eliminated.
     
          The accompanying information reflects, in the opinion
     of management, all adjustments (which consist only of
     normal recurring adjustments) necessary to present fairly 
     the results for the interim periods.  The preparation of
     financial statements in conformity with generally accepted
     accounting principles requires that management make
     certain estimates and assumptions that affect the amounts
     reported in the consolidated financial statements and
     accompanying notes.  Actual results could differ from
     those estimates.  Reference should be made to NS Group,
     Inc.'s  Form 10-K for the fiscal year ended September 28,
     1996 for additional footnote disclosure, including a
     summary of significant accounting policies.
     
          In the first quarter of fiscal 1997, the Company
     adopted the provisions of Statement of Financial
     Accounting Standards No. 121 (Statement 121).  Statement
     121  establishes accounting standards for impairment of
     long-lived assets to be held and used and for long-lived
     assets that are to be disposed.  The impact on the
     Company's financial statements from the adoption of
     Statement 121 was not material.
     
          In the first quarter of fiscal 1997, the Company also
     adopted Statement of Financial Accounting Standards No.
     123 (Statement 123).  Statement 123 establishes accounting
     and reporting standards for stock-based employee
     compensation plans.  As permitted under Statement 123 the
     Company has elected to remain on the intrinsic value based
     method of accounting for stock-based employee compensation
     plans.  As such, beginning with the 1997 fiscal year-end,
     Statement 123 requires pro forma disclosures of net income
     and earnings per share, as if the fair value based method
     of accounting had been applied.
     
          Certain amounts for the prior period have been
     reclassified in the accompanying condensed consolidated
     financial statements to conform to fiscal 1997
     presentation.
     
          The Company's fiscal year ends on the last Saturday
     of September.  
     
     Note 2:  Inventories
     
          At December 28, 1996 and September 28, 1996,
     inventories stated at the lower of LIFO (last-in,
     first-out) cost or market represent approximately 32% and
     36% of total inventories before the LIFO reserve,
     respectively.  Inventories consist of the following
     components ($000's):
     
<TABLE>
<S>                          <C>             <C>
                             December 28,    September 28,
                               1 9 9 6         1 9 9 6        
     Raw materials            $  6,867       $  5,948
     Semi-finished 
     and finished goods         48,716         50,471
                                55,583         56,419
          LIFO reserve          (3,122)        (3,102)
                               $52,461        $53,317
     
</TABLE>
     
     Note 3:  Commitments and Contingencies
     
          The Company has various commitments for the purchase
     of materials, supplies and energy arising in the ordinary
     course of business.  
     
          Legal Matters  
     
          The Company is subject to various claims, lawsuits
     and administrative proceedings arising in the ordinary
     course of business with respect to workers compensation,
     health care and product liability coverages (each of which
     is self-insured to certain levels), as well as commercial
     and other matters.  The Company accrues for the cost of
     such matters when the incurrence of such costs is probable
     and can be reasonably estimated.   Based upon its
     evaluation of available information, management does not
     believe that any such matters are likely, individually or
     in the aggregate, to have a material adverse effect upon
     the Company's consolidated financial position, results of
     operations or cash flows.
     
          Environmental Matters
     
          The Company is subject to federal, state and local
     environmental laws and regulations, including, among
     others, the Resource Conservation and Recovery Act (RCRA),
     the Clean Air Act, the 1990 Amendments to the Clean Air
     Act, the Clean Water Act and all regulations promulgated
     in connection therewith, including, among others, those
     concerning the discharge of contaminants as air emissions
     or waste water effluents and the disposal of solid and/or
     hazardous wastes such as electric arc furnace dust.  As
     such, the Company is from time to time involved in
     administrative and judicial proceedings and administrative
     inquiries related to environmental matters.
     
     
          As with other steel mills in the industry, Koppel and
     Newport produce dust which contains lead, cadmium and
     chromium, and is classified as a hazardous waste.  The
     Company currently collects the dust resulting from its
     electric arc furnace operations through emission control
     systems and contracts with a company for treatment and
     disposal of the dust at an EPA-approved facility.  
     
          The Company has on its property at Newport a
     permitted hazardous waste disposal facility.  Newport's
     permit for operating the hazardous waste disposal facility
     requires that it investigate, test, and analyze for
     potential releases of hazardous constituents from its
     closed loop water recirculating system.  Any contamination
     documented as a result of the investigation would require
     certain cleanup measures; however, the Company believes
     that the cost of any such cleanup measures, if required,
     would not be material.
     
