UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549
                                  FORM 10-K
|x| Annual Report Pursuant To Section 13 or 15(d) Of The Securities Exchange Act
      of 1934 (Fee Required)
      For the fiscal year ended December 30, 1995
                                                                OR
|  |Transition Report Pursuant To Section 13 or 15(d) Of The Securities Exchange
      Act of 1934 (No Fee Required)
      For the transition period from

      Commission file number 0-15385
                       ONE PRICE CLOTHING STORES, INC.
       (Exact name of registrant as specified in its charter)
<TABLE>
<S>    <C>                                               <C>                                          
               Delaware                                               57-0779028
(State or other jurisdiction of organization)            (I.R.S. Employer Identification No.)

        1875 East Main Street
      Highway 290, Commerce Park
        Duncan, South Carolina                                         29334
(Address of principal executive offices)                              (Zip Code)
</TABLE>

  Registrant's telephone number, including area code:  (864) 433-8888

  Securities registered pursuant to Section 12(b) of the Act:          None

  Securities registered pursuant to Section 12(g) of the Act:

                       Common Stock, $0.01 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 non-affiliates of the 
registrant as of March 22, 1996:
Common Stock, $0.01 Par Value - $26,811,231

The number of shares  outstanding of the issuer's  classes of common stock as of
March 22, 1996: Common Stock, $0.01 Par Value - 10,335,031 shares

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the proxy statement for the annual  shareholders  meeting to be held
May 20, 1996 are incorporated by reference into Part III.



<PAGE>



PART I

ITEM 1.     BUSINESS

General

One Price Clothing Stores,  Inc. (the "Registrant" or the "Company")  operates a
chain of off-price  retail women's and children's  specialty  stores  offering a
wide variety of first quality,  contemporary,  in-season apparel and accessories
for the uniform retail price of $7. The Company purchases merchandise at heavily
discounted  prices  in  large  quantities  from a  broad  mix of  manufacturers,
jobbers,  importers and other  suppliers.  Items offered in the Company's stores
typically sell in department and specialty stores for $15 and up. The Company is
able to acquire such  merchandise  at heavily  discounted  prices because of its
willingness to purchase large  quantities and odd lots and to buy goods later in
the season  than most other  retailers.  The  Company's  buyers are able to take
advantage of situations such as  over-production,  order  cancellations,  excess
foreign factory capacity or quota and  manufacturers'  needs to liquidate stock.
This  purchasing  strategy allows the Company to obtain a price advantage and to
react quickly to seasonal fashion  preferences and weather conditions  affecting
consumer  spending.  It is the  Company's  policy to offer  only  first  quality
apparel;  the Company does not purchase "seconds" or irregular  merchandise from
its suppliers. The Company increased its retail price from $6 to $7 on August 5,
1990,  the only price  increase  since the Company began  operations in 1984. At
this time,  management  does not  anticipate  increasing the retail price in the
near future.

Company History and Organization

The Company  opened its first  store in August  1984.  The  Company  changed its
corporate  domicile  from  South  Carolina  to  Delaware  on April  9,  1987 and
completed the initial  public  offering of its Common Stock on May 27, 1987. All
information  contained  herein has been  adjusted  to reflect  the  issuance  of
10.120811  shares of the Company's  Common Stock,  $.01 par value,  (the "Common
Stock")  in  exchange  for each  share  of  Common  Stock  then  outstanding  in
connection  with the  Company's  re-incorporation  in Delaware,  a 3-for-2 stock
split  effected in the form of a stock  dividend paid on October 15, 1987, and a
3-for-2 stock split  effected in the form of a stock  dividend paid on April 29,
1994. On February 9, 1994, a wholly-owned  subsidiary of the Company,  One Price
Clothing of Puerto Rico,  Inc.,  was  incorporated  in Puerto Rico. It commenced
operations  on May 28,  1994.  As used  herein,  unless  the  context  otherwise
indicates,  the "Company" refers to One Price Clothing Stores,  Inc., a Delaware
corporation,  to its immediate predecessor,  a South Carolina corporation of the
same name, to the South  Carolina  corporation's  predecessor,  a North Carolina
corporation  organized  in 1984 under the name J. K.  Apparel,  Inc.  and to One
Price Clothing of Puerto Rico, Inc.

Industry Segments

The Company operates in only one industry  segment.  All of the Company's assets
and significant  revenues and pre-tax earnings relate to retail sales of women's
and   children's   apparel  and   accessories  to  the  general  public  through
Company-operated  stores. At the end of 1995, 1994 and 1993, the Company's total
assets were $79,364,000,  $67,930,000 and $64,201,000,  respectively.  Net sales
were  $294,692,000 in 1995,  $283,326,000 in 1994 and  $234,698,000 in 1993. The
Company had a net loss of $1,304,000  in 1995,  net income of $4,389,000 in 1994
and net income of $8,724,000 in 1993.  Other than operations in Puerto Rico, the
Company had no operations  outside the  continental  United States at the end of
fiscal  1995 and no export  sales.  Reference  is hereby  made to the  financial
statements included in Part II for more detailed information about the Company's
assets.

Operations



<PAGE>



The  Company  operates  a chain  of  off-price  retail  women's  and  children's
specialty  stores  offering  a wide  variety  of  first  quality,  contemporary,
in-season  apparel  and  accessories  for the  uniform  retail  price of $7. The
Company  registered  the trademark "One Price" with the United States Patent and
Trademark  Office in June,  1990 for a ten-year  period with the option to renew
upon  expiration.  The Company  intends to apply for renewal for this trademark.
The Company  registered the trademark "Every Day Every Item" in June, 1989 for a
twenty-year  period with the United  States  Patent and  Trademark  Office.  The
trademark  expires in June, 2009 with the option to renew. The Company considers
these  trademarks to be valuable and significant to the conduct of its business.
The  Company  registered  "Every  Day Every  Item",  "Todos  Los Dias  Todos Los
Articulos," "One Price" and "Un Solo Precio" in Mexico in June, 1993. Management
has  decided to forego use of this mark at this time in Mexico  which may result
in the lapsing of such registrations in Mexico.

The One Price Store. The Company's typical store has approximately  3,300 square
feet, of which  approximately 2,400 square feet is devoted to selling space. All
of the Company's stores are located in leased  facilities with convenient access
to  adequate   parking  or  public   transportation.   At  December   30,  1995,
approximately 92% of the Company's stores were located in strip shopping centers
and the remaining stores were located in central business districts or malls.
The Company does not franchise its stores.

The  Company's  stores  are  primarily  located  in or near  communities  with a
population  of at  least  40,000  -  50,000  and  above,  as  well  as in  large
metropolitan  areas. Most of the Company's stores are open seven days a week and
typical  hours of  operation  are from 10:00 a.m.  until 7:00 p.m. or 9:00 p.m.,
Monday through Saturday, with shorter hours on Sunday. A typical store employs a
full-time  manager,  one  or  two  full-time  assistant  managers  and up to ten
additional part-time sales associates.

The Company's  stores are designed for customer  convenience  and for attractive
presentation  of  merchandise.  All  apparel  is  displayed  on  hangers  and is
organized  by  classification,  style and color,  promoting a pleasant  shopping
environment and customer convenience.

The Company's store  operations  department is headed by a Senior Vice President
of Stores who is assisted by two Directors of Store  Operations and Regional and
District  Sales  Managers.  Each  Regional  Sales  Manager  is  responsible  for
approximately  9 districts.  Each  District  Sales  Manager is  responsible  for
approximately  10 to 12 stores and visits each store in his or her district on a
regular or as-needed basis to provide  assistance in promoting sales,  training,
store  layout and  merchandise  presentation,  and to monitor  adherence  to the
Company's operational and management policies.

Store Locations and Expansion. At December 30, 1995, the Company operated 701 
stores in 28  states and Puerto Rico.

The Company  opened a net of 83 stores and closed 23  underperforming  stores in
fiscal 1995. The Company's expansion plans in 1996 include opening approximately
20 new stores  primarily in existing  markets,  closing  approximately 60 stores
(compared  to an  average  of 30  stores  over  the  last  several  years),  and
relocating approximately 10 stores.

Purchasing. The Company's practice is to offer value to its customers by selling
desirable women's and children's  apparel and accessories at considerably  lower
prices  than  generally  would be  available  from  department  stores and other
specialty retailers. The Company purchases its merchandise at heavily discounted
prices and on favorable terms from manufacturers,  jobbers,  importers and other
vendors.

The  Company  typically  is  able  to  purchase   merchandise  from  vendors  at
substantially discounted prices as a result of the following circumstances:  the
inability  of a  manufacturer  or  importer  to dispose of  merchandise  through
regular channels,  the discontinuance of merchandise because of changes in color
or  style,   over-production   by  manufacturers,   cancellation  of  orders  by
conventional retail stores, the need of


<PAGE>



catalog  retailers to dispose of inventories of unordered  catalog  merchandise,
and  manufacturers'  need to utilize excess capacity or import quota or need for
liquidity. The Company's ability and willingness to purchase in large quantities
and in odd-lot or broken-size  assortments and its reputation for reliability in
the industry  provide the Company with  purchasing  advantages.  Typically,  the
Company  buys the majority of its  merchandise  close to and during each selling
season,  later  than  department  stores  and other  specialty  retailers.  This
purchasing  strategy  permits  the  Company  to  react  to  fashion  trends  and
opportunistic  developments  during  a  selling  season.  The  Company  may also
purchase selected merchandise in advance of a selling season.

During fiscal 1995, the Company  purchased  merchandise from  approximately  940
vendors,  including  manufacturers,  jobbers,  importers and other  vendors.  No
vendor  accounted  for more than 10% of the  Company's  total  purchases for the
year.

Although  there can be no assurance that the Company will be able to continue to
acquire sufficient quantities of first quality merchandise at such low prices on
favorable  terms,  the Company  continues to add new vendors and  believes  that
adequate sources of first quality merchandise are available at appropriate price
levels.   The  Company  does  not  maintain   long-term  or  exclusive  purchase
commitments or arrangements with any vendor.

Corporate Offices and Distribution  Center. The Company's  Corporate Offices and
Distribution Center are located in Duncan, South Carolina. With the exception of
functions performed by certain  merchandise  buyers,  regional directors of real
estate,  district  and  regional  sales  managers,  and  certain  administrative
functions performed in Puerto Rico, substantially all purchasing, accounting and
other administrative functions are centralized at the Corporate Offices.

Substantially  all merchandise is shipped directly from vendors to the Company's
Distribution  Center  where the goods are  processed  and sent to the  Company's
stores. The majority of shipments to stores are made by common carriers.

Merchandising.  The Company's merchandising strategy emphasizes contemporary and
in-season  apparel for juniors,  misses,  large-sized  women and  children.  The
Company's target customers are value- and fashion-conscious  women, primarily in
lower and  middle  income  brackets.  The  Company  offers  only  first  quality
merchandise  at the retail price of $7 per item and  emphasizes the value of its
merchandise  compared to similar  merchandise  sold  elsewhere at higher prices.
Women's  apparel sold by the Company  includes  contemporary  sportswear such as
knit tops, pants,  blouses,  shirts,  skirts,  sweaters,  jackets and shorts. In
addition,  the Company  occasionally  sells other types of  merchandise  such as
dresses, swimsuits,  jumpsuits, raincoats, lingerie and other related items. The
Company  also  offers  selected  accessories  such  as  scarves,  socks,  belts,
handbags,  jewelry and fragrances, in addition to apparel.  Accessory sales as a
percentage  of net sales were  10.9% in fiscal  1995,  10.7% in fiscal  1994 and
11.6% in fiscal 1993.  Sales of children's  clothing  comprised less than 10% of
net sales in each of the last three fiscal years.

Management  Information  System. The Company's  management  information  system,
featuring  point-of-sale cash registers and a computerized  inventory management
system,  permits  management  to review each store's  inventory on a daily and a
weekly basis thereby  enabling the Company to tailor its  purchasing  strategies
and merchandise shipments to stores based on customer demand.

During fiscal 1995, the Company implemented a new warehouse management system to
improve  the  management  of the  location  and flow of  merchandise  within the
Distribution Center.

Seasonality

The Company's sales and operating results are seasonal, as is typical in the
 women's retail apparel


<PAGE>



industry.  The Company's  sales  historically  have been lowest during the first
quarter  (January-March)  and the third  quarter  (July-September)  and  highest
during   the   second    quarter    (April-June)    and   the   fourth   quarter
(October-December).  Reduced sales volumes in first and third quarters  coincide
with the  transition of seasonal  merchandise.  Therefore,  increased  levels of
markdowns  generally  occur  during  these  transitional  periods and  operating
expenses, when expressed as a percentage of net sales, are typically higher.

