<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, DC  20549

                                 FORM 10-Q

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

                   For the quarterly period ended AUGUST 1, 1998

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

                     Commission File Number 0-20035



                            NATURAL WONDERS, INC.
            (Exact name of Registrant as specified in its charter)

                DELAWARE                                  77-0141610
      (State or other jurisdiction of          (IRS Employer Identification No.)
     incorporation or organization)

                4209 TECHNOLOGY DRIVE, FREMONT, CALIFORNIA  94538
                     (Address of principal executive offices)
                                   (Zip code)

                                  510-252-9600
               (Registrant's telephone number, including area code)

     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
                   -----


Common stock outstanding as of August 29, 1998: 8,011,489 shares of common 
stock.


                                   1 of 14
<PAGE>

                            NATURAL WONDERS, INC.
                                    INDEX

<TABLE>
<CAPTION>
                                                                        Page
                                                                       Number
                                                                       ------
<S>                                                                    <C>
PART I.   FINANCIAL INFORMATION

ITEM 1.   Financial Statements (Unaudited)

          Condensed Statements of Operations                             3
          Quarters ended August 1, 1998 and August 2, 1997

          Condensed Balance Sheets                                       4
          August 1, 1998, January 31, 1998 and August 2, 1997

          Condensed Statements of Cash Flows                             5
          Six months ended August 1, 1998 and August 2, 1997

          Notes to Condensed Financial Statements for the                6-7
          period ended August 1, 1998

ITEM 2.   Management's Discussion and Analysis of                        8-11
          Financial Condition and Results of Operations

PART II.  OTHER INFORMATION

ITEM 1.   Legal Proceedings                                              11

ITEM 2.   Changes in Securities - None

ITEM 3.   Defaults Upon Senior Securities - None

ITEM 4.   Submission of Matters to a Vote of Security Holders            12

ITEM 5.   Other Information - None

ITEM 6.   Exhibits and Reports on Form 8-K                               13

          SIGNATURE                                                      14

</TABLE>


                                    2 of 14
<PAGE>

                            NATURAL WONDERS, INC.
                      CONDENSED STATEMENTS OF OPERATIONS
                    (In thousands, except per share data)
                                 (Unaudited)

<TABLE>
<CAPTION>
                                                QUARTER ENDED               SIX MONTHS ENDED
                                           -----------------------      ------------------------
                                           AUGUST 1,     AUGUST 2,      AUGUST 1,      AUGUST 2,
                                             1998          1997           1998            1997
                                           ---------     ---------      ---------      ---------
<S>                                        <C>           <C>            <C>            <C>
Net sales                                   $27,443       $26,850        $50,708        $49,086
Cost of goods sold and
  store occupancy expenses                   19,961        20,159         39,398         36,578
                                            -------       -------        -------        -------
     Gross margin                             7,482         6,691         11,310         12,508
Selling, general & administrative expenses    9,942        10,484         20,991         19,657
                                            -------       -------        -------        -------
     Operating loss                          (2,460)       (3,793)        (9,681)        (7,149)

Interest expense                                 57           136            125            292
Other expenses
Interest income and other, net                  (26)         (113)           (52)          (183)
                                            -------       -------        -------        -------
     Loss before taxes                       (2,491)       (3,816)        (9,754)        (7,258)
Income tax benefit                             (922)       (1,489)        (3,609)        (2,832)
                                            -------       -------        -------        -------
     Net loss                               $(1,569)      $(2,327)       $(6,145)       $(4,426)
                                            -------       -------        -------        -------
                                            -------       -------        -------        -------

Net earnings per common share:
Basic                                       $ (0.19)      $ (0.29)       $ (0.76)       $ (0.55)
Diluted                                     $ (0.19)      $ (0.29)       $ (0.76)       $ (0.55)

Weighted average common shares outstanding
Basic                                         8,084         7,993          8,066          7,990
Diluted                                       8,084         7,993          8,066          7,990

</TABLE>

                          See notes to financial statements


                                   3 of 14
<PAGE>

                            NATURAL WONDERS, INC.
                           CONDENSED BALANCE SHEETS
                            (Dollars in thousands)
                                 (Unaudited)