          In November 1996, Koppel received a Notice of
     Violation from the EPA alleging violations of the Clean
     Air Act and the Pennsylvania State Implementation Plan. 
     The violations allegedly occurred during 1995 and 1996 and
     pertain to air emissions from Koppel's electric arc
     furnace operations.  At this time, the Company is unable
     to determine if the EPA will assess civil penalties as a
     result of the alleged violations, or the extent of any
     such potential penalties.
     
          In March 1995, Koppel and the EPA signed a Consent
     Order relating to an  April 1990 RCRA facility assessment
     (the Assessment) completed by the EPA and the Pennsylvania
     Department of Environmental Resources.  The Assessment was
     performed in connection with a permit application
     pertaining to a landfill that is adjacent to the Koppel
     facilities.  The Assessment identified potential releases
     of hazardous constituents at or adjacent to the Koppel
     facilities prior to the Company's  acquisition of the
     Koppel facilities.  The Consent Order establishes a
     schedule for investigating, monitoring, testing and
     analyzing the potential releases.   Contamination
     documented as a result of the investigation requires
     cleanup measures and certain remediation has begun. 
     Pursuant to various indemnity provisions in agreements
     entered into at the time of the Company's acquisition of
     the Koppel facilities, certain parties have agreed to
     indemnify the Company against various known and unknown
     environmental matters.  The Company believes that the
     indemnity provisions provide for it to be fully
     indemnified against all matters covered by the Consent
     Order, including all associated costs, claims and
     liabilities.
          
          In two separate incidents occurring in fiscal 1993
     and 1992, radioactive substances were accidentally melted
     at Newport, resulting in the contamination of a quantity
     of electric arc furnace dust.  The Company is
     investigating and evaluating various issues concerning
     storage, treatment and disposal of the radiation
     contaminated electric arc furnace dust; however, a final
     determination as to method of treatment and disposal, cost
     and further regulatory requirements cannot be made at this
     time.  Depending on the ultimate timing and method of
     treatment and disposal, which will require appropriate
     federal and state regulatory approval, the actual cost of
     disposal could substantially exceed current estimates and
     the Company's insurance coverage.    
     
          The Company expects to recover and has recorded a
     $2.3 million receivable relating to insurance claims for
     the recovery of disposal costs which will be filed with
     the applicable insurance carrier at the time such disposal
     costs are incurred.  As of December 28, 1996, claims
     recorded in connection with disposal costs exhaust
     available insurance coverage.  Based on current knowledge,
     management believes the recorded gross reserves of $4.4
     million for disposal costs pertaining to these incidents
     are adequate.
     
          Subject to the uncertainties concerning the Consent
     Order and the storage and disposal of the radiation
     contaminated dust, the Company believes that it is
     currently in compliance in all material respects with all
     applicable environmental regulations.  The Company cannot
     predict the level of required capital expenditures or
     operating costs that may result from future environmental
     regulations.
     
          Capital expenditures for the next twelve months
     relating to environmental control facilities are expected
     to be approximately $1.0 million; however, such
     expenditures could be influenced by new or revised
     environmental regulations and laws or new information or
     developments with respect to the Company's operating
     facilities.
     
          As of December 28, 1996, the Company had
     environmental remediation reserves of $4.4 million which
     pertain almost exclusively to accrued disposal costs for
     radiation contaminated dust.  As of December 28, 1996, the
     estimated range of possible losses related to the
     environmental contingency matters discussed above in
     excess of those accrued by the Company is $0 to $3.0
     million; however, with respect to the Consent Order, the
     Company cannot estimate the range of possible losses
     should the Company ultimately not be indemnified.  Based
     upon its evaluation of available information, management
     does not believe that any of the environmental contingency
     matters discussed above are likely, individually or in the
     aggregate, to have a material adverse effect upon the
     Company's consolidated financial position, results of
     operations or cash flows.  However,  the Company cannot
     predict with certainty that new information or
     developments with respect to the Consent Order or its
     other environmental contingency matters, individually or
     in the aggregate, will not have a material adverse effect
     on the Company's consolidated financial position, results
     of operations or cash flows.
     