Working Capital Requirements

Historically, the Company's primary needs for liquidity and capital have been to
fund the cost of its new store  expansion,  the  related  growth in  merchandise
inventories, and the expansion of the Corporate Offices and Distribution Center.
These needs have been met through cash  provided by  operations,  the  Company's
available line of credit,  long-term debt and operating leases.  The Company had
an agreement  with its banks for a  $25,000,000  unsecured  line of credit and a
$15,000,000 letter of credit facility expiring May 31, 1996.  Effective June 30,
1995, the Company's credit agreement was amended to convert the $25,000,000 line
of credit  facility to a $19,000,000  line of credit and a $6,000,000  term loan
facility,  collateralized  by land,  building and  improvements at the Corporate
Office and Distribution Center.

In March 1996,  the Company  replaced its  existing  credit  facilities  with an
agreement  with a new lender which  provides for a revolving loan facility of up
to $37,500,000  (including a letter of credit sub-facility of up to $25,000,000)
and a $7,500,000 term loan facility . Borrowings under the new credit agreement,
based upon a borrowing base formula,  are  collateralized by all assets owned by
the Company  during the term of the agreement  which expires in March 1998.  The
agreement  contains  certain  covenants  and terms  described  in Item 7 of this
report.

Merchandise inventories are typically purchased on credit,  including the use of
letters  of  credit.   Letters  of  credit  are  used  to  purchase  merchandise
inventories from foreign suppliers. All such purchases are paid in United States
dollars; thus, the Company is not subject to foreign currency risks. As a result
of the Company's  opportunistic  buying  strategy and to ensure that an adequate
supply of merchandise is available for shipment to its stores,  the Company may,
at times,  invest a  significant  amount of its working  capital in  merchandise
inventories.

Revenues from retail sales are  recognized at the time of the sale.  The Company
accepts cash, checks,  and, in selected stores,  certain major credit cards. All
stores offer a liberal  exchange and return policy.  An estimate for merchandise
returns is recorded in the period the merchandise was purchased.

Customers

No  material  part of the  business of the  Company is  dependent  upon a single
customer or a few customers.




<PAGE>



Competition

The women's retail apparel industry is highly  competitive.  In order to compete
effectively,  the Company is dependent upon its ability to purchase  merchandise
at substantial  discounts.  The Company does not know of any direct  competition
from other specialty  apparel  retailers having a $7 one-price  concept,  though
other competitors do employ a similar ceiling price concept of $10. However, the
Company does compete with department stores,  specialty stores, discount stores,
other off-price  retailers and  manufacturer-owned  outlet stores, many of which
are owned by large  national  or  regional  chains  with  substantially  greater
resources than the Company.  There can be no assurance that other retailers with
substantially  greater  financial  resources  than the Company  will not adopt a
purchasing  and  marketing  concept  similar to that of the Company.  Management
believes that the primary competitive factors in the retail apparel industry are
price,  quality,  variety of  merchandise,  good site  selection and low cost of
operation. The Company believes that it is well positioned in all of these areas
to compete in its markets.

Environmental Factors

The  Company  is  not  aware  of  any  federal,  state  or  local  environmental
regulations which will materially affect its operations or competitive  position
or require material capital expenditures.  The Company cannot predict,  however,
the impact of possible future legislation or regulation on its operations.

Employees

At December 30, 1995, the Company had  approximately  4,800 employees,  of which
approximately  48 percent were  full-time  employees.  The  Company,  like other
retailers,  experiences a high  turnover  rate of full-time and part-time  store
employees but has generally not  experienced  difficulties  in hiring  qualified
personnel.  None  of  the  Company's  employees  are  covered  by  a  collective
bargaining  agreement,  and management believes that the Company's  relationship
with its employees is good.

Change in Fiscal Year

In March 1996,  the Company  elected to change its fiscal year from the Saturday
nearest  December 31 to the  Saturday  nearest  January 31,  beginning in fiscal
1996.  This  change was made to conform  the  Company's  fiscal  calendar to the
seasonal  patterns it experiences,  as well as to enhance  comparability  of its
fiscal quarterly and annual results with other retail companies.

Private Securities Litigation Reform Act of 1995

The  statements  contained in this Item 1  (Description  of Business) and Item 6
(Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations)  that are not  historical  facts may be  forward-looking  statements
subject to the safe harbor created by the Private  Securities  Litigation Reform
Act of 1995.  The Company  cautions  readers of this Annual  Report on Form 10-K
that a number of important  factors could cause the Company's  actual results in
1996  and  beyond  to  differ  materially  from  those  expressed  in  any  such
forward-looking  statements.  These factors  include,  without  limitation,  the
general economic and business  conditions  affecting women's apparel  retailers,
competition from other existing or new women's apparel retailers,  the Company's
ability  to meet  debt  service  obligations  and  other  liquidity  needs,  the
seasonality  of the  Company's  sales,  the  availability  of both  domestic and
foreign sources of merchandise  inventories at substantially  discounted prices,
Acts of God, and unusual seasonal weather patterns.


<PAGE>



ITEM 2.     PROPERTIES

The Company leases all of its store locations. At December 30, 1995, the Company
had 701 stores  operating in 28 states and Puerto Rico.  The Company  leases its
stores under operating  leases generally with initial terms of five to ten years
and with one to two  renewal  option  periods  of five  years  each.  The leases
typically  contain kickout  provisions based on that store's annual sales volume
or the shopping center's  occupancy.  The leases generally provide for increased
rents resulting from increases in operating costs and property taxes. Certain of
the leases provide contingent or percentage rentals based upon sales volume, and
other stores are leased on a month-to-month  basis. To date, the Company has not
experienced difficulty in obtaining leases for suitable locations for its stores
on  satisfactory  terms.  Approximately  60 existing store leases expire or have
initial lease terms  containing  lessee  renewal  options which may be exercised
during fiscal 1996.  Management  believes that the Company will not experience a
significant  increase in lease expense as a result of exercising renewal options
or negotiating  additional  lease terms for such  locations.  The following is a
list of store  locations  by state as of December  30, 1995 (25 of these  stores
have closed since year end):
<TABLE>
<S>                                                                                    <C>
                                                                                       NUMBER OF
STATE                                                                                   STORES
Alabama................................................................................. ..16
Arizona.....................................................................................9
Arkansas....................................................................................5
California.................................................................................56
Florida....................................................................................68
Georgia....................................................................................45
Illinois...................................................................................35
Indiana....................................................................................16
Kansas......................................................................................4
Kentucky...................................................................................12
Louisiana..................................................................................17
Maryland...................................................................................14
Michigan...................................................................................19
Mississippi................................................................................11
Missouri...................................................................................17
North Carolina.............................................................................44
New Jersey..................................................................................8
New Mexico..................................................................................8
New York...................................................................................17
Ohio.......................................................................................32
Oklahoma....................................................................................9
Pennsylvania...............................................................................30
Puerto Rico................................................................................21
South Carolina.............................................................................37
Tennessee..................................................................................29
Texas......................................................................................88
Virginia...................................................................................25
West Virginia...............................................................................2
Wisconsin...................................................................................7
TOTAL STORES..............................................................................701
</TABLE>


The Company's  Corporate Offices and Distribution  Center are located in Duncan,
South  Carolina on  approximately  82 acres which are owned by the  Company.  In
fiscal  1993,  the Company  completed  a 28,000  square  foot  expansion  of its
Corporate  Offices.  During fiscal 1995, the Company  expanded the  Distribution
Center by approximately 90,000 square feet. These expansions increased the total
size of the Corporate Offices and Distribution  Center to approximately  500,000
square feet at December 30, 1995.  With the  addition of certain  equipment  and
systems in fiscal  1995,  the  expanded  Distribution  Center  should be able to
support  the  Company's  growth  over  the next  several  years.  The  Company's
borrowings  under its new credit facility are secured by all assets owned by the
Company during the term of the agreement.



<PAGE>



ITEM 3.  LEGAL PROCEEDINGS

On September 22, 1994,  two separate  lawsuits  making  certain  securities  and
common law allegations and seeking  unspecified damages were filed in the United
States  District  Court for the District of South  Carolina,  Columbia  Division
against  the Company  and its  Chairman  and Chief  Executive  Officer  Henry D.
Jacobs,  Jr. A motion to consolidate these cases was filed. The lawsuits,  which
sought  certification  as class  actions,  alleged  that the  Chairman and Chief
Executive Officer and the Company made materially false, misleading and untimely
projections  and statements on earnings.  The  plaintiffs in these cases,  which
were sought to be consolidated, were Leonard Pitten, Katherine Hogan and Anthony
J.  Mallozzi.  The Company moved to dismiss the lawsuits,  and on July 10, 1995,
such  lawsuits  were  dismissed  by the Court.  On August 7, 1995,  the deadline
expired for the  plaintiffs  to appeal the  dismissal,  and these  lawsuits  are
permanently ended.

From time to time the Company is a defendant in legal actions  involving  claims
arising in the normal course of its business.  The Company  believes  that, as a
result of its legal  defenses and  insurance  arrangements,  none of these other
actions presently pending,  if decided adversely,  would have a material adverse
effect on its financial position and results of operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of the Company's fiscal year.




<PAGE>



PART II

ITEM 5.           MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
                  RELATED SHAREHOLDER MATTERS

The  Company's  common  stock is traded  under the symbol  ONPR in the  National
Market  System of NASDAQ.  As of March 22, 1996,  there were  approximately  420
shareholders of record.

The Company has never paid cash  dividends  since its  inception.  The Company's
credit agreement  contains  covenants which,  among other things,  restricts the
Company from paying  dividends.  Currently,  the Board of  Directors  intends to
continue its policy of retaining  earnings for  operations  and expansion of the
business.

The quarterly high and low sales prices of the Company's  Common Stock as quoted
by NASDAQ are shown below.  Prices have been adjusted to reflect a 3-for-2 stock
split  effected  in the form of a stock  dividend to  shareholders  of record on
April 15, 1994.
<TABLE>
<S>                                         <C>             <C>                      <C>            <C> 

                                                       1995                                      1994
                                            -----------------------------------------------------------------
                                            High              Low                     High             Low

     First .................................8 3/8             6 1/8                   17 2/3           11 1/2
     Second ................................7 1/2             3 3/4                   20               14 7/8
     Third .................................6 1/8             3 3/4                   18                8 1/2
     Fourth ................................5 1/2             2 3/4                   11 1/4            6 7/8

</TABLE>

The closing price on December 29, 1995 was $3.00 per share compared to $7.88 per
share at December 30, 1994.





<PAGE>



ITEM 6.  SELECTED FINANCIAL DATA

The following table presents selected financial data for the Company for each of
the five fiscal years ended December 28, 1991 through  December 30, 1995. All of
the selected  financial data are extracted from the Company's  audited financial
statements and should be read in conjunction  with the financial  statements 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>
<S>                                                        <C>              <C>          <C>         <C>    
                                                                                                     Fiscal Year Ended
                                                             Dec. 30,       Dec. 31,     Jan. 1       Jan. 2      Dec. 28
                                                               1995           1994        1994        1993(a)       1991
Dollars in thousands except per share amounts

  1 Net sales                                              $  294,692      283,326      234,698       184,149      130,213
  2 (Loss) income before taxes and cumulative effect
      of a change in accounting principle                  $   (2,595)       7,138       13,959        10,913        7,180
  3 (Loss) income before cumulative effect of a change
      in accounting principle                              $   (1,304)       4,389        8,724         6,846        4,487
  4 Cumulative effect on prior years of a change
      in accounting principle                              $     --            --           --            --           186
  5 Net (loss) income                                      $   (1,304)       4,389        8,724         6,846        4,673
  6 Current assets                                         $   35,990       31,252       35,336        27,253       22,081
  7 Long-term assets                                       $   43,374       36,678       28,865        23,465       17,626
  8 Total assets                                           $   79,364       67,930       64,201        50,718       39,707
  9 Current liabilities                                    $   18,594       13,035       14,798        10,861        8,668
10  Long term debt and note payable to be refinanced       $    6,579        --             --            --           --
11  Deferred income taxes                                  $    1,482        1,449        1,166         1,061        1,052
12  Other noncurrent liabilities                           $      828          372          411           447          --
13  Shareholders' equity                                   $   51,881       53,074       47,826        38,349       29,987
14  Total investment                                       $   59,554      `53,226       48,158        39,228       30,636
15  Stores opened during the year, net                     #       60          101           94            81           70
16  Stores operating at year-end                           #      701          641          540           446          365
17  Number of employees                                    #    4,841        4,907        4,199         3,723        2,829
18  Weighted average common shares (000)                   #   10,314       10,525       10,404        10,304        9,996
19  Common shares outstanding at year-end (000)            #   10,335       10,305       10,221        10,123        9,918
20  (Loss) income per share before cumulative effect
      of a change in accounting principle                  $    (0.13)        0.42        0.84           0.66         0.45
21  Cumulative effect on prior years per share
      of a change in accounting principle                  $      --           --          --            --           0.02
22  Net (loss) income per common share                     $    (0.13)        0.42        0.84           0.66         0.47
23  Book value per common share                            $     5.02         5.15        4.68           3.79         3.02
24  Cash dividends declared per common share               $        0            0           0              0            0

</TABLE>

    Notes to Summary of Selected Financial Data

    a.  Fiscal year 1992 was a 53 week year, while all other years presented
        consisted of 52 weeks.

