The following items were the
                                                subject of a Form 12b-25 and
                                                are included herein:Items 6,
                                                7, 8 and 14(a)(1).
                            
                              
                              SECURITIES AND EXCHANGE COMMISSION

                                   Washington, D.C.  20549


                                         FORM 10-K/A
        (mark one)

        *     Annual   Report  Pursuant  to  Section  13  or  15(d)  of  the
              Securities Exchange Act of 1934


                          For the fiscal year ended August 31, 1997

              Transition  Report  Pursuant  to  Section  13  or 15(d) of the
              Securities Exchange Act of 1934

                                     ____________________

                               Commission file number:  0-21192
                                     ____________________

                 CAMPO   ELECTRONICS,  APPLIANCES  AND  COMPUTERS, INC.
                (Exact name of registrant as specified in its charter)

           Louisiana                                       72-0721367
   (State or other jurisdiction           (I.R.S. Employer Identification No.)
 of incorporation or organization)

                 109 Northpark Blvd., Covington, Louisiana   70433
                  (Address of principal executive offices) (zip code)

         Registrant's telephone number, including area code:  (504) 867-5000
                                     ____________________

               SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                             None

                SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                                 Common Stock, $.10 par value

                                       (Title of class)

                                     ____________________

        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 by check mark if disclosure of delinquent  filers  pursuant
        to Item 405 of Regulation S-K is not contained herein, and will  not
        be  contained,  to the best of Registrant's knowledge, in definitive
        proxy or information  statements  incorporated  by reference in Part
        III of this Form 10-K or any amendment to this Form 10-K.  _____
                                     ____________________

        The aggregate market value of the voting stock held by nonaffiliates
        (affiliates being considered, for purposes of this calculation only,
        directors, executive officers and 5% shareholders) of the Registrant
        as of November 25, 1997 was approximately $4,098,985.
                                     ____________________

        The  number  of  shares of the Registrant's Common Stock,  $.10  par
        value per share outstanding, as of November 28, 1997 was 5,766,906.






       ITEM 6.    SELECTED FINANCIAL AND OPERATING DATA
                  (In  thousands,  except  per  share  amounts and operating
       data)

         The following statement of operations and balance  sheet  data  for
       fiscal  1993  through  fiscal  1997  are  derived  from the Company's
       audited financial statements, which were audited by Coopers & Lybrand
       L.L.P., independent certified public accountants.  The data set forth
       below should be read in conjunction with the financial  statements of
       the Company and the notes thereto included under Item 8 of  this Form
       10-K and "Management's Discussion and Analysis of Financial Condition
       and Results of Operations" included under Item 7 of this Form 10-K.  

<TABLE>
<CAPTION>

                                              Years Ended August 31,        
<S>                                    <C>         <C>         <C>         <C>         <C>
                                       1997        1996        1995        1994        1993  
Statement of Operations Data:(1) 
                                                                                       
Net sales                              $ 242,278   $ 294,967   $ 294,620   $ 194,621   $ 101,954
Cost of sales                            202,501     232,183     232,843     147,813      76,821
  Gross profit                            39,777      62,784      61,777      46,808      25,133
Selling, general and administrative  
 expenses                                 58,005      62,189      61,972      40,367      21,555
Professional services(2)                     376         879      -----       -----       ----- 
Severance costs(2)                           410         340      -----       -----       ----- 
Merger costs                              -----       -----          303      -----       ----- 
                                       ---------   ---------   ---------   ---------   ---------
  Operating income (loss)                (19,014)       (624)       (498)      6,441       3,578 

Other income (expense):             
  Interest expense                        (2,447)     (2,100)     (1,399)       (299)       (556) 
  Interest income                             92         137          95         125         179
  Other, net                                 212         445         503         409         255
                                       ---------   ---------   ---------   ---------   ---------
                                          (2,143)     (1,518)       (801)        235        (122)
                                       ---------   ---------   ---------   ---------   ---------
                                  
Income (loss) before income tax and  
 cumulative effect of change in       
 accounting principle                    (21,157)     (2,142)     (1,299)      6,676       3,456 
Income (expense) from 
 reorganization items:                                  
  Gain  (loss) on disposal of  
   assets(3)                              (5,338)     -----       -----       -----       ----- 
  Lease  rejection reserve on
   closed stores(3)                       (3,100)     -----       -----       -----       ----- 
  Write  down   of  impaired  
   goodwill(3)                              (640)     -----       -----       -----       ----- 
  Severance costs(4)                        (351)     -----       -----       -----       ----- 
  Restructuring(5)                          (957)     -----       -----       -----       ----- 
                                       ----------  ---------   ---------   ---------   ---------
                                         (10,386)     -----       -----       -----       ----- 
                                       ----------  ---------   ---------   ---------   ---------
Income tax expense (benefit)               2,690        (754)       (256)      2,519         815
                                       ----------  ---------   ---------   ---------   ---------
 Income (loss) before cumulative     
  effect of change in accounting       
  principle                              (34,233)     (1,388)     (1,043)      4,157       2,641
Cumulative effect of change in  
 accounting principle                     -----       -----       (1,892)     -----       -----
                                       ----------  ---------   ---------   ---------   ---------
Net income (loss)                      $ (34,233)  $  (1,388)  $  (2,935)  $   4,157   $   2,641
                                       ----------  ---------   ---------   ---------   ---------
                                       ----------  ---------   ---------   ---------   ---------
                                  
Pro Forma Statement of Operations Data: 
       
Net income (loss) as reported          $ (34,233)  $  (1,388)  $  (2,935)  $   4,157   $   2,641
Charge in lieu of federal and
 state income tax(6)                      -----       -----       -----       -----          407
Retroactive application of the
 straight-line method                     -----       -----       -----          422         357
Cumulative effect of change in  
 accounting principle                     -----       -----       (1,892)     -----       -----  
                                       ----------  ---------   ---------   ---------   ---------
Reported pro forma net income(7)       $ (34,233)  $  (1,388)  $  (1,043)  $   3,735   $   1,877
                                       ----------  ---------   ---------   ---------   ---------
                                       ----------  ---------   ---------   ---------   ---------
        
Per Share Data:   

Net income (loss) before cumulative  
 effect of change in accounting     
 principle                             $   (6.13)  $   (0.25)  $   (0.19)  $    0.91   $    0.80
                                       ---------   ---------   ---------   ---------   ---------
Cumulative effect of change in
 accounting principle                     -----       -----        (0.34)     -----      -----
                                       ---------   ---------   ---------   ---------   ---------
Net income (loss)                      $   (6.13)  $   (0.25)  $   (0.53)  $    0.91   $    0.80
                                       ---------   ---------   ---------   ---------   ---------
                                       ---------   ---------   ---------   ---------   ---------
Pro forma net income (loss)            $  -----    $  -----    $   (0.19)  $    0.81   $    0.57
                                       ---------   ---------   ---------   ---------   ---------
                                       ---------   ---------   ---------   ---------   ---------
Weighted average number of common
 shares outstanding                    5,584,509   5,566,906   5,565,942   4,590,391   3,306,069
                                       ---------   ---------   ---------   ---------   ---------
                                       ---------   ---------   ---------   ---------   ---------
                                       
Selected Operating Data:   
           
Store data(8) 
  Stores open at beginning of  
  period                                      31          31          21          22          12
  Stores opened or acquired                    0           0          14           6          13
  Stores closed or replaced                  (11)          0          (4)         (7)         (3)
                                       ---------   ---------   ---------   ---------   ---------
  Stores open at end of period                20          31          31          21          22
Average sales for stores open for      
  entire year period(9)                $   8,944   $   9,334   $  10,419   $   9,001   $   7,892
Percentage  change  in  comparable  
  sales(9)                                (14.1%)     (13.6%)       5.1%       28.5%       18.4% 
Approximate total square feet of
  store selling space at period end      309,210     491,000     491,000     252,474     245,184
Sales per weighted average selling  
  square foot(9)                       $     532   $     590   $     740   $     739   $     658   
  
Balance Sheet Data:           

Working capital                        $   4,592   $  15,824   $  18,535   $  12,594   $   8,478
Total assets                           $  74,132   $ 119,034   $ 135,710   $  97,122   $  71,396
Long-term debt, less current portion   $  18,368(10) $18,191   $  20,257   $     982   $   3,792
Shareholders'equity                    $     375   $  34,129   $  35,505   $  38,437   $  17,775
Dividends paid (11)                       -----       -----       -----       -----    $   1,247
                                          
</TABLE>
       __________
       (1)  Prior  to  February  1993, the Company operated as a corporation
            taxable as an S Corporation  under  the  Internal  Revenue Code.
            The  Company  terminated  its  S  Corporation status immediately
            prior to the effective date of its  February 1993 initial public
            offering.   Net  income  per  common  share   prior   to  the  S
            Corporation   rescission  is  not  included  because  management
            believes such information  is  not  relevant  in  light  of  the
            Company's termination of its S Corporation status.

       (2)  During  fiscal  1996,  the  Company  hired  a consulting firm to
            evaluate  and  refine  its  storeline  operations.    The  costs
            associated  with  these  consulting  services  of  $879,000 were
            expensed  during  fiscal 1996.  Also, in July 1996, two  of  the
            Company's executives  resigned  from the Company to pursue other
            opportunities.   The severance packages  associated  with  these
            resignations  of $340,000  were  expensed  in  July  1996.   The
            impacts of these  costs  (net of tax) on net income per share of
            the Company for the fiscal  year  ended  August  31,  1996  were
            decreases   of   $0.10   and   $0.04  per  share,  respectively.
            Professional services expensed in  fiscal  1997  were  $376,000.
            This  includes  $303,000 of services related to the  acquisition 
            of new computer software (the implementation of which  has  been  
            postponed).  Also, consultants were hired to assist in financial 
            planning for the Company and these  charges amounted to $73,000.  
            In fiscal  1997,  severance  was paid to  an  executive  of  the  
            Company who resigned  and  taxable  fringe  benefits  were  paid  
            to another executive  who  resigned  during  fiscal  1996. These 
            payments totaled $410,000 and were expensed in fiscal 1997.  The 
            impacts of these costs on  net loss per share of the Company for  
            the fiscal year ended August  31,  1997 were ($0.07) and ($0.07) 
            per share, respectively.

       (3)  As part of the Chapter 11 reorganization,  the  Company   closed 
            eleven stores and  one  warehouse  during fiscal 1997 and closed 
            another warehouse in October 1997.  A reserve was established to  
            provide  for costs  associated  with the rejection of leases for 
            the closed locations of  $3,100,000.   Loss  on  the disposal of 
            assets held at these locations was $5,338,000. These  items were 
            expensed during the fiscal  year  ended August 31, 1997.  It was  
            determined  that  goodwill  for two  locations  that  were  part  
            of  the Company's  acquisition of Shreveport Refrigeration, Inc. 
            was impaired and a  write   down   of  goodwill in the amount of 
            $640,000 was  expensed during fiscal 1997.  The impacts of these 
            costs on net loss per share of the Company  for  the fiscal year 
            ended August 31, 1997 were  ($0.56),  ($0.96)  and  ($0.11)  per 
            share, respectively.

       (4)  During  fiscal 1997, two of the  Company's  executives  resigned
            from the  Company  as part of the reorganization.  The severance
            packages paid to these  executives  totaled  $114,000  and  were
            expensed in fiscal 1997.  Also, due to the closure of locations,
            severance  packages  paid  to  the  employees at those locations
            totaled $237,000 and were expensed in  fiscal 1997.  The impacts
            of these costs on net loss per share of  the  Company for fiscal
            year ended August 31, 1997 were ($0.02) and ($0.04)  per  share,
            respectively.

       (5)  The  Company incurred increased consulting fees, legal fees  and
            fees associated  with  the  closing  of  locations.  These costs
            amounted to $957,000 and were expensed during  fiscal 1997.  The
            impact of these costs on the net loss per share  of  the Company
            for fiscal year ended August 31, 1997 was ($0.17) per share.

       (6)  Reflects  the  income taxes, at the applicable statutory  rates,
            for which provision would have been made if the Company had been
            a C Corporation for all periods presented.

       (7)  Pro forma net income  per  common  share  for  fiscal 1993 after
            giving  effect  to  the acquisition of Shreveport Refrigeration,
            Inc.  and retirement of  the  promissory  note  due  the  former
            majority shareholder was $2,816,863 and $0.79, respectively.

       (8)  The Company  closed  25  stores  and opened 24 new Campo Concept
            stores during fiscal 1993, 1994, 1995  and  1997.  Also reflects
            the purchase of nine locations of Shreveport Refrigeration, Inc.
            in  July  1993 and the September 1993 closing of  one  of  these
            locations.   Includes the March 1993 opening of a temporary site
            in Baton Rouge,  Louisiana  while  awaiting  the completion of a
            Campo Concept store opened in October 1993.

       (9)  Includes comparisons of new Campo Concept stores  to  previously
            existing  Company stores replaced by such Campo Concept  stores.
            The Company's  comparable  store  sales calculations include the
            effects of certain non-retail sales  to  commercial  buyers  and
            beginning in 1993, include net sales of extended warranty plans.
            If  non-retail  sales  were  excluded,  the percentage change in
            comparable store sales for fiscal 1994 and  1993 would have been
            22.1% and 16.8%, respectively.  Management believes  that  prior
            to  fiscal  1993,  non-retail  sales  did not have a significant
            impact  on  comparable store sales increases.   Sales  from  the
            Company's  three  Sound  Trek  locations  that  were  closed  in
            September 1993  and  January  1994  have  been excluded from the
            computation of comparable store sales beginning  in  the quarter
            in which they were closed.  Beginning in fiscal 1995, comparable
            store  sales were calculated using same store format and  retail
            sales only  and begin comparisons in the store's fifteenth month
            of operation.

       (10) See notes 6 and 7 of the financial statements.

       (11) Reflects payments  made  to  shareholders  for payment of income
            taxes prior to recission of Subchapter S election in conjunction
            with the Company's initial public offering.




       ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         The  following  should be read in conjunction  with  the  "Selected
       Financial and Operating Data" and the notes thereto and the financial
       statements  and notes thereto  of  the  Company  appearing  elsewhere
       herein.

       Fiscal 1997 Overview

         Net sales during fiscal 1997  showed  an 17.9% decrease from fiscal
       1996  levels,  and  the  Company experienced comparable  store  sales
       declines of 14.1% during fiscal  1997  as  compared  to  fiscal 1996,
       continuing  a  trend that began in the third quarter of fiscal  1995.
       The decline in comparable store sales reflects the combined impact of
       the general weakness  in  the  retail  consumer electronics industry,
       increased competition in many of the Company's  principal  markets, a
       slowdown  in  the  development of new products in consumer electronic
       categories and reduced spending levels of consumers for non-essential
       goods due to record  high  debt levels.  The decrease in net sales in
       1997 is attributable to the  comparable  store sales decline together
       with the closure of 11 stores in fiscal 1997.   The  relatively  soft
       level   of  consumer  demand  within  the  consumer  electronics  and
       appliance  industry  has created a highly competitive and promotional
       climate, which, in turn, has resulted in lower gross profit margins.

