U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB

(Mark One)

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

For the quarterly period ended March 31, 2001

      |_|   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 0-24798

                                  RAQUEL, INC.
--------------------------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)

           Nevada                             93-1123005
--------------------------------------------------------------------------------
(State or other jurisdiction                (IRS Employer
of Incorporation)                            Identification Number)

         269 So. Beverly Dr., Suite 938, Beverly Hills, California 90212
         ---------------------------------------------------------------
                    (Address of principal executive offices)

                                 (310) 274-0086
                           ---------------------------
                           (Issuer's telephone number)

                  formerly known as Colecciones de Raquel, Inc.
--------------------------------------------------------------------------------
     (Former name, former address and former fiscal year, if changed since
                                  last report)

      Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 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 |_|

At March 31, 2001, 24,700,000 shares of the Company's $.0001 par value common
stock were outstanding.

<PAGE>

PART 1 - FINANCIAL INFORMATION

ITEM 1.  Financial Statements                                               PAGE
                                                                            ----

     (a) Balance Sheet (Unaudited) -March 31, 2001 .......................... 1

     (b) Statements of Operations (Unaudited) - Three months
         ended March 31, 2001 and 1999 Period from
         Inception (December 1, 1987) to March 31, 2001 ..................... 2

     (c) Statement of Stockholder's Equity (Unaudited) -
         Period from Inception (December 1, 1987) to March 31, 2001 ......... 3

     (d) Statements of Cash Flows (Unaudited) - Three months
         ended March 31, 2001 and Period from
         Inception (December 1, 1987) to March 31, 2001 ..................... 4

     (e) Notes to Unaudited Financial Statements ............................ 5

ITEM 2.  Management's Discussion and Analysis or
         Plan of Operation .................................................. 7

PART II - OTHER INFORMATION ................................................. 8


                                       ii
<PAGE>

                                  Raquel, Inc.
                   (formerly known as Colecciones de Raquel)
                         (A Development Stage Company)
                                 Balance Sheet
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                     March 31, 2001
                                                                     --------------
<S>                                                                     <C>
Assets

   Current Assets

       Cash and equivalents                                             $    11,151
       Merchandise Inventory                                                 57,185
       Deposits paid and other assets                                         2,081
                                                                        -----------

       Total Current Assets                                             $    70,417

   Equipment, Furniture & Fixtures, net of accum. depr. $33,244                 774
                                                                        -----------

   Total Assets                                                         $    71,192
                                                                        ===========

Liabilities and Stockholders Equity

   Current Liabilities
       Accounts payable & Taxes payable                                 $     5,078

       Total current liabilities                                        $     5,078

   Stockholder's equity
       Common stock - $.0001 par value, 50,000,000 shares authorized,
       24,700,000 shares issued and outstanding                               2,470

       Additional paid in capital                                         1,375,704

       Deficit accumulated during the development stage                  (1,312,061)
                                                                        -----------

       Total stockholder's equity                                            66,113
                                                                        -----------

   Total liabilities and stockholder's equity                           $    71,192
                                                                        ===========
</TABLE>

                 See accompanying notes to financial statements.


                                                                               1
<PAGE>

                                  Raquel, Inc.
                   (formerly known as Colecciones de Raquel)
                         (A Development Stage Company)
                            Statements of Operations
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                            Three Months            Inception 12/87 to
                                                             Ended March                 March 31,

                                                       2001              2000             2001
                                                       ----              ----             ----
<S>                                                 <C>               <C>             <C>
Sales                                                      932               800           46,519
Cost of Goods Sold                                         233               160           23,952
                                                    ----------        ----------      -----------

Gross Profit                                               699               640           22,567

Selling, general, and administrative expenses            8,022            12,293        1,447,058
                                                    ----------        ----------      -----------

(Loss) from operations                                  (7,322)          (11,653)      (1,363,699)

Other Income                                               168             1,323          118,076

Loss before provision for income taxes                  (7,200)          (10,330)      (1,306,460)

Provision for income taxes                                 800                             (6,400)

Net Loss                                               ($7,200)         ($10,330)     ($1,312,060)
                                                    ==========        ==========      ===========

Net Loss per share                                       ($.01)            ($.01)
                                                    ==========        ==========

Weighted average number of common shares            24,700,000        27,300,000
                                                    ==========        ==========
</TABLE>

                 See accompanying notes to financial statements.