    Line Definitions
    14       Total  investment  --  Total  of  all  interest-bearing  debt,
             capitalized  leases,  net deferred  taxes,  and  shareholders'
             equity.
    17       Number of employees -- Number of full and part-time employees at 
             year-end.
    23       Book value per common share -- Book value of shareholders' equity 
             per outstanding common share line 13 divided by line 19).


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


<PAGE>



    AND RESULTS OF OPERATIONS

    FINANCIAL SUMMARY

    The following table sets forth,  for the three most recent fiscal years,
    certain financial statement elements as a percentage of net sales:
<TABLE>
<S>  <C>                                                       <C>                        <C>                     <C>        
                                                                                      Fiscal Year Ended

             
                                                                Dec. 30,                   Dec. 31,                  Jan.1,
                                                                  1995                      1994                     1994
     PERCENT OF NET SALES:
     Net sales                                                    100.0%                     100.0%                  100.0%
     Cost of sales                                                 59.6%                      60.0%                   58.3%
                                                                --------                     ------                  ------
     Gross margin                                                  40.4%                      40.0%                   41.7%
                                                                --------                     ------                  ------
     Selling, general and administrative expenses                  30.9%                      29.0%                   27.7%
     Store rent and related expenses                                8.4%                       7.1%                    6.6%
     Depreciation and amortization expense                          1.5%                       1.3%                    1.4%
     Interest expense                                               0.4%                       0.1%                    0.1%
                                                                 -------                      -----                   -----
                                                                   41.2%                      37.5%                   35.8%
     Interest income                                                0.0%                       0.0%                    0.0%
                                                                 -------                      -----                   -----
     Net expenses                                                  41.2%                      37.5%                   35.8%
                                                                 -------                      -----                   -----

     (Loss) income before income taxes                            (0.8)%                       2.5%                    5.9%
     (Benefit from) provision for income taxes                    (0.4)%                       1.0%                    2.2%
                                                                  ------                      -----                   -----
     Net (loss) income                                            (0.4)%                       1.5%                    3.7%
                                                                  ======                      =====                   =====
     Stores in operation at year-end                                701                        641                      540
                                                                  ======                      =====                   =====
</TABLE>

1995 COMPARED TO 1994

Net sales in 1995 increased 4% to $294.7  million  compared to $283.3 million in
1994.  This increase in sales is due to the net addition of 60 stores during the
year.  Comparable  store sales,  those  stores in  operation  at least  eighteen
months, decreased 13% during 1995. Management believes the decline in comparable
store  sales in 1995  compared to 1994 is due to the  continued  softness in the
women's  apparel  market.  Sales  results in January  1996,  impacted  by severe
weather conditions,  were also disappointing;  however,  sales trends since that
time have shown some encouraging signs.

The  Company  opened 83 stores  and  closed  23  underperforming  stores in 1995
compared to opening 128 stores and  closing 27  underperforming  stores in 1994.
Fourteen  stores were  relocated in 1995 compared to 6  relocations  in 1994. In
light  of  recent  results  and the  near-term  outlook  for the  industry,  the
Company's present plan for 1996 is to open approximately 20 stores, primarily in
existing  markets,  and  to  relocate  approximately  10  stores.  Additionally,
approximately  60 stores will be closed in 1996.  Management has decided to slow
its  previously  announced  plans to grow to 1,000  stores over the next several
years in order to focus on improving the profitability of the Company's existing
stores.

The  Company's  sales and operating  results are seasonal,  as is typical in the
women's retail apparel  industry.  The Company's  sales  historically  have been
lowest during the first quarter  (January - March) and the third quarter (July -
September)  and highest  during the second quarter (April - June) and the fourth
quarter  (October  -  December).  Reduced  sales  volumes in the first and third
quarters  coincide  with the  transition  of  seasonal  merchandise.  Therefore,
increased  levels of  markdowns  occur  during  these  transitional  periods and
operating  expenses,  when expressed as a percentage of net sales, are typically
higher.  After the end of 1995, the Company  elected to change its year from the
Saturday  nearest  December 31 to the Saturday  nearest January 31, beginning in
1996.  This change was made to conform the  Company's  calendar to the  seasonal
patterns it experiences,  as well as to enhance  comparability  of its quarterly
and annual results with other retail companies.


<PAGE>



Gross margins as a percentage  of net sales  increased to 40.4% in 1995 compared
to 40.0% in 1994.  The  improvement  in gross margin was primarily the result of
management's  efforts to control  inventory  levels and flow which  resulted  in
fewer  markdowns  when  expressed  as a  percentage  of net sales.  Net sales of
apparel and of accessories represented  approximately 89% and 11%, respectively,
of annual net sales in both 1995 and 1994.

Selling,  general and  administrative  expenses increased as a percentage of net
sales to 30.9% in 1995  compared  to 29.0% in 1994.  This  increase  in selling,
general and  administrative  expenses,  when  expressed as a  percentage  of net
sales,  is  principally  due to the 10% reduction in average store sales volumes
during 1995 compared to 1994. When expressed as a percentage of net sales, store
operations  expenses and home office expenses increased while distribution costs
decreased. Selling, general and administrative expenses in dollars on an average
store basis decreased 4% for the Company as a whole during 1995 compared to 1994
primarily as a result of management's  stringent  efforts to control costs,  the
completion of the distribution  center conversion from hanging  merchandise to a
flat pack  operation and expansion of the facility and the  implementation  of a
new warehouse management system.  Store operations expenses,  distribution costs
and  expenses  at the  corporate  offices in dollars on an average  store  basis
decreased 1%, 11% and 7%, respectively.

Store  rent  expense  as a  percentage  of net sales  increased  to 8.4% in 1995
compared to 7.1% in 1994.  This increase is  principally  due to the lower sales
volumes during 1995 compared to last year.  Average store rent expense increased
6% in 1995 compared to the same period last year, primarily due to the Company's
store  expansion  strategy  of  entering  into  larger,  more  costly  urban and
metropolitan  markets  with higher base rent and common area charge  structures,
and the closing of older,  underperforming  stores which had lower  average rent
costs.  Management anticipates that this trend of increasing average store rents
may continue.  The Company has  approximately  60 existing leases that expire or
have  initial  lease  terms  containing  lessee  renewal  options  which  may be
exercised during 1996.  Management believes that the Company will not experience
a material  increase in aggregate  store rents as a result of renewal options or
negotiating new lease terms for such locations.

Depreciation  and  amortization  expense  increased to 1.5% of net sales in 1995
from  1.3% of net  sales in 1994.  This  increase  resulted  primarily  from the
completion of the distribution center expansion.

The effective income tax rate for 1995 was 49.7% compared to 38.5% in 1994. This
increase was primarily due to the tax benefit arising in 1995 from the carryback
of the Federal  Targeted  Jobs Tax Credits  and the  recognition  in 1995 of the
deferred  income tax asset  associated  with the remaining  net  operating  loss
carryforward  generated  by  the  Company's  Puerto  Rico  subsidiary  in  1994.
Management expects the Company's  effective tax rate to decrease in 1996 because
the items creating the 1995 increase (tax benefit  arising from carryback of the
Targeted Jobs Tax Credits and recognition of the tax benefit  relating to future
benefit of prior year Puerto Rico net operating loss) will not be repeated.

1994 COMPARED TO 1993

In 1994, average store sales increased 19% in the first quarter, increased 5% in
the second quarter, were flat in the third quarter and declined 9% in the fourth
quarter  compared to 1993.  Management  believes sales for 1994 were  negatively
impacted by an  industry-wide  decline in consumer  spending on women's  apparel
throughout  the latter part of the year,  coupled  with  unseasonably  warm fall
temperatures.  Intense  promotional pricing in the fall season by competitors in
the women's retail apparel industry,  in response to the above factors, was also
believed to have further negatively impacted the Company's sales and margins. In
the latter part of the third quarter of 1994, the Company  changed its method of
processing merchandise within its Distribution Center which temporarily caused a
disruption in its ability to  sufficiently  restock the Company's  stores,  thus
further negatively impacting sales.




<PAGE>



Net sales in 1994 were $283.3 million, an increase of 21% over 1993 net sales of
$234.7  million.  The  increase  resulted  from a net addition of 101 new stores
during 1994. The Company opened 128 stores and closed 27 underperforming  stores
in 1994 compared to opening 125 stores and closing 31 underperforming  stores in
1993.  In 1994,  comparable  store sales,  those stores in operation at least 18
months,  increased 14% in the first quarter, were flat in the second quarter and
declined 5% and 13% in the third and fourth quarters, respectively.
Comparable store sales decreased 3% for the 1994 year.

Gross margin as a percentage of net sales decreased to 40.0% in 1994 compared to
41.7% in 1993. The reduction in the gross margin percentage  resulted  primarily
from increased markdowns on slow-moving  segments of the Company's  inventories.
The increase in the rate of  markdowns  in 1994  primarily  resulted  from:  (1)
stocking  stores that opened late in the summer  season with warm  weather  type
merchandise  that  subsequently  was  found  predominantly  to have too  short a
remaining selling season; and (2) the sluggish  sell-through of merchandise as a
result of the  industry-wide  decline in consumer  spending  on women's  apparel
during the latter part of the year.

Selling,  general and  administrative  expenses increased as a percentage of net
sales to 29.0% in 1994  compared  to 27.7% in 1993.  Generally,  net sales  were
substantially  below expectations for the second half of 1994, which resulted in
increased  selling,  general and  administrative  expenses  when  expressed as a
percentage of net sales.  This increase in selling,  general and  administrative
expenses  was  primarily  attributable  to  increased  transportation  costs and
increased costs in the Company's stores as well as a slight increase in expenses
at the Corporate Offices.

Transportation   costs  increased   approximately  0.5  percentage  points  when
expressed  as a  percentage  of net  sales  compared  to 1993 due to a change in
transportation  from the use of a leased fleet to the use of common carriers for
the delivery of merchandise to the majority of the Company's stores.

During the second half of 1994, the Company converted the Distribution  Center's
production  process  from  a  hanging  operation  to a  flatpack  operation.  In
conjunction  with this change in the production  process,  the Company began the
expansion of the Distribution Center by approximately  90,000 square feet. These
changes were made to facilitate  distribution to the increasing number of stores
and to reduce processing and transportation costs.

The increased costs in the Company's stores  primarily  resulted from additional
store labor and  increases in other store  operating  expenses.  The increase in
store labor resulted in a 0.4 percentage points increase in selling, general and
administrative  expenses  compared to last year. Other store operating  expenses
increased 0.2 percentage points when expressed as a percentage of net sales.

Expenses at the Company's Corporate Offices increased 0.2 percentage points when
expressed as a percentage  of net sales  partially  due to  investments  made in
personnel and management  training  during the latter part of the year. As noted
above,  net  sales  were  below  expectations  for the year  which  resulted  in
increased  selling,  general and  administrative  expenses  when  expressed as a
percentage of net sales.

Store  rent  expense  as a  percentage  of net sales  increased  to 7.1% in 1994
compared to 6.6% in 1993.  This increase  resulted  primarily from the Company's
store expansion  strategy of entering larger,  metropolitan  markets with higher
base rent and common area maintenance  charge  structures.  As previously noted,
net sales were  significantly  below  expectations  for the second half of 1994,
which resulted in increased store rent expense when expressed as a percentage of
net sales.

