<PAGE>     

                                    FORM 10-Q
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

For the quarterly period ended August 25, 1996

                                       OR

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

For the transition period from         to

                         Commission File Number: 0-14394

                           TOWN & COUNTRY CORPORATION
             (Exact name of Registrant as specified in its charter)

          Massachusetts                                      04-2384321
(State or other jurisdiction of incorporation    (I.R.S. Employer Identification
      or organization)                                        Number)

                 25 Union Street, Chelsea, Massachusetts 02150
              (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code (617) 884-8500

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 s uch  filing
requirements for the past 90 days. Yes X No

On September 30, 1996, the Registrant had outstanding 23,301,192 shares of Class
A Common  Stock,  $.01 par value and  2,664,927  shares of Class B Common Stock,
$.01  par  value.  The  Registrant  also had  1,366,631  shares  of  Convertible
Preferred  Stock, $1 par value,  outstanding on September 30, 1996. These shares
are immediately convertible into 2,733,262 shares of Class A Common Stock.
<PAGE>
TOWN & COUNTRY CORPORATION                                            Form 10-Q
                                                                         Page 2
PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>


                                            August 25,           February 25,
                                              1996                  1996
                                           (Unaudited)
  
ASSETS   
CURRENT ASSETS:
<S>                                          <C>                    <C>    
  Cash and cash equivalents                  $2,778,318             $5,151,929
  Restricted cash                               103,513                102,012
  Accounts receivable--
    Less allowances for doubtful
      accounts of $6,436,000 at
      8/25/96 and $2,120,000 at
      2/25/96                                43,919,333            51,294,879
  Inventories (Note 4)                       50,096,093            90,138,403
  Prepaid expenses and other
    current assets                            3,407,989             1,956,537

        Total current assets            $   100,305,246       $   148,643,760

PROPERTY, PLANT & EQUIPMENT, at cost    $    85,543,386       $    84,073,513
  Less - Accumulated depreciation            45,888,473            43,814,604

                                        $    39,654,913       $    40,258,909

INVESTMENT IN AFFILIATES                $    15,385,482       $    15,385,482

OTHER ASSETS                            $     6,366,443       $     6,841,345

                                        $   161,712,084       $   211,129,496
</TABLE>























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

<PAGE>
TOWN & COUNTRY CORPORATION                                            Form 10-Q
                                                                         Page 3


CONSOLIDATED BALANCE SHEETS (Continued)
<TABLE>
<CAPTION>

                                              August 25,         February 25,
                                                1996                  1996
LIABILITIES AND STOCKHOLDERS' EQUITY         (Unaudited)

CURRENT LIABILITIES:
<S>                                           <C>               <C>   

      Notes payable to banks (Note 3)         $24,856,833       $15,193,176
      Current portion of long-term debt
        (Note 3)                                6,636,770           244,928
      Accounts payable                         18,649,521        20,237,262
      Accrued expenses                          8,514,882        15,078,569
      Accrued taxes                               484,833           659,744

         Total current liabilities            $59,142,839       $51,413,679

    LONG-TERM DEBT, less current portion
      (Note 2)                                $85,827,695       $93,174,432

    OTHER LONG-TERM LIABILITIES                $1,055,354       $ 1,122,625

            Total liabilities                $146,025,888      $145,710,736

    COMMITMENTS AND CONTINGENCIES
    MINORITY INTEREST                          $5,022,637       $ 5,228,363

    EXCHANGEABLE PREFERRED STOCK, $1.00
      par value--$14.59 preference value-
        Authorized--200,000 shares
        Issued and outstanding--
        152,217 shares                         $2,313,333       $2,319,476

    STOCKHOLDERS' EQUITY:
    Preferred stock, $1.00 par value-
      Authorized and unissued--800,000 and
        2,266,745 shares, respectively        $  --            $      --
    Convertible Preferred Stock, $1.00 par
      value, $6.50 preference value
      Authorized--4,000,000 and
        2,533,255 shares, respectively
      Issued and outstanding--1,366,631 and
        2,288,567 shares, respectively          1,366,631         2,288,567
    Class A Common Stock, $ .01 par value-
      Authorized--40,000,000 shares
      Issued and outstanding--23,301,178
        and 21,235,246 shares, respectively        233,012           212,352
    Class B Common Stock, $.01 par value-
      Authorized--8,000,000 shares
      Issued and outstanding--
      2,664,941 shares                             26,649            26,649
    Additional paid-in capital                 75,399,374        74,175,437
    Retained deficit                          (68,675,440)      (18,832,084)
            Total stockholders' equity       $  8,350,226       $57,870,921
                                             $161,712,084      $211,129,496
</TABLE>