         Net loss for the fiscal years ended August 31, 1997, 1996 and 1995,
       before restructuring charges  and  certain  unusual  or non-recurring
       items  were  approximately  $10.6  million,  $632,000, and  $850,000,
       respectively.   Net  losses  for  each  of  these periods  after  the
       restructuring charges and unusual or non-recurring  items  were $34.2
       million,  $1.4  million  and $2.9 million, respectively.  The Company
       incurred $10.4 million in  restructuring  charges in fiscal 1997, and
       these  costs  are explained below under "Reorganization  Items."   In
       addition, the Company  incurred  unusual  or  non-recurring  items of
       approximately  $8.3 million affecting cost of sales and gross margin,
       $1.1 million affecting  selling, general and administrative expenses,
       $786,000 affecting professional  services  and  severance costs shown
       separately on the statements of operations, $305,000  affecting other
       income  (expenses),  net,  and  $2.7  million in income tax  expense.
       These items are explained below in the  respective  titled  sections.
       During  fiscal  1996, the Company also recorded certain non-recurring
       charges related to  professional consulting fees and severance costs,
       which aggregated approximately  $756,000  (after reduction for income
       taxes).   During  fiscal  1995,  the  Company recorded  certain  non-
       recurring charges related to merger costs  and  the cumulative effect
       of the change in accounting principle, which aggregated approximately
       $2.1 million (after reduction for income taxes).

         Net loss per weighted average common share in fiscal 1997, 1996 and
       1995, before the charges discussed above were $1.90,  $.11  and $.15,
       respectively.  Net loss per share in fiscal 1997, 1996 and 1995  were
       $6.13, $.25, and $.53, respectively.

         As  previously  disclosed,  the  poor  performance  of  the  retail
       industry  and  the  Company  over  an  extended period led management
       during fiscal 1996 to review the Company's  operations and to explore
       methods to improve operational efficiency and  reduce costs.  To that
       end, the Company implemented several initiatives  designed to improve
       the  Company's operations.  Although management believed  that  these
       measures, if given enough time, would have had a positive impact, the
       Company's  comparable store sales  continued  to  decline  as  retail
       industry conditions have continued to deteriorate, leading management
       to  conclude   during  the  first  quarter  of  fiscal  1997  that  a
       comprehensive review  of the Company's operations was appropriate for
       the purpose of developing  a  long-term  strategic  plan.  As part of
       this self-evaluative process, the Company hired a consulting  firm in
       the  third  quarter  that  specializes  in turning around financially
       troubled companies in consumer retail industries.   After  evaluating
       and   discussing  with  the  Board  of  Directors  several  different
       strategic  options, the consulting firm ultimately recommended to the
       Board  a  significant   downsizing   of   the  Company's  operations;
       specifically,  the closing of the nine stores,  in  addition  to  two
       unprofitable stores  that  had been closed in the second quarter, and
       the closure of one distribution  center.   In  addition,  in order to
       allow the Company to fully realize the operational benefits  from the
       closing of these facilities, the consulting firm recommended that the
       Company seek the protection of the federal bankruptcy laws, which the
       Company  did by filing a voluntary petition under Chapter 11 on  June
       4, 1997.   The  Company's use of this strategic tool was primarily to
       allow the Company  to  terminate  on a more favorable basis the long-
       term leases of the facilities identified for closure.  The Chapter 11
       filing was undertaken with   the   cooperation  and  support  of  the
       Company's bank group and floor plan lenders.

         Following the filing of its Chapter 11 petition, the Company closed  
       nine stores  and one distribution  center  in  July 1997. It also had
       previously  closed two stores in January 1997, located in Huntsville,
       Alabama and in  Jackson,  Mississippi.   The  facilities  which  were
       closed  in  July 1997 were (i) one store each in Tuscaloosa, Alabama;
       Longview, Texas, Texarkana, Texas; Jackson, Mississippi; Chattanooga,
       Tennessee; Alexandria,  Louisiana; and Lafayette, Louisiana, (ii) two
       stores  in  Memphis,  Tennessee   and  (iii)  the  Bessemer,  Alabama
       warehouse.  The Shreveport, Louisiana warehouse was closed subsequent
       to year-end in October 1997.  Inventory  at  the Shreveport warehouse
       was moved to a smaller warehouse leased beginning   in  October  1997
       that  is  adjacent  to  the  Company's remaining warehouse located in
       Harahan, Louisiana.

         Campo has implemented a number  of  changes  to reduce its variable
       expense structure in line with declining sales revenues.  The Company
       has  examined  closely  its  operations  at  all levels  to  identify
       opportunities for expense reduction.  The Company has streamlined its
       corporate structure in light of current business  conditions  through
       significant  staff  reductions in administrative positions.  In order
       to compensate for increasing paper costs, the Company has reduced the
       number of pages and frequency of its advertising tabloids.  Campo has
       outsourced functions  that  can  be  handled  by  a  third party more
       efficiently,  such  as  facilities  management and extended  warranty
       claims administration.  After the end  of  fiscal 1997, the Company's
       new management team implemented a number of  cost  reduction measures
       and  changes  which  should  result  in significant savings  for  the
       Company in the future.  The sales associate  commission  program  and
       the   extended   warranty  commission  program  were  reduced  to  be
       consistent with the  commission  structures  offered by the Company's
       competitors.  The Shreveport distribution center  was  closed and the
       Company's  distribution  operations  were  consolidated  in  the  New
       Orleans facility.  Store payrolls were put under tighter control  and
       corporate  office  payroll  was  reduced  further  through additional
       position eliminations.

       Results of Operations

         The  following  table  sets  forth, for the periods indicated,  the
       relative percentages that certain  income  and  expense items bear to
       net sales:
        


                                              Fiscal years ended August 31,   
                                              1997        1996        1995  
                                                
Net sales                                     100.0%      100.0%      100.0%
Cost of sales                                  83.6        78.7        79.0 
                                             -------     -------     -------
Gross profit                                   16.4        21.3        21.0
Selling,  general  and  administrative        
  expenses                                     23.9        21.1        21.1
Professional services                            .1         0.3       -----
Severance costs                                  .2         0.1       -----
Merger costs                                  -----       -----         0.1
                                             -------     -------     -------
Operating income (loss)                        (7.8)       (0.2)       (0.2)
Other income (expense)                          (.9)       (0.5)       (0.3)
                                             -------     -------     -------
Income  (loss) before income taxes and  
  cumulative   effect   of   change  in        
  accounting principle and  
  reorgnization items                          (8.7)       (0.7)       (0.5) 
Income  (expense)  from reorganization 
  items:                               
  Loss on disposal of assets                   (2.2)      -----       -----
  Lease rejection reserve on closed            
   stores                                      (1.3)      -----       -----
  Writedown of impaired goodwill                (.3)      -----       -----
  Severance costs                               (.1)      -----       -----
  Restructuring costs                           (.4)      -----       -----
                                             -------     -------     -------
                                               (4.3)      -----       -----
                                             -------     -------     -------  
Income tax expense (benefit)                    1.1        (0.2)       (0.1)
                                             -------     -------     -------
Income (loss) before cumulative effect  
 of change in accounting principle            (14.1)       (0.5)       (0.4)
Cumulative effect of change in accounting   
 principle                                    -----       -----        (0.6)
                                             -------     -------     -------
Net  income  (loss)  before cumulative 
 effect of change in                         
 accounting principle                         (14.1)       (0.5)       (1.0)
Cumulative effect of change in accounting    
 principle                                    -----       -----        (0.6)
                                             -------     -------     -------
Net loss                                       (14.1)%     (0.5)%      (0.4)%
                                             -------     -------     -------
                                             -------     -------     -------


       Comparison of Fiscal Years Ended August 31, 1997, 1996 and 1995

         Net  Sales.   Net  sales  were  $242.3  million, $295.0 million and
       $294.6 million for the fiscal years ended August  31, 1997, 1996, and
       1995, respectively, representing a decrease of 17.9%  and an increase
       of 0.12% in fiscal 1997 and 1996, respectively.  Net sales  decreased
       in  fiscal  1997 due to a decline in comparable store sales discussed
       below, the effect  of  closing  two  stores in the second quarter and
       nine  stores  in the forth quarter of 1997,  and  a  decline  in  the
       recognition of extended warranty revenue applicable to contracts sold
       before August 1, 1995 also discussed below.  In a period of declining
       comparable store  sales,  net sales increased slightly in fiscal 1996
       due primarily to the annualization of sales from the 14 stores opened
       during fiscal 1995 and the  impact  of  a  full  year's effect of the
       accelerated  recognition  of  extended  warranty  contracts   revenue
       discussed below.

         Comparable store sales decreased by 14.1% and 13.6% in fiscal  1997
       and  1996,  respectively.  The decreases in comparable store sales in
       both years were  due  to  increased  competition  in  those  existing
       markets  containing  the Company's comparable retail stores and  poor
       economic conditions affecting  the  retail  electronics  industry  in
       general.   There  has  also  been considerable price deflation in the
       retail market for computers, VCR's,  camcorders,  and  big screen and
       super-tube  television  sets.   Comparable  store  sales  were   also
       negatively   affected   by   the  Company's  filing  for  Chapter  11
       reorganization in the fourth quarter of fiscal 1997, as this resulted
       in  vendor  supply problems, inventory  out-of-stocks,  and  negative
       publicity with the buying public.

         Extended warranty revenue recognized under the straight-line method
       (applicable to those extended warranty contracts sold prior to August
       1, 1995) was  $5.8  million,  $8.4  million and $10.1 million for the
       years ended August 31, 1997, 1996 and  1995,  respectively.  Extended
       warranty  expenses  for  these same periods were $3.7  million,  $5.3
       million and $5.0 million,  respectively,  before  any  allocation  of
       other  selling, general and administrative expenses.  Since August 1,
       1995, the  Company  has  sold  to  an  unaffiliated  third  party all
       extended  warranty service contracts sold by the Company to customers
       on and after  such  date.   The  Company  records  the  sale of these
       contracts, net of any related sales commissions and the fees  paid to
       the  third  party,  as  a  component  of  net  sales  and immediately
       recognizes  revenue  upon  the sale of such contracts.  Although  the
       Company sells these contracts  at  a  discount,  the  amount  of  the
       discount  approximates  the  cost  the Company would incur to service
       these contracts, while transferring  the  full  obligation for future
       services  to  a  third  party.   Net  revenue from extended  warranty
       contracts sold to the third party for the entire 1997 and 1996 fiscal
       years and the one month of fiscal 1995  that such contracts have been
       sold was $7.3 million, $9.4 million, and $927,000, respectively.

         Gross Profit.  Gross profit for fiscal  1997  was $39.8 million, or
       16.4%  of net sales as compared to $62.8 million,  or  21.3%  of  net
       sales, for fiscal 1996, and $61.8 million, or 21.0% of net sales, for
       fiscal 1995.   The significant decline in the gross margin percentage 
       for 1997 was due primarily to the  effects of certain unusual or one-
       time charges to cost of sales totalling approximately $8.3 million or 
       3.5% of net sales. Higher than normal inventory shrink at the  eleven
       stores  closed  during  the  year (the going out of business or "GOB"
       stores) and selling inventory  below cost at GOB sales (instead of at
       normal margins) accounted for an  approximately $4.1 million decrease
       in  gross  margin dollars or a 1.7% decrease  in  the  overall  gross
       margin percentage.   An  increase  in the reserve for doubtful vendor
       receivables   over   and  above  normal  provisions   accounted   for
       approximately a $1.8 million  decrease  in  gross margin dollars or a
       0.7% decrease in the gross margin percentage.   This  was  due to the
       increased difficulty in collecting from vendors amounts due on volume
       rebates,  returned merchandise, cooperative advertising rebates,  and
       invoice price  differences.   As  a  result  of an improvement in its
       inventory  management  system that allows for better  control  and  a
       detailed review of inventory  and  controls at repair service centers
       used by the Company, the Company identified  and recorded charges for
       obsolete  and  damaged  goods  in the amount of $2.4  million.   This
       resulted in a 1.0% decrease in the gross margin percentage.

         Other items which contributed  to the gross margin decline included
       a reduction in the percentage level  of  vendor  rebates,  which  was
       caused by the Company's lower volume of purchases.  This resulted  in
       a 0.3% reduction in the gross margin percentage.  Deferred revenue on
       company  administered  warranty  contracts  issued prior to August 1,
       1995 is recognized in sales on a straight line basis over the life of
       the  contracts,  while  repair expenses are recognized  as  incurred.
       Revenue recognition declines as individual contracts expire, and this
       has resulted in a 0.6% decrease  in the gross margin percentage.  The
       remaining 0.5% decrease in the gross  margin percentage was caused by
       increased   competition   (both   in   number  of   competitors   and
       corresponding increased price competition).

         The slight increase in the gross margin  percentage  in fiscal 1996
       compared   to  fiscal  1995  is  due  primarily  to  the  net  margin
       contribution  of  the  Company's  accelerated recognition of revenues
       from  sales of its extended warranty  contracts  to  an  unaffiliated
       third party,  which  was  partially  offset by the negative impact of
       increased competition and soft demand  affecting  the retail industry
       in general.

         Selling, General and Administrative Expenses.  Selling, general and
       administrative  expenses for fiscal 1997 were $58.0  million  (before
       the consulting and  severance  costs discussed below) or 23.9% of net
       sales as compared to $62.2 million, or 21.1% of sales for fiscal 1996
       and $62.0 million, or 21.1% of sales  for  fiscal  1995.  Fiscal 1997
       selling, general and administrative expenses as a percentage of sales
       increased  over  the  prior  year due to a number of items  including
       certain unusual or non-recurring  charges  totaling  $1.1  million or
       0.5% of net sales.  As a result of a comprehensive review of  accrued
       advertising liabilities, the Company recorded an additional provision
       for  advertising  expense  totaling  $822,000  or  0.4% of net sales.
       Common  Stock  awards  were granted to certain key executives  as  an
       inducement to join the Company,  and  this  results  in an additional
       payroll expense provision of $289,000 or 0.1% of net sales.

         Excluding the unusual or non-recurring charges above,  fiscal  1997
       selling,  general  and administrative expenses as a percentage of net
       sales increased over  the  prior  year  due  to  an  increase  in the
       percentage  of  sales  related  to  advertising  costs, certain fixed
       payroll costs, depreciation expense and other expenses.   These costs
       did  not  decline  in  proportion  to  the  decline  in sales.  As  a
       percentage  of  sales,  advertising costs increased by 0.4%,  certain
       fixed payroll costs increased by 0.7%, depreciation expense increased
       by 0.3%, and all other selling,  general  &  administrative  expenses
       increased  by  0.7%.   Promotional  income from the Company's private
       label credit card, which is included  in this category, also declined
       by 0.2% of sales.  Fiscal 1996 selling,  general  and  administrative
       expenses  as  a  percentage of sales remained consistent with  fiscal
       1995 due primarily  to  an  increase  in  promotional  and other fees
       derived  from  the Company's private label credit card program  which
       was offset by the  effects  of  additional fixed costs related to the
       Company's expansion in fiscal 1995,  soft  retail sales on fixed cost
       ratios and increased advertising costs due primarily  to higher paper
       costs.