     Note 4:  Summarized Financial Information
     
          The Company's Senior Secured Notes are
     unconditionally guaranteed in full, jointly and severally,
     by each of the Company's subsidiaries (Subsidiary
     Guarantors), each of which is wholly-owned.  Separate
     financial statements of the Subsidiary Guarantors are not
     presented because they are not deemed material to
     investors.  The following is summarized financial
     information of the Subsidiary Guarantors as of December
     28, 1996 and September 28, 1996 and for the three month
     periods ended December 28, 1996 and December 30, 1995. 
     All significant intercompany accounts and transactions
     between the Subsidiary  Guarantors have been eliminated.
                    
<TABLE>
<S>                         <C>                <C>
     
                             December 28,      September 28,
                               1996                1996        
                              (Dollars in thousands)
     
          Current assets      $128,094       $123,803
          Noncurrent assets   $138,799       $151,110
          
          Current liabilities $ 61,488       $ 61,980
     
          Payable to parent   $159,315       $162,593
          Other noncurrent 
           liabilities           9,731          9,953
               Total non-
          current liabilities $169,046       $172,546
     
</TABLE>
     
     
                                Three Months Ended     
                              December 28,      December 30,                  
                                 1996                1995        
                                 (Dollars in thousands)
<TABLE>
<S>                           <C>            <C>
     
               Net sales      $105,167       $   89,295
               Gross profit   $ 12,343       $    6,893
               Net income
                (loss)        $  1,296       $   (2,386)
</TABLE>
     
     
     NS GROUP, INC. AND SUBSIDIARIES
     
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
     CONDITION AND RESULTS OF OPERATIONS
     
     General
     
          The Company operates in two business segments:
     specialty steel and industrial adhesives.  Within the
     specialty steel segment are the operations of Koppel, a
     manufacturer of seamless tubular steel products and
     special bar quality (SBQ) products  and Newport, a
     manufacturer of welded tubular steel products and hot
     rolled coils.  The Company's specialty steel products
     consist of: (I) seamless and welded oil country tubular
     goods (OCTG) primarily used in oil and natural gas
     drilling and production operations; (ii) line pipe used in
     the transmission of oil, gas and other fluids; (iii) SBQ
     products primarily used in the manufacture of heavy
     industrial equipment; and (iv) hot rolled coils which are
     sold to service centers and other manufacturers for
     further processing.  Within the adhesives segment are the
     operations of Imperial, a manufacturer of industrial
     adhesives products.
     
          The matters discussed or incorporated by reference in
     this Report on Form 10-Q that are forward-looking
     statements (as defined in the Private Securities
     Litigation Reform Act of 1995) involve risks and
     uncertainties. Such risks and uncertainties include, but
     are not limited to, the level of domestic as well as
     worldwide oil and natural gas drilling activity; general
     economic conditions; product demand and industry capacity;
     industry pricing; the presence or absence of
     governmentally imposed trade restrictions;  manufacturing
     efficiencies; volatility in raw material costs,
     particularly steel scrap; costs of compliance with
     environmental regulations; product liability or other
     claims;  the Company's ability to meet operating cash
     requirements, including capital expenditures; and the
     Company's capital structure, which may limit its
     operational and financial flexibility.  These risks and
     uncertainties may cause the actual results or performance
     of the Company to differ materially from any future
     results or performance expressed or implied by such
     forward-looking statements.
     
     Results of Operations
     
          The Company's net sales, cost of products sold and
     operating results by business segment for the three month
     periods ended December 28, 1996 and December 30, 1995 are
     summarized below. 
     
                                   Three Months Ended     
                                December 28, December 30,
                                    1996        1995       
                                 (Dollars in thousands)
<TABLE>
<S>                              <C>         <C>

     Net sales 
       Specialty steel segment
          Koppel                 $  46,894   $  42,043      
          Newport                   48,086      38,339
                                    94,980      80,382 
       Adhesives segment            10,187       8,913         
                                 $ 105,167   $  89,295
     Cost of products sold                   
       Specialty steel segment 
           Koppel                $  43,372   $  37,481
           Newport                  41,706      37,937
                                    85,078      75,418
       Adhesives segment             7,746       6,984
                                 $  92,824   $  82,402 
     Operating income
       Specialty steel segment  
           Koppel                $   1,640   $   3,049
           Newport                   5,021      (1,623)
                                     6,661       1,426 
       Adhesives segment               244         132
       Corporate allocations         ( 960)       (951)     
                                 $   5,945   $     607
</TABLE>
     