Depreciation  and  amortization  expense  decreased to 1.3% of net sales in 1994
from 1.4% of net sales in 1993.

The effective income tax rate for 1994 was 38.5% compared to 37.5% in 1993. This
increase was primarily due to the start-up net operating loss in Puerto Rico for
which no tax benefit was  recognized.  This  increase and the effect of slightly
higher  state and local  statutory  income tax rates were  minimized  by the tax
benefit from charitable  contributions of inventory and utilization of state and
Federal tax credits.

INFLATION


<PAGE>




During its three most  recent  years,  the Company  believes  that the impact of
inflation  has not been  material  to its  financial  condition  or  results  of
operations.  Occasionally,  the Company may experience  increases in the average
purchase  price  per unit of  merchandise;  however,  such  increases  generally
reflect the impact of an increase in the quality of goods purchased  rather than
inflationary factors. 

LIQUIDITY AND CAPITAL RESOURCES

Historically, the Company's primary needs for liquidity and capital have been to
fund its new store expansion,  the related growth in merchandise inventories and
the  expansion of the Corporate  Offices and  Distribution  Center.  Until 1995,
these needs were met  principally  through cash provided by  operations  and the
Company's available line of credit.  During 1995, the Company amended its credit
agreement to include a term loan  facility to provide a source of capital and in
1996 replaced this facility with a new agreement described below.

At December 30, 1995,  inventory  increased by 10% compared to last year,  while
average  store  inventories  increased 1% compared to last year.  This  includes
inventory in the stores, in the Distribution Center and in- transit at year end.
The average  inventories in the Company's  stores decreased 13% to approximately
$25,000  per  store  compared  to last  year's  $28,800  per  store,  reflecting
management's   efforts  to  control  inventories  and  minimize  the  effect  of
markdowns.  Inventories in-transit from foreign suppliers increased by $5,700 to
$8,500 per store compared to last year,  primarily due to the timing of overseas
buying trips and due to the opportunistic  purchases of Spring  merchandise made
available by foreign  suppliers.  In 1995,  import  purchases  were 16% of total
purchases  compared  to 10% in 1994.  The level of  merchandise  inventories  is
subject to fluctuations  because of the Company's  opportunistic buying strategy
and prevailing  business  conditions.  In 1996, the Company  intends to continue
this strategy and to  opportunistically  purchase  merchandise in advance of the
selling seasons when it is to the Company's advantage.  This strategy may impact
the level of total  merchandise  inventories  at the end of each quarter in 1996
and the Company's liquidity and working capital needs.

The Company  previously  had an  agreement  with its banks that  provided  for a
$19,000,000 line of credit facility, a $15,000,000 letter of credit facility and
a $6,000,000  term loan  facility  scheduled to expire May 31, 1996.  Borrowings
against the line of credit  accrued  interest at the Company's  option of a Base
Rate  (defined  as the higher of the Agent  Bank's  prime  interest  rate or the
Federal Funds rate plus 0.50%) or the adjusted  LIBOR rate plus 1.50%.  The term
loan accrued interest,  payable  quarterly,  at the Company's option of the Base
Rate, as defined above, plus 1.0% or the adjusted LIBOR rate plus 2.50%.

At December 30, 1995, the Company had $5,500,000 outstanding under the term loan
and  $2,412,000  outstanding  under the line of credit  compared  to no  amounts
outstanding  at December 31, 1994.  The maximum  amounts  outstanding  under the
credit  facilities  during  1995 and 1994,  respectively  were  $24,540,000  and
$16,421,000.  The average amounts  outstanding  under the credit facilities were
$16,264,000  during  1995 and  $3,165,000  during  1994.  The  change in average
amounts  outstanding  principally  resulted  from the  decrease in cash from the
beginning of 1994 to the end of 1994. The weighted  average  interest rates were
8.2% and 7.6% during 1995 and 1994, respectively.

Letters  of credit are used  primarily  to  purchase  merchandise  from  foreign
suppliers.  All such  purchases are paid in United  States  dollars;  thus,  the
Company is not  subject  to  foreign  currency  risks.  Approximately  9% of the
Company's  purchases  in 1995 were paid by letters of credit  compared  to 6% in
1994.  This  increase  in  purchases  paid by  letters  of  credit is due to the
Company's  opportunistic buying strategy and taking advantage of the increase in
the quota made available to the Company by foreign  suppliers,  particularly for
purchases made late in the year for Spring 1996  merchandise.  The proportion of
merchandise purchased with letters of credit may vary in 1996.

On March 25, 1996, the Company  replaced its existing credit  facilities with an
agreement  with a new lender which  provides for a revolving loan facility of up
to $37,500,000  (including a letter of credit sub-facility of up to $25,000,000)
and a $7,500,000 term loan facility.  The new credit  facilities expire in March
1998 and may be extended at the lender's  option for an additional year.
Borrowings under the credit agreement are  collateralized by all assets owned by
the Company during the term of the agreement and bear interest, at the Company's
option (subject to certain limitations in the agreement), at the prime rate plus
0.5% or the Adjusted Eurodollar Rate, as defined,  plus 2.5%. Maximum borrowings
under the revolving credit facility and utilization of


<PAGE>



the letter of credit  facility are based on a borrowing base formula  determined
with respect to eligible  inventory (as defined in the  agreement).  At December
30, 1995, when the Company's  inventories  were at the seasonally  lowest levels
and outstanding  letters of credit were at the seasonally  highest  levels,  the
Company would have had approximately  $8.8 million of excess  availability under
the  borrowing  base  formula  on a pro  forma  basis.  Availability  under  the
revolving  facility  will  fluctuate in accordance  with the Company's  seasonal
variations in inventory levels.  The lending formula may be revised from time to
time by the lender in response to changes in the  composition  of the  Company's
inventory  or  other  business  conditions.  The  term  loan  is  payable  in 57
consecutive equal monthly  installments  plus interest  commencing July 1996. If
the new credit  facility is not renewed in March 1998, the  outstanding  balance
under the term loan would be due and payable at that time.  Current  obligations
totaling  $3,079,000  outstanding  at December 30, 1995 under the former  credit
agreement  were  classified  as long  term,  as the  Company  had the intent and
ability to refinance such obligations on a long-term basis.  Certain fees may be
payable by the Company for early termination of the credit agreement.

The new credit agreement  contains certain covenants which,  among other things,
restricts  the  ability of the  Company to incur  indebtedness,  or  encumber or
dispose of assets,  and prohibits the Company from repurchasing its Common Stock
or paying dividends.  Additionally, the Company must maintain a minimum adjusted
net worth (as defined in the  agreement)  of  $34,000,000  and maintain  minimum
working capital,  exclusive of amounts  outstanding under the credit facilities,
of $5,000,000.

Net cash provided by operating  activities  for 1995,  1994, and 1993 were
$3,694,000, $3,627,000 and $9,121,000, respectively. The slight increase in cash
provided by operating activities in 1995 was primarily the result of an increase
in  accounts  payable  and  other  liabilities  offset  by an  increase  in  the
merchandise  inventories  associated with the growth in the number of stores, an
increase in prepaid Federal and state income taxes and the Company's net loss.

Net cash  used in  investing  activities  for  1995,  1994,  and 1993 was
$11,277,000,  $12,625,000 and $9,388,000, respectively. The Company made capital
expenditures of $10,865,000,  $12,294,000 and $8,932,000,  respectively, in each
of the years  presented.  Capital  expenditures  were  primarily  for  leasehold
improvements  and  equipment  for new stores  opened and for  expansions  to the
Distribution  Center in each year,  as well as the  expansion  of the  Corporate
Offices during 1994 and 1993.

Net cash provided by financing  activities was $7,889,000 for 1995 due, in large
part,  to the issuance of  $6,000,000  of long term debt and  $2,412,000  of net
borrowings  under the Company's  line of credit.  Net cash provided by financing
activities  was  $820,000  and  $717,000  in 1994 and  1993,  respectively,  and
resulted primarily from the exercise of the Company's Common Stock options.

In 1996,  the  Company  plans to spend  approximately  $2.5  million  on capital
expenditures  in  part  to  open   approximately  20  new  stores  and  relocate
approximately 10 stores.  The Company's  liquidity  requirements in 1996 will be
met principally  through cash provided by operations and its credit  facilities.
If deemed by management  to be in the best  interest of the Company,  additional
long-term debt, capital leases or other permanent financing may be explored.

EFFECT OF NEW ACCOUNTING PRONOUNCEMENTS

The Financial  Accounting  Standards Board ("FASB") has issued Statement No. 121
(SFAS  121),  "Accounting  for  the  Impairment  of  Long-Lived  Assets  and for
Long-Lived Assets to be Disposed Of." This statement  essentially  requires that
when the Company  commits to closing  specific stores and for other stores which
may be  impaired,  the fixed assets for such stores must be written down to fair
market value. The Company  anticipates  that the adoption of SFAS 121,  required
for years  beginning  after December 15, 1995,  will result in a decrease in net
fixed  assets  of  approximately   $1,630,000  and  a  charge  of  approximately
$1,395,000 (net of income taxes) which will be shown as the cumulative effect of
a change in accounting principle in the 1996 Statement of Operations.

<PAGE>

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Shareholders of
One Price Clothing Stores, Inc.
Duncan, South Carolina


We have  audited  the  accompanying  consolidated  balance  sheets  of One Price
Clothing Stores, Inc. and subsidiary (the "Company") as of December 30, 1995 and
December  31,  1994,  and the related  consolidated  statements  of  operations,
shareholders'  equity,  and cash flows for each of the three years in the period
ended  December  30, 1995.  Our audits also  included  the  financial  statement
schedule  listed  in the  Index  at Item 14 (d).  These  consolidated  financial
statements  and  financial  statement  schedule  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated  financial statements and financial statement schedule based on our
audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the 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,  such consolidated  financial  statements present fairly, in all
material respects, the financial position of the Company as of December 30, 1995
and December 31, 1994,  and the results of its operations and its cash flows for
each of the three years in the period ended December 30, 1995 in conformity with
generally accepted accounting  principles.  Also, in our opinion, such financial
statement  schedule,  when  considered  in  relation  to the basic  consolidated
financial statements taken as a whole,  presents fairly in all material respects
the information set forth therein.


DELOITTE & TOUCHE LLP
Greenville, South Carolina

February 15, 1996
(March 25, 1996 as to Note B and Note H)


<PAGE>

<TABLE>

     
                                        ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
                                                 CONSOLIDATED BALANCE SHEETS

<S>                                                                 <C>                                 <C>            
                                                                      December 30,                     December 31,
                                                                         1995                                1994
Assets -- Note B
CURRENT ASSETS
   Cash and cash equivalents                                            $   668,000                    $    362,000
   Miscellaneous receivables, net of allowance for
     doubtful accounts of $275,000 (1995) and
     $189,000 (1994)                                                      1,017,000                         907,000
   Merchandise inventories                                               28,961,000                      26,337,000
   Prepaid Federal and state income taxes                                 1,363,000                          71,000
   Prepaid expenses                                                       1,888,000                       1,866,000
   Deferred income taxes -- Note C                                        2,093,000                       1,709,000
                                                                        -----------                     -----------
     TOTAL CURRENT ASSETS                                                35,990,000                      31,252,000
                                                                        -----------                     -----------
PROPERTY AND EQUIPMENT, at cost
   Land                                                                     914,000                         914,000
   Land improvements                                                        494,000                         475,000
   Building                                                              16,005,000                      11,855,000
   Leasehold improvements                                                11,277,000                      10,055,000
   Fixtures and equipment                                                30,069,000                      25,697,000
                                                                        -----------                     -----------
                                                                         58,759,000                      48,996,000
   Less accumulated depreciation                                         17,575,000                      13,606,000
                                                                        -----------                     -----------
                                                                         41,184,000                      35,390,000
                                                                        -----------                     -----------
OTHER ASSETS                                                              2,190,000                       1,288,000
                                                                        -----------                     -----------
                                                                        $79,364,000                     $67,930,000
                                                                        ===========                     ===========
Liabilities and Shareholders' Equity
CURRENT LIABILITIES
   Accounts payable                                                     $10,298,000                     $ 6,470,000
   Current portion of long term debt and note payable
      -- Note B                                                           1,333,000                            --
   Accrued salaries and wages                                             1,453,000                       1,571,000
   Accrued employee benefits                                              2,307,000                       2,191,000
   Sales tax payable                                                      1,904,000                       1,610,000
   Other accrued and sundry liabilities                                   1,299,000                       1,193,000
                                                                        -----------                     -----------
     TOTAL CURRENT LIABILITIES                                           18,594,000                      13,035,000
                                                                        -----------                     -----------
LONG TERM DEBT AND NOTE PAYABLE
   TO BE REFINANCED  -- Note B                                            6,579,000                            --
                                                                        -----------                     -----------
DEFERRED INCOME TAXES -- Note C                                           1,482,000                       1,449,000
                                                                        -----------                     -----------
OTHER NONCURRENT LIABILITIES -- Note F                                      828,000                         372,000
                                                                        -----------                     -----------
COMMITMENTS AND CONTINGENCIES -- Note D
SHAREHOLDERS' EQUITY -- Notes B, E and G
   Preferred Stock, par value $0.01 - authorized
     and unissued 500,000 shares
   Common Stock, par value $0.01 - authorized 35,000,000
     shares, issued and outstanding 10,335,031 (1995)
     and 10,305,256 (1994) shares                                           103,000                         103,000
   Additional paid-in capital                                            11,002,000                      10,891,000
   Retained earnings                                                     40,776,000                      42,080,000
                                                                        -----------                     -----------
                                                                         51,881,000                      53,074,000
                                                                        -----------                     -----------
                                                                        $79,364,000                     $67,930,000
                                                                        ===========                     ===========
</TABLE>