         During fiscal 1997, the Company hired a consulting firm  to  assist
       it  in  strategic  and  financial planning.  It also hired a software
       firm to tailor software packages  and  train  all  of  the  Company's
       personnel  on  a new financial and inventory system which was planned
       to be installed  and  implemented  during  the year.  As explained in
       Item 1 of this Form 10-K, the project was interrupted  prior  to full
       implementation  due to the Chapter 11 Bankruptcy filing and the  cash
       position of the Company.    The costs associated with the services of
       both of these firms of  $376,000 were expensed in fiscal 1997.  Also,
       in fiscal 1997, two of the Company's  executives  resigned  from  the
       Company to pursue other opportunities.  Severance packages associated
       with these resignations of $410,000 were expensed during the year.

         During fiscal 1996, the Company hired a consulting firm to evaluate
       and  refine  its  store  line  operations.   Together,  the Company's
       management  and  the consulting firm established and implemented  the
       "Superior Customer  Service"  strategy,  which  focuses  on improving
       customer service and reducing costs by streamlining store operational
       procedures.   The  cost associated with these consulting services  of
       $879,000 were expensed during fiscal 1996.  Also, in fiscal 1996, two
       of the Company's executives  resigned from the Company, and severance
       packages totaling $340,000 were expensed.

         Other   Income   (Expense).    Interest    expense   increased   by
       approximately $346,000 and $700,000 in fiscal  years  1997  and 1996,
       respectively.   Interest  expense  is net of discount income received
       from  floor  plan  lenders,  who pass along  certain  of  the  vendor
       discounts on floor plan purchases  to  the Company.  Interest expense
       increased in fiscal 1997 due to a decrease  in  this  discount income
       caused by a reduction in inventory purchases.  The increase in fiscal
       1996  was  due  primarily  to  the Company using fixed and short-term
       borrowing arrangements to restructure  the  debt incurred to fund the
       Company's expansion in fiscal 1995.   Other  income (expense) in 1997 
       also included an unusual or one-time loss  on  the  sale  of  certain  
       marketable  securities   totaling approximately $305,000. 
       

         Reorganization  Items.   The  Company  closed eleven stores and one
       warehouse  in  fiscal  1997  and  closed an additional  warehouse  in
       October 1997, as discussed in Item  1 of this Form 10-K.  As a result
       of the closures in fiscal 1997, leasehold  improvements  were written
       off  and  furniture  and  fixtures  were  either written off or  sold
       resulting  in  a  loss on disposal of assets of   $4.5  million.   In
       addition, the Company  provided  a  reserve  for expected write-downs
       related to the additional warehouse closed in  October  1997 totaling
       $468,000.  $383,000 in deferred software costs were written  off  due
       to  a  decision to delay indefinitely a conversion to a new financial
       and inventory  management computer system.  As part of the Bankruptcy
       process, the Company  has  rejected  certain closed store leases with
       Court approval.  The Bankruptcy law provides  for  a specific formula
       calculation of the rejected lease liability which must  be recognized
       as  an  unsecured  liability.   As a result of this calculation,  the
       Company has recorded a lease rejection  reserve  of  $3.1 million for
       fiscal  year  1997.   During  fiscal  1997,  goodwill was reduced  by
       $640,000 due to the closure of two store locations in Texas that were
       part  of  the 1993 Shreveport Refrigeration, Inc.  acquisition.   The
       resignation  of  two executives as part of the reorganization process
       and severance amounts  paid  related to closed stores resulted in the
       $351,000  severance  pay expense  in  this  category.   Restructuring
       charges  recorded  by  the   Company  totaled  $957,000  and  include
       professional and consulting fees  directly  related to the Chapter 11
       filing and reorganization.  Of this amount, $331,000  was paid to one
       consulting  firm  hired  in  fiscal  1997  to  assist the Company  in
       restructuring the organization and its debt.  $210,000  was  paid  to
       several  legal firms involved in the Chapter 11 filing and bankruptcy
       process, and  $97,000  was  paid  to a professional employment agency
       related to the Company's search for  a  new  Chief Executive Officer.
       $50,000 was paid in credit fees related to establishing the Company's
       debtor-in-possession  line  of credit of $3 million.   The  remaining
       amount was paid for various expenses  and consultants involved in the
       going out of business sales at closed stores.

         Income Taxes.  The Company's effective  income tax rate was (8.5%),
       35.2%, and 19.7% for the fiscal years ended August 31, 1997, 1996 and
       1995, respectively.  The effective rate of the income tax benefit for
       fiscal 1997 was negatively impacted by the  recording  of a valuation
       allowance  related  to  deferred  tax  assets.  This resulted  in  an
       unusual net charge to income tax expense  of $2.7 million.  Excluding
       the  valuation  allowance, the effective income  tax  rate  would  be
       36.9%.

       Liquidity and Capital Resources

         Historically, the  Company's primary sources of liquidity have been
       from cash from operations,  revolving  lines  of credit, and from the
       Company's initial and secondary public offerings.   Net  cash used in
       operating  activities  was ($4.4) million in fiscal 1997 compared  to
       $3.2 million provided by operations in fiscal 1996 and ($2.1) million
       used by operations in fiscal  1995.   The  increase  in  cash used in
       operating  activities  in fiscal 1997 reflects the large decrease  in
       earnings as adjusted for  non-cash  charges and reorganization items,
       which was partially offset by the effect  of decreases in inventories
       and receivables.  Total assets at August 31, 1997 were $74.1 million,
       a  decrease  of  $44.9  million (37.7%) from August  31,  1996.   The
       decrease in assets includes  decreases  of $6 million in receivables,
       $24.4 million in inventories, $4.3 million  in  deferred  tax assets,
       and $8.6 million in net property and equipment.

         The  Company  incurred  capital  expenditures  of $1.7 million  and
       $949,000   during   the  years  ended  August  31,  1997  and   1996,
       respectively.  These  expenditures  were primarily in connection with
       new   computer  equipment  and  software  purchases   and   leasehold
       improvements     funded     with    mostly    short-term  borrowings.
       Virtually  all  of  the  1997 capital expenditure  amount  above  was
       incurred prior to the Chapter  11  Bankruptcy filing on June 4, 1997.
       The Company also purchased $500,000  in  U.  S. Treasury Bills during
       the  year.  At August 31, 1997, there was a balance  of  $421,000  in
       U.S. Treasury  Bills  which were pledged to support certain executive
       employment  and severance  agreements.  
       
         Long-term debt  as  of  August  31,  1997,  consisted of three term
       loans,  one  with  a  bank  group,  and  the  others  with  financial
       institutions.   Effective June 1, 1996, the loan agreement  with  the
       banks was amended such that  the  term loan and a previously existing 
       line of credit would bear interest at the Prime Rate. On December  1,  
       1996, the term loan and  line  of  credit facility with the banks was 
       further  amended to (i) to  accelerate  the  maturity  date  on  both 
       facilities from  August 31, 1998 to  September 1, 1997, (ii) decrease 
       the amount available  under  the  line  of  credit to $5 million from 
       January 1, 1997 through maturity,  (iii)   provide   waivers  of  the 
       Company's non-compliance with certain  financial covenants for August  
       31,  1996  and  the  first quarter of  fiscal  1997,  suspend certain 
       financial  covenants  through  maturity and  amend   other  financial  
       covenants in line with the Company's  fiscal 1997 budget and (iv) add 
       certain  inventory collateral to secure both facilities.  The Company 
       paid a small  fee  to secure the waivers  and  also  agreed   to   an 
       increase in the quarterly commitment fee   payable  on  the  unfunded 
       amounts under the line of credit  facility.  The loan  agreement with 
       the banks was further  amended  on  June 25,  1997 to consolidate the 
       note  with  the  outstanding  balance  on  the  then existing line of 
       credit,  extend  the  term  of the note to 36 months, and  change the  
       interest  rate to 9%.  Interest  only  payments are due quarterly for 
       the first  year,  with  nine  fixed quarterly  principal  payments of 
       $223,000 plus   accrued interest to begin after one year.  A  balloon  
       payment is due on the remaining balance of the note at June 27, 2000.   
       Outstanding amounts pursuant to  this  agreement  are  collateralized  
       by  the Company's real  estate.  The  outstanding  principal  balance  
       and applicable interest rate on this  loan  as of   August   31, 1997 
       were  $18.4  million and 9%, respectively.

         The   term   loan   with  the  banks  contains  certain   reporting
       requirements and restrictive  covenants  which require the Company to
       maintain certain minimum annual earnings levels  and  working capital
       levels.  This term loan also contains a cross default provision  with
       all  other  debt  instruments  of  the  Company and a provision which
       prohibits the Company from paying dividends  on its common stock.  As
       of August 31, 1997, the Company was not in compliance with certain of 
       the covenants contained in the bank term  loan, and was in default of 
       this  agreement  due  to  these  violations  as well as certain cross 
       default provisions. However, on December 12, 1997 the Company obtained
       the agreement of the lenders to forebear through  September  1,  1998 
       the  enforcement of their rights and  remdies  under  the  term  loan 
       agreement contingent upon the approval of this forebearance agreement
       and an agreement requiring the payment of certain  professional  fees
       to the banks  by the Bankruptcy Court.  The Company  believes  it  is 
       probable that the Bankruptcy Court will approve these agreements. The
       forebearance agreement also provides that the lenders  will  forebear 
       the enforcement of their rights and  remedies  through  September  1, 
       1998 if the  Company  were  to  violate  certain  financial covenants 
       relating to minimum annual earnings and working capital levels during 
       that period, which the Company does not expect to comply with in  the 
       upcoming fiscal year.

         The principal balance of the first of the other term loans was $3.8
       million  as  of August 31, 1997 and accrues interest  at  7.19%  (the
       average weekly  yield of 30 Day Commercial paper plus 1.8%), with the
       balance of all outstanding  principal  due and payable at maturity on
       August 30, 2002.  The furniture, fixtures  and  equipment  at various
       locations  leased  by  the  Company collateralize outstanding amounts
       pursuant to this agreement.  The balance on this note is carried as a
       liability subject to compromise.   The second of the other term loans
       was  $297,000 as of August 31, 1997,  and  accrues  interest  payable
       monthly at an annual rate of 9%.  The note is divided equally between
       two instruments,  one  with a maturity date of September 1, 1999, and
       the second with a maturity  date  of  December  1, 1999.  The note is
       secured by certain computer software.

         As of August 31, 1997, the Company also uses several  "floor  plan"
       finance companies to finance the majority of its inventory purchases.
       In  addition,  the  Company  finances some of its inventory purchases
       through open-account arrangements  with various vendors.  The Company
       has  an  aggregate  borrowing  limit  with  the  floor  plan  finance
       companies of approximately $43.5 million  with outstanding borrowings
       being   collateralized   with   merchandise  inventory   and   vendor
       receivables.  Payment terms under  these  agreements are on a "pay as
       sold" basis, with the Company being required to pay down indebtedness
       on a daily basis as the financed goods are  sold.   Each of the floor
       plan  financing  agreements contains cross default clauses  with  all
       other debt instruments  of  the  Company.  As of August 31, 1997, the
       Company was not in compliance with several covenants contained in the 
       floor plan agreements and was also in default  of  those  floor  plan
       agreements due to its failure to make certain  payments  required  by 
       the agreements  relating  to  inventory  shortages  and  obsolescence 
       identified by the Company.  The Company obtained waivers for some  of 
       these violations  and  as  of  December 11,  1997  had  obtained  the 
       agreement of each of the floor plan lenders to forebear their  rights 
       and remedies pursuant to the floor plan agreements  subject  to:  (i)
       the Company's payment of approximately $1,654,000 in principal,  plus
       interest at the prime rate plus 3%, to  the  floor  plan  lenders  at 
       various dates through December 15,  1998;  and  (ii)  the approval of 
       these forebearance agreements  by  the  Bankruptcy Court.  Management 
       believes that sufficient liquidity will  exist  during  the  upcoming  
       year to fund those required payments and that it is probable that the 
       Bankruptcy Court will approve these forebearance agreements.

         The Company  has  also   obtained   debtor   in  possession ("DIP") 
       financing from two of its floor plan lenders in the  form  of  a   $3 
       million line of credit. The line of credit matures  at   December 31, 
       1998  and  bears  interest   at   prime  plus  3%,  payable  monthly,  
       with two principal  payments  of  $1.5  million each due December 31, 
       1997  and December 31, 1998. The primary use of the line of credit is 
       to finance  inventory purchases  during  peak periods.   This line of 
       credit, together  with  amounts owed under such  lenders'  floor plan 
       financing arrangements, is collateralized  by  merchandise  inventory   
       and  the  Company's anticipated federal income tax refund, as well as 
       by a broad  lien on all  of  the  Company's  other  assets.  The line 
       of credit financing  agreement   contains  certain covenants, a cross 
       default clause with all other debt instruments of the Company, and it 
       prohibits the Company from  spending  more  than  $50,000 per year on 
       capital  expenditures without approval.  As of August  31,  1997, the  
       Company was not in compliance  with  certain  reporting  requirements
       and  covenants contained  in  this  agreement, but  the  Company  has
       obtained the forebearance agreements discussed above.

         Net  cash  provided by financing activities  was  $4.8  million  in
       fiscal 1997, compared to $(2.1) million used in financing  activities 
       in fiscal 1996 and $21.5 million provided in fiscal 1995.  The source 
       of cash in 1997 resulted  from long-term borrowings, net of payments, 
       of $1.8 million from term loans, and short-term  borrowings,  net  of
       payments, of $3.0  million  from  the  new  DIP  line of credit.  The
       primary use of cash in fiscal 1996 consisted of principal payments on
       the term loans.  The primary source of cash during  fiscal  1995  was
       derived  from  short-term borrowings, which were refinanced in August
       1995 through term loans with three banks and a financial institution.

         Since the Company  filed  for  Chapter  11  reorganization,  it has
       closed  nine  stores  and  two warehouses, has cut corporate overhead
       expenses and store operating  expenses,  and  has  initiated  several
       strategies  designed  to improve operating performance (as more fully
       explained in Item 1 of  this  Form  10-K).  Based upon projections of
       its operating results, the Company believes  that its existing funds,
       its operating cash flows, the available DIP line  of credit discussed
       above, and the vendor and inventory financing arrangements  discussed
       above are sufficient to satisfy expected cash requirements in  fiscal
       1998.   However,  there  is no assurance that the Company's projected
       operating results will be  achieved  during fiscal 1998.  The Company
       may require additional working capital  financing in fiscal 1999 when
       the balance of the line of credit becomes due on December 31, 1998.

         Based upon the financial statements at August 31, 1997, the Company
       does not meet all of the listing requirements  of the Nasdaq National
       Market.   If  the  Company's  Common Stock were to be  delisted,  the
       Company's common shareholders would  likely experience a reduction in
       the liquidity of their shares.