          Sales data for the Company's specialty steel segment
     for the three month periods ended December 28, 1996 and
     December 30, 1995 were as follows:
     
                                  Three Months Ended       
                               December 28,  December 30,
                                   1996          1995        
<TABLE>
<S>                                 <C>         <C>
     Tons shipped
       Koppel
         Seamless tubular           33,600      34,100
         SBQ                        36,000      28,900
       Newport
         Welded tubular             93,800      74,800 
         Hot rolled coils and 
         other products              7,700      11,000 
                                   171,100     148,800 
     Net sales ($000's)   
       Koppel 
         Seamless tubular       $   30,917    $ 28,063
         SBQ                        15,977      13,980
       Newport 
         Welded tubular             44,890      34,176 
         Hot rolled coils and 
         other products              3,196       4,163
                                $   94,980    $ 80,382
     
</TABLE>
     
          Net sales for the first quarter of fiscal 1997
     increased $15.9 million, or 17.8%, from the first quarter
     of fiscal 1996 to $105.2 million.  Specialty steel segment
     net sales increased $14.6 million, or 18.2%, and the
     adhesives segment net sales increased $1.3 million, or
     14.3%.  The overall increase in specialty steel segment
     net sales was primarily attributable to increased
     shipments of the Company's tubular products as more fully
     discussed below.
          
          Total seamless tubular net sales for the fiscal 1997
     first quarter increased $2.9 million, or 10.2%, on a
     volume decrease of 1.5% from the first quarter of fiscal
     1996.   The increase in total seamless tubular net sales
     for the quarter was due to increased shipments and average
     selling prices for seamless OCTG products, from the
     comparable prior year period.  These increases were
     attributable to increased domestic and world wide drilling
     activity, including off-shore drilling and, with respect
     to pricing, changes in product mix.  The increase in total
     seamless tubular net sales was moderated by a decrease in
     sales and shipments of seamless line pipe.  Fiscal 1997
     first quarter average selling prices for all seamless
     tubular products increased 11.8% over the first quarter of
     fiscal 1996.  
     
          Total welded tubular net sales for the quarter
     increased $10.7 million, or 31.3%, on a volume increase of
     25.4%, from the comparable prior year period.  The
     increase in total welded tubular net sales for the first
     quarter was primarily attributable to an increase in
     shipments of welded OCTG products over the first quarter
     of fiscal 1996.  Welded OCTG shipments were impacted by a
     10.6% increase in domestic drilling activity from the
     first quarter of fiscal 1996.  The increase in total
     welded tubular net sales and shipments was moderated by a
     decline in welded line pipe sales and shipments from the
     fiscal 1996 first quarter, which resulted, in part, from
     the Company's increased emphasis on welded OCTG products. 
     The average selling price for all welded tubular products
     in the first quarter of fiscal 1997 was $479 per ton, a
     4.8% increase from the comparable prior year period.  The
     increase was due to the improved OCTG market and to
     changes in product mix.   
     
          The demand for the Company's OCTG products is
     cyclical in nature, being primarily dependent on the
     number and depth of oil and natural gas wells being
     drilled in the United States and globally.  The average
     number of oil and natural gas drilling rigs in operation
     in the United States (rig count) was 846 in the first
     quarter of fiscal 1997, up from 765 in the comparable
     period of fiscal 1996.  The level of drilling activity is
     largely a function of the current prices of oil and
     natural gas and the industry's future price expectations. 
     Demand for OCTG products is also influenced by the levels
     of inventory held by producers, distributors and end
     users.  In addition, the demand for OCTG products produced
     domestically is also significantly impacted by the level
     of foreign imports of OCTG products.  The level of OCTG
     imports is affected by:  (I) the value of the U.S. dollar
     versus other key currencies; (ii) overall world demand for
     OCTG products; (iii) the production cost competitiveness
     of domestic producers; (iv) trade practices of, and
     government subsidies to, foreign producers; and (v) the
     presence or absence of governmentally imposed trade
     restrictions in the  United States.
      