See notes to consolidated financial statements


<PAGE>

<TABLE>


                                        ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
                                            CONSOLIDATED STATEMENTS OF OPERATIONS
<S>                                                         <C>                  <C>                    <C>
                                                                                           Period Ended
                                                            December 30,          December 31,          January 1,
                                                                  1995                   1994               1994


NET SALES                                                   $294,692,000           $283,326,000       $234,698,000
Cost of sales                                                175,754,000            170,066,000        136,727,000
                                                           --------------          ------------      -------------
GROSS MARGIN                                                 118,938,000            113,260,000         97,971,000
                                                           --------------          ------------     --------------
Selling, general and administrative
   expenses                                                   91,048,000             82,118,000         65,124,000
Store rent and related expenses                               24,810,000             20,210,000         15,599,000
Depreciation and amortization expense                          4,394,000              3,612,000          3,184,000
Interest expense                                               1,326,000                271,000            166,000
                                                           --------------          ------------     --------------
                                                             121,578,000            106,211,000         84,073,000
Interest income                                                   45,000                 89,000             61,000
                                                           --------------          ------------     --------------
NET EXPENSES                                                 121,533,000            106,122,000         84,012,000
                                                           --------------          ------------     --------------
(LOSS) INCOME BEFORE INCOME TAXES                             (2,595,000)             7,138,000         13,959,000
(Benefit from) provision for income taxes -- Note C           (1,291,000)             2,749,000          5,235,000
                                                           ---------------         ------------     --------------

NET (LOSS) INCOME                                           $  (1,304,000)         $  4,389,000     $    8,724,000
                                                            ==============         ============     ==============
Net (loss) income per common share                          $       (0.13)         $       0.42 $            0.84
                                                            ==============         ============ =================

Weighted average shares outstanding                            10,313,860            10,524,978         10,403,850
                                                            =============          ============     ==============
</TABLE>

See notes to consolidated financial statements

<TABLE>


                                       CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<S>                                          <C>              <C>          <C>              <C>          <C>
                                                                           Addditional
                                                     Common Stock           Paid-in         Retained
                                               Shares         Amount        Capital         Earnings          Total

Balance at January 2, 1993                    10,123,173       $102,000    $ 9,280,000      $28,967,000     $38,349,000
     Stock options exercised                      98,325                       753,000                          753,000
     Net income                                                                               8,724,000       8,724,000
                                              ----------       --------    -----------      -----------     -----------  
Balance at January 1, 1994                    10,221,498        102,000     10,033,000       37,691,000      47,826,000
     Stock options exercised                      83,758          1,000        858,000                          859,000
     Net income                                                                               4,389,000       4,389,000
                                              ----------     ----------    -----------      -----------     -----------
Balance at December  31, 1994                 10,305,256        103,000     10,891,000       42,080,000      53,074,000
     Stock options exercised                      29,775           --          111,000                          111,000
     Net loss                                                                                (1,304,000)     (1,304,000)
                                              ----------     ----------    -----------      ------------     ----------
Balance at December 30, 1995                  10,335,031       $103,000    $11,002,000      $40,776,000    $ 51,881,000
                                              ==========     ==========    ===========      ============   ============

</TABLE>

See notes to consolidated financial statements


<PAGE>


<TABLE>

                                          ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
                                              CONSOLIDATED STATEMENTS OF CASH FLOWS

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

                                                                                   Period Ended
                                                                     December 30,            December 31,            January 1,
                                                                         1995                  1994                   1994
OPERATING ACTIVITIES
   Net (loss) income                                                $ (1,304,000)          $  4,389,000           $  8,724,000
   Adjustments to reconcile net (loss) income to
     net cash provided by operating activities:
     Depreciation and amortization                                     4,394,000              3,612,000              3,184,000
     Deferred income taxes                                              (351,000)              (145,000)              (514,000)
     Loss on disposal of property and equipment                          789,000                947,000                460,000
     (Increase) decrease in other noncurrent assets                     (522,000)               253,000                344,000
     Changes in operating assets and liabilities:
       (Increase) in miscellaneous receivables
         and prepaid expenses                                            (42,000)              (644,000)              (638,000)
       (Increase) in merchandise inventories                          (2,624,000)            (3,022,000)            (6,376,000)
       (Increase) decrease in prepaid Federal and
           state income taxes                                         (1,292,000)            (2,661,000)             1,562,000
       Increase in accounts payable and other liabilities              4,646,000                898,000              2,375,000
                                                                     ------------         --------------           -----------

NET CASH PROVIDED BY OPERATING
   ACTIVITIES                                                          3,694,000              3,627,000              9,121,000
                                                                     ------------         --------------           -----------

INVESTING ACTIVITIES
   Purchases of property and equipment                               (10,865,000)           (12,294,000)            (8,932,000)
   Purchases of other noncurrent assets                                 (412,000)             ( 331,000)              (456,000)
                                                                    -------------         --------------           ------------
NET CASH USED IN INVESTING ACTIVITIES                                (11,277,000)           (12,625,000)            (9,388,000)
                                                                    -------------         --------------           ------------

FINANCING ACTIVITIES
   Net borrowings from line of credit                                  2,412,000               --                      --
   Proceeds from issuance of long term debt                            6,000,000               --                      --
   Repayment of long term debt                                          (500,000)              --                      --
   Debt financing costs incurred                                         (90,000)              --                      --
   Decrease in other noncurrent liabilities                              (44,000)               (39,000)               (36,000)
   Proceeds from exercise of Common Stock options                        111,000                859,000                753,000
                                                                    -------------          -------------          ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                              7,889,000                820,000                717,000
                                                                    -------------          -------------          ------------

INCREASE (DECREASE) IN  CASH
  AND CASH EQUIVALENTS                                                   306,000             (8,178,000)               450,000

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF YEAR                                                     362,000              8,540,000              8,090,000
                                                                    -------------          -------------          ------------

CASH AND CASH EQUIVALENTS AT END
   OF YEAR                                                          $    668,000           $    362,000           $  8,540,000
                                                                    =============          =============          ============

SUPPLEMENTAL CASH FLOW INFORMATION
   Income taxes paid                                                $    477,000           $  5,330,000           $  3,953,000
   Interest paid                                                       1,117,000                298,000                166,000

</TABLE>

See notes to consolidated financial statements

<PAGE>
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 30, 1995

NOTE A - Operations and Summary of Significant Accounting Policies

Business:  One Price  Clothing  Stores,  Inc.  and  subsidiary  (the  "Company")
operates a chain of off-price  retail  women's and children's  specialty  stores
offering a wide variety of first quality,  contemporary,  in- season apparel and
accessories  for the uniform  retail  price of $7. At  December  30,  1995,  the
Company operated 701 stores in 28 states and Puerto Rico.

Principles of Consolidation:  The consolidated  financial statements include the
accounts  of the  Company  and  its  wholly-owned  subsidiary.  All  significant
intercompany accounts and transactions have been eliminated in consolidation.

Accounting Estimates: The preparation of financial statements in conformity with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  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 those estimates.

Cash and Cash Equivalents:  The Company considers all highly liquid  investments
with an original  maturity  of three  months or less when  purchased  to be cash
equivalents.

Merchandise Inventories: Merchandise inventories are stated at the lower of 
average unit cost or market. Average unit cost is determined by the first-in, 
first-out (FIFO) method.

Depreciation:  Depreciation is computed by the  straight-line  method,  based on
estimated  useful  lives of 10 years for land  improvements,  33 to 40 years for
buildings,  5 to 10 years  for  leasehold  improvements  and 3 to 15  years  for
fixtures and equipment.

Income  Taxes:  The Company  accounts for income taxes using the  principles  of
Statement of Financial  Accounting  Standards ("SFAS") No. 109,  "Accounting for
Income Taxes." Under SFAS No. 109,  deferred  income taxes  represent the future
income tax effect of temporary differences between the book and tax bases of the
Company's assets and liabilities,  assuming they will be realized and settled at
the amount reported in the Company's financial statements.

Trademarks: The cost of trademarks is being amortized over their expected useful
lives of 10 years using the straight-line method.

Purchased Software: Purchased software is included in other assets and is 
amortized over its estimated useful life of 5 years using the straight-line 
method.

Revenue Recognition: Revenues from retail sales are recognized at the time of 
the sale.  An estimate for merchandise returns is recorded in the period the 
merchandise was purchased.

Store Preopening Costs: Costs associated with the opening of new stores are 
expensed as incurred.

Store  Closing  Costs:  At the time  management  commits  to  close a  store,  a
provision  is made and  operations  are  charged for any  remaining  store lease
obligation after closing or penalty to cancel the lease obligation.


Advertising and Promotional Costs:  Advertising and promotional costs are 
expensed when incurred.  Such expenses were $324,000, $347,000 and $141,000 in 
1995, 1994 and 1993, respectively.


<PAGE>




Income Per Common Share: Net income per common share is computed by dividing net
income by the  weighted  average  number of shares of Common  Stock and dilutive
common stock equivalent shares for stock options (Note E) outstanding during the
period.

Fiscal Year: The Company's year ends on the Saturday nearest December 31.

Reclassifications: Certain amounts included in prior years' financial statements
have been reclassified to conform to the 1995 presentation.

NOTE B -  Credit Facilities

The Company  previously  had an  agreement  with its banks that  provided  for a
$19,000,000 line of credit facility, a $15,000,000 letter of credit facility and
a $6,000,000  term loan  facility  scheduled to expire May 31, 1996.  Borrowings
against the line of credit  accrued  interest at the Company's  option of a Base
Rate  (defined  as the higher of the Agent  Bank's  prime  interest  rate or the
Federal Funds rate plus 0.50%) or the adjusted  LIBOR rate plus 1.50%.  The term
loan accrued interest,  payable  quarterly,  at the Company's option of the Base
Rate, as defined above, plus 1.0% or the adjusted LIBOR rate plus 2.50%.

The maximum amounts outstanding under the credit facilities during 1995 and
1994 were  approximately  $24,540,000 and  $16,421,000,  respectively.  The
average amounts  outstanding  under the credit  facilities were $16,264,000
during 1995 and $3,165,000  during 1994. The weighted average interest rate
was 8.2% in 1995 and 7.6% in 1994.  At December 30,  1995,  the Company had
$5,500,000 outstanding under the term loan and $2,412,000 outstanding under
the line of credit compared to no amounts outstanding at December 31, 1994.
The  Company  had  outstanding  letters  of  credit  for  the  purchase  of
merchandise inventories totaling approximately  $11,923,000 at December 30,
1995 compared to $7,656,000 at December 31, 1994.

The fair value of the  Company's  outstanding  debt at  December  30,  1995
approximates the carrying value.