       Seasonality

         Seasonality affects the Company's financial results as it does with
       most retail businesses.  Net sales and  gross  margin  on a quarterly
       basis   are  impacted  by  fluctuations  in  the  level  of  consumer
       purchases,  seasonal demand for certain product categories, timing of
       Company  promotional  programs  and  fluctuations  in  manufacturer's
       rebate programs.   Net  sales tend to be highest during the Company's
       second and fourth fiscal  quarters.   The  second quarter, commencing
       December 1, is favorably impacted by the Christmas selling season and
       during the fourth quarter the Company benefits  from  the summer peak
       in  sales of room air conditioners and other refrigeration  products.
       The Company's  unaudited quarterly operating results for each quarter
       of fiscal 1997 and 1996 were as follows:

         The  Company's  unaudited  quarterly  operating  results  for  each
       quarter of fiscal 1997 and 1996 were as follows:

Fiscal 1997
(In thousands, except per share amounts)
                                     First      Second     Third      Fourth
                                     Quarter    Quarter    Quarter    Quarter
                                     Ended      Ended      Ended      Ended  
                                     Nov. 30,   Feb. 28,   May 31,    Aug.31,
        
Net sales                            $ 65,763   $ 78,295   $ 51,030   $ 47,191
Gross profit                           12,870     11,683      8,207      7,017
Net income (loss)                        (806)   (14,391)    (8,502)   (10,533)
Per Share Data:            
  Net income (loss)                  $  (0.14)  $  (2.59)  $  (1.53)  $  (1.87)

Fiscal 1996
(In thousands, except per share amounts)
                                     First      Second     Third      Fourth 
                                     Quarter    Quarter    Quarter    Quarter
                                     Ended      Ended      Ended      Ended  
                                     Nov. 30,   Feb. 29,   May 31,    Aug. 31,
   
Net sales                            $ 78,955   $ 89,865   $ 60,189   $ 65,958
Gross profit                           17,877     18,298     12,919     13,690
Net income (loss)                         275        468     (1,402)      (729)
Per Share Data:            
  Net income (loss)                  $   0.05   $   0.08   $  (0.25)  $  (0.13)


       Impact of Inflation

         In management's  opinion,  general inflation has not had a material
       impact on the Company's financial  results  for the past three years.
       However,  technological advances coupled with  increased  competition
       have caused retail prices on many of the Company's product catagories
       to decline  requiring  the  Company  to sell more units of product to
       maintain the same sales dollars.  Those  products that have increased
       in  price  have  in  most  cases  done  so in proportion  to  current
       inflation rates.  Management does not anticipate  that inflation will
       have  a  material  impact on the Company's financial results  in  the
       future.

       Impact of Accounting Standards

         In February 1997, the Financial Accounting Standards Board ("FASB")
       issued two Statements  of  Financial  Standards,  Statement  No. 128,
       "Earnings   Per   Share"   and  Statement  No.  129,  "Disclosure  of
       Information About Capital Structure,"  both  effective  for financial
       statements  issued  for  periods ending after December 15, 1997.   In
       June 1997, the FASB issued  two  Statements  of  Financial Accounting
       Standards,  Statement  No. 130 "Reporting Comprehensive  Income"  and
       Statement No. 131 "Disclosures  about  Segments  of an Enterprise and
       Related Information," both effective for fiscal years beginning after
       December 15, 1997.  Management believes adoption of  these statements
       will have a financial statement disclosure impact only  and  will not
       have   a   material  effect  on  the  Company's  financial  position,
       operations or cash flows.

       Forward-Looking Statements

         This report  contains forward-looking statements (as defined in the
       Private Securities  Litigation  Reform  Act of 1995) representing the
       Company's  current  expectations, beliefs,  estimates  or  intentions
       concerning the Company's  future  performance  and operating results,
       its  products, services, markets and industry, and/or  future  events
       relating to or effecting the Company and its business and operations.
       When used in this report, the words "believes," "estimates," "plans,"
       "expects,"  "intends," "anticipates," and similar expressions as they
       relate  to the  Company  are  intended  to  identify  forward-looking
       statements.   Although  the  Company  believes  that the expectations
       reflected in such forward-looking statements are  reasonable,  it can
       give  no  assurance  that  such  expectations will prove to have been
       correct.   Important  factors  that could  cause  actual  results  or
       achievements of the Company to differ materially from those indicated
       by the forward-looking statements  include,  without  limitation, the
       effectiveness of the Company's business and marketing strategies, the
       product  mix  sold  by the Company, customer demand, availability  of
       existing  and  new  merchandise   from,  and  the  establishment  and
       maintenance of relationships with,  suppliers,  price competition for
       products  and services sold by the Company, management  of  expenses,
       gross  profit   margins,  availability  and  terms  of  financing  to
       refinance or repay  existing financings or to fund capital needs, the
       continued and anticipated growth of the retail home entertainment and
       consumer electronics  industry,  a change in interest rates, exchange
       rate fluctuations, the seasonality  of the Company's business and the
       other risks and factors detailed in this  report and in the Company's
       other filings with the SEC.  These risks and uncertainties are beyond
       the ability of the Company to control.  In  many  cases,  the Company
       cannot  predict  all of the risks and uncertainties that could  cause
       actual results to  differ  materially  from  those  indicated  by the
       forward-looking  statements.   All forward-looking statements in this
       report are expressly qualified in  their  entirety  by the cautionary
       statements in this paragraph.


       ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                 CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
                           INDEX TO FINANCIAL STATEMENTS


                                                                           Page
Campo Electronics, Appliances and Computers, Inc. - Financial Statements
         Report of Independent Accountants                                  14
         Balance Sheets as of August 31, 1997 and 1996                      15
         Statements of Operations for the Years Ended August 31, 
           1997, 1996, and 1995                                             16
         Statements of Shareholders' Equity for the Years Ended
           August 31, 1997, 1996, and 1995                                  17
         Statements  of Cash Flows for the Years Ended August 31,
           1997, 1996 and 1995                                              18
         Notes to Financial Statements                                      19



                         REPORT OF INDEPENDENT ACCOUNTANTS


       To the Shareholders
       Campo Electronics, Appliances and Computers, Inc.

       We have audited the accompanying balance sheets of Campo Electronics,
       Appliances and  Computers, Inc. (the "Company") as of August 31, 1997
       and 1996, and related  statements of operations, shareholders' equity
       and cash flows for each of the three years in the period ended August
       31, 1997.  These financial  statements  are the responsibility of the
       Company's management.  Our responsibility is to express an opinion on
       these financial statements based on our audits.

       We  conducted  our  audits  in  accordance  with  generally  accepted
       auditing standards.  Those standards require that we plan and perform
       our audit to obtain reasonable assurance about  whether the financial
       statements  are  free  of material misstatement.  An  audit  includes
       examining,  on a test basis,  evidence  supporting  the  amounts  and
       disclosures in  the  financial  statements.   An  audit also includes
       assessing  the  accounting principles used and significant  estimates
       made by management,  as  well  as  evaluating  the  overall financial
       statement  presentation.   We  believe  that  our  audits  provide  a
       reasonable basis for our opinion.

       In  our  opinion,  the financial statements referred to above present
       fairly, in all material  respects,  the  financial  position of Campo
       Electronics, Appliances and Computers, Inc. as of August 31, 1997 and
       1996, and the results of its operations and its cash  flows  for each
       of the three years in the period  ended August 31, 1997 in conformity
       with generally accepted accounting principles.

       The  accompanying  financial  statements  have been prepared assuming
       that the Company will continue as a going concern.   The  Company has
       suffered recurring losses from operations and incurred a net  loss of
       $34.2  million for the year ended August 31, 1997.  Additionally,  as
       discussed in Note 2 to the financial statements, on June 4, 1997, the
       Company  filed  a petition for reorganization under Chapter 11 of the
       U.S. Bankruptcy Code.   The Company has not yet prepared or submitted
       a  plan  of  reorganization.    These   items,  among  others,  raise
       substantial doubt about the Company's ability  to continue as a going
       concern.   The  financial statements do not include  any  adjustments
       that might result from the outcome of this uncertainty.


       /s/ COOPERS & LYBRAND L.L.P.
       COOPERS & LYBRAND L.L.P.

       New Orleans, Louisiana

       November 14, 1997, except as to Note six and Note seven, as to  which 
       the date is December 12, 1997.


 
                CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
                             (DEBTOR-IN-POSSESSION)
                                BALANCE SHEETS
                          AUGUST 31,1997 AND 1996

                                                    1997        1996
          ASSETS
Current assets:
   Cash and cash equivalents                $  1,640,849 $  3,303,822
   Investments in marketable securities          421,431      129,788
   Receivables (net of an allowance of $1.6 
   million in 1997 and $2.9 million in 1996)   8,603,894   14,561,102
   Merchandise inventory                      31,951,502   56,387,842
   Deferred income taxes                        ------      3,033,000
   Other                                         873,200      471,399
                                            ------------ ------------
      Total current assets                    43,490,876   77,886,953
                                            ------------ ------------

Property and equipment, net                   27,741,034   36,376,959
Deferred income taxes                           ------      1,234,000
Intangibles and other                          2,899,774    3,535,639
                                            ------------ ------------
                                            $ 74,131,684 $119,033,551
                                            ------------ ------------

            LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities not subject to compromise:
Current liabilities:
      Current portion of long-term debt     $    350,438 $  2,478,179
      Short-term borrowings                    3,000,000     ------
      Post-petition accounts payable           1,311,816    3,844,201
      Accounts payable-floor plan             23,661,531   43,949,585
      Post-petition accrued expenses           7,861,586    7,169,218
      Deferred revenue                         2,713,040    4,621,294
                                            ------------ ------------
         Total current liabilities            38,898,411   62,062,477
                                            ------------ ------------

   Long-term debt, less current portion       18,368,005   18,191,371
   Deferred revenue                            1,937,256    4,650,296
                                            ------------ ------------
         Total long-term liabilities          20,305,261   22,841,667
                                            ------------ ------------

Liabilities subject to compromise             14,552,674     ------
                                            ------------ ------------
         Total liabilities                    73,756,346   84,904,144
                                            ------------ ------------
Commitments and contingencies

Shareholders' equity:
Common shock, $.10 par value, 20,000,000 
   shares authorized, 5,791,906 and 
   5,566,906 issued and outstanding at 
   August 31,1997 and 1996, respectively         579,191      556,691
Paid-in capital                               32,639,856   32,373,306
Retained earnings (deficit)                  (32,843,709)   1,388,849
Less:  Unrealized loss on marketable       
     securities                                 ------       (189,439)
                                           ------------- ------------
      Total shareholders' equity                 375,338   34,129,407
                                           ------------- ------------
                                            $ 74,131,684 $119,033,551
                                           ------------- ------------


The accompanying notes are in integral part of these financial statements.


                 CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
                            (DEBTOR-IN-POSSESSION)
                           STATEMENTS OF OPERATIONS
                FOR THE YEARS ENDED AUGUST 31,1997,1996 AND 1995

                                        1997          1996           1995
                                   -------------- -------------- --------------
Net Sales                          $ 242,278,066  $ 294,967,168  $ 294,619,960
Cost of sales                        202,501,396    232,182,625    232,842,703
                                   -------------- -------------- --------------
   Gross profit                       39,776,670     62,784,543     61,777,257

Selling, general and 
  administrative expenses             58,005,013     62,188,708     61,972,378
Professional services                    376,000        879,368       ------
Severance costs                          410,104        340,430       ------
Merger costs                              ------         ------        303,413
                                   -------------- -------------- --------------
   Operating loss                    (19,014,447)      (623,963)      (498,534)

Other income (expense):
   Interest expense                   (2,446,894)    (2,100,590)    (1,399,388)
   Interest income                        92,229        137,386         94,602
   Other, net                            213,317        445,106        504,075
                                   -------------- -------------- --------------
                                      (2,141,348)    (1,518,098)      (800,711)
                                   -------------- -------------- --------------
   Loss before income taxes, 
     cumulative effect of change 
     in accounting principle and
     reorganization items            (21,155,795)    (2,142,061)    (1,299,245)

Income (expense) from 
  reorganization items:
   Loss on disposal of assets         (5,338,472)      ------          ------
   Lease rejection reserve on 
     closed facilities                (3,100,000)      ------          ------
   Write down of impaired goodwill      (640,000)      ------          ------
   Severance costs                      (351,105)      ------          ------
   Other restructuring charges          (957,186)      ------          ------
                                   -------------- -------------- --------------
                                     (10,386,763)      ------          ------
                                   -------------- -------------- --------------
Income tax expense (benefit)           2,690,000       (754,000)      (256,000)
                                   -------------- -------------- --------------
Net loss before cumulative 
   effect of change in 
   accounting principle              (34,232,558)    (1,388,061)    (1,043,245)
Cumulative effect of change 
   in accounting principle 
   (Note 3)                             ------         ------       (1,891,948)
                                   -------------- -------------- --------------
Net loss                           $ (34,232,558)  $ (1,388,061) $  (2,935,193)

Per share data:
   Net loss before cumulative 
     effect of change in
     accounting principle                 ($6.13)        ($0.25)        ($0.19)
   Cumulative effect of 
     change in accounting
     principle                          ------        ------            ($0.34)
                                   -------------- -------------- --------------
   Net loss                               ($6.13)        ($0.25)        ($0.53)
                                   ============== ============== ==============
   Weighted average number of 
     common shares outstanding         5,584,509      5,566,906      5,565,942

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

<TABLE>
<CAPTION>


             CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC. 
                         (DEBTOR-IN-POSSESSION)
                   STATEMENTS OF SHAREHOLDERS' EQUITY
           FOR THE YEARS ENDED AUGUST 31,1997, 1996 AND 1995

                                                                      Retained
                                     Common Stock                     Earnings                                Total
                                 Shares                  Paid-in    (Accumulated    Unearned               Shareholders'
                               Outstanding    Amount     Capital      Deficit)   Compensation      Other      Equity
                              ------------ ----------- ------------ ------------ ------------- ----------- -------------
<S>                            <C>         <C>         <C>         <C>           <C>           <C>        <C>
Balance, September 1,1994       5,558,906  $  555,891  $32,310,606 $  5,712,103  $  (141,750)  $  ------  $ 38,436,850
Stock options exercised             8,000         800       62,700      ------       ------       ------        63,500
Unrealized loss on marketable
   securities                     ------      ------       ------       ------       ------     (134,767)     (134,767)
Amortization of stock awards      ------      ------       ------       ------        74,250      ------        74,250
Net loss                          ------      ------       ------    (2,935,193)     ------       ------    (2,935,193)
                               ----------- ----------- ------------ ------------ ------------- ----------- -------------
Balance, August 31,1995         5,566,906     556,691   32,373,306    2,776,910      (67,500)   (134,767)   35,504,640


Unrealized loss on marketable
   securities                     ------      ------       ------       ------       ------      (54,672)      (54,672)
Amortization of stock awards      ------      ------       ------       ------        67,500      ------        67,500
Net loss                          ------      ------       ------    (1,388,061)     ------       ------    (1,388,061)
                               ----------  ----------  ----------- ------------  ------------  ---------- -------------
Balance, August 31,1996         5,566,906     556,691   32,373,306    1,388,849      ------     (189,439)   34,129,407