          The U. S. government is currently imposing duties on
     the imports of various OCTG products from certain foreign
     countries in response to antidumping and countervailing
     duty cases filed by several U.S. steel companies.  The
     Company cannot predict the U.S. government's future
     actions regarding import duties or other trade
     restrictions on imports of OCTG products.
     
           SBQ product net sales for the first quarter of
     fiscal 1997 increased $2.0 million, or 14.3%, on a volume
     increase of 24.6% from the comparable prior year period.  
     Fiscal 1997 first quarter average selling price for SBQ
     products declined 8.3% from the first quarter of fiscal
     1996. While shipments of SBQ products have stabilized and
     are above comparable prior year levels, market and
     competitive conditions resulted in lower pricing.  Other
     product shipments in the first quarter of fiscal 1997 were
     primarily attributable to the sale of hot rolled coils.  
     The demand for the Company's SBQ and hot rolled coil
     products is cyclical in nature and is sensitive to general
     economic conditions.  
     
          Gross profit for the first quarter of fiscal 1997
     increased $5.5 million from the first quarter of fiscal
     1996 for a gross profit margin of 11.7% in fiscal 1997
     compared to 7.7% in the first quarter of fiscal 1996.  The
     specialty steel segment gross profit increased $4.9
     million for the three month period and gross profit margin
     increased to 10.4% from 6.2% in the first quarter of
     fiscal 1996.  The increase in specialty steel segment
     gross profit and margin for the three month comparable
     periods was attributable to Newport's operations, where
     gross profit margins increased from 1.0% to 13.3% as a
     result of improved operating efficiencies, cost reduction
     initiatives, as well as higher shipments and average
     selling prices.  Koppel's gross profit margins declined
     from 10.9% in the prior year three month period to 7.5%
     for the current year, primarily due to lower operating
     efficiencies resulting from a scheduled repair and
     maintenance shut down in its tubular operations as well as
     a decline in SBQ pricing, as discussed above.    
     
          The adhesives segment gross profit increased $0.5
     million for the first fiscal quarter due primarily to an
     increase in sales volume and slightly lower raw material
     costs.  Gross profit margin for the first quarter of
     fiscal 1997 was 24.0% compared to 21.6% for the comparable
     fiscal 1996 period.  The increase was primarily a result
     of increased sales of higher margin products.
     
          Fiscal 1997 first quarter selling and administrative
     expenses increased $0.1 million from the first quarter of
     fiscal 1996 and decreased as a percentage of net sales to
     6.1% from 7.0% in the comparable prior year period.
     
          As a result of the above factors, operating income
     increased $5.3 million, from $0.6 million in the first
     quarter of fiscal 1996 to $5.9 million in the current
     quarter.   The increase in operating income was almost
     solely attributable to the specialty steel segment and was
     primarily due to improved operations at the Company's
     welded tubular operations combined with increased
     shipments and average selling prices for welded and
     seamless OCTG products.  The specialty steel segment was
     also impacted by lower operating efficiencies at the
     Company's seamless tubular operations resulting from a
     scheduled repair and maintenance shut down.  
     
          Interest expense was unchanged at $6.1 million for
     the first quarter of fiscal 1997 and 1996, and interest
     income increased $0.2 million for the same periods as a
     result of higher average invested cash and short-term
     investment balances.
     
          Other income (expense), net decreased $0.6 million
     for the three month periods.  The prior year comparable
     period includes income from property claims filed with the
     Company's insurance company in previous years.
     
          As a result of the above factors, the Company
     reported net income of $0.2 million, or $.02 per share, in
     the first quarter of fiscal 1997 compared to a net loss of
     $3.2 million, or a $.23 loss per share in the first
     quarter of fiscal 1996.  
     
      Liquidity and Capital Resources
     
          Working capital at December 28, 1996 was $85.8
     million compared to $80.9 million at September 28, 1996. 
     The current ratio was 2.17 to 1 at December 28, 1996 
     compared to 2.16 to 1 at September 28, 1996.  At December
     28,1996, the Company had cash and short-term investments
     totaling $28.8 million, $1.9 million of which was
     restricted in an environmental trust account related to a
     permitted hazardous waste disposal facility located on the
     Company's property at Newport.  At December 28, 1996, the
     Company had no outstanding advances against its $45.0
     million revolving credit facility (Credit Facility);
     however, $27.5 million of the Credit Facility secured
     various letters of credit issued primarily in connection
     with the purchase of steel slabs at Newport, of which
     $10.3 million is due in January of 1997.
     