On March 25, 1996, the Company replaced its existing credit facilities with
an agreement with a new lender which provides for a revolving loan facility
of up to $37,500,000  (including a letter of credit  sub-facility  of up to
$25,000,000) and a $7,500,000 term loan facility. The new credit facilities
expire in March  1998 and may be  extended  at the  lender's  option for an
additional year.   Borrowings  under  the  credit  agreement  are
collateralized  by all assets  owned by the Company  during the term of the
agreement and bear interest,  at the Company's  option  (subject to certain
limitations in the agreement),  at the prime rate plus 0.5% or the Adjusted
Eurodollar  Rate,  as  defined,  plus 2.5%.  Maximum  borrowings  under the
revolving  credit facility and utilization of the letter of credit facility
are based on a borrowing base formula  determined  with respect to eligible
inventory  (as defined in the  agreement).  At December 30, 1995,  when the
Company's  inventories were at the seasonally lowest levels and outstanding
letters of credit were at the seasonally  highest levels, the Company would
have had  approximately  $8.8  million  of  excess  availability  under the
borrowing  base  formula  on a pro  forma  basis.  Availability  under  the
revolving facility will fluctuate in accordance with the Company's seasonal
variations  in inventory  levels.  The lending  formula may be revised from
time to time by the lender in response to changes in the composition of the
Company's inventory or other business conditions.  The term loan is payable
in 57 consecutive equal monthly  installments plus interest commencing July
1996.  If the new  credit  facility  is not  renewed  in  March  1998,  the
outstanding  balance  under the term loan would be due and  payable at that
time. Current obligations  totaling $3,079,000  outstanding at December 30,
1995 under the former credit agreement were classified as long term, as the
Company  had the intent and  ability to  refinance  such  obligations  on a
long-term  basis.  Certain  fees may be  payable by the  Company  for early
termination of the credit agreement.

The new credit  agreement  contains certain  covenants  which,  among other
things,  restricts  the  ability of the Company to incur  indebtedness,  or
encumber or dispose of assets,  and prohibits the Company from repurchasing
its  Common  Stock or paying  dividends.  Additionally,  the  Company  must
maintain a minimum  adjusted  net worth (as  defined in the  agreement)  of
$34,000,000  and maintain  minimum  working  capital,  exclusive of amounts
outstanding under the credit facilities, of $5,000,000.


<PAGE>



NOTE C - Income Taxes

The (benefit from) provision for income taxes consists of the following:
<TABLE>
<S>                                                         <C>                      <C>                 <C>
                                                                        Period Ended
                                                           December 30,            December 31,            January 1,
                                                             1995                    1994                   1994
Current:
      Federal                                              $(1,001,000)              $2,400,000            $4,809,000
      State and local                                           62,000                  494,000               940,000
Deferred:
      Federal                                                   (5,000)                (116,000)             (428,000)
      State and local                                         (145,000)                 (29,000)              (86,000)
      Puerto Rico                                             (202,000)                     --                    --
                                                           ------------              -----------            ----------

Total (benefit from) provision for income taxes            $(1,291,000)              $2,749,000            $5,235,000
                                                           ============              ===========           ==========


Presented below are the elements which comprise  deferred income tax assets
and liabilities:

                                                                                              December 30,          December 31,
                                                                                                 1995                     1994
Gross deferred income tax assets:
 Accrued employee benefits deductible
   for tax purposes when paid                                                                  $   739,000         $    568,000
 Excess of tax over financial statement
   basis of inventory                                                                            1,111,000            1,062,000
 Accrued retirement benefits deductible
   for tax purposes when paid                                                                      145,000              162,000
 State and local net operating loss carryforwards                                                  113,000                --
 Puerto Rico net operating loss carryforward                                                       202,000              292,000
 Valuation allowance for Puerto Rico
   loss carryforward                                                                                 --                (292,000)
 Miscellaneous                                                                                     186,000              185,000
                                                                                              ------------          ------------
   Gross deferred income tax assets                                                              2,496,000            1,977,000
                                                                                               -----------          ------------

 Gross deferred income tax liabilities:
   Excess of financial statement over tax basis
    of property and equipment                                                                   (1,794,000)          (1,592,000)
  Excess of financial statement over
    tax basis of supplies                                                                          (91,000)            (125,000)
                                                                                                -----------         ------------
  Gross deferred income tax liabilities                                                         (1,885,000)          (1,717,000)
                                                                                                -----------         ------------
  Net deferred income tax asset                                                                 $  611,000          $   260,000
                                                                                                ===========         ============

</TABLE>

  The net deferred income tax asset is recognized in the accompanying balance
sheets as follows:
<TABLE>
<S>                                                                                            <C>                <C>
                                                                                                December 30,      December 31,
                                                                                                    1995              1994

  Current assets                                                                               $  2,093,000        $ 1,709,000
  Noncurrent liabilities                                                                         (1,482,000)        (1,449,000)
                                                                                                ------------       ------------
  Net deferred income tax asset                                                                $    611,000        $   260,000
                                                                                               =============       ============
</TABLE>

In  1994,  the  Company's  Puerto  Rico  subsidiary  generated  a  net
operating loss of approximately  $696,000 which is available to offset
future  taxable  income  in  Puerto  Rico  through  2001.  Due  to the
subsidiary's short operating history  (operations  commenced in 1994),
management was not assured that the deferred  income tax asset related
to the  operating  loss  carryforward  would be realized at the end of
1994.  Accordingly,  a valuation  allowance  for 100% of the  deferred
income tax asset was  established.  In 1995, the  subsidiary  realized
taxable income of $212,000.  Management  believes that the  operating  loss in
1994 was  attributable to the start-up of the Puerto Rico  operations. Manage-
ment  now  believes  that it is more  likely  than  not that the remaining  
deferred  tax  asset  will be  realized.  Accordingly,  the Company reversed 
the valuation  allowance that was previously provided and the deferred tax asset
related to the Puerto Rico subsidiary's net operating  loss  carryforward  is
recognized  at December  30,  1995.  Management  believes  that  scheduled  
reversals  of  other  temporary differences  and  anticipated  future taxable 
income are sufficient to realize the remaining  net deferred  income tax assets 
at December 30, 1995.

A  reconciliation  of the statutory  Federal  income tax rate to the annual
effective income tax rate follows:
<TABLE>
<S>                                                                                <C>                <C>                 <C>
                                                                                                   Period Ended
                                                                                    December 30,       December 31,       January 1,
                                                                                        1995                  1994           1994
                                                                                ------------------    ------------------   --------

     Federal income tax at statutory rate                                             (35.0)%              35.0%             35.0%
     State and local income tax, net of Federal
          tax benefit                                                                  (3.2)                4.5               4.0
     Puerto Rico net operating loss                                                    (7.8)                3.4                --
     Tax benefit from carryback of Federal Targeted
          Jobs Tax Credits                                                             (5.9)                 --                --
     Tax benefit from contributions of inventory                                         --                (2.7)             (0.6)
     Other, net                                                                         2.2                (1.7)             (0.9)
                                                                                      -------             -------           ------
                                                                                      (49.7)%              38.5%             37.5%
                                                                                      =======             =======           ======
</TABLE>

     NOTE D - Operating Leases

     The Company generally leases its stores under operating leases with initial
     terms of five to ten years with one to two renewal  option  periods of five
     years each. The leases generally provide for increased rents resulting from
     increases in  operating  costs and  property  taxes.  Certain of the leases
     provide for  contingent or  percentage  rentals based upon sales volume and
     others are leased on a month-to-month basis.

     In addition,  the Company has  operating  leases for  automobiles,  trucks,
     trailers and certain other equipment with one to ten year terms. The leases
     for trucks and trailers  also  provide for  contingent  rentals  based upon
     miles driven. 

     Future minimum rental commitments as of December 30, 1995 for
     noncancelable leases, are approximately as follows:
<TABLE>
<S>            <C>                                                  <C>
               1996...............................................  $21,266,000
               1997..............................................    18,183,000
               1998..............................................    13,758,000
               1999..............................................    10,122,000
               2000.............................................      5,764,000
               Later.............................................    11,435,000
               Total..............................................  $80,528,000


</TABLE>
<PAGE>




     Total rental expense for operating leases was as follows:

<TABLE>
<S>                                               <C>                      <C>                  <C>
                                                                 Period Ended
                                                     December 30,           December 31,        January 1,
                                                        1995                    1995               1994
                                                     ------------           ------------        ----------

              Minimum rentals ...................... $21,686,000            $16,962,000            $13,782,000
              Contingent rentals ..................    4,739,000              3,836,000              2,837,000
                                                     ------------          -------------          -------------
                                                     $26,425,000            $20,798,000            $16,619,000
                                                     ===========           =============           ============
</TABLE>


     NOTE E - Employee Benefits

     Stock  Option  Plans:  The Company has three stock  option plans (the 1991,
     1988  and 1987  plans)  which  provide  for  grants  to  certain  officers,
     directors,  and key employees of stock options to purchase shares of Common
     Stock of the Company. Options granted under the plans expire ten years from
     the date of grant and, to date,  have been  granted at prices not less than
     the fair market value at the date of grant. Effective October 27, 1988, the
     Board of Directors  retired all unissued  options under the Company's  1987
     Plan. Options cancelled  subsequent to October 27, 1988 under the 1987 Plan
     are retired.  Options cancelled under the 1991 and 1988 Plans are available
     for reissuance.

     Information with respect to the stock option plans is as follows:
<TABLE>
<S>                                                 <C>                           <C>                      <C>                 <C>
                                                                                        Year
                                                              1995                                              1994
                                                   -------------------------------------------------------------------------------
                                                   Number of Shares   Price Per Share     Number of Shares         Price per Share
Outstanding at beginning of year                        551,000        $2.67--$19.00         602,000                 $2.67--$12.59
Options granted                                         108,000        $2.94--$ 7.87          77,000                 $9.06--$19.00
Options exercised                                       (30,000)       $2.67--$ 5.08         (84,000)                $2.67--$11.17
Options cancelled                                       (68,000)       $5.08--$14.81         (44,000)                $5.33--$16.38
                                                        --------       -------------         --------                 --------
Outstanding at end of year                              561,000        $2.94--$19.00          551,000                $2.67--$19.00
                                                        ========       ==============       =========
Exercisable at end of year                              247,000                               222,000
                                                        ========                            =========
Available for future grants                             301,000                               341,000
                                                        ========                            =========
</TABLE>

     At  December  30,  1995,  a total of  862,000  shares of Common  Stock were
     reserved for issuance under the Company's option plans.

     Effective  April,  1995, the Company adopted the 1995 Director Stock Option
     Plan which provides for annual grants to non-employee  members of the Board
     of Directors.  Such grants are immediately exercisable on the date of grant
     and expire ten years from the date of grant.  There was no  activity  under
     this plan during 1995. At December 30, 1995, 105,000 shares of common stock
     were reserved for issuance under the Director Stock Option Plan.

     Retirement Plan: The Company has a 401(k) and profit-sharing  plan, the One
     Price Clothing Stores, Inc. Retirement Plan (the "Plan").  All employees in
     the  United  States who are 21 years of age or older with at least one year
     of service are eligible to participate in the Plan. Effective January 1995,
     the   Company's   contribution   obligation   increased   to  50%  of  each
     participant's  contribution  with a  maximum  contribution  of  2.5% of the
     participant's base  compensation.  In 1994, the Company was obligated under
     the  Plan  to make a  matching  contribution  of 25% of each  participant's
     contribution  with  a  maximum  matching   contribution  of  1.25%  of  the
     participant's  base  compensation.  In  addition,  the  Company may make an
     annual  discretionary  contribution on behalf of the participants;  no such
     discretionary  contributions  have  been  made  by  the  Company.  Employer
     contributions  (approximately  $292,000,  $132,000,  and  $101,000 in 1995,
     1994, and 1993, respectively) vest ratably over five years.

     Stock Purchase Plan: The Company adopted a Stock Purchase Plan, effective 
     March 1995, that allows


<PAGE>



     participating employees to purchase, through payroll deductions,  shares of
     the  Company's  Common Stock at  prevailing  market  prices.  All full-time
     associates  who are 18 years of age or older  with at least  six  months of
     service are eligible to  participate  in the Stock Purchase Plan. The Stock
     Purchase  Plan  provides  that  participants  may  authorize the Company to
     withhold  from net earnings  and deposit  such amounts with an  independent
     custodian.   The  custodian  purchases  Common  Stock  of  the  Company  at
     prevailing  market  prices  and  distributes  the shares  purchased  to the
     participants  upon request.  The Company pays expenses  associated with the
     purchases  of the Common  Stock and  administration  of the Stock  Purchase
     Plan.

     NOTE F -  Related Party Transactions

     The Company has a deferred  compensation  agreement with a former executive
     officer who is currently a member of the Company's Board of Directors.  The
     agreement  provides  for  monthly  payments  aggregating  $75,000  annually
     (including interest) through July 2002.