The accompanying notes are an integral part of these consolidated  financial
statements.
<PAGE>
TOWN & COUNTRY CORPORATION                                           Form 10-Q
                                                                        Page 4


CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>

                        For the Three Months      For the Six Months
                               Ended                     Ended
                      August 25,     August 27,   August 25,    August 27,
                         1996            1995       1996            1995

<S>                 <C>              <C>           <C>            <C>    

NET SALES           $43,192,085     $48,194,042    101,456,209    $117,165,025

COST OF SALES        30,315,885      33,549,046     68,381,785      80,623,605

INVENTORY CHARGE
   (Note 1)          35,521,000      --             35,521,000      --

Gross profit (loss)$(22,644,800)    $14,644,996    $(2,446,576)    $36,541,420

SELLING, GENERAL &
  ADMINISTRATIVE
  EXPENSES           21,928,851      15,448,826     40,904,377      34,549,732


  Income (loss)from
    operations     $(44,573,651)       (803,830)  $(43,350,953)     $1,991,688

INTEREST EXPENSE,
  net                (3,125,377)     (3,077,090)    (6,151,528)     (6,048,971)
 
MINORITY INTEREST       112,275        (212,352)       141,310        (334,651)
</TABLE>






























    The accompanying notes are an integral part of these consolidated  financial
    statements.
<PAGE> 
TOWN & COUNTRY CORPORATION                                         Form 10-Q
                                                                      Page 5


CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Unaudited)
<TABLE>
<CAPTION>

                     For the Three Months Ended      For the Six Months Ended
                       August 25,     August 27,     August 25,      August 27,
                          1996          1995            1996            1995

<S>                     <C>            <C>          <C>             <C>    

LOSS BEFORE
  INCOME TAXES          $(47,586,753)  $(4,093,272)  $(49,361,171)   $(4,391,934)


PROVISION FOR
  INCOME TAXES                60,000        87,740       140,025        303,502

  NET LOSS              $(47,646,753) $(4,181,012)  $(49,501,196)   $(4,695,436)

ACCRETION OF DISCOUNT
  AND DIVIDENDS ON
  PREFERRED STOCKS           119,032      287,304        342,160        531,039

LOSS ATTRIBUTABLE
  TO COMMON
  STOCKHOLDERS          $(47,765,785) $(4,468,316)  $(49,843,356)   $(5,226,475)

LOSS PER COMMON
  SHARE (Note 5):          $(1.86)      $(0.19)        $(1.99)         $(0.22)

WEIGHTED AVERAGE
  COMMON SHARES
  OUTSTANDING
  (Note 5):               25,706,935   23,774,892     25,012,072     23,675,234
</TABLE>























    The accompanying notes are an integral part of these consolidated  financial
    statements.
<PAGE>
TOWN & COUNTRY CORPORATION                                           Form 10-Q
                                                                        Page 6


CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited)
<TABLE>
<CAPTION>


                                             For the Six Months Ended
                                          August 25,          August 27,
                                             1996                1995
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                   <C>                 <C>       
Net loss                              $   (49,501,196)    $    (4,695,436)
Adjustments to reconcile net loss
  to net cash used in operating activities-
  Depreciation and amortization             1,438,352           2,355,676
  Loss on disposal of certain
    assets                                      --                  1,138
  Undistributed earnings of affiliates,
    net of minority interest                 (141,310)            334,652
  Interest paid with issuance of debt                           4,200,569
  Change in assets and liabilities--
    Decrease (increase) in accounts
      receivable                            7,375,546           5,382,086
    Decrease (increase) in inventory       40,042,310          (4,339,040)
    Decrease (increase) in prepaid
      expenses and other current assets    (1,451,452)           (602,775)
    Decrease (increase) in other assets       333,132            (346,102)
    Increase (decrease) in accounts
      payable                              (1,587,741)           (982,259)
    Increase (decrease) in accrued
      expenses                             (6,563,687)         (2,992,385)
    Increase (decrease) in accrued taxes     (174,911)           (362,468)
    Increase (decrease) in other
      liabilities                             (67,271)           (136,508)
         Net cash used in operating
          activities                      (10,298,228)         (2,182,852)

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                       (1,537,885)         (1,191,035)
Proceeds from sale of certain assets           26,001              10,370
         Net cash used in investing
          activities                       (1,511,884)         (1,180,665)
</TABLE>








    The accompanying notes are an integral part of these consolidated financial
    statements.
<PAGE>
TOWN & COUNTRY CORPORATION                                        Form 10-Q
                                                                     Page 7


CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
<TABLE>
<CAPTION>

                                                For the Six Months Ended
                                              August 25,          August 27,
                                                1996                1995
CASH FLOWS FROM FINANCING ACTIVITIES:
<S>                                      <C>               <C>   
Payments on revolving credit facilities $(99,482,302)      $(117,253,432)
Proceeds from borrowings under
  revolving credit facilities            109,145,959         123,192,699
Payments on long-term debt                  (135,610)         (1,462,053)
Proceeds from the issuance
  of common stock                             40,994              12,073
Decrease (increase) in restricted cash        (1,501)              1,344
Payment of dividend                         (131,039)            (61,734)

        Net cash provided by
          financing activities           $ 9,436,501        $  4,428,897

NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                  $ (2,373,611)       $  1,065,380

CASH AND CASH EQUIVALENTS AT
  BEGINNING OF PERIOD                      5,151,929           3,336,921

CASH AND CASH EQUIVALENTS AT
  END OF PERIOD                         $  2,778,318        $  4,402,301

SUPPLEMENTAL CASH FLOW DATA:
Cash paid during the period for:
  Interest                              $  7,164,987         $ 2,448,318
  Income taxes                               210,006             696,146
</TABLE>


Supplemental Disclosure of Noncash Investing and Financing Activities (Note 6)



















The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
<PAGE>
TOWN & COUNTRY CORPORATION                                            Form 10-Q
                                                                         Page 8
                         PART I - FINANCIAL INFORMATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 AUGUST 25, 1996

(1)Inventory Charge

During the period from late August up to and including the
issuance of this report, the Company implemented a program to
recycle approximately $44 million of inventory to  recover gold
and diamonds to meet immediate production requirements.  The
Company also sold, for approximately $2 million, inventory with
an original cost basis of approximately $5 million.  The Company
has charged second quarter operations approximately $35.5
million.   Of this amount only approximately $2.5 million was
incurred in the second quarter.  The remaining approximately
$33.0 million represents third quarter activity, including a
$2.9 million provision as an estimate of additional activity
which will be required.

These actions were taken when access to cash and gold under the
Company's working capital facility and gold leasing agreement
became constrained near the end of the second quarter and on a
more pronounced basis in the third quarter,  and also because of
the Company's commitment to meet its customers' shipping requirements.

(2)      Significant Accounting Policies

The unaudited consolidated financial statements presented herein
have been prepared by the Company and contain all adjustments
(consisting of only normal recurring adjustments) necessary to
present fairly and on a basis consistent with the consolidated
financial statements for the year ended February 25, 1996, the
Company's financial position as of August 25, 1996, and the
results of its operations for the three- and six-month periods
ended August 25, 1996, and August 27, 1995, and cash flows for
the six-month periods ended August 25, 1996, and August 27, 1995.

The results of operations for the six months ended August 25,
1996 are not necessarily indicative of the results to be
expected for the year due to the seasonal nature of the
Company's operations and the significant inventory charge taken
in the three-months ended August 25, 1996.

The significant accounting policies followed by the Company are
set forth in Note (2) of the Company's consolidated financial
statements for the year ended February 25, 1996, which have been
included in the Annual Report on Form 10-K, Commission File
Number 0-14394, for the fiscal year ended February 25, 1996. 
Except as disclosed below, the Company has made no change in
these policies during the six months ended August 25, 1996.
<PAGE>
Long-Lived Assets

On February 26, 1996, the Company adopted Financial Accounting
Standard Board's Statement of Financial Accounting Standards
(SFAS) No. 121 "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed of".  SFAS No.
121 addresses accounting and reporting requirements for
long-term assets based on their fair market values.  The
Company's financial condition and results of operations were not
materially impacted as a result of adopting SFAS No. 121.

Stock Options

On February 26, 1996, the Company adopted SFAS No. 123
"Accounting for Stock-Based Compensation".  The Company intends
to continue accounting for its stock based compensation plans
for employees in accordance with Accounting Principles Board
Opinion (APB) No. 25.  Under SFAS No. 123, companies choosing to
continue to use APB No. 25 to account for stock based
compensation plans for employees, must make footnote disclosure
of the effects that use of the valuation methods described in
SFAS No. 123 would have on their earnings per share.  The
Company will disclose this information in the notes to its
consolidated financial statements for the fiscal year ended
February 23, 1997.  The company accounts for non-employee stock
based compensation under SFAS No. 123.