          Net cash flows provided by operating activities
     totaled $12.7 million in the first quarter of fiscal 1997,
     compared to $6.1 million in the comparable prior year
     period.  The Company recorded net income of $0.2 million
     in the first quarter of fiscal 1997 compared to a net loss
     of $3.2 million in the first quarter of fiscal 1996. 
     Major sources of cash from operating activities in the
     first quarter of fiscal 1997 included $4.9 million in
     non-cash depreciation and amortization charges; a $4.4
     million increase in accrued liabilities primarily
     resulting from accrued interest expense on the Company's
     senior secured notes, which have a scheduled $8.9 million
     interest payment in January of 1997; a $2.4 million
     decrease in accounts receivable, primarily due to lower
     sales in December 1996 at Koppel, resulting from the
     scheduled repair and maintenance shut down; and an
     increase in long-term deferred taxes and a decrease in
     inventories of $1.0 million and $0.9 million,
     respectively.  The major use of cash in operating
     activities for the period was a $1.1 million increase in
     other current assets.   
     
          For the first quarter of fiscal 1996, net cash flows
     used in operating activities of $6.1 million were
     primarily impacted by a $9.7 million increase in
     inventories resulting from the purchase of steel slabs at
     Newport and a $1.7 million decrease in long-term deferred
     taxes.  Offsetting these uses were $5.1 million in
     non-cash depreciation and amortization charges; a $4.3
     million increase in accounts payable, resulting primarily
     from the purchase of steel slabs; a $4.2 million increase
     in accrued liabilities, primarily from accrued interest
     expense on the Company's senior secured notes; a decrease
     in accounts receivable resulting from a decline in sales
     and a decrease in other current assets primarily due to
     the collection of previously filed insurance claims.  
     
          The Company invested $0.8 million in capital
     expenditures during the first quarter of fiscal 1997,
     primarily related to improvements to and acquisition of
     machinery and equipment in the specialty steel segment. 
     The Company currently estimates that fiscal 1997 capital
     spending will approximate $9.0 million, primarily in the
     specialty steel segment, and its sources for funding
     capital expenditures include cash flow from operations,
     available cash and short-term investments, as well as
     available borrowing sources.  The Company also generated
     $0.7 million in cash from the sale of certain investment
     property.   
     
          Net cash flows from financing activities in the first
     quarter of fiscal 1997 included repayments on long-term
     debt of $0.6 million, compared to long-term debt
     repayments of $0.2 million in the first quarter of fiscal
     1996.    
     
          Earnings before interest, taxes, depreciation and
     amortization (EBITDA) were $10.8 million in the first
     quarter of fiscal 1997 compared to $6.2 million in the
     first quarter of fiscal 1996.  EBITDA is calculated as net
     income (loss) plus interest expense, taxes, depreciation
     and amortization.  EBITDA provides additional information
     for determining the Company's ability to meet debt service
     requirements.  EBITDA does not represent and should not be
     considered as an alternative to net income, any other
     measure of performance as determined by generally accepted
     accounting principles, as an indicator of operating
     performance or as an alternative to cash flows from 
     operating, investing or financing activities or as a
     measure of liquidity.
     
          The Company believes that its current available cash
     and short-term investments, its cash flow from operations
     and its borrowing sources will be sufficient to meet 
     anticipated operating cash requirements, including capital
     expenditures, for at least the next twelve months.
     
     Inflation
     
          The Company believes that inflation has not had a
     material effect on its results of operations to date. 
     Generally, the Company experiences inflationary increases
     in its costs of raw materials, energy, supplies, salaries
     and benefits and selling and administrative expenses. 
     Except with respect to significant increases in steel
     scrap prices, the Company has generally been able to pass
     these inflationary increases through to its customers.
     
     Other Matters
     
          Legal Matters
     
          The Company is subject to various claims, lawsuits
     and administrative proceedings arising in the ordinary
     course of business with respect to workers compensation,
     health care and product liability coverages (each of which
     is self-insured to certain levels), as well as commercial
     and other matters.  Based upon its evaluation of available
     information, management does not believe that any such
     matters are likely, individually or in the aggregate, to
     have a material adverse effect upon the Company's
     consolidated financial position, results of operations or
     cash flows.
     