<TABLE>
<CAPTION>
                                                       AUGUST 1,    JANUARY 31,    AUGUST 2,
                                                         1998          1998          1997
                                                       ---------    -----------    ---------
<S>                                                    <C>          <C>            <C>
       ASSETS
Current Assets:
  Cash and cash equivalents                            $    298      $  6,351      $  6,928
  Short-term investments                                      0        13,400         3,300
  Merchandise inventories                                26,263        23,184        25,262
  Prepaid expenses and other current assets               9,065         5,332         7,323
                                                       --------      --------      --------
     Total current assets                                35,626        48,267        42,813
Property and Equipment:
  Leasehold improvements                                 30,103        28,818        26,501
  Property and equipment under capital lease              4,993         4,993         8,434
  Furniture, fixtures and equipment                      29,080        27,232        20,946
                                                       --------      --------      --------
                                                         64,176        61,043        55,881
  Less accumulated depreciation and amortization        (35,493)      (32,200)      (29,408)
                                                       --------      --------      --------
                                                         28,683        28,843        26,473
Other Assets                                              2,217         2,227         1,785
                                                       --------      --------      --------
Total Assets                                           $ 66,526      $ 79,337      $ 71,071
                                                       --------      --------      --------
                                                       --------      --------      --------


       LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Trade accounts payable                               $  3,979      $  7,997      $  6,750
  Accrued compensation and related costs                  2,052         2,825         2,717
  Accrued liabilities                                     3,326         3,636         2,880
  Short-term borrowings                                   2,650             0             0
  Income taxes payable                                      121         1,857           198
  Current portion of capital lease obligations              672           866         1,398
  Current portion of long-term debt                         373         1,405         1,410
                                                       --------      --------      --------
     Total current liabilities                           13,173        18,586        15,353
Capital Lease Obligations                                    63           461           749
Long-Term Debt                                              178           683         1,268
Deferred Rents                                            3,691         3,805         3,924
Commitments and Contingencies
Stockholders' Equity:
  Common stock, par value $.0001; authorized
  17,000,000 shares; outstanding
  8,058,289, 8,072,109 and 8,001,177 shares                   1             1             1
  Capital in excess of par value                         34,824        34,528        34,297
  Retained earnings                                      15,128        21,273        15,479
                                                       --------      --------      --------
     Total capital and retained earnings                 49,953        55,802        49,777
     Less:  Treasury Stockholders'
       (120,100 shares) at cost                             532             0             0
                                                       --------      --------      --------
     Total Stockholders' equity                          49,421        55,802        49,777
                                                       --------      --------      --------
Total Liabilities and Stockholders' Equity             $ 66,526      $ 79,337      $ 71,071
                                                       --------      --------      --------
                                                       --------      --------      --------
</TABLE>

                        See notes to financial statements


                                    4 of 14
<PAGE>

                            NATURAL WONDERS, INC.
                      CONDENSED STATEMENTS OF CASH FLOWS
                            (Dollars in thousands)
                                 (Unaudited)

<TABLE>
<CAPTION>
                                                        SIX MONTHS ENDED
                                                -------------------------------
                                                AUGUST 1, 1998   AUGUST 2, 1997
                                                --------------   --------------
<S>                                             <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Loss                                          $ (6,145)       $ (4,426)
  Adjustments to reconcile net loss to
  net cash used in operating activities:
    Depreciation and amortization                      3,419           3,079
    Loss on sale of asset                                183
    Change in operating assets and liabilities:
       Merchandise inventories                        (3,079)         (4,418)
       Prepaid expenses and other assets              (3,722)         (3,139)
       Trade accounts payable                         (4,018)          1,575
       Accrued compensation and related costs           (772)            194
       Accrued liabilities                              (310)            280
       Income tax payable                             (1,737)         (2,044)
       Deferred rent                                    (114)            (99)
                                                    --------        --------
  Net cash used in operating activities              (16,295)         (8,998)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of short-term investments                 (6,902)         (3,200)
  Sales of short-term investments                     20,300          17,800
  Proceeds from sale of equipment
  Purchases of property and equipment                 (3,440)         (2,850)
  Business acquisition                                  (738)
                                                    --------        --------
 Net cash provided by investing activities             9,958          11,012

CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments on capital lease                   (592)         (2,800)
    obligations
  Principal payments on long-term debt                (1,538)
  Net borrowing on line of credit                      2,650
  Purchase of treasury stock                            (532)
  Issuance of common stock                                39
  Exercise of stock options and warrants                 257              47
                                                    --------        --------
  Net cash provided by/(used in)
    financing activities                                 284          (2,753)

NET DECREASE IN CASH AND CASH EQUIVALENTS             (6,053)           (739)

CASH AND CASH EQUIVALENTS:
  Beginning of year                                    6,351           7,667
                                                    --------        --------
  End of period                                     $    298        $  6,928
                                                    --------        --------
                                                    --------        --------

CASH PAID DURING PERIOD:
  Interest                                          $    129        $    293
  Income taxes                                      $  1,737        $  1,927

</TABLE>


                       See notes to financial statements


                                    5 of 14
<PAGE>

                             NATURAL WONDERS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE PERIOD ENDED AUGUST 1, 1998

1.   The financial statements are unaudited and reflect all adjustments
     (consisting only of normal recurring adjustments) which, in the opinion of
     management, are necessary for a fair presentation of the financial position
     and operating results for the interim periods.  The results of operations
     for the quarter ended August 1, 1998 are not necessarily indicative of the
     results to be expected for the entire fiscal year ending January 30, 1999.