                                                                               2
<PAGE>

                                  Raquel, Inc.
                   (formerly known as Colecciones de Raquel)
                         (A Development Stage Company)
                       Statement of Stockholders' Equity
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                           Deficit
                                                            Addt'l         During the
                               Common Stock                 Paid In        Development
                               Shares           Amount      Capital        Stage            Total
                               ------           ------      -------        -----            -----
<S>                            <C>              <C>         <C>            <C>              <C>
Balance, December 31, 1997     24,000,0000      $2,400      $1,375,444     $  (819,926)     $ 557,918

Common Stock issued for
  consulting services            3,000,000         330                                            330

Net Loss                                                                      (217,582)      (217,582)
                               -----------      ------      ----------     -----------      ---------

Balance, December 31, 1998      27,300,000       2,730      $1,375,444      (1,027,508)       340,666

Common stock canceled           (2,600,000)       (260)                                             0

Net Loss                                                                      (169,677)      (169,677)
                               -----------      ------      ----------     -----------      ---------

Balance, December 31, 1999      24,700,000      $2,470      $1,375,704     $(1,207,185)     $ 170,989

Net Loss                                                                       (97,675)       (97,675)

Balance December 31, 2000       24,700,000      $2,470      $1,375,704     $(1,304,860)     $  73,314

Net Loss March 31, 2001                                                         (7,201)

                               24,7000,000      $2,470      $1,375,704     $(1,312,061)     $  71,192
</TABLE>

                 See accompanying notes to financial statements.


                                                                               3
<PAGE>

                                  Raquel, Inc.
                   (formerly known as Colecciones de Raquel)
                         (A Development Stage Company)
                            Statements of Cash Flows
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                         Period from Inception
                                                     For the Thee Month Period Ended         December 31, 1987
                                                                           March 31,                to Current
                                                                                2001            March 31, 2001
                                                                  ------------------            --------------
<S>                                                                         <C>                    <C>
Cash flows from operating activities
Net loss                                                                    $ (7,201)              $(1,312,061)
Adjustments to reconcile net loss to net cash used in
 operating activities
             Depreciation                                                          0                    47,721
        (Increase) decrease in
             Inventory                                                           232                   (57,185)
             Prepaid expenses & other assets                                     715                    (3,511)

        Increase (decrease) in
             Accounts Payable & accrued expenses                                (254)                    5,733
                                                                            --------               -----------

             Net cash used in operating activities                          $ (6,508)              $(1,319,303)
                                                                            --------               -----------

Cash flows from investing activities
             Purchase of Equipment & Improvements                                 (0)                  (47,721)

             Net cash used in investing activities                                (0)              $   (47,721)
                                                                                                   -----------

Cash flows from financing activities
        Proceeds from MMI settlement agreement                                    --               $ 1,250,000
        Proceeds from sale of common stock                                        --                    91,090
        Payments for offering costs                                               --
Loans & paid-in capital from preferred stockholder                                --                    36,754
                                                                            --------               -----------

        Net cash provided by financing activities                                 --               $ 1,378,174
                                                                            --------               -----------

        Net increase(decrease) in cash and cash                              ($6,508)
             equivalents                                                    --------
Cash & cash equivalents, beginning of period                                $ 17,658
                                                                            --------

Cash & cash equivalents, end of period                                      $ 11,151
                                                                            ========

Interest received                                                           $    168
                                                                            ========
</TABLE>


                                                                               4
<PAGE>

                                  Raquel, Inc.
                   (formerly known as Colecciones de Raquel)
                         (A Development Stage Company)
                         Notes to Financial Statements
                                  (Unaudited)

1. Business

      Raquel, Inc. (formerly known as Colecciones de Raquel) (The "Company")
      designs and markets cosmetics, skin care, fragrance, and lingerie. The
      Company's cosmetics line is specifically designed for golden skin tones
      such as sallow and olive complexions.

2. Unaudited financial statements

      The financial statements as of March 31, 2001 and March 30, 1999 included
      herein are unaudited; however, such information reflects all adjustments
      consisting of normal recurring adjustments, which are, in the opinion of
      management, necessary for a fair presentation of the information for such
      periods. In addition, the results of operation for the interim periods are
      not necessarily indicative of results for the entire year. The
      accompanying financial statements should be read in conjunction with the
      Company's annual report filed on Form 10-KSB.

3. Warrants and related settlement agreement

      In August 1994, the Company completed an initial public offering of its
      securities. The Company sold 1,000,000 units at $.10 per unit for gross
      proceeds of $100,000 on a self-underwritten basis. Expenses of the
      offering were $8,910. Each unit consists of one share of common stock and
      one Class A Warrant. The Class A Warrants were exercisable for one share
      of common stock and two Class B Warrants at a price of $.25 each. The
      Class B Warrants were exercisable for one share of common stock and one
      Class C Warrant at a price of $.50 each. The Class C warrants were to be
      exercisable for one share of common stock at a price of $1.00 each.