(3)     Loan Arrangements

On July 3, 1996, the Company entered into a new credit agreement
with Foothill Capital Corporation ("Foothill").  The agreement
provides senior secured financing consisting of a $40 million
revolving credit facility and a $30 million letter of credit in
support of a Gold Consignment Facility provided by Fleet
Precious Metals ("Fleet"); however, the aggregate amount of the
combined facilities which may be outstanding at any date is $65
million.  The agreement is for a period of two years and
provides Foothill with an option to renew for three additional
years.  The loans bear interest at a rate per annum equal to the
greater of (a) 2% above the reference rate announced by an
identified group of major banks selected by Foothill or (b) 8%. 
The agreement contains standard covenants for facilities of this
type including financial covenants relating to interest
coverage, minimum net worth, minimum working capital, debt to
net worth and current ratios and limitations on dividends,
distributions and capital expenditures.  Advances under the
credit line are based on eligible accounts receivables and
inventory.  Foothill has first priority security interest in
receivables, inventory and substantially all real estate and
fixed assets owned by the Company and its domestic subsidiaries
subject to Fleet's first position as gold consignor, supported
by the letter of credit.  

The Company's results of operations created potential violations
of certain financial covenants in its working capital facility. 
The Company has received waivers of these financial covenants
from Foothill.  The Company is currently discussing with its
lender permanent modifications of the covenants in the working
capital facility.  There can be no assurance, however, that the
Company and its lenders will be able to agree upon such
modifications to the working capital facility.  The working
capital facility, pursuant to its terms, is expected to be
amended following completion of the Balfour sale (Note 7), to
reflect such sale.
<PAGE>
During the first quarter of fiscal 1996, the Company used its
final PIK to make the semiannual interest payment due May 13,
1995, on the 13% Senior Subordinated Notes, due May 31, 1998,
with approximately $4.2 million of additional notes.  The
Company is obligated to make  semiannual cash interest payments
of approximately $4.5 million.  Such a payment was made on May
15, 1996, and the next payment is due to be made on November 15,
1996.

In charging the second quarter with the inventory charge, the
Company has reduced its net worth below a covenant threshold
established in the Senior Secured Notes and Senior Subordinated
Notes.  If the Company's net worth remains below this threshold
for two consecutive quarters, within 45 days thereafter, the
Company is required to make an offer to redeem 7.5% of the
outstanding notes under these two indentures, and to continue to
offer such redemptions semiannually as long as the condition
persists.   If such redemption needed to be made, the first such
redemption offer of approximately $6.2 million would need to be
made on or about January 8, 1997.   Such redemption would be
made sixty days thereafter, on or about March 9, 1997.  An
assumed bond redemption amount has been included in current
portion of long-term debt on the accompanying Consolidated
Balance Sheet as of August 25, 1996.

The Company is currently taking action to amend the indentures
to the Senior Secured Notes and the Senior Subordinated Notes. 
Such amendments would, among other things, reduce the covenant
threshold referred to above to a level that is below the
Company's current net worth.  To amend each indenture, the
Company believes it must receive the written consent of the
holders of at least a majority in principal amount of the
outstanding notes under each indenture. Such a majority has
executed such written consents.  However, such consents and the
related amendments shall not be effective until the Trustees of
the indentures have approved and executed them the
Company and its lender under its working capital facility have
entered into a written amendment to the working capital facility
which modifies the financial covenants set forth in the working
capital facility.  Therefore, there can be no assurances that
such written consents shall become effective and that the
indentures will be amended.

The Company's domestic gold facility provides secured gold
consignment availability of approximately 70,000 troy ounces.  A
subsidiary of the Company has an agreement with a gold supplier
to provide secured gold consignment availability of
approximately 4,800 troy ounces.  As of August 25, 1996,
approximately 68,000 ounces of gold valued at approximately
$25.8 million were on consignment under the Company's gold
consignment facilities.

<PAGE>
(4)Inventories

Inventories consisted of the following at August 25, 1996, and February 25,
1996:
<TABLE>
<CAPTION>

                             August 25,     February 25,
                                1996            1996
<S>                         <C>             <C>    
Raw Materials               $10,509,726     $14,820,768
Work-in-Process              10,926,966       9,947,057
Finished Goods               28,659,401      65,370,578
                             ----------      ----------
                            $50,096,093     $90,138,403
</TABLE>

(5)Loss Per Common Share

Loss per common share is computed by adjusting the Company's net loss for the
accretion of discount and dividends on preferred stocks and dividing by the
weighted average number of common shares outstanding during each period.