          Environmental Matters
          
          The Company is subject to federal, state and local
     environmental laws and regulations, including, among
     others, the Resource Conservation and Recovery Act (RCRA),
     the Clean Air Act, the 1990 Amendments to the Clean Air
     Act, the Clean Water Act and all regulations promulgated
     in connection therewith, including, among others, those
     concerning the discharge of contaminants as air emissions
     or waste water effluents and the disposal of solid and/or
     hazardous wastes such as electric arc furnace dust.  As
     such, the Company is from time to time involved in
     administrative and judicial proceedings and administrative
     inquiries related to environmental matters.
     
          As with other steel mills in the industry, Koppel and
     Newport produce dust which contains lead, cadmium and
     chromium, and is classified as a hazardous waste. The
     Company currently collects the dust resulting from its
     electric arc furnace operations through emission control
     systems and contracts with a company for treatment and
     disposal of the dust at an EPA-approved facility.  
     
          The Company has on its property at Newport a
     permitted hazardous waste disposal facility.  Newport's
     permit for operating the hazardous waste disposal facility 
     requires that it investigate, test, and analyze for
     potential releases of hazardous constituents from its
     closed loop water recirculation system.  Any contamination
     documented as a result of the investigation would require
     certain cleanup measures; however, the Company believes
     that the cost of any such cleanup measures will not be
     material.
     
          In November 1996, Koppel received a Notice of
     Violation from the EPA alleging violations of the Clean
     Air Act and the Pennsylvania State Implementation Plan.  
     The violations allegedly occurred during 1995 and 1996 and
     pertain to air emissions from Koppel's electric arc
     furnace operations.   At this time, the Company is unable
     to determine if the EPA will assess civil penalties as a
     result of the alleged violations, or the extent of any
     such potential penalties.
     
          In March 1995, Koppel and the EPA signed a Consent
     Order relating to an April 1990 RCRA facility assessment
     (the Assessment) completed by the EPA and the Pennsylvania
     Department of Environmental Resources.  The Assessment was
     performed in connection with a permit application
     pertaining to a landfill that is adjacent to the Koppel
     facilities.  The Assessment identified potential releases
     of hazardous constituents at or adjacent to the Koppel
     facilities prior to the Company's acquisition of the
     Koppel facilities.  The Consent Order establishes a
     schedule for investigating, monitoring, testing and
     analyzing the potential releases.  Contamination
     documented as a result of the investigation requires
     cleanup measures and certain remediation has begun. 
     Pursuant to various indemnity provisions in agreements
     entered into at the time of the Company's acquisition of
     the Koppel facilities, certain parties have agreed to
     indemnify the Company against various known and unknown
     environmental matters.  The Company believes that the
     indemnity provisions provide for it to be fully
     indemnified against all matters covered by the Consent
     Order, including all associated costs, claims and
     liabilities.
     
          In two separate incidents occurring in fiscal 1993
     and 1992, radioactive substances were accidentally melted
     at Newport, resulting in the contamination of a quantity
     of electric arc furnace dust.  The Company is
     investigating and evaluating various issues concerning
     storage, treatment and disposal of the radiation
     contaminated  electric arc furnace dust; however, a final
     determination as to method of treatment and disposal, cost
     and further regulatory requirements cannot be made at this
     time.  Depending on the ultimate timing and method of
     treatment and disposal, which will require appropriate
     federal and state regulatory approval, the actual cost of
     disposal could substantially exceed current estimates and
     the Company's insurance coverage.    The Company expects
     to recover and has recorded a $2.3 million receivable
     relating to insurance claims for the recovery of disposal
     costs which will be filed with the applicable insurance
     carrier at the time such disposal costs are incurred.  As
     of December 28, 1996, claims recorded in connection with
     disposal costs exhaust available insurance coverage. 
     Based on current knowledge, management believes the
     recorded gross reserves of $4.4 million for disposal costs
     pertaining to these incidents are adequate.
     
          Subject to the uncertainties concerning the Consent
     Order and the storage and disposal of the radiation
     contaminated dust, the Company believes that it is
     currently in compliance in all material respects with all
     applicable environmental regulations.  The Company cannot
     predict the level of required capital expenditures or
     operating costs that may result from future environmental
     regulations.
     