      In February 1995, all of the B Warrants were exercised in a transaction
      which the Company claims was fraudulent. Although the Company received no
      portion of the $250,000 exercise price, Units consisting of one share of
      common stock and two B Warrants were issued by the Company's transfer
      agent without the knowledge of the Company's officers or directors to
      persons purportedly exercising the A Warrants.

      In February 1995, all of the B Warrants were exercised in a transaction
      which the Company claims was fraudulent. Although the Company received no
      portion of the $1,000,000 exercise price, Units consisting of one share of
      common stock and one C warrant were issued by the Company's transfer agent
      without the knowledge of the Company's officers or directors to persons
      purportedly exercising the B Warrants.

      The shares of common stock issued in the Company's initial public offering
      and upon exercise of the A Warrants and B Warrants (collectively,
      "Shares") have been publicly traded. The C Warrants were also purportedly
      exercised without the receipt by the Company of the exercise price, the
      Company believes that the shares issued upon exercise of the C Warrants
      were not traded and the Company has canceled the C Warrants and the shares
      issued upon their exercise.

      In September 1995, the Company entered into an Agreement with Moore
      McKenzie, Inc., a Philippine corporation ("MMI"), which purchased and
      resold the shares following their exercise by third party entities. MMI
      has expressly denied any involvement in the exercise of the A Warrants, B
      Warrants, and C Warrants. Solely for the purpose of protecting and
      preserving its investment in the Shares and


                                                                               5
<PAGE>

      3. Warrants and related settlement agreement (continued)

      its reputation and goodwill, MMI agreed to pay the Company the exercise
      price of the A Warrants ($250,000) and B Warrants ($1,000,000). As of
      February 29, 1996, the Company had received all of the settlement

      Further, the Company agreed to sell MMI an additional 1,000,000 shares of
      common stock at a price of $1.00 per share in place of the shares which
      could have been purchased upon exercise of the canceled C Warrants. The
      option to purchase the additional 1,000,000 shares at $1.00 per share
      expired in September, 1996. MMI did not purchase the additional 1,000,000
      and no additional shares were issued. As part of the Agreement with MMI,
      the Company agreed to assist and cooperate with MMI in any action against
      third parties to recover MMI's damages suffered as a result of or in
      connection with MMI's purchase of the Shares.

4. Legal proceedings

      In September of 1998, the Company filed a complaint and Demand for
      Arbitration before the American Arbitration Association against John W.
      Vanover. The Demand for Arbitration is for the return of $10,000 in cash
      and stock certificates for 2.6 million Company common shares. The basis of
      the dispute is for non-performance, bad faith, and willful malfeasance. An
      Arbitration hearing was held on July 16, 1999, before the American
      Arbitration Association in regard to the Company's claims against John W.
      Vanover. On August 5, 1999 the Company received notice that the Company
      had been awarded its demands in the Complaint. As a result, 2.6 million
      shares have been canceled, additionally, the Company was awarded $10,000,
      plus cost of suit. These monies have not yet been collected.

      Additionally, the Company entered into an investor relations agreement
      with Angela Z. Hardy in June, 1999. The Company has a dispute regarding
      the agreement and anticipates litigation is imminent in this matter.

      Currently, there are no material pending legal proceedings to which the
      Company or the property of the Company are subject. In addition, no
      proceedings are known to be contemplated by a governmental authority
      against the Company or any officer or director of the Company.

5. Leases

      On October 1, 1995, the Company entered into a two year lease for a store
      front located in Beverly Hills, California. In October, 1997 this lease
      was renewed for another 2 years. The space is approximately 700 square
      feet, and the monthly rent is $1,100. This lease expired in October 1999,
      and the Company has continued to occupy the premises on a month-to-month
      basis. In May 1996, the Company entered into a three year lease for a 900
      square foot store front in downtown Los Angeles, California. Monthly rent
      for the space, which the Company is utilizing for its second
      showroom/boutique location, is $1,451 per month. This lease expired on
      June 30, 1999, and the store has been closed.

      As of March 31, 2001, the Company moved its offices, the mailing address
      is 269 So. Beverly Drive, Suite 938, Beverly Hills, California 90212,
      telephone number (310) 274-0086, fax number (310) 274-0161.


                                                                               6
<PAGE>

ITEM 2. Management's Discussion And Analysis Or Plan Of Operation

      Material Changes in Results of Operations

      First Quarter revenues were slightly higher than the previous year.In
      order to preserve capital, the Company continues with cut-backs, resulting
      in lowering its Selling, general, and administrative expenses by 38%
      compared to the Second Quarter of 1999.