(6) Supplemental  Disclosure of Noncash Investing and Financing  Activities
On May 15, 1995, the Company issued approximately $4.2 million in new 13% Senior
Subordinated  Notes due May 31,  1998,  as  payment of the  semiannual  interest
installment. Approximately $2.5 million of this amount was classified as accrued
expense in the February 26, 1995, Consolidated Balance Sheet.
<PAGE>
(7) Agreement for the Sale of Subsidiary Assets

On May 20, 1996, the Company entered into an agreement to sell 
assets and liabilities of its Balfour and Gold Lance
subsidiaries constituting substantially all of the operations of
Balfour and Gold Lance to Class Rings, Inc. (CRI), a new company
formed by Castle Harlan Partners II, L.P. and the Company. 
Separately, CRI entered into an agreement with CJC Holdings,
Inc. (CJC) to acquire its school ring business.

The Federal Trade Commission (FTC), which has had the
transaction under review since May 1996, has given preliminary
approval to a modified agreement between the Company and CRI.

Under the modifications which received preliminary approval by
the FTC, the purchase price has been adjusted to $44 million,
adjustable for the fluctuation in working capital from January
28, 1996 to the date of closing, plus the cash equivalent to the
value of gold on hand as of the date of closing.  The Company
will not receive any stock interest in CRI.  The Company will
retain the operations of Gold Lance.  The Company is working to
reflect such changes in an amended purchase agreement which is
anticipated to be completed in the near future.

Completion of the proposed transaction, as modified, is
contingent upon certain closing conditions being met, including,
without limitation, final Federal Trade Commission approval, 
CRI's ability to raise sufficient capital to complete the
acquisition and the parties entering into an amended purchase
agreement.  There can be no assurance as to the timing of the
completion of such transaction or as to whether such transaction
shall be consummated.  The transaction, if consummated, is not
expected to have an unfavorable impact on the Company's
financial position.

The Company also has agreements to sell a number of real estate
parcels, the principal component of which is its building in New
York City.  Although the closings of these real estate sales are
subject to a number of contingencies, and there can be no
assurance that any or all of these real estate parcels will be
sold, the Company currently expects to close these sales prior
to the end of the current fiscal year.  If all of the real
estate parcels were to be sold, the Company expects that it
would realize net proceeds of approximately $7.8 million of cash
and should not have a significant effect on results of
operations.

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

This Form 10-Q contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934,
as amended.  The Company's actual results could differ
materially from those set forth in the forward-looking
statements.  Certain factors that might cause such a  difference
include the inability to:  (i) obtain permanent modifications of
certain covenants in the Company's working capital facility;
(ii) amend the indentures to the Senior Secured notes and the
Senior Subordinated Notes; (iii) sell the Company's Balfour
subsidiary and (iv) close certain real estate transactions
described herein.

Results of Operations for the Six Months Ended August 25, 1996
Compared to the Six Months Ended August 27, 1995

During the period from late August up to and including the
issuance of this report, the Company implemented a program to
recycle approximately $44 million of inventory to  recover gold
and diamonds to meet immediate production requirements.  The
Company also sold, for approximately $2 million, inventory with
an original cost basis of approximately $5 million.  The Company
has charged second quarter operations approximately $35.5
million.   Of this amount only approximately $2.5 million was
incurred in the second quarter.  The remaining approximately
$33.0 million represents third quarter activity, including a
$2.9 million provision as an estimate of additional activity
which will be required.

These actions were taken when access to cash and gold under the
Company's working capital facility and gold leasing agreement
became constrained near the end of the second quarter and on a
more pronounced basis in the third quarter, and also because of
the Company's commitment to meet its customers' shipping requirement.

Net sales for the six months ended August 25, 1996, decreased
$15.7 million or 13.4 % from $117.2 million in fiscal 1996 to
$101.5  million in fiscal 1997.  Current year sales of fine
jewelry have decreased approximately $15.1 million or 20.2% over
the corresponding period in fiscal 1996.   The Company is
working to improve its product offerings, reduce the cost of
procurement and provide a higher standard of service to convince
its  customer base that the Company should get a larger piece of
their business.  

Cost of goods sold for the six months ended August 25, 1996,
decreased approximately $12.2 million from $80.6 million in
fiscal 1996 to $68.4 million in fiscal 1997.  Margin on sales
increased 1.4% from 31.2% in fiscal 1996 to 32.6% in fiscal
1997.  Gross profit margin has benefited from the higher mix of
Balfour sales to total sales where scholastic product margin is
higher than fine jewelry.

Selling, general, and administrative expenses for the current
period increased approximately $6.3 million  from $34.6 million
in fiscal 1996 to $40.9 million in fiscal 1997.  As a percentage
of net sales, selling, general, and administrative expenses were
approximately 10.8% higher in the current year than for the six
months ended August 27, 1995.  Included in the period were
charges of approximately $5.5 million in excess of expected
costs to resolve disputed items with customers.