          Capital expenditures for the next twelve months
     relating to environmental control facilities are expected
     to be approximately $1.0 million; however, such
     expenditures could be influenced by new and revised
     environmental regulations and laws or new information or
     developments with respect to the Company's operating
     facilities.
     
          As of December 28, 1996, the Company had
     environmental remediation reserves of $4.4 million, which
     pertain almost exclusively to accrued disposal costs for
     radiation contaminated dust.  As of December 28, 1996, the
     estimated range of possible losses related to the
     environmental contingency matters discussed above in
     excess of those accrued by the Company is $0 to $3.0
     million; however, with respect to the Consent Order, the
     Company cannot estimate the range of possible losses
     should the Company ultimately not be indemnified.  Based
     upon its evaluation of available information, management
     does not believe that any of the environmental contingency
     matters discussed above are likely, individually or in the
     aggregate, to have a material adverse effect upon the
     Company's consolidated financial  position, results of
     operations or cash flows.  However, the Company cannot
     predict with certainty that new information or
     developments with respect to the Consent Order or its
     other environmental contingency matters, individually or
     in the aggregate, will not have a material adverse effect
     on the Company's consolidated financial position, results
     of operations or cash flows.
     
     
     PART II   -    OTHER INFORMATION
     
     ITEM 1.        Legal Proceedings
     
          For a discussion regarding the Consent Order entered
     into by the Company and the EPA and the Notice of
     Violation received by Koppel from the EPA, see
     Management's Discussion and Analysis of Financial
     Condition and Results of Operations - Other Matters - 
     Environmental Matters.
     
     ITEM 6.        Exhibits and Reports on Form 8-K
     
          a)   Exhibits  - Reference is made to the Index to
     Exhibits, which is incorporated herein by reference.
     
          b)   Reports on Form 8-K - None.
     
     
     
     
     SIGNATURES
     
     Pursuant to the requirements of the Securities Exchange
     Act of 1934, the Registrant has duly caused this report to
     be signed on its behalf by the undersigned thereunto duly
     authorized.
     
     
                              NS GROUP, INC.
     
     
     
                                
     Date: February 3, 1997   By: /s/Clifford R. Borland        
                              Clifford R. Borland
                              Chairman and Chief Executive      
                              Officer
     
     
     
     
     Date: February 3, 1996   By:  /s/John R. Parker            
                              John R. Parker
                              Vice President and Treasurer
     
     INDEX TO EXHIBITS
     
     
     Number                 Description
     
     3.1   Amended and Restated Articles of Incorporation of
     Registrant, filed as Exhibit 3.1 to Amendment No. 1 to
     Registrants' Form S-1 dated January 17, 1995, File No.
     33-56637, and incorporated herein by this reference
     
     3.2  Amended and restated By-Laws of Registrant, dated
     December 4,1995, filed as Exhibit 3.2 to Company's Form
     10-K for the fiscal year ended September 30,1995, File No.
     1-9838, and incorporated herein by this reference
     
     4.21 Revolving Credit, Guaranty and Security Agreement
     among Bank of New York Commercial Corporation, PNC Bank
     Ohio, N.A., Newport, Koppel, Imperial, the Company,
     Erlanger, Northern Kentucky Air, Inc. and Northern
     Kentucky Management, Inc., filed as Exhibit 4.21 to
     Company's Form 10-Q for the quarterly period ended July 1,
     1995, File No. 1-9838, and incorporated herein by this
     reference; Amendment No. 1 dated October 23, 1995 and
     Amendment No. 2 dated December 21, 1995 filed as Exhibit
     4.21 to Company's Form 10-Q for the quarterly period ended
     December 30, 1995, File No. 1-9838, and incorporated
     herein by this reference; Amendment No. 3 dated February
     14, 1996, filed as Exhibit 4.1 to Company's Post-Effective
     Amendment No. 1 on Form S-3 to Form S-1 Registration
     Statement, Registration No. 33-56637, and incorporated
     herein by this reference; Amendment No. 4 dated September
     12,1996, filed as exhibit 4.21 to Company's Form 10-K for
     the fiscal year ended September 28,1996, File No. 1-9838,
     and incorporated herein by this reference; and Amendment
     No. 5 dated December 27, 1996, filed herewith 
     
     27   Financial Date Schedule