      Material Changes in Financial Condition

      During the three month period ended March 31, 2001 the Company's cash
      position decreased due to the continued low level of revenue relative to
      its cost of operations, and lack of offsetting inflows from financing
      activities. However, the Company entered into an agreement with LBI Group,
      Inc. and Vincent Barone for options to purchase stock at a discounted
      price. Proceeds from this transaction are for 4,000,000 shares at $.05
      each. (See S-8 filing of March, 2001.) On May 2, 2001 a Promissory Note
      was signed by the principals of the LBI Group and Vincent Barone to
      exercise their options. The Company will be receiving monthly payments in
      the amount of $6,000.00. (See Exhibit 10.23, Promissory Notes of Paul
      Lovito, Matthew Lovito, Darrin Lovito, Marc Lovito [LBI Group, Inc.]; and
      Vincent Barone filed with the Amended10KSB 2000).

      Distribution

      On December 11, 2000, the Company issued a press release announcing that
      it was changing its marketing structure to direct sales. The Company's
      management believes that this structure would better serve its consumers.
      Further, direct sales has been very successful among its target market,
      Hispanics. Direct cosmetics companies such as Avon, Mary Kay, and Jaffra
      have a strong presence and continue to expand in many Latin American
      countries.

      According to statistics, direct sales in 1999 in the United States totaled
      $24.54 billion, with the personal care category representing 24.9%; an
      equivalent of $6.11 billion. Raquel, Inc. expects that this new avenue of
      sales and distribution will ultimately increase its revenues.


                                                                               7
<PAGE>

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

      In September of 1998, the Company filed a complaint and Demand for
      Arbitration before the American Arbitration Association against John W.
      Vanover. The Demand for Arbitration is for the return of $10,000 in cash
      and stock certificates for 2.6 million Company common shares. The basis of
      the dispute is for non-performance, bad faith, and willful malfeasance.
      Other than this item, there are no material pending legal proceedings to
      which the Company or the property of the Company are subject.

      An Arbitration hearing was held on July 16, 1999, before the American
      Arbitration Association in regard to the Company's claims against John W.
      Vanover. On August 5, 1999 the Company received notice that the Company
      had been awarded its demands in the Complaint.As a result, 2.6 million
      shares have been canceled, additionally, the Company was awarded $10,000,
      plus cost of suit. These monies have not yet been collected.

      On June 27, 2000, a Complaint against Angela Z. Hardy and Corporate Image
      Builders was filed in Santa Monica Superior Court for several causes of
      action. The Company was awarded stock in January, 2001. However, the
      Company has not yet collected these securities.

      Currently, there are no material pending legal proceedings against the
      Company. In addition, no proceedings are known to be contemplated by a
      governmental authority against the Company or any officer or director of
      the Company.

Item 2. Changes in Securities

      In September 1998, the Company issued 3,300,000 shares of common stock in
      exchange for consulting services to be performed by two consultants. Both
      consultants' contracts and services were terminated in 1998 and the
      Company placed a stop order on the above shares. (See Item 1 above.)
      Further, in April 1999, one consultant agreed to return 700,000 shares of
      common stock issued in exchange for consulting services for $4,000 in
      cash.

      In June, 1999, the Company entered into an agreement with Angela Z. Hardy
      and Corporate Image Builders for investor relations services. Per this new
      agreement, the Company has released the shares which were initially issued
      to Angela Zucchini, aka, Angela Z. Hardy in June of 1998, for payment of
      these services.

      In December, 1999 2.6 million shares of common stock were canceled as a
      result of an action against John Vanover.

      The Company issued and additional 4,000,000 shares in May, 2001 in order
      to execute purchase of options. See Part I, Item 2, Material Changes in
      Financial Condition.

Item 3. Defaults Upon Senior Securities

      Inapplicable.

Item 4. Submission of Matters to a Vote of Security Holders

      Inapplicable.


                                                                               8
<PAGE>

Item 5. Other Information

      Inapplicable.

Item 6. Exhibits and Reports on Form 8K

      (a)   Exhibits

            Inapplicable.

      (b)   Reports on Form 8-K

            No reports on Form 8-K were filed during the period covered by this
            report.

                                       SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                       RAQUEL, INC.
                                       (FORMERLY KNOWN AS COLECCIONES DE RAQUEL)
                                       (Registrant)


Dated: May 22, 2001                    By: /s/ Raquel Zepeda
                                           -------------------------------------

                                           Raquel Zepeda, Chief Financial
                                           Officer


                                                                               9