Net interest expense for the six months ended August 25, 1996,
increased approximately $0.1 million  relative to the
corresponding period in fiscal 1996. 

Although the Company had a taxable loss for the six months ended
August 25, 1996, a tax provision of approximately $140,000 was
recorded.  The tax provision was primarily due to the Company's
inability to fully recognize the tax benefits of operating
losses in certain jurisdictions, as well as state and foreign
income taxes.

Liquidity and Working Capital

The Company's results of operations created potential violations
of certain financial covenants in its working capital facility. 
The Company has received waivers of these financial covenants
from Foothill.  The Company is currently discussing with its
lender permanent modifications of the covenants in the working
capital facility.  There can be no assurance, however, that the
Company and its lenders will be able to agree upon such
modifications to the working capital facility.  The working
capital facility, pursuant to its terms, is expected to be
amended following completion of the Balfour sale (Note 7), to
reflect such sale.

In charging the second quarter with the inventory charge, the
Company has reduced its net worth below a covenant threshold
established in the Senior Secured Notes and Senior Subordinated
Notes.  If the Company's net worth remains below this threshold
for two consecutive quarters, within 45 days thereafter, the
Company is required to make an offer to redeem 7.5% of the
outstanding notes under these two indentures, and to continue to
offer such redemptions semiannually as long as the condition
persists.   If such redemption needed to be made, the first such
redemption offer of approximately $6.2 million would need to be
made on or about January 8, 1997.   Such redemption would be
made sixty days thereafter, on or about March 9, 1997.  An
assumed bond redemption amount has been included in current
portion of long-term debt on the accompanying Consolidated
Balance Sheet as of August 25, 1996.

The Company is currently taking action to amend the indentures
to the Senior Secured Notes and the Senior Subordinated Notes. 
Such amendments would, among other things, reduce the covenant
threshold referred to above to a level that is below the
Company's current net worth.  To amend each indenture, the
Company believes it must receive the written consent of the
holders of at least a majority in principal amount of the
outstanding notes under each indenture. Such a majority has
executed such written consents.  However, such consents and the
related amendments shall not be effective until the Trustees of
the indentures have approved and executed them and the
Company and its lender under its working capital facility have
entered into a written amendment to the working capital facility
which modifies the financial covenants set forth in the working
capital facility.  Therefore, there can be no assurances that
such written consents shall become effective and that the
indentures will be amended.

An interest payment of approximately $4.5 million on the Senior
Subordinated Notes is due on November 15, 1996.

On May 20, 1996, the Company entered into an agreement to sell 
assets and liabilities of its Balfour and Gold Lance
subsidiaries constituting substantially all of the operations of
Balfour and Gold Lance to Class Rings, Inc. (CRI), a new company
formed by Castle Harlan Partners II, L.P. and the Company. 
Separately, CRI entered into an agreement with CJC Holdings,
Inc. (CJC) to acquire its school ring business.

The Federal Trade Commission (FTC), which has had the
transaction under review since May 1996, has given preliminary
approval to a modified agreement between the Company and CRI.

Under the modifications which received preliminary approval by
the FTC, the purchase price has been adjusted to $44 million,
adjustable for the fluctuation in working capital from January
28, 1996 to the date of closing, plus the cash equivalent to the
value of gold on hand as of the date of closing.  The Company
will not receive any stock interest in CRI.  The Company will
retain the operations of Gold Lance.  The Company is working to
reflect such changes in an amended purchase agreement which is
anticipated to be completed in the near future.

Completion of the proposed transaction, as modified, is
contingent upon certain closing conditions being met, including,
without limitation, final Federal Trade Commission approval, 
CRI's ability to raise sufficient capital to complete the
acquisition and the parties entering into an amended purchase
agreement.  There can be no assurance as to the timing of the
completion of such transaction or as to whether such transaction
shall be consummated.  The transaction, if consummated, is not
expected to have an unfavorable impact on the Company's
financial position.

The Company also has agreements to sell a number of real estate
parcels, the principal component of which is its building in New
York City.  Although the closings of these real estate sales are
subject to a number of contingencies, and there can be no
assurance that any or all of these real estate parcels will be
sold, the Company currently expects to close these sales prior
to the end of the current fiscal year.  If all of the real
estate parcels were to be sold, the Company expects that it
would realize net proceeds of approximately $7.8 million of cash
and should not have a significant effect on results of
operations.

Cash used in operating activities for the six months ended
August 25, 1996 was approximately $10.3 million, compared with a
use of approximately $2.2 million for the corresponding period
of fiscal 1996.   The additional cash requirements are the
result of the earnings deterioration and the requirement to make
cash interest payments on the 13% Senior  Subordinated Notes.