     The Company paid approximately $171,000,  $32,000 and $33,000 in 1995, 1994
     and 1993,  respectively,  for legal  services  provided  by the law firm of
     which a Company Director is a member.

     NOTE G - Shareholders' Equity

     In March 1994,  the Company  declared a 3-for-2 stock split effected in the
     form of a stock dividend  payable April 29, 1994 to  shareholders of record
     as of the close of business on April 15,  1994.  Accordingly,  Common Stock
     outstanding,  the weighted  average number of common and common  equivalent
     shares and per share amounts were retroactively  adjusted to give effect to
     the stock split.

     The  Company  adopted a  Shareholder  Rights Plan in  November  1994.  Each
     shareholder  of record on  November  15,  1994 is entitled to one Right for
     each  share of Common  Stock held on such date.  Each  Right  entitles  the
     registered  holder to  purchase  from the  Company one half share of Common
     Stock at a specified  price.  The Rights become  exercisable  only upon the
     occurrence of certain  conditions set forth in the Shareholder  Rights Plan
     relating to the  acquisition  of 20% or more of the  outstanding  shares of
     Common Stock.

     NOTE H - Subsequent Events

     On March 14, 1996, the Company's Board of Directors adopted a resolution to
     change the Company's year end from the Saturday  nearest December 31 to the
     Saturday  nearest  January 31,  beginning in 1996.  This change was made to
     conform the Company's calendar to the seasonal patterns it experiences,  as
     well as to enhance  comparability  of its quarter and annual  results  with
     other retail companies.

     On March 14, 1996, the Company's  Board of Directors also approved  changes
     in the methods of accounting for  merchandise  inventories.  The Company is
     changing  from the lower of  average  first-in,  first-out  (FIFO)  cost or
     market method of accounting to the FIFO retail method. The Company believes
     that the retail method will provide improved  information for the operation
     of its business in a manner  consistent  with the method used widely in the
     retail industry.  The Company is also  capitalizing  into inventory certain
     merchandise acquisition and distribution costs to provide a better matching
     of revenues and expenses,  particularly in interim  periods.  The effect of
     these  changes  in  accounting  for  merchandise   inventories,   effective
     beginning in January  1996,  will result in a net  increase in  merchandise
     inventories  of  approximately  $1,031,000  and a benefit of  approximately
     $629,000 (net of income taxes) which will be shown as the cumulative effect
     of a change in accounting principle in the 1996 Statement of Operations.

     NOTE I - Effect of New Accounting Pronouncements

     The Financial  Accounting Standards Board ("FASB") has issued Statement No.
     121 (SFAS 121), "Accounting for the Impairment of Long-Lived Assets and for
     Long-Lived Assets to be Disposed Of." This statement  essentially  requires
     that when the  Company  commits  to closing  specific  stores and for other
     stores  which may be  impaired,  the fixed  assets for such  stores must be
     written  down to fair  market  value.  The  Company  anticipates  that  the
     adoption of SFAS 121, required for years beginning after December 15, 1995,
     will result in


<PAGE>



     a decrease in net fixed assets of approximately  $1,630,000 and a charge of
     approximately  $1,395,000  (net of income taxes) which will be shown as the
     cumulative effect of a change in accounting principle in the 1996 Statement
     of Operations.

     NOTE J -  Quarterly Results (Unaudited)

     The following is a summary of quarterly (13 weeks) operations for the years
     ended  December  30, 1995 and December  31, 1994 (in  thousands  except per
     share data).
<TABLE>
<S>    <C>                                                                    <C>            <C>        
                                                                                               1995 Quarters Ended
                                                                            April 1,      July 1       September 30,   December 30,
                                                                              1995         1995           1995              1995
                                                                            -------------------------------------------------------
       Net sales                                                           $54,639      $86,647        $74,307          $79,099
       Gross margin                                                         19,330       37,925         29,641           32,042
       Net (loss) income                                                    (5,084)       4,314        (1,135)              601
       Net (loss) income per common share                                  $ (0.49)     $  0.42        $(0.11)          $  0.06


                                                                                               1994 Quarters Ended
                                                                           April 2,      July 2        October 1,      December 31,
                                                                             1994         1994           1994              1994
                                                                        ------------  ---------        --------        -----------
       Net sales                                                           $56,007      $82,566        $65,877          $78,876
       Gross margin                                                         21,119       36,508         23,736           31,897
       Net (loss) income                                                      (872)       5,992         (1,835)           1,104
       Net (loss) income per common share                                 $  (0.08)      $ 0.57        $ (0.17)          $ 0.11

</TABLE>



<PAGE>



     ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE

             None

     PART III

     ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The  information  required  under  this  item  is  incorporated  herein  by
     reference to the sections  entitled  "Election of Directors" and "Executive
     Officers  of the Company  and  Security  Ownership  of  Management"  of the
     Company's definitive Proxy Statement (the "Proxy Statement") filed with the
     Securities and Exchange Commission in connection with the Annual Meeting of
     Shareholders to be held May 20, 1996.

     ITEM 11.  EXECUTIVE COMPENSATION

     The  information  required  under  this  item  is  incorporated  herein  by
     reference to the sections entitled  "Compensation  Committee Interlocks and
     Insider  Participation,"  "Compensation of Executive Officers," "Employment
     Contracts and Deferred Compensation Arrangements,"  "Compensation Committee
     Report on Executive  Compensation,"  "Performance  Graph" and  "Election of
     Directors - Directors' Fees" of the Proxy Statement.

     ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  information  required  under  this  item  is  incorporated  herein  by
     reference  to  the  sections  entitled   "Security   Ownership  of  Certain
     Beneficial  Owners and Management,"  "Election of Directors" and "Executive
     Officers of the Company and Security Ownership of Management" of the Proxy
     Statement.

     ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information  required in this item is incorporated  herein by reference
     to the sections  entitled  "Compensation  Committee  Interlocks and Insider
     Participation"   and  "Employment   Contracts  and  Deferred   Compensation
     Arrangements" of the Proxy Statement.

     PART IV

     ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
               REPORTS ON FORM 8-K

     (a) 1.       Financial Statements

     The following  financial  statements of One Price Clothing Stores,  Inc are
     included in Part II, Item 8:
<TABLE>
<S>      <C>      <C>
         o        Independent Auditors' Report

         o        Consolidated Balance Sheets as of December 30, 1995 and December 31, 1994

         o        Consolidated Statements of Operations for the years ended December 30, 1995, December 31,
                  1994 and January 1, 1994

         o        Consolidated Statements of Shareholders' Equity for the years ended December 30, 1995,
                  December 31, 1994 and January 1, 1994

         o        Consolidated Statements of Cash Flows for the years ended December 30, 1995, December 31,


<PAGE>



                  1994 and January 1, 1994

         o        Notes to Consolidated Financial Statements

     (a) 2.       Financial Statement Schedule

         The following financial statement schedule of One Price Clothing Stores, Inc. is included in Item 14
         (d):

         o        Schedule II -- Valuation and Qualifying Accounts.

                  Schedules not listed above have been omitted  because they are
                  not applicable or the information is included in the financial
                  statements or notes thereto.

     (a) 3.  Exhibits including those incorporated by reference:
</TABLE>

     Exhibit
     Number     Description

     3(a)       Certificate  of  Incorporation  of the  Registrant,  as  amended
                through April 1987:  Incorporated by reference to exhibit of the
                same number in Registrant's  Registration Statement on Form S-1,
                filed April 10, 1987, (File No. 33-13321) ("the S-1").

     3(a)(1)    Certificate of Amendment of Certificate of  Incorporation of the
                Registrant:  Incorporated  by  reference  to exhibit of the same
                number in  Registrant's  Annual Report on Form 10-K for the year
                ended January 1, 1994, (File No. 0-15385)("the 1993 Form 10-K").

     3(b)       Restated By-Laws of the Registrant, as of July 22, 1992 and 
                amended as of  July 20, 1994 and March 14, 1996.

     4(a)       See Exhibits 3(a), 3(a)(1), and 3(b).

     4(b)       Specimen of Certificate of the Registrant's Common Stock: 
                Incorporated by reference to Exhibit 1 of the Registrant's 
                Registration Statement on Form 8-A filed with the Securities and
                Exchange Commission on June 23, 1987, (File No. 0-15385).

     4(c)       Shareholder Rights Agreement by and between the Registrant and 
                Wachovia Bank of North Carolina, N. A. as Rights Agent dated 
                November 3, 1994:  Incorporated by reference to Exhibit 2
                to the Registrant's Form 8-K filed November 10, 1994 
               (File No. 0-15385).

     4(d)       Loan and Security Agreement by and between Congress Financial 
                Corporation (Southern) as Lender and the Registrant and One 
                Price Clothing of Puerto Rico, Inc., as Borrowers dated
                March 25, 1996.

     4(e)       The  Company  hereby  agrees to furnish to the  Commission  upon
                request of the Commission a copy of any instrument  with respect
                to long-term  debt not being  registered  in a principal  amount
                less  than  10% of the  total  assets  of the  Company  and  its
                subsidiary on a consolidated basis.

     Material Contracts -- Executive Compensation Plans and Arrangements:

     10(a)*     Stock Option Plan of the Registrant  dated February 20, 1987 and
                related  forms  of  Incentive  and  Non-qualified  Stock  Option
                Agreements:  Incorporated  by reference to Exhibit  10(d) of the
                S-1.

     10(b)*     Stock Option Plan of the Registrant dated December 12, 1988 and 
                related forms of Incentive and


<PAGE>



                Non-qualified Stock Option Agreements: Incorporated by reference
                to Exhibit 10(a) in the Registrant's Annual Report on Form 10-K 
                for the year ended December 31, 1988, (File No. 0-15385)
                ("the 1988 Form 10-K").

     10(c)*     One Price Clothing Stores, Inc. 1991 Stock Option Plan: 
                Incorporated by reference to Exhibit 10(b) in the Registrant's 
                Annual Report on Form 10-K for the year ended December 28, 1991,
                (File No. 0-15385) ("the 1991 Form 10-K").

     10(d)*     Summary of Officer Bonus Plan: Incorporated by reference to 
                exhibit of the same number in Registrant's Annual Report on Form
                10-K for the year ended January 2, 1993, (File No. 0-15385)
                ("the 1992 Form 10-K").

     10(e)*     Form of Employment Agreement between Registrant and Henry D. 
                Jacobs, Jr.: Incorporated by reference to Exhibit 10(j) in the 
                1988 Form 10-K.

     10(f)*     Employment Agreement dated February 1, 1991 between the 
                Registrant and Ethan S. Shapiro:  Incorporated by reference to 
                Exhibit 10(m) in the Registrant's Annual Report on Form 10-K for
                the year ended December 29, 1990, (File No. 0-15385) ("the 1990
                Form 10-K").

     10(g)*     Key man term insurance policy, issued February 20, 1993, on the 
                life of Henry D. Jacobs, Jr.: Incorporated by reference to 
                exhibit of the same number in the 1992 Form 10-K.

     10(h)*     Employment Agreement dated January 16, 1995 between the 
                Registrant and Stephen A. Feldman: Incorporated by reference to 
                exhibit of the same number in Registrant's Annual Report
                on Form 10-K for the year ended December 31, 1994, 
                (File No. 0-15385)("the 1994 Form 10-K").

     10(i)*     Disability Income Policy for the benefit of Henry D. Jacobs, Jr.
                : Incorporated by reference to exhibit of the same number in the
                1992 Form 10-K.

     10(j)*     Disability Income Policy for the benefit of Ethan S. Shapiro: 
                Incorporated by reference to exhibit of the same number in the 
                1992 Form 10-K.

     10(k)*     Agreement between the Registrant and Jane R. Shapiro, Trustee of
                the Ethan S. Shapiro Life Insurance Trust: Incorporated by 
                reference to exhibit of the same number in the 1992 Form 10-K.

     10(l)*     Agreement dated June 24, 1992 between the Registrant and Raymond
                S. Waters: Incorporated by reference to exhibit of the same 
                number in the 1992 Form 10-K.

     10(m)*     Directors' Stock Option Plan effective April 19, 1995:  
                Incorporated by reference to exhibit of the same number in the 
                1994 Form 10-K.

     10(n)*    Employment Agreement dated March 30, 1992 between the Registrant 
                and Ronald Swedin.

     10(o)*     Employment Agreement dated December 12, 1995 between the 
                Registrant and Thomas Unrine.