Stock awards                       75,000       7,500       87,800      ------       ------       ------        95,300
Restricted stock awards           150,000      15,000      178,750      ------       ------       ------       193,750
Realized loss on securities       ------      ------       ------       ------       ------      189,439       189,439
Net loss                          ------      ------       ------   (34,232,558)     ------       ------   (34,232,558)
                               ----------  ----------  ----------- ------------  ------------  ---------- -------------   
Balance, August 31,1997         5,791,906  $  579,191  $32,639,856 $(32,843,709) $   ------    $  ------  $    375,338
                               ----------  ----------  ----------- ------------  ------------  ---------- ------------- 
                               ----------  ----------  ----------- ------------  ------------  ---------- -------------  
                                                                                                          
</TABLE>

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

               CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC. 
                          (DEBTOR-IN-POSSESSION)
                        STATEMENTS OF CASH FLOWS
               FOR THE YEARS ENDED AUGUST 31,1997,1996 AND 1995

                                                1997         1996         1995

Cash flow from operating activities:
Net loss                                $(34,232,558)  (1,388,061)  (2,935,193)
  Adjustments to reconcile net income 
  to net cash provided by operating
  activities:
   Depreciation and amortization           4,451,800    5,454,334    5,393,961
   Cumulative effect of change in 
     accounting principle                    ------     ------       1,891,948
   Deferred taxes                          4,267,000    3,388,470   (2,490,244)
   Provision for uncollectible 
     receivables                           3,921,227    2,294,000    2,140,000
   Stock awards                              289,050       67,500       74,250
   Loss on disposal of investments           317,170     ------        ------
   Loss (gain) on disposal of assets       1,768,122     ------         (7,507)
   (Increase) decrease in assets:
     Receivables                           2,035,981    2,548,573   (9,331,613)
     Merchandise inventory                24,436,340    3,870,565  (11,082,489)
     Other assets                           (572,055)     212,834   (2,727,339) 
   Increase (decrease) in liabilities:
     Accounts payable                    (16,441,180)  (6,509,981)  12,479,915
     Accrued expenses                        787,676      (50,287)    (140,853)
     Deferred revenue                     (4,621,294)  (6,693,674)   4,675,018
   Adjustments due to reorganization 
   items:
     Lease rejection reserve on closed
       stores                              3,100,000     ------     ------
     Loss on disposal of assets            5,338,472     ------     ------
     Write down of impaired goodwill         640,000     ------     ------
     Increase in accrued expenses for        
       restructuring items                   957,186     ------     ------
     Payment of restructuring charges       (866,158)    ------     ------
                                         ------------ ------------ ------------
       Net cash provided by (used in)      
         operating activities             (4,423,221)   3,194,273   (2,060,146)
                                         ------------ ------------ ------------
Cash flow from investing activities:
  Purchase of property and equipment      (1,696,440)    (948,695) (19,389,098)
  Purchase of investments                   (500,000)    ------     ------
  Proceeds from sale of assets               105,341     ------         92,747
  Proceeds from sales of assets due 
    to reorganization                         60,600     ------     ------
                                         ------------ ------------ ------------
    Net cash used in investing 
      activities                          (2,030,499)    (948,695) (19,296,351)
                                         ------------ ------------ ------------
Cash flow from financing activities:
  Borrowings under long-term debt          3,804,338     ------     21,775,159
  Repayments under long-term debt         (2,013,591)  (2,047,076)    (320,996)
  Borrowings under line of credit         31,850,000   65,300,000   ------
  Repayments under line of credit        (31,850,000) (65,300,000)  ------
  Proceeds from redemption of stock 
    options                                 ------       ------         63,500
  Borrowings under DIP line of credit      4,750,000     ------     ------
  Repayments under DIP line of credit     (1,750,000)    ------     ------
                                         ------------ ------------ ------------
    Net cash provided by (used in) 
      financing activities                 4,790,747   (2,047,076)  21,517,663
                                         ------------ ------------ ------------
Net increase (decrease) in cash 
  and cash equivalents                    (1,662,973)     198,502      161,166
Cash and cash equivalents at 
  beginning of period                      3,303,822    3,105,320    2,944,154
                                         ------------ ------------ ------------
Cash and cash equivalents at 
  end of period                         $  1,640,849    3,303,822    3,105,320
                                         ------------ ------------ ------------
                                         ------------ ------------ ------------
Supplemental disclosures of cash 
flow information: 
  Cash paid during the period for:
    Interest                            $  2,205,535    1,767,496    1,235,439
                                         ------------ ------------- -----------
                                         ------------ ------------- -----------
    Income taxes                        $     26,000      118,240    3,874,187
                                         ------------ ------------- -----------
                                         ------------ ------------- -----------
  Supplemental schedule of noncash 
  investing and financing activities:
    Assets acquired under capital lease $    285,701     ------     ------
                                         ------------ ------------- -----------
                                         ------------ ------------- -----------

The accompanying notes are an integral part of these financial statements.
 
                    CAMPO ELECTRONICS, APPLIANCES AND COMPUTERS, INC.
                              (DEBTOR-IN-POSSESSION)
                          NOTES TO FINANCIAL STATEMENTS


      1.  Organization and Summary of Significant Accounting Policies:

        a.  Organization

         The Company is  a  specialty  retailer  of  name  brand  consumer
       electronics,  major  appliances, computers and home office products
       with 20 stores in Louisiana, Alabama, Mississippi and Florida as of
       August 31, 1997.

         b.  Basis of Presentation

         The financial statements  have  been  prepared in accordance with
       the American Institute of Certified Public Accountants Statement of
       Position 90-7, "Financial Reporting by Entities  in  Reorganization
       Under  the  Bankruptcy Code."  The financial statements  have  been
       prepared using accounting principles applicable to a going concern,
       which assumes  realization  of assets and settlement of liabilities
       in the normal course of business.  The appropriateness of using the
       going concern basis is dependent  upon,  among  other  things,  the
       ability  to  comply with debtor in possession financing agreements,
       confirmation of  a  plan  of reorganization, the ability to achieve
       profitable operations, and  the ability to generate sufficient cash
       flows from operations to meet obligations.  See Note 2.

         c.  Marketable Securities

         During  fiscal  year  1995  the   Company  adopted  Statement  of
       Financial Accounting Standards ("SFAS")  No.  115,  "Accounting for
       Certain  Investments in Debt and Equity Securities."   The  Company
       has classified  its investments as available for sale in accordance
       with SFAS No. 115.   As such, these investments are carried at fair
       value with net unrealized gains or losses reported net of tax, as a
       separate component of shareholders' equity.

         Marketable securities  at  August 31, 1997 included approximately
       $421,000  in  six  month  U.S. Government  Treasury  Bills.   These
       investments which are held  in  a  general  corporate  account, are
       designated  to  fund  certain  potential  obligations  related   to
       employment  agreements.  Of this amount, $300,000 is collateral for
       certain  bonuses   for   two  former  executives  pursuant  to  the
       agreements which are currently disputed in bankruptcy court.  There
       was no unrealized gain or loss associated with these securities.

         Marketable securities at  August 31, 1996 consist of common stock
       with a cost basis of approximately  $435,000.   At August 31, 1996,
       the  Company had unrealized holding losses of $305,547  and  during
       the fiscal  year  ended August 31, 1997 the Company realized a loss
       of $317,000 on this common stock.   Gains and losses are calculated
       using the specific identification method.

         d.  Merchandise Inventory

         Merchandise inventory  is  stated at the lower of cost or market,
       whereby cost is determined using the average cost method.

         During fiscal 1997, the Company recorded a valuation allowance in
       the  amount of $672,000 primarily  for  distressed  merchandise  at
       outside service locations and inventory shrinkage.

         e.  Property and Equipment

         Property  and  equipment  is  stated  at  cost  less  accumulated
       depreciation  and amortization.  Depreciation and amortization  are
       calculated  using   the   straight-line  method  over  the  assets'
       estimated useful lives, which  range  from three to nineteen years.
       Property held under capital leases is stated  at  the  lower of the
       present value of the minimum lease payments at the lease  or market
       value and is amortized over the lease term or the estimated  useful
       life of the asset, whichever is shorter.

         Expenditures  for  maintenance,  repairs  and  minor renewals are
       charged  to  operating  expenses as incurred.  Major  renewals  and
       betterments are capitalized.   Upon sale or disposal of depreciable
       assets, the related cost and related  accumulated  depreciation are
       removed  from  the  accounts  with resulting gains or losses  being
       reflected as other income (expense).

         f.  Intangibles

         Goodwill arose from the acquisition  of  Shreveport Refrigeration
       Inc. in July 1993 and is being amortized over a 35 year period on a
       straight-line basis.  The Company assesses goodwill  on  a periodic
       basis  to  determine  if goodwill has been impaired.  In the  third
       quarter of fiscal year  1997,  goodwill was reduced by $640,000 due
       to the closure of two locations  (Texarkana and Longview) that were
       part of the Shreveport Refrigeration,  Inc.  acquisition.  Goodwill
       at  August  31,  1997  and  1996 in the amounts of  $2,126,000  and
       $2,856,000,  respectively  (net   of  accumulated  amortization  of
       $364,000 and $274,000) is included in intangibles and other assets.

         g.  Deferred Revenues

         The Company sells extended warranty contracts which cover periods
       beyond   the  warranty  period  covered   by   the   manufacturers'
       warranties.   Effective  September 1, 1994, the Company changed its
       method of accounting for these  revenues  and expenses to recognize
       extended   warranty   contract  sales  and  the  associated   sales
       commissions over the term  of  each  contract  on  a  straight-line
       basis.   Expenses  such as administrative, advertising and  repairs
       are charged to operations as incurred. (See Note 3.)

         Effective August 1,  1995,  the  Company  agreed  to  sell  to an
       unaffiliated  third  party  all extended warranty service contracts
       sold  by the Company subsequent  to  July  31,  1995.   Revenue  is
       recognized  from  the  sale of these contracts at the time of sale,
       net of any related sales  commissions  and  fees  paid to the third
       party, as a component of net sales.

         h.  Income Taxes

         The Company accounts for income taxes in accordance with SFAS No.
       109,   "Accounting  for  Income  Taxes".   SFAS  No.  109  requires
       recognition of deferred tax liabilities and assets for the expected
       future tax  consequences  of  events that have been included in the
       financial  statements or tax returns,  as  well  as  requiring  the
       gross-up of  assets  and  liabilities  for  the effects of deferred
       taxes  in  connection  with purchase business combinations.   Under
       this method, deferred tax  assets  and  liabilities  are determined
       based  on  the difference between the financial statement  and  tax
       bases of assets  and  liabilities using enacted tax rates in effect
       for the year in which the differences are expected to reverse.  The
       Company recognizes a valuation allowance for deferred tax assets if
       it determines that it is  not  probable  that  a  benefit  will  be
       realized.   During  the  fiscal  year  ended  August  31, 1997, the
       Company  recorded  a  valuation allowance against the deferred  tax
       asset of $14.3 million.

         i.  Earnings per Share

         Earnings per share is  computed using the weighted average number
       of shares of common stock  and common stock equivalents outstanding
       during the year.

         j.  Statement of Cash Flows

         For  purposes  of  the  Statement  of  Cash  Flows,  the  Company
       considers all highly liquid  debt  instruments  purchased  with  an
       original maturity of three months or less to be cash equivalents.

         k.  Revenue Recognition

         Revenue  is  recognized  at  the  time  the customer either takes
       possession of the merchandise or such merchandise  is  delivered to
       the customer.  Net sales, which includes warranty revenue,  consist
       of gross sales less discounts and returns and allowances.

         l.  Advertising Costs

         Advertising  costs  are  expensed  as  incurred  and  included in
       selling,  general  and  administrative expenses in the accompanying
       statement  of  operations.    Net  advertising  expense  was  $13.0
       million, $13.6 million and $14.0 million for the years ended August
       31,  1997,  1996 and 1995, respectively.   These  costs  relate  to
       advertising the  Company's name and promoting the products it sells
       in newspapers and on radio and television.

         m.  Impairment of Long-Lived Assets

         In 1997, the Company  adopted  Statement  of Financial Accounting
       Standards  No.  121, "Accounting for the Impairment  of  Long-Lived
       Assets and for Long-Lived Assets to be Disposed Of" (SFAS No. 121).
       SFAS No. 121 establishes accounting standards for the impairment of
       long-lived assets,  certain  identifiable intangibles, and goodwill
       related to those assets to be  held  and used for long-lived assets
       and  certain identifiable intangibles to  be  disposed  of.   Under
       provisions  of  SFAS No. 121, impairment losses are recognized when
       expected future cash  flows  are  less  than  the  related  assets'
       carrying  value.   Accordingly,  when  indicators of impairment are
       present,  the  Company evaluates the carrying  value  of  property,
       plant and equipment  and  intangibles  in relation to the operating
       performance and future undiscounted cash  flows  of  the underlying
       business.  The Company adjusts the net book value of the underlying
       assets if the sum of expected future cash flows is less  than  book
       value.

         n.  Risk and Uncertainties

         The  diversity  of  the Company's products, customers, suppliers,
       and geographic operations  significantly  reduces  the  risk that a
       severe impact will occur in the near term as a result of changes in
       its customer base, competition, sources of supply or markets.

         Financial  instruments  which  potentially expose the Company  to
       concentration of credit risk, as defined  by  SFAS No. 105, consist
       primarily  of  cash  and cash equivalents and accounts  receivable.
       The Company's cash equivalents  consist  principally  of  overnight
       investments  with  financial  institutions  which  exceed  balances
       insured   by   the   Federal   Deposit  Insurance  Corporation.   A
       significant portion of the Company's vendor related receivables are
       with its leading manufacturers.   Although  the  Company  does  not
       currently  foresee a credit risk associated with these receivables,
       repayment is  dependent  upon  the  financial  stability  of  these
       manufacturers.

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

         o.  New Financial Accounting Standards

         In February 1997, the Financial Accounting Standards Board issued
       two Statements of Financial Accounting Standards, Statement No. 128
       "Earnings  Per  Share"  and  Statement  No.   129   "Disclosure  of
       Information About Capital Structure," both effective  for financial
       statements issued for periods ending after December 15,  1997.   In
       June  1997,  the  Financial  Accounting  Standards Board issued two
       Statements  of Financial Accounting Standards,  Statement  No.  130
       "Reporting Comprehensive Income" and Statement No. 131 "Disclosures
       about Segments  of  an  Enterprise  and  Related Information," both
       effective  for  fiscal  years beginning after  December  15,  1997.
       Management  believes adoption  of  these  statements  will  have  a
       financial statement  disclosure  impact  only  and  will not have a
       material effect on the Company's financial position,  operations or
       cash flows.

         p.  Fair Value of Financial Instruments

         Cash  and  cash  equivalents,  trade  accounts receivable,  trade
       accounts payable and accrued liabilities  are financial instruments
       for which the carrying value approximates fair value because of the
       short-term   maturity   of  these  instruments.    Investments   in
       marketable securities are carried at their fair market value, which
       is determined using quoted  market prices.  The Company's long-term
       debt approximates fair value  due to the interest rates included in
       the  debt  which  approximates current  market  rates  for  similar
       instruments.

         q.  Reclassifications

         Certain amounts in  prior years have been reclassified to conform
       to classifications adopted  in  fiscal  1997  with no impact on net
       loss or shareholders' equity.