Cash used in investing activities for the six months ended
August 25, 1996 was approximately $1.5  million  versus
approximately $1.2 million for the corresponding period in
fiscal 1996. 

Cash provided by financing activities was approximately $9.4
million for the six months ended August 25, 1996, compared with
$4.4 million for the six months ended August 27, 1995.  Cash
generated from financing activities was primarily used to fund
operations during both periods.  The Company was able to finance
a portion of its operating cash requirements from cash available
at foreign subsidiaries.

The Company's net cash position decreased from approximately
$5.2 million at February 25, 1996, to approximately $2.8 million
at August 25, 1996.
<PAGE>
Item 4. Submission of Matters to a Vote of Security-Holders

On July 18, 1996, the Company held its Annual Meeting of Stockholders. At this
meeting, one matter was submitted for a vote of the stockholders: election of
one director. The following votes were cast on the foregoing matter:

BROKER
                             FOR        WITHHELD       NON-VOTE
Election of Charles Hill  44,479,437     36,142         473,252


Directors C. William Carey, Richard E. Floor, Marcia C. Morris and William
Schawbel continue their terms of office.

Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits

    
     11     Earnings Per Share Computations
     27     Financial Data Schedule
     99     Waiver of Events of Default with respect to the
              "Non-Compliance Items

    (b)     Reports on Form 8-K

There were no Form 8-K filings during the second quarter ended August 25, 1996.
<PAGE>



                                   SIGNATURES
                                   ----------



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  Report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                                  TOWN & COUNTRY CORPORATION
                                                          (Registrant)


Date:  October 25, 1996                           /s/ Francis X. Correra
                                                  --------------------------
                                                  Francis X. Correra
                                                  Senior Vice President and
                                                  Chief Financial Officer

<PAGE>
TOWN & COUNTRY CORPORATION                                          EXHIBIT 11

Earnings Per Share Computations
(Unaudited)
<TABLE>
<CAPTION>

                       For the Three Months Ended     For the Six Months Ended
                        August 25,     August 27,      August 25,     August 27,
                          1996           1995            1996           1995
PRIMARY EPS:
<S>                    <C>           <C>             <C>            <C>    
Net loss               $(47,646,753) $(4,181,012)    $(49,501,196)  $(4,695,436)
Accretion of discount
  and dividends
  on preferred stocks       119,032      287,304          342,160       531,039
Loss attributable to
  common stockholders  $(47,765,785) $(4,468,316)    $(49,843,356)  $(5,226,475)

Weighted average common
  shares outstanding     25,706,935   23,774,892       25,012,072    23,675,234
Weighted shares issued
  from exercise and 
  assumed execise of:
     warrants                  --             --              --             --
     options                   --             --              --             --
Shares for EPS
  calculation            25,706,935   23,774,892        25,012,072   23,675,234


REPORTED EPS:
Net loss                 $(1.85)       $(0.18)          $(1.98)        $(0.20)
Accretion of discount
  and dividends
  on preferred stocks     (0.01)        (0.01)           (0.01)         (0.02)
Loss per common share    $(1.86)       $(0.19)          $(1.99)        $(0.22)
</TABLE>
  

FULLY DILUTED EPS:

For the periods  presented in this  exhibit,  there is no dilution  from Primary
EPS.




















    This  exhibit  should be  reviewed  in  conjunction  with Note 4 of Notes to
    Consolidated Financial Statements.
<PAGE>
TOWN & COUNTRY CORPORATION                                           EXHIBIT 27
FINANCIAL DATA SCHEDULE

<TABLE>
<S>                                                                <C>    
Cash and cash items                                                $ 2,778,318
Marketable securities                                                 --
Notes and accounts receivable--
  Trade                                                             50,355,333
Allowances for doubtful accounts                                     6,436,000
Inventory                                                           50,096,093
Total current assets                                               100,305,246
Property, plant and equipment                                       85,543,386
Accumulated depreciation                                            45,888,473
Total assets                                                       161,712,084
Total current liabilities                                           59,142,839
Bonds, mortgages, and similar debt                                  85,827,695
Common stock                                                           259,661
Preferred stock--
    Mandatory redemption                                             2,313,333
No mandatory redemption                                              1,366,631
Other stockholders' equity                                           6,723,934
Total liabilities and stockholders' equity                         161,712,084
Net sales of tangible products                                     101,456,209
Total revenues                                                     101,456,209
Cost of tangible goods sold                                         68,381,785
Total costs and expenses applicable to
   sales and revenues                                               68,381,785
Other costs and expenses                                            70,026,162
Provision for doubtful accounts and notes                            6,399,215
Interest and amortization of debt discount                           6,151,528
Income (loss) before taxes and other items                         (49,361,171)
Income tax expense                                                     140,025
Income (loss) continuing operations                                (49,501,196)
Discontinued operations                                              --
Extraordinary items                                                  --
Cumulative effect--
   Changes in accounting principles                                  --
Net income (loss) per common share                                 (49,843,356)
Earnings per share--
   Primary                                                              $(1.99)
   Fully diluted                                                        $(1.99)
</TABLE>
<PAGE>
                                                                   EXHIBIT 99