     Material Contracts -- Other:

     10(p)      Credit  Agreement  dated  March  16,  1995  by and  between  the
                Registrant   and   NationsBank   (as  agent)  for  an  unsecured
                $25,000,000 line of credit facility and a $15,000,000  letter of
                credit  facility:  Incorporated by reference to Exhibit 10(q) in
                the 1994 Form 10-K.

     10(q)      Assignment and Acceptance (dated April 24, 1995) of an interest
                in the Credit Agreement (dated 

<PAGE>



                March 17, 1995) to CoreStates  Bank and  Promissory  Notes dated
                April 13, 1995 by and between the Registrant and CoreStates Bank
                and  NationsBank,  N.A.:  Incorporated  by  reference to Exhibit
                10(a) in the Registrant's  quarterly report on Form 10-Q for the
                quarter ended July 1, 1995,  (File No.  0-15385) ("the July 1995
                Form 10-Q").

     10(r)      Amendment  Number 1 to  Credit  Agreement  (dated as of June 30,
                1995) by and between the  Registrant,  various banks and lending
                institutions,  and NationsBank,  N.A. (as agent), and Promissory
                Notes and  Mortgage  and  Security  Agreement:  Incorporated  by
                reference to Exhibit 10(b) in the July 1995 Form 10-Q.

     11         Statement regarding computation of per share earnings.

     21         Subsidiary of the Registrant.

     23         Consent of Deloitte & Touche LLP.

     27         Financial Data Schedule (electronic filing only).

     ---------------------------------------

     * Denotes a management contract or compensatory plan or agreement.

     (b)   Reports on Form 8-K.

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

     (c)   Exhibits.

           The  response to this  portion of Item 14 is  submitted as a separate
section of this report.

     (d)   Financial Statement Schedules.

           The  response to this  portion of Item 14 is  submitted as a separate
section of this report.




<PAGE>



     SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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.
<TABLE>
<S>                                                     <C>
                                                        ONE PRICE CLOTHING STORES, INC.

     Date: March 29, 1996                               /s/ Henry D. Jacobs, Jr.
                                                        ------------------------
                                                        Henry D. Jacobs, Jr.
                                                        Chairman of the Board and
                                                        Chief Executive Officer


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
     report  has been  signed  below by the  following  persons on behalf of the
     Registrant and in the capacities and on the dates indicated.


     Date: March 29, 1996                               /s/ Henry D. Jacobs, Jr.
                                                        ------------------------
                                                        Henry D. Jacobs, Jr.
                                                        Chairman of the Board,
                                                        Chief Executive Officer and Director
                                                        (principal executive officer)


     Date: March 29, 1996                               /s/ Ethan S. Shapiro
                                                        --------------------
                                                        Ethan S. Shapiro
                                                        President, Chief Operating Officer and
                                                        Director


     Date: March 29, 1996                               /s/ Raymond S. Waters
                                                        ---------------------
                                                        Raymond S. Waters
                                                        Secretary and Director


     Date: March 29, 1996                               /s/ Stephen A. Feldman
                                                        ----------------------
                                                        Stephen A. Feldman
                                                        Executive Vice President and
                                                        Chief Financial Officer
                                                        (principal financial officer)





<PAGE>





     Date: March 29, 1996                               /s/ David F. Bellet
                                                        -------------------
                                                        David F. Bellet
                                                        Director


     Date: March 29, 1996                               /s/ Charles D. Moseley, Jr.
                                                        ---------------------------
                                                        Charles D. Moseley, Jr.
                                                        Director


     Date: March 29, 1996                               /s/ Laurie M. Shahon
                                                        --------------------
                                                        Laurie M. Shahon
                                                        Director


     Date: March 29, 1996                               /s/ Malcolm L. Sherman
                                                        ----------------------
                                                        Malcolm L. Sherman
                                                        Director


     Date: March 29, 1996                               /s/ James M. Shoemaker, Jr.
                                                        ---------------------------
                                                        James M. Shoemaker, Jr.
                                                        Director


     Date: March 29, 1996                               /s/ Cynthia C. Turk
                                                        -------------------
                                                        Cynthia C. Turk
                                                        Director

</TABLE>





<PAGE>




                                          ONE PRICE CLOTHING STORES, INC.
                                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<S>       <C>                 <C>                      <C>            <C>          <C>                <C>                  <C>   

            COL. A             COL. B                                 COL. C                           COL. D            COL. E
         DESCRIPTION                                                 ADDITIONS
                              Balance at              Charged to                   Charged            Deduction -        Balance
                              Beginning of            Cost &                       to Other-          Describe (1)       at End of
                              Period                  Expenses                     Describe                              Period





  YEAR ENDED
  DECEMBER 30, 1995

  Allowance for
  doubtful accounts            $189,000                 $607,000                                          $521,000         $275,000
                               ========                 ========                                          ========         ========


  YEAR ENDED
  DECEMBER 31, 1994

  Allowance for
  doubtful accounts            $135,000                 $822,000                                         $768,000         $189,000
                               ========                 ========                                         ========         ========



  YEAR ENDED
  JANUARY 1, 1994

  Allowance for
  doubtful accounts            $100,000                 $723,000                                         $ 688,000        $135,000
                               ========                 ========                                         =========        ========
</TABLE>




  (1) Write-offs charged against the allowance for returned customer checks




<PAGE>



                                             ONE PRICE CLOTHING STORES, INC.
                                                      EXHIBIT INDEX



  Exhibit
  Number                        Description

  3(a)     Certificate of  Incorporation  of the Registrant,  as amended through
           April 1987:  Incorporated  by reference to exhibit of the same number
           in Registrant's  Registration  Statement on Form S-1, filed April 10,
           1987, (File No. 33-13321) ("the S-1").

  3(a)(1)  Certificate  of  Amendment of  Certificate  of  Incorporation  of the
           Registrant:  Incorporated  by  reference to exhibit of same number in
           Registrant's Annual Report on Form 10-K for the year ended January 1,
           1994, (File No. 0-15385) ("the 1993 Form 10-K").

  3(b)     Restated By-Laws of the Registrant, as of July 22, 1992 and amended 
           as of July 20, 1994 and March 14, 1996.

  4(a)     See Exhibits 3(a), 3(a)(1), and 3(b).

  4(b)     Specimen of Certificate of the Registrant's Common Stock: 
           Incorporated by reference to Exhibit 1 of the Registrant's 
           Registration Statement on Form 8-A filed with the Securities and 
           Exchange Commission on June 23, 1987, (File No. 0-15385).

  4(c)     Shareholder Rights Agreement by and between the Registrant and 
           Wachovia Bank of North Carolina, N.A. as Rights Agent dated November 
           3, 1994:  Incorporated by reference to Exhibit 2 to the Registrant's
           Form 8-K filed November 10, 1994 (File No. 0-15385).

  4(d)     Loan  and  Security  Agreement  by  and  between  Congress  Financial
           Corporation  (Southern)  as Lender and the  Registrant  and One Price
           Clothing of Puerto Rico, Inc., as Borrowers dated March 25, 1996.

  4(e)     The Company hereby agrees to furnish to the  Commission  upon request
           of the Commission a copy of any instrument  with respect to long-term
           debt not being  registered in a principal amount less than 10% of the
           total  assets of the Company  and its  subsidiary  on a  consolidated
           basis.

  Material Contracts -- Executive Compensation Plans and Arrangements:

  10(a)*   Stock  Option  Plan of the  Registrant  dated  February  20, 1987 and
           related   forms  of  Incentive  and  Non-   qualified   Stock  Option
           Agreements: Incorporated by reference to Exhibit 10(d) of the S-1.

  10(b)*   Stock  Option  Plan of the  Registrant  dated  December  12, 1988 and
           related   forms  of  Incentive  and  Non-   qualified   Stock  Option
           Agreements:  Incorporated  by  reference  to  Exhibit  10(a)  in  the
           Registrant's  Annual Report on Form 10-K for the year ended  December
           31, 1988, (File No. 0-15385) ("the 1988 Form 10-K").

  10(c)*   One Price Clothing Stores, Inc. 1991 Stock Option Plan: Incorporated
           by reference to Exhibit 10(b) in the Registrant's Annual Report on 
           Form 10-K for the year ended December 28, 1991, (File No. 0-15385) 
           ("the 1991 Form 10-K").




<PAGE>



  10(d)*   Summary of Officer Bonus Plan: Incorporated by reference to exhibit 
           of the same number in Registrant's Annual Report on Form 10-K for the
           year ended January 2, 1993, (File No. 0-15385) ("the 1992 Form 10-
           K").

  10(e)*   Form of Employment Agreement between Registrant and Henry D. Jacobs, 
           Jr.:Incorporated by reference to Exhibit 10(j) in the 1988 Form 10-K.

  10(f)*   Employment Agreement dated February 1, 1991 between the Registrant 
           and Ethan S. Shapiro:  Incorporated by reference to Exhibit 10(m) in 
           the Registrant's Annual Report on Form 10-K for the year
           ended December 29, 1990, (File No. 0-15385) ("the 1990 Form 10-K").

  10(g)*   Key man term insurance policy, issued February 20, 1993, on the life 
           of Henry D. Jacobs, Jr.: Incorporated by reference to exhibit of the 
           same number in the 1992 Form 10-K.

  10(h)*   Employment Agreement dated January 16, 1995 between the Registrant 
           and Stephen A. Feldman:  Incorporated by reference to exhibit of the 
           same number in Registrant's Annual Report on Form 10-K for the year 
           ended December 31, 1994, (File No. 0-15385)(the "1994 Form 10-K").

  10(i)*   Disability Income Policy for the benefit of Henry D. Jacobs, Jr.: 
           Incorporated by reference to exhibit of
           the same number in the 1992 Form 10-K.

  10(j)*   Disability Income Policy for the benefit of Ethan S. Shapiro: 
           Incorporated by reference to exhibit of the same number in the 1992 
           Form 10-K.

  10(k)*   Agreement between the Registrant and Jane R. Shapiro, Trustee of the 
           Ethan S. Shapiro Life Insurance Trust: Incorporated by reference to 
           exhibit of the same number in the 1992 Form 10-K.

  10(l)*   Agreement dated June 24, 1992 between the Registrant and Raymond S. 
           Waters: Incorporated by reference to exhibit of the same number in 
           the 1992 Form 10-K.

  10(m*    Directors' Stock Option Plan effective April 19, 1995:  Incorporated 
           by reference to exhibit of the same number in the 1994 Form 10-K.

  10(n)*   Employment Agreement dated March 30, 1992 between the Registrant and 
           Ronald Swedin.

  10(o)*   Employment Agreement dated December 12, 1995 between the Registrant 
           and Thomas Unrine.

  Material Contracts -- Other:

  10(p)    Credit  Agreement  dated March 16, 1995 by and between the Registrant
           and  NationsBank  (as agent)  for an  unsecured  $25,000,000  line of
           credit  facility  and  a  $15,000,000   letter  of  credit  facility:
           Incorporated by reference to Exhibit 10(q) in the 1994 Form 10-K.

  10(q)    Assignment  and  Acceptance  (dated April 24, 1995) of an interest in
           the Credit  Agreement  (dated March 17, 1995) to CoreStates  Bank and
           Promissory  Notes dated April 13, 1995 by and between the  Registrant
           and CoreStates Bank and NationsBank,  N.A.: Incorporated by reference
           to Exhibit 10(a) in the  Registrant's  quarterly  report on Form 10-Q
           for the quarter  ended July 1, 1995,  (File No.  0-15385)  ("the July
           1995 Form 10-Q").

  10(r)    Amendment Number 1 to Credit Agreement (dated as of June 30, 1995) by
           and between the Registrant,  various banks and lending  institutions,
           and NationsBank,  N.A. (as agent),  and Promissory Notes and Mortgage
           and Security Agreement: Incorporated by reference to Exhibit 10(b) in
           the July 1995 Form 10- Q.

  11       Statement regarding computation of per share earnings.

  21       Subsidiary of the Registrant.

  23       Consent of Deloitte & Touche LLP.

  27       Financial Data Schedule (electronic filing only).

           ---------------------------------------

             * Denotes a management contract or compensatory plan or agreement.

  (b)  Reports on Form 8-K.

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

  (c)  Exhibits.

       The  response  to this  portion  of Item 14 is  submitted  as a  separate
section of this report.

  (d)  Financial Statement Schedules.

       The  response  to this  portion  of Item 14 is  submitted  as a  separate
section of this report.



<PAGE>