       2.  Chapter 11 Bankruptcy Proceedings and Restructuring

         On June 4, 1997, the Company filed a voluntary petition in the U.
       S.  Bankruptcy  Court  for  the Eastern District of  Louisiana  for
       reorganization under Chapter  11  of the U. S. Bankruptcy Code (the
       "Bankruptcy  Code"), and is currently  operating  its  business  as
       debtor-in-possession  under the supervision of the Bankruptcy Court
       (the "Bankruptcy Court").

         As  of  the  petition  date,   actions  to  collect  pre-petition
       indebtedness are stayed and other  contractual  obligations may not
       be enforced against the Company.  In addition, under the Bankruptcy
       Code, the Company may reject executory contracts,  including  lease
       obligations.   Parties affected by these rejections may file claims
       with the Bankruptcy  Court  in  accordance  with the reorganization
       process.  Substantially all liabilities as of the petition date are
       subject to settlement under a plan of reorganization  to  be  voted
       upon  by  creditors and equity security holders and approved by the
       Bankruptcy  Court.  The Company has not yet prepared or submitted a
       plan of reorganization.   As  provided  by the Bankruptcy Code, the
       Company has the exclusive right for a period  of  time  to submit a
       plan  of  reorganization.  This  period  has  been extended by  the
       Bankruptcy Court to January 15, 1998, and further extensions may be
       sought and may be granted or rejected by the Bankruptcy Court.

         The Company has obtained the approval of the  Bankruptcy Court to
       continue  to  pay for utility services, certain consumer  practices
       (including  the   continuation  of  service  on  existing  extended
       warranty contracts),  payroll  and  employee benefits, and property
       and  liability insurance coverage.  These  items  are  recorded  as
       accrued  expenses  not  subject to compromise.  The Company is also
       allowed to continue normal business practices, including purchasing
       inventory and payment of  normal  operating expenses incurred after
       the filing of the bankruptcy petition.

         As part of the reorganization process,  the Company closed eleven
       stores and one distribution center in fiscal  1997.  It also closed
       an  additional  distribution  center  in October, 1997,  after  its
       fiscal year-end.  The facilities which  were  closed  were  (i) one
       store  each  in Huntsville, Alabama; Tuscaloosa, Alabama; Longview,
       Texas;  Texarkana,   Texas;   Chattanooga,  Tennessee;  Alexandria,
       Louisiana;  and  Lafayette, Louisiana,  (ii)  two  stores  each  in
       Jackson Mississippi; and Memphis, Tennessee and (iii) the Bessemer,
       Alabama warehouse.   The Shreveport, Louisiana warehouse was closed
       subsequent  to  year-end   in  October,  1997.   Inventory  at  the
       Shreveport  warehouse  was moved  to  a  smaller  leased  warehouse
       adjacent to the Company's  remaining  warehouse located in Harahan,
       Louisiana.

         The Company has liabilities, not subject  to  compromise, owed to
       its floor plan lenders and its bank group.  The liabilities owed to
       the  floor  plan  lenders  are  collateralized  by  the   Company's
       merchandise  inventory.   The  amount  due  on  the  bank  note  is
       collateralized by the  Company's real estate holdings.  The Company 
       is in default of these agreements but has obtained the agreement of 
       the  lenders  to  forebear  the  enforcement  of  their  rights and 
       remedies  subject  to  the  terms  of  the  forbearance  agreements 
       discussed in notes 6 and 7.  Unsecured vendor claims  are  included  
       in  the  amounts  listed as liabilities subject to compromise.

         Since the Company filed for Chapter 11 reorganization, it has cut
       corporate overhead expenses and store operating  expenses,  and has
       initiated   several   strategies   designed  to  improve  operating
       performance (as more fully explained  in Item 1 of this Form 10-K).
       Based upon its projections, the Company  believes that its existing
       funds, its operating cash flows, and the available  line  of credit
       and the vendor and inventory financing arrangements discussed above
       are  sufficient  to  satisfy  expected  cash requirements in fiscal
       1998.  However, there is no guarantee that  the Company's projected
       operating results will be achieved during fiscal 1998.  The Company
       may  require additional working capital financing  in  fiscal  1999
       when the  balance of the line of credit becomes due on December 31,
       1998.

         Based upon  the  financial  statements  at  August  31, 1997, the
       Company does not meet all of the listing requirements of the Nasdaq
       National  Market.   If  the  Company's  common  stock  were  to  be
       delisted, the Company's common shareholders would likely experience
       a reduction in the liquidity of their shares.

       3.  Change in Accounting

         In  the  third  quarter  of  fiscal 1995, the Company changed its
       method of recognizing extended warranty contract revenue and direct
       expenses, primarily commissions paid for the sale of the contracts,
       from recognizing such revenues and  expenses  over  the life of the
       contracts based on historical patterns of expenses incurred  to the
       straight-line  method.  The new method, adopted effective September
       1, 1994, is the  alternative prescribed by the Financial Accounting
       Standards Board Technical  Bulletin No 90-1, and is currently being
       used by the Company's major  competitors.   The change was made due
       primarily to continuing changes in the Company's  product  mix  and
       warranty  expense  patterns  that  resulted  in its prior method of
       amortizing extended warranty contract revenue not always reflecting
       current  patterns at which warranty expenses were  incurred.   This
       change in  accounting has no impact on the Company's cash flow, and
       expenses not  directly  associated  with  the  acquisition  of  the
       extended   warranty   contracts,   such   as   repair   costs   and
       administrative  expenses,  are  expensed as they are incurred.  The
       cumulative effect of change in accounting  principle  in the amount
       of  $1,891,948  reflects  the  retroactive  effect of applying  the
       straight-line  method  to  prior years after reduction  for  income
       taxes in the amount of $1,159,581.

       4.  Receivables

         Receivables at August 31, 1997 and 1996 consist of the following:

                                                        1997         1996 
        Consumer Receivables                          $ 2,086,505  $ 2,841,889
        Vendor Receivables                              2,638,876    5,914,114
        Income Tax Receivables                          1,542,999    3,083,172
        Other Receivables                               2,335,514    2,721,927
                                                      -----------  -----------
                                                      $ 8,603,894  $14,561,102
                                                      -----------  -----------
                                                      -----------  -----------
                                                      
         The above receivables are  net  of  allowances of $1.6 million at
       August 31, 1997 and $2.9 million at August 31, 1996.

       5.  Property and Equipment:

         Property   and  equipment  less  accumulated   depreciation   and
       amortization is as follows:
                                                      August 31,  
                                                 1997          1996
                                                 
Land                                          $  7,180,594  $  7,646,594
Buildings (19 year life)                        13,488,424    15,022,521
Leasehold improvements (10 to 15 year life)      6,937,593    11,793,602
Furniture, fixtures and equipment
  (5 to 7 year life)                            13,079,521    15,153,794
Automobiles and trucks (3 to 5 year life)          474,592       506,713   
                                              ------------  ------------
                                                41,160,724    50,123,224
Less accumulated depreciation and 
amortization                                    13,419,690    13,746,265
                                              ------------  ------------
                                              $ 27,741,034  $ 36,376,959   
                                              ------------  ------------
                                              ------------  ------------
                                              

         Depreciation  expense  related  to property and equipment for the
       years ended August 31, 1997, 1996,  and 1995 was $4.1 million, $4.2
       million  and $3.3 million, respectively.   Equipment  and  vehicles
       with a cost  of  approximately  $1,078,000  was  held under capital
       lease as of August 31, 1997 and $798,000 as of August  31, 1996 and
       1995.   Accumulated  amortization  related  to these capital  lease
       assets was approximately $764,000 and $632,000  as  of  August  31,
       1997 and 1996, respectively.

       6.  Accounts Payable-Floor Plan:

         The  Company has approximately $23.6 million and $43.9 million as
       of August 31, 1997 and 1996, respectively, outstanding under "floor
       plan"  agreements   with   finance  companies.   These  floor  plan
       agreements have aggregate borrowing  limits  of approximately $43.5
       million  with  repayment  on  a  pay-as-sold  basis  with  interest
       accruing  on  outstanding  balances at various fixed  and  variable
       rates.  The agreements provide no specific termination date and are
       cancellable at the option of  either  party.   Outstanding  amounts
       pursuant  to  these  agreements  are  collateralized by merchandise
       inventory and certain receivables of the Company.  As of August 31, 
       1997 the Company was  not  in  compliance  with  several  covenants 
       contained in the floor plan agreements and was also in  default  of  
       those  floor  plan  agreements  due  to its failure to make certain  
       payments required by the agreements relating to inventory shortages  
       and  obsolescence  identified by the Company.  The Company obtained 
       waivers for some of these violations and as of  December  11,  1997 
       had obtained the agreement of each of the  floor  plan  lenders  to
       forebear their  rights  and  remedies  pursuant  to  the floor plan 
       agreements  subject  to: (i) the Company's payment of approximately 
       $1,654,000 in principal,  plus  interest at the prime rate plus 3%, 
       to the floor plan lenders at various  dates  through  December  15, 
       1998; and (ii) the approval of these forebearance agreements by the
       Bankruptcy Court.  Management believes  that  sufficient  liquidity 
       will exist during the upcoming year to fund those required payments  
       and that it is probable that  the  Bankruptcy  Court  will  approve 
       these forebearance agreements.  The existing floor plan  agreements  
       were renegotiated during   the bankrtupcy  reorganization  process.   
       The agreements continue on a  "pay  as  sold"  basis,  whereby  the 
       Company pays for the excess of the accrued liability to  the  floor 
       plan lender  over  the  required inventory collateral value.  These  
       payments,  which  were formerly made  on  a  weekly  basis, are now 
       paid daily, two banking  days  in arrears.

       7.  Debt:

       Long-term obligations

         Long-term  obligations  as of August 31, 1997 and 1996 consist of
       the following:

                                                          August 31, 
                                                      1997         1996
                                                      
       Long-term debt, with interest payable at    
         various rates                             $ 18,718,443  $ 20,521,182
       Capital lease obligations                          -----       148,368 
                                                   ------------  ------------
                                                   $ 18,718,443  $ 20,669,550 
          Less current maturities                       350,438     2,478,179 
                                                   ------------  ------------
                                                   $ 18,368,005  $ 18,191,371 
                                                   ------------  ------------
                                                   ------------  ------------
                                                   
         Long-term  debt  as  of  August 31, 1997, consisted of three term
       loans, one with a bank group  consisting  of  three  banks, and the
       others  with financial institutions.  Effective June 1,  1996,  the
       loan agreement  with  the banks was amended such that the term loan
       and a previously existing line of credit would bear interest at the
       Prime Rate.  On December  1, 1996, the term loan and line of credit
       facility with the banks was  further  amended to (i) accelerate the
       maturity date on both facilities from August  31, 1998 to September
       1,  1997,  (ii)  decrease the amount available under  the  line  of
       credit to $5 million  from  January 1, 1997 through maturity, (iii)
       provide  waivers  of  the  Company's   noncompliance  with  certain
       financial covenants for August 31, 1996  and  the  first quarter of
       fiscal  1997, suspend certain financial covenants through  maturity
       and amend  other  financial  covenants  in  line with the Company's
       fiscal  1997  budget and (iv) add certain inventory  collateral  to
       secure both facilities.  The Company paid a small fee to secure the
       waivers and also  agreed to an increase in the quarterly commitment
       fee payable on the  unfunded  amounts  under  the  line  of  credit
       facility.  The loan agreement was further amended on June 25,  1997
       to  consolidate  the  term loan with the outstanding balance on the
       line of credit, extend  the  term  of  the  loan  to 36 months, and
       change  the  interest rate to 9%.  Interest only payments  are  due
       quarterly for  the  first year, with nine fixed quarterly principal
       payments of $223,000  plus  accrued interest to begin one year from
       the amendment date.  A balloon  payment  is  due  on  the remaining
       balance of the note at June 27, 2000.  Outstanding amounts pursuant
       to this agreement are collateralized by the Company's real  estate.
       The  outstanding principal balance and applicable interest rate  on
       this loan  as  of  August  31,  1997  were  $18.4  million  and 9%,
       respectively.   Based on management's estimate  of the market value 
       of the  property  collateralizing  this  term  loan,  it  has  been 
       recorded as a liability not subject to compromise. The amended term  
       loan with the banks contains  certain  reporting  requirements  and  
       restrictive covenants which require the Company to maintain certain  
       minimum  annual  earnings levels and  working capital levels.  This 
       term loan also contains a subjective acceleration clause as well as 
       a cross default provision with all other debt  instruments  of  the  
       Company and a provision which  prohibits the  Company  from  paying 
       dividends on its common stock.  As of  August 31, 1997, the Company 
       was not in compliance with certain of the  covenants  contained  in 
       the bank term loan, and was in default of  this  agreement  due  to 
       these violations as  well  as  certain  cross  default  provisions.  
       However, on December 12, 1997 the Company obtained the agreement of 
       the lenders to forebear through September 1, 1998  the  enforcement 
       of  their  rights  and  remedies  under  the  term  loan  agreement 
       contingent upon the approval of this forebearance agreement and  an
       agreement requiring the payment of certain professional fees to the 
       banks by the Bankruptcy Court. The Company believes it is  probable  
       that  the  Bankruptcy  Court  will  approve these  agreements.  The 
       forebearance agreement also provides that the lenders will forebear 
       the enforcement of their rights and remedies  through  September 1, 
       1998 if the Company were to  violate  certain  financial  covenants 
       relating  to  minimum  annual  earnings  and working capital levels 
       during  that  period,  which  the Company does not expect to comply 
       with in the upcoming fiscal year.

         The principal balance of the first  of  the  other term loans was
       $3.8  million as of August 31, 1997 and accrues interest  at  7.19%
       (the average  weekly  yield  of 30 Day Commercial paper plus 1.8%),
       with the balance of all outstanding  principal  due  and payable at
       maturity on August 30, 2002.  Outstanding amounts pursuant  to this
       agreement   are  collateralized  by  the  furniture,  fixtures  and
       equipment at  various locations leased by the Company.  The balance
       on this note is recorded as a liability subject to compromise.

         The second of the other term loans was $297,000 as of August 1997
       and accrues interest  payable monthly at an annual rate of 9%.  The
       note is divided equally  between two instruments, one with maturity
       at September 1, 1999, and the second with a maturity of December 1,
       1999.  The note is collateralized  by certain computer software and
       is recorded as a liability not subject to compromise.