                          FOOTHILL CAPITAL CORPORATION

                                                               October 24, 1996



Town & Country Corporation
Town & Country Fine Jewelry Group, Inc.
Gold Lance, Inc.
L.G. Balfour Company, Inc.
25 Union Street
Chelsea, Massachusetts 02150

Re: Waivers of Events of Default with respect to the "Non-Compliance Items"
    as defined below

Gentlemen:

Reference is made to the Loan Agreement dated as of July 3, 1996
(as the same heretofore may have been amended or modified, the
"Agreement") between Foothill Capital Corporation ("Lender") and
Town & Country Corporation, Town & Country Fine Jewelry Group,
Inc., Gold Lance, Inc., and L.G. Balfour Company, Inc.
(collectively, "Borrower").  Terms used herein and not otherwise
defined herein shall have the meaning ascribed thereto in the
Agreement.

Borrower has advised Lender that:

1.   Borrower is not in compliance with Section 6.13(a) of the
Agreement on August 25, 1996, because Borrower failed to
maintain the minimum ratio of Consolidated Current Assets
divided by Consolidated Current Liabilities required therein at
all times;

2.  Borrower is not in compliance with Section 6.13(b) of the 
Agreement on August 25, 1996, because  Borrower failed to
maintain the minimum Consolidated Tangible Net Worth required
therein at all times;

3.  Borrower is not in compliance with Section 6.13(c) of the
Agreement on August 25, 1996, because Borrower failed to
maintain the minimum Working Capital amount required therein at
all times;

4.  Borrower is not in compliance with Section 6.13(d) of the
Agreement on  August 25, 1996, because Borrower failed to
maintain the minimum Consolidated Interest Coverage Ratio
required therein for the twelve (12) month period ended August
25, 1996; and

5.  Borrower is not in compliance with Section 6.13(f) of the
Agreement on August 25, 1996, because Borrower failed to
maintain a ratio of Consolidated Total Senior Liabilities
divided by Consolidated Tangible Capital Base not more than
the ratio required therein at all times;

(the  foregoing   items  1,  2,  3,  4,  and  5  are  referred
to  herein, collectively, as the "Non-Compliance Items"). 
Borrower has asked Lender to waive any Event of Default 
that may have been occasioned by any of the  Non-Compliance
Items.  Lender hereby waives any Event of Default that may 
have been  occasioned solely by any of the Non-Compliance Items.

The waiver of the Non-Compliance Items is limited to the
specifics hereof, shall not apply with respect to any facts or
occurrences other than those on which the applicable
Non-Compliance Item is based, shall not excuse future
non-compliance with the Agreement (as it may from time to time
be amended), including Section 6.13 thereof, and except as
expressly set forth herein, shall not operate as a waiver or an
amendment of any right, power or remedy of Lender, nor as a 
consent to any further or other matter, under the Loan Documents.

This waiver shall not be effective until Lender advises 
Borrower in writing that Lender has obtained any consents that
Lender may need or require from participants of Lender.

Cordially,

Foothill Capital Corporation
By:  /s/Anthony Aloi
Name: Anthony Aloi
Title:   Senior Vice President
<PAGE>
FOOTHILL

October 24, 1996


Mr. Robert Hannon
Town & Country Corporation
25 Union Street
Chelsea, MA 02150

Dear Bob:

This letter should serve as notice that Foothill Capital has
received proper

consent from our participants and the "Waiver of Event of
Default with respect to 

the Non-Compliance Items" dated October 24, 1996, is now
effective.


Sincerely


/S/ Anthony Aloi
Anthony Aloi
Assistant Vice President

CC:
Bruce Hilowitz, CIT
Alan Ghole, FINOVA Capital Corporation
Kevin Vaughan, Textron Financial Corporation
Britt Terrell, Coast Business Credit




                          Foothill Capital Corporation
                        617-624-4400 / Fax 617-722-9493
                 60 State Street, Suite 1150, Boston, MA 02109