         Annual maturities on long-term debt  not  subject  to  compromise
       during the next five years are as follows:

               Years Ending                Not Subject
               August 31,                      to
                                           Compromise
               1998                           350,438  
               1999                         1,060,178 
               2000                        17,307,827
               2001                             -----    
               2002                             -----     
               Thereafter                       -----
                                         ------------
                                         $ 18,718,443
                                         ------------
                                         ------------

         Also, as of August 31, 1997, the Company has a $3 million line of
       credit  available  provided  jointly by two of the Company's  floor
       plan lenders.  The available credit line reduces to $1.5 million on
       December 31, 1997 and the balance  is  due  on maturity at December
       31, 1998.  The outstanding balance on the line  at  August 31, 1997
       was  $3.0 million.  The outstanding balance on the line  of  credit
       bears  interest at an annual rate of prime plus 3% (11.5% at August
       31, 1997),  payable  monthly,  and  is  collateralized by a pending
       federal income tax refund and certain of  the Company's inventories
       and  all  other  assets  not  serving  as  collateral  under  other
       agreements.   The  proceeds  were  used to fund  general  operating
       expenses,  including purchases of inventory  during  peak  periods.
       The Company  anticipates  that pending federal and state income tax
       refunds  will be adequate to  repay  the  line  of  credit  by  the
       required $1.5  million  due  in  December 1997.  The line of credit
       financing agreement contains certain  covenants,  a  cross  default
       clause  with  all  other  debt  instruments  of the Company, and it
       prohibits the Company from spending more than  $50,000  per year on
       capital expenditures without approval.  As of August 31,  1997, the
       Company  was  not in compliance with certain reporting requirements
       and  covenants  contained  in  this  agreement,  but  the   Company 
       obtained the forebearance agreements discussed in note 6  from  the
       two floor-plan lenders. This  line  requires  a facility fee in the 
       amount of $150,000.   A payment in the amount of $50,000  was  made 
       upon  entry of an Emergency Order  approving  this agreement by the 
       Bankruptcy Court, and two equal payments of $50,000 each are due on 
       November 30, 1997 and 1998.  The  weighted  average  interest rates 
       applicable for short term borrowings during fiscal  1997  and  1996 
       were 8.91% and 8.02%, respectively.

       8.Liabilities Subject to Compromise

         The liabilities subject to compromise include vendor payables and
       accrued  expenses  incurred  up  to  the date  of  the  filing  for
       reorganization under Chapter 11 of the  U.S.  Bankruptcy Code, with
       the exception of liabilities specifically exempted by certain first
       day orders filed with the Bankruptcy Court.  These first day orders
       obtained with the approval of the Bankruptcy Court, allowed for the
       payment of utility services, certain consumer practices  (including
       the   continuation   of   service  on  existing  extended  warranty
       contracts),  payroll  and  employee   benefits,  and  property  and
       liability insurance coverage.  Liabilities  relating to these items
       are recorded as accrued expenses not subject  to  compromise.  Also
       included  in liabilities subject to compromise are:   $3.8  million
       balance on  note payable (see Note 7); capital lease obligations of
       $242,000; a provision  for  settlements  payable  to  landlords  of
       closed  stores  where  the  Company has rejected the leases of $3.1
       million; and $7.5 million made  up of various liabilities resulting
       from  purchases of inventory and supplies  delivered  and  services
       rendered prior to the Bankruptcy Filing.

       9.  Lease Commitments:

         The Company's  retail  operations  are  conducted  principally in
       leased  facilities  under agreements which expire at various  dates
       through 2012.  In addition  to  base rent, certain lease agreements
       require the Company to pay executory  costs  such  as  real  estate
       taxes,   utilities   and  common  area  maintenance.   For  certain
       locations, the Company  pays rent based upon a specified percentage
       of sales.  Generally, the  leases  provide for renewals for various
       periods at stipulated rates.  (See Note  12  for  a  description of
       operating leases with related parties.)

         Future  minimum  lease  payments  under the above non-cancellable
       operating leases as of August 31, 1997 are as follows:

            1998                                      $   2,549,264
            1999                                          2,469,134
            2000                                          2,464,156
            2001                                          2,281,998
            2002                                          1,810,315
            Thereafter                                    4,011,822
                                                      -------------
                                                      $  15,586,689
                                                      -------------
                                                      -------------

         The future minimum lease payments related to the closed stores is
       excluded from the above table.

         Rental expense, including common area  maintenance, insurance and
       real estate taxes, pursuant to the above operating  leases,  net of
       sublease  rental  income,  amounted  to approximately $8.9 million,
       $5.7 million and $4.7 million for the  years ended August 31, 1997,
       1996 and 1995, respectively.   The Company has a sublease agreement
       for one of its properties that expires on May 31, 1998 and provided
       sublease income of $138,000.

         As debtor-in-possession, the Company has  the  right,  subject to
       Bankruptcy Court approval and certain other limitations, to  assume
       or  reject  executory  contracts  and  unexpired  leases.   In this
       context,  "assume"  means  that  the  Company agrees to perform its
       obligations and cure all existing defaults  under  the  contract or
       lease  and  "reject"  means  that the Company is relieved from  its
       obligations to perform further  under  the contract or lease but is
       subject  to  a  claim of damages for the breach  thereof.   Damages
       resulting from rejection  are  treated  as  pre-petition  unsecured
       claims in the reorganization.  At August 31, 1997 the Company has a
       reserve for estimated lease damage claims related to closed  stores
       included  in liabilities subject to compromise of $3,100,000, which
       was provided  for in restructuring charges in the year ended August
       31, 1997.

       10.   Impairment Loss on Long-Lived Assets

         The  Company  wrote-down   leasehold   improvements,   furniture,
       fixtures  and  equipment,  and  any  associated  goodwill of eleven
       stores  and  a distribution warehouse which were closed  in  fiscal
       1997 and accrued the cost of the closure of a second warehouse that
       was closed in  October  1997.   Pretax charges of $5.3 million were
       recorded for the closed locations  and  a  $640,000  write-down  of
       goodwill  associated  with  these  locations.   The  amount  of the
       charges  recorded  was  determined  by  the  net  book value of the
       respective items.  The reorganization charges are recorded  in  the
       Income  Statement  on the line "Loss on disposal of assets" and the
       goodwill write-down  is  included  on  the line item "Write down of
       impaired goodwill."

       11.   Income Taxes:

         The components of the provision for income  taxes  for  the years
       ended August 31, 1997, 1996 and 1995 are as follows:

                                    1997          1996          1995 
                                    
Current                             $(1,576,800)  $(4,142,470)  $ 2,234,244 
Deferred                            (10,077,883)    3,388,470    (2,490,244)  
Valuation  allowance for 
deferred tax asset                   14,344,683         -----         ----- 
                                    -----------   -----------   -----------
Income tax expense (benefit)        $ 2,690,000   $  (754,000)  $  (256,000)
                                    -----------   -----------   -----------
                                    -----------   -----------   -----------

         The provisions  (benefits)  for  income  taxes  as  reported  are
       different  from  the provisions (benefits) computed by applying the
       statutory federal  income tax rate.  The differences are reconciled
       as follows:


                                    1997           1996          1995     

Federal income taxes at statutory
 rate                               $(10,724,470)  $  (728,301)  $  (441,743) 
State income taxes net of federal                      
 benefit                              (1,192,309)      (80,970)      (42,875)
Adjustment to prior year provision         -----         -----       173,366 
Valuation allowance for deferred 
 taxes                                14,344,683         -----         -----
Other                                    262,096        55,271        55,252 
                                    ------------   -----------   -----------
Income tax expense (benefit)        $  2,690,000   $  (754,000)  $  (256,000)
                                    ------------   -----------   -----------
Effective tax rate                       (8.53%)         35.2%         19.7%
                                    ------------   -----------   -----------
                                    ------------   -----------   -----------
                                    
         The components  of  the  Company's  net  deferred tax asset as of
       August 31, 1997 and 1996 are as follows:
             
                                     1997           1996     
Deferred tax assets:          
   Unrealized loss on marketable     
     securities                      $     -----    $   116,100
   Receivables, net                    1,798,300      1,032,600 
   Merchandise inventory                 729,200        785,500   
   Deferred revenue                    1,756,900      3,502,800 
   Alternative minimum tax credit        256,000        173,000 
   Cumulative effect of change in  
     accounting principle - deferred  
     revenue                               -----          -----
   Net operating loss                 11,239,000          -----
Other                                    167,200        307,900
                                     -----------    -----------    
Total deferred tax asset              15,946,600      5,917,900 
                                     -----------    -----------

Deferred tax liabilities:  
   Preopening costs                        -----         66,000  
   Property and equipment, net           932,740        924,300 
   Trade discounts                       611,200        592,900 
   Other                                  57,977         67,700
                                     -----------    -----------
   Total    deferred    tax  
     liabilities                       1,601,917      1,650,900
  Valuation allowance                 14,344,683          -----
                                     -----------    -----------
  Net deferred tax asset             $         0    $ 4,267,000
                                     -----------    -----------
                                     -----------    -----------
             
      

         The Company recorded a valuation allowance in the amount of $14.3
       million during  the  year ended August 31, 1997 for that portion of
       the net deferred tax asset that cannot be realized by carrybacks or
       offsetting deferred tax  liabilities.   The  valuation allowance is
       based  upon  the  fact that sufficient positive evidence  does  not
       exist, as defined in  Statement  of  Financial Accounting Standards
       No.  109,  Accounting  for Income Taxes,  regarding  the  Company's
       ability to realize certain  deferred  tax  assets  and carryforward
       items.  As a result of the valuation allowance, income  tax expense
       was approximately $2.7 million for the year ended August 31, 1997.

       12.  Related Party Transactions:

         The Company conducts a portion of its business in property leased
       by the heirs of its former majority shareholder.  During  the years
       ended August 31, 1997, 1996 and 1995, the Company made payments  to
       such  heirs  or  former  shareholder  (or  on behalf of such former
       shareholder) in the approximate amounts of $173,000,  $161,000  and
       $189,000,   respectively,  representing  rentals  under  the  above
       arrangements.

         Notes payable  to  former  shareholder, which terminated upon his
       death in January 1997, related  to  personal service contracts, and
       was $569,782 as of August 31, 1996.   These notes accrue  interest,
       payable   monthly,   at  8.50%  and  such  interest   amounted   to
       approximately $20,000,  $53,000  and   $60,000  during fiscal years
       1997, 1996 and 1995, respectively.

         Notes  payable  to  a  director,  major  shareholder  and  former
       executive of the Company related to personal service contracts were
       $85,776  as  of  August  31,  1997.  These notes  accrue  interest,
       payable   monthly,  at  8.50%  and  such   interest   amounted   to
       approximately $3,000 during fiscal 1997.

         A Director of the Company is the managing partner of the law firm
       which serves as the Company's general counsel.  During fiscal 1997,
       1996 and 1995,  $142,000, $173,000 and $205,000, respectively, were
       paid in fees to this firm.

         A Director of the  Company,  appointed during fiscal 1997, is   a
       partner of the law firm  which  serves  as  the  Company's  special 
       counsel.  During fiscal 1997, $62,000 were paid in  fees   to  this 
       firm.

       13.  Employee Incentive Compensation and Benefit Plans

       Stock Incentive Plan

         The  Company has a Stock Incentive Plan (the "Plan"),  which  was
       adopted by the  Board  of  Directors  in  1993,  for the benefit of
       officers and key employees of the Company.  The Plan,  as  amended,
       authorized the issuance of incentive stock options covering  up  to
       850,000  shares  of common stock exercisable at prices equal to the
       fair market value  of  the  stock  on  the  date of grant.  

                  
      The  Company  in  fiscal  years  1996 and 1997 granted stock options and
issued shares of restricted Common Stock  under the Plan.  The Company applies
APB Opinion 25 and related Interpretations  in  accounting  for  the Plan.  In
1995,  the  FASB  issued  FASB  Statement  No. 123 "Accounting for Stock-Based
Compensation"  ("SFAS  123") which, if fully adopted  by  the  Company,  would
change the methods the Company  applies  in  recognizing the cost of the Plan.
Adoption of the cost recognition provisions  of  SFAS  123 is optional and the
Company has decided not to elect these provisions of SFAS  123.   However, pro
forma disclosures as if the Company adopted the cost recognition provisions of
SFAS 123 in 1995 are required by SFAS 123 and are presented below.

      Under  the  Plan,  the  Company is authorized to issue shares of  Common
Stock pursuant to "Awards" granted  as  incentive  stock  options (intended to
qualify under Section 422 of the Internal Revenue Code of 1986,  as  amended),
non-qualified stock options, restricted shares, and stock awards.  The Company
granted nonqualified stock options in fiscal 1996 and 1997 under the Plan  and
shares of restricted Common Stock in fiscal 1997 under the Plan.

      The  Company  granted nonqualified stock options in fiscal 1996 and 1997
to employees.  The  stock  options  granted  in  fiscal  1996  and  1997  have 
contractual terms of 10 years.  All of  the  options  granted to the employees  
and have an exercise price equal to or greater than the fair market  value  of 
the stock at grant date.  The options  granted  in  fiscal  1996 and 1997 vest 
over various vesting schedules.  Approximately one-half of these stock options 
vest ratably  over  a  period  of  five years or less.  The balance vest fully 
on the ninth anniversary of  the  date  of  grant,  but  allow for accelerated  
vesting  in  25%  increments  as  the  per  share  stock price increases to be 
$3, $4, $5, and $6, respectively.

      A summary of the status of the Company's stock options  as of August 31,
1996 and August 31, 1997 and the changes during the year ended  on those dates
is presented below:

<TABLE>
<CAPTION>
                             
                                                   Stock Options 
                          ---------------------------------------------------------------
                                        1997                              1996
                          -------------------------------  ------------------------------

                            No. Shares of     Weighted      No. Shares of     Weighted   
                             Underlying       Average        Underlying       Average    
                              Options         Exercise        Options         Exercise   
                                               Prices                          Prices    
 <S>                             <C>              <C>            <C>              <C>
 Outstanding at beginning         
  of the year                     252,257          $ 7.98         316,372          $10.63
 Granted                          524,000          $ 1.72          96,000          $ 2.58
 Forfeited                        331,500          $ 2.55          65,050          $ 9.11
 Expired                          157,757          $10.50          95,065          $10.60
                                 _________        ________       _________        ________
 Outstanding at end of            
  year                            287,000          $ 1.43         252,257          $ 7.98
                                 _________        ________       _________        ________
                                 _________        ________       _________        ________
 Exercisable at end of             
  year                             75,000          $ 1.32         158,907          $10.72
                                 _________        ________       _________        ________
                                 _________        ________       _________        ________
 Weighted average fair    
  value of options granted           ----          $ 0.85             ---          $ 1.28
                                 _________        ________       _________        ________
                                 _________        ________       _________        ________

</TABLE>

      The fair value of each stock option granted is estimated on  the date of
grant   using  the  Black-Scholes  option-pricing  model  with  the  following
weighted-average  assumptions  for  grants  in fiscal 1996 and 1997:  dividend
yield of 0%; risk-free interest rates range from  5.79%  to 6.64%; an expected
life of 5 years for all grants; and a volatility of 47.0% for all grants.

Options outstanding as of August 31, 1997 are summarized below:

<TABLE>
<CAPTION>
                           Options Outstanding                   Options Exercisable
               ___________________________________________  ___________________________

   Range of        Number       Wgtd. Avg.     Wgtd. Avg.       Number       Wgtd. Avg. 
   Exercise     Outstanding     Remaining      Exercise      Exercisabled     Exercise 
   Prices        at 8-31-97    Contr. Life     Price          at 8-31-97      Price       
<S>                 <C>               <C>          <C>           <C>             <C>
$1.19 - $2.00       225,000           9.87         $1.26         75,000          $1.32
$2.01 - $2.88        62,000           9.02         $2.06            ---          $ ---
$1.19 - $2.88       287,000           9.69         $1.43         75,000          $1.32

</TABLE>

                             

      Under  the  Plan,  the Company also granted shares of restricted  Common
Stock to selected employees.  Shares of restricted stock generally vest at the
rate of 20% per year on the  first through the fifth anniversaries of the date
of grant.  In 1997, the Company  granted 225,000 shares of restricted stock to
selected employees.  No cash consideration  was  paid  for  such  shares.   In
accordance with APB 25, the Company has recognized a compensation charge equal
to  the  fair  market  value of these shares on the date issued.  The SFAS 123
charge for these shares is equal to the APB 25  charge.   Compensation expense
of $289,050, $67,500 and $74,250 relating to the restricted shares  and  stock
awards was recorded during the fiscal years ended August 31,  1997,  1996  and
1995, respectively.


      Had the compensation  cost  for  the  Company's stock-based compensation
plans been determined consistent with SFAS 123,  the  Company's  net  loss (in 
thousands) and net loss  per  common share for 1996 and 1997 would approximate 
the  pro forma amounts below:


                 As Reported      Pro Forma      As Reported      Pro Forma   
                   8/31/97         8/31/97         8/31/96         8/31/96   

SFAS 123 Charge     $    ---       $     54          $   ---        $     9
Net Loss            $(34,233)      $(34,287)         $(1,388)       $(1,397)
Net Loss Per         
 Common Share       $  (6.13)      $  (6.14)         $  (.25)       $  (.25)   



      The  effects  of applying SFAS 123 in this pro forma disclosure are  not
indicative of future amounts.  SFAS 123 does not apply to awards granted prior
to the 1996 fiscal year.

       401(k) Savings Plan

         The Company has adopted a 401(k) Savings  Plan for the benefit of
       substantially all employees.  The Plan provides for  both  employee
       and  employer  contributions.   The  Company  matches  25%  of  the
       employee's  contribution  limited to 1.0%  of the employee's annual
       compensation subject to limitations  set  annually  by the Internal
       Revenue  Service.   The  Company's contributions were approximately
       $60,000 and $69,000 for the  years  ended August 31, 1997 and 1996,
       respectively.


       14.     Other Matters:

       Private Label Credit Card Agreement

         The Company has an agreement whereby an independent  credit  card
       bank  has agreed to provide financing to qualified customers of the
       Company under the Company's "Campo" store private label credit card
       program.  The agreement provides for a financing line of up to $125
       million  and the Company earns promotional and other fees as a part
       of this agreement.

       15.     Preferred Stock

         The Company has 500,000 shares of preferred stock authorized with
       no par value.  No shares have been issued or are outstanding.

       16.     Contingencies and Commitments:

         In the normal  course  of  business,  the  Company is involved in
       various legal proceedings.  Based upon the Company's  evaluation of
       the information presently available, management believes  that  the
       ultimate  resolution  of  any  such  proceedings  will  not  have a
       material  adverse  effect  on  the  Company's  financial  position,
       liquidity or results of operation.

         Under  Chapter  11,  substantially  all  pending  litigation  and
       collection of outstanding claims against the Company at the date of
       the  filings  are  stayed  while  the  Company  continues  business
       operations as debtor-in-possession.  As debtor-in-possession  under
       Chapter 11, the Company is authorized to operate its business,  but
       it  may  not  engage in transactions outside the ordinary course of
       business without  first  complying  with  the  notice  and  hearing
       provisions  of  the  Bankruptcy Code and obtaining Bankruptcy Court
       approval where and when necessary.

         The Bankruptcy Court  approved  the  formation  of  the  official
       unsecured   creditors   committee   ("Creditors  Committee").   The
       Bankruptcy Court allowed the Creditors  Committee  to  employ legal
       counsel.  The Company is required to pay certain expenses  of  this
       committee,   including  counsel,  to  the  extent  allowed  by  the
       Bankruptcy Court.

         The Company entered into an employment agreement with the current
       Chief Executive  Officer  dated  June  15,  1997  which  has a term
       expiring on August 31, 2000.

         During fiscal year 1998, the Company's existing computer software
       systems will need to be evaluated and computer programs upgraded or
       amended to be year 2000 compliant.  The cost of this effort has not
       yet been determined.



   
ITEM 14     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
            FORM 8-K
            
(a)         The following documents are filed as part of this report:
                        
            1.    Financial Statements

                The Company's financial statements listed below have
                been filed as part of this report:

                                                                      Page

                Report of Independent Accountants                       14
                Balance Sheets as of August 31, 1997 and 1996           15
                Statements  of Operations for the Years Ended August
                  31, 1997, 1996 and 1995                               16
                Statements of  Shareholders'  Equity  for  the Years
                  Ended August 31, 1997, 1996 and 1995                  17
                Statements of Cash Flows for the Years Ended  August
                  31, 1997, 1996 and 1995                               18
                Notes to Financial Statements                           19
                
            2.    Financial Statement Schedules

                  All  schedules  have  been  omitted  because  they  are  not
                  applicable  or  not  required, or the information appears in
                  the financial statements or notes thereto.

            3.    Exhibits

            3.1   Amended  and  Restated  Articles  of  Incorporation  of  the
                  Company(1),  as  amended  by  Articles  of  Amendment  dated
                  January 3, 1995.(2)

            3.2   Composite By-laws of the Company, as of October 4, 1996.(3)

            10.1  Master Lease of 2201 S. Claiborne  Avenue, 110 Terry Parkway
                  and 800 Distributors Row dated as of  August  1, 1991 by and
                  between  Anthony J. Campo and Giant TC, Inc., as  terminated
                  with respect  to  Terry  Parkway  by  Partial Termination of
                  Master Lease dated as of December 30, 1992  by  and  between
                  Anthony J. Campo and Giant TC, Inc.(1)

            10.2  Lease  of  5015  Bloomfield  dated  March  15,  1977, by and
                  between Elmwood Development Co. and Campo Appliance  Co.  of
                  Clearview,  Inc.,  as  amended  by  Supplemental and Amended
                  Lease Agreement dated 1977, together  with  Sublease of 5015
                  Bloomfield dated as of August 1, 1991 by and  between  Campo
                  Appliance Co. of Clearview, Inc. and Giant TC, Inc.(1)

            10.3  Non-Competition  Agreement  dated  September  1, 1991 by and
                  between Giant TC, Inc. and Anthony J. Campo.(1)

            10.4  Personal  Services Contract dated September 1, 1991  by  and
                  between Giant TC, Inc. and Anthony J. Campo.(1)

            10.5  Amendment and  Restatement  of Non-Competition Agreement and
                  Personal  Services  Contract dated  June  29,  1992  by  and
                  between Anthony J. Campo and Giant TC, Inc.(1)

            10.6  Credit Card Program Agreement  dated  as  of May 29, 1992 by
                  and between Giant TC, Inc. and Monogram Credit  Card Bank of
                  Georgia(1),  as amended by Amendment to Credit Card  Program
                  Agreement dated  as  of May 29, 1992 by and between Monogram
                  Credit  Card  Bank  of  Georgia   and   Campo   Electronics,
                  Appliances  and  Computers, Inc. (formerly Giant TC,  Inc.),
                  dated October 29, 1993.(4)

            10.7  Giant TC, Inc. 1992  Stock  Incentive Plan(1), as amended by
                  Amendment  No.  1  to  Campo  Electronics,   Appliances  and
                  Computers, Inc. 1992 Stock Incentive Plan dated  October 13,
                  1993(5), as amended by Amendment No. 2 to Campo Electronics,
                  Appliances  and  Computers,  Inc. 1992 Stock Incentive  Plan
                  dated May 20, 1994(6), as amended by Amendment No. 3 and the
                  Amended  and  Restated  Campo  Electronics,  Appliances  and
                  Computers, Inc. 1992 Stock Incentive  Plan dated December 7,
                  1994(2), as amended by the Second Amended and Restated Campo
                  Electronics,  Appliances  and  Computers,  Inc.  1992  Stock
                  Incentive  Plan dated January 12,  1996,(7)  as  amended  by
                  Amendment No. 1 thereto dated October 4, 1996,(3) as further
                  amended and  restated by the Third Amended and Restated 1992
                  Stock Incentive Plan dated August 8, 1997. *

            10.8  Form of Indemnity  Agreement  by  and between Giant TC, Inc.
                  and  each  of  Anthony P. Campo, Joseph  E.  Campo,  Barbara
                  Treuting Casteix,  L.  Ronald  Forman,  Donald T. Bollinger,
                  Anthony  J.  Correro,  III,  David  L.  Ducote,  William  E.
                  Wulfers,   Michael   G.   Ware,  John  Watson  and   Malcolm
                  Ballinger.(1) *

            10.9  Employment Agreement dated  June  29,  1992  by  and between
                  Giant  TC,  Inc.  and Anthony P. Campo , as amended December
                  30,  1992(1)  as  terminated   and  replaced  by  Employment
                  Agreement  dated  December 16, 1993  by  and  between  Campo
                  Electronics, Appliances  and  Computers, Inc. and Anthony P.
                  Campo(5),  as  amended  by  the  Amendment   to   Employment
                  Agreement  dated  May  16,  1996,(7)  as  terminated  by the
                  Severance Agreement and Personal Services Contract and  Non-
                  Competition Agreement dated March 19, 1997.(8)

            10.10 Employment  Agreement  dated  June  29,  1992 by and between
                  Giant TC, Inc. and Donald E. Galloway(1) as  terminated  and
                  replaced  by Employment Agreement dated December 16, 1993 by
                  and between  Campo  Electronics,  Appliances  and Computers,
                  Inc. and Donald E. Galloway(5), as amended by the  Amendment
                  to Employment Agreement dated May 16, 1996, as terminated by
                  letter agreement dated July 12, 1996.(7)

            10.11 Acquisition  and Interim Servicing Agreement  dated November
                  22, 1993 by and between Monogram Credit Card Bank of Georgia
                  Item 14 and Campo  Electronics,  Appliances  and  Computers,
                  Inc.(4)

            10.12 Loan Agreement dated August 30, 1995 by and between Hibernia
                  National   Bank   and   Campo  Electronics,  Appliances  and
                  Computers, Inc.(9), as amended  by  the  First  Amendment to
                  Loan Agreement as of August 30, 1995 by and between Hibernia
                  National   Bank   and   Campo  Electronics,  Appliances  and
                  Computers, Inc.(3), as amended  by  the  Second Amendment to
                  Loan  Agreement  dated May 31, 1996 by and between  Hibernia
                  National  Bank  and   Campo   Electronics,   Appliances  and
                  Computers,  Inc.(10),  as amended by the Third Amendment  to
                  Loan  Agreement  dated  December  1,  1996  by  and  between
                  Hibernia National Bank and Campo Electronics, Appliances and
                  Computers, Inc., as amended  by  Amendment to Loan Agreement
                  dated June 25, 1997. *

            10.13 Loan Agreement dated August 30, 1995 by and between Met Life
                  Capital  Corporation and Campo Electronics,  Appliances  and
                  Computers, Inc.(9)

            10.14 Sale Agreement  dated August 30, 1995 by and between Federal
                  Warranty  Service   Corporation   and   Campo   Electronics,
                  Appliances and Computers, Inc.(9)

            10.15 Change of Control Agreement dated as of August 29,  1996  by
                  and  between  Campo  Electronics,  Appliances and Computers,
                  Inc. and Anthony P. Campo.(7)

            10.16 Campo Electronics, Appliances and Computers,  Inc. Severance
                  Pay Plan dated as of August 29, 1996.(7)

            10.17 Employment Agreement, dated March 21, 1997, by  and  between
                  the  Company  and  Rex  O.  Corley,  Jr.,  as  terminated by
                  Severance Agreement dated June 19, 1997.(8)

            10.18 Employment  Agreement, dated March 21, 1997, by and  between
                  the Company and  Charles  S. Gibson, Jr., as amended on June
                  24, 1997,(8) as terminated upon resignation of the officer.

            10.19 Employment Agreement, dated  March  21, 1997, by and between
                  the  Company  and  Wayne  J. Usie, as amended  on  June  24,
                  1997,(8) as terminated upon resignation of the officer.

            10.20 Employment Agreement, dated  April  14, 1997, by and between
                  the  Company  and  John  K.  Ross,(8)  as  terminated   upon
                  resignation of the officer.

            10.21 Employment  Agreement,  dated April 23, 1997, by and between
                  the  Company  and James B.  Warren,(8)  as  terminated  upon
                  resignation of the officer.

            10.22 Employment Agreement,  dated  June  15, 1997, by and between
                  the Company and William E. Wulfers.(8)

            10.23 Consultation Agreement, dated April 17, 1997, by and between
                  the Company and York Management Services, Inc. *

            23    Consent of Coopers & Lybrand L.L.P.

            27    Financial Data Schedule
__________
*     Previously filed.
(1)   Incorporated by reference from the Company's Registration  Statement  on
      Form  S-1  (Registration  No.  33-56796)  filed  with  the Commission on
      January 6, 1993.
(2)   Incorporated  by reference from the Company's Quarterly Report  on  Form
      10-Q for the fiscal quarter ended February 28, 1995.
(3)   Incorporated by  reference  from  the Company's Quarterly Report on Form
      10-Q for the fiscal quarter ended November 30, 1996.
(4)   Incorporated by reference from the  Company's Annual Report on Form 10-K
      for the fiscal year ended August 31, 1993.
(5)   Incorporated by reference from the Company's  Registration  Statement on
      Form S-1 (Registration No. 33-76184) filed with the Commission  on March
      8, 1994.
(6)   Incorporated by reference from the Company's Annual Report on Form  10-K
      for the fiscal year ended August 31, 1994.
(7)   Incorporated  by reference from the Company's Annual Report on Form 10-K
      for the fiscal year ended August 31, 1996.
(8)   Incorporated by  reference  from  the Company's Quarterly Report on Form
      10-Q for the fiscal quarter ended May 31, 1997.
(9)   Incorporated by reference from the  Company's Annual Report on Form 10-K
      for the fiscal year ended August 31, 1995.
(10)  Incorporated by reference from the Company's  Quarterly  Report  on Form
      10-Q for the fiscal quarter ended May 31, 1996.

                              ____________________

b)          Reports on Form 8-K

      A  Current  Report on Form 8-K was filed on June 4, 1997 to report
      the Company's  filing  of a voluntary petition to reorganize under
      Chapter 11 of the Federal Bankruptcy Code.

(c)         Exhibits

      All exhibits required by  Item  601  of  Regulation  S-K have been
      filed.

(d)         Financial Statement Schedules

      All schedules have been omitted because they are not applicable or
      not   required,  or  the  information  appears  in  the  financial
      statements or notes thereto.



                                SIGNATURE
                  
    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment to be 
signed on its behalf by the undersigned, therunto duly authorized.

                                    CAMPO ELECTRONICS, APPLIANCES AND
                                    COMPUTERS, INC.
                     
Dated: December 15, 1997            By:   /s/ Michael G. Ware
                                          Michael G. Ware
                                          Senior Vice President and
                                          Chief Financial Officer