     This financial information should be read in conjunction with the audited
     financial statements and notes thereto included in the Company's 1997
     Annual Report to Stockholders and Form 10-K  for the fiscal year ended
     January 31, 1998 as filed with the Securities and Exchange Commission.

2.   In June 1997, the Financial Accounting Standards Board issued Statements of
     Financial Accounting Standards No. 130, "Reporting Comprehensive Income",
     which requires that an enterprise report, by major components and as a
     single total, the change in its net assets during the period from nonowner
     sources; and No. 131, "Disclosures about Segments of an Enterprise and
     Related Information" which establishes annual and interim reporting
     standards for an enterprise's operating segments and related disclosures
     about its products, services, geographic area, and major customers.
     Adoption of these statements will not materially impact the Company's
     financial position, results of operations or cash flows.  Both statements
     are effective for fiscal years beginning after December 15, 1997, with
     earlier application permitted.

3.   Effective June 5, 1998, Natural Wonders, Inc. reached a negotiated
     settlement of the patent infringement claim disclosed in its Form 10-K for
     the year ended 1997.  The current year impact of the settlement, including
     legal expenses and reserves was approximately $525,000. This was recorded
     in the first quarter ended May 2, 1998.

4.   In fiscal 1997 the Board of Directors of the Company authorized the
     repurchase of up to $2,000,000 of the Company's outstanding common stock.
     Beginning in February 1998, the Company began repurchasing stock and as of
     the end of the second quarter of fiscal 1998 had purchased 120,100 shares
     for a total of $532,000.


                                    6 of 14
<PAGE>

5.   The Company had a credit facility agreement with a commercial bank, which
     included a  revolving line of credit for $12,000,000 which expired on June
     1, 1998. The line of credit was also available for the issuance of
     commercial and standby letters of credit up to $9,500,000 and $500,000
     respectively. The Company had a second credit facility with another
     commercial bank, which included a revolving line of credit for $3,000,000
     which expired on June 30, 1998. Commercial and standby letters of credit
     were also available up to $3,000,000. The Company has replaced both
     facilities with a single facility at one of the banks. The new credit
     facility agreement has a maximum total availability of $23,000,000 during
     the increase period, which is from September 1, 1998 through December 31,
     1998 and $12,000,000 for the rest of its term, which is July 1, 1998
     through August 31, 1998 and January 1, 1999 through June 30, 1999. The
     facility includes borrowing on a line of credit for up to $23,000,000
     during the increase period and $7,000,000 during the remainder of the term.
     The facility is also available for the issuance of commercial and stand-by
     letters of credit for up to $4,000,000 each during the increase period and
     $8,000,000 each for the rest of the term. The total borrowings on the line
     of credit and the letters of credit may not exceed $23,000,000 during the
     increase period or $12,000,000 during the remainder of the term. There is a
     60 consecutive day out of borrowing period for the line of credit between
     December 31, 1998 and the maturity date of the line of credit. The Company
     has the option of choosing interest payable at a rate based on LIBOR plus
     1.5% or a rate equal to the bank's prime rate. The agreement contains
     restrictive covenants, which include achieving quarterly earnings/loss
     targets, maintaining certain financial ratios, and requiring bank consent
     for the payment of dividends. The Company was in compliance with the bank
     covenants as of August 1, 1998.


                                    7 of 14
<PAGE>

PART I.   FINANCIAL INFORMATION

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
          RESULTS OF OPERATIONS.

RESULTS OF OPERATIONS

GENERAL

     As of August 1, 1998, Natural Wonders operated 175 stores in 36 states
compared to 165 stores in 36 states as of August 1, 1997. In the first six
months of 1998, five new stores were opened and one store was closed as compared
to two new stores opened in the first six months of fiscal 1997, as well as 12
stores acquired from What a World!, Inc., on May 22, 1997.

SALES

     During the second quarter of 1998, sales increased 2.2% over the same
period in 1997. The increase was primarily due to new stores and to a full
period of sales generated from stores opened and acquired in 1997. Comparable
store sales decreased 4.0% in the second quarter of 1998, as compared to the
same period in 1997. The decrease in the second quarter was primarily due to
continued weakness in the Discovery and Kids merchandising areas.

COST OF GOODS SOLD AND STORE OCCUPANCY EXPENSES

     Cost of goods sold and store occupancy expenses include distribution center
costs and other expenses associated with acquiring inventory.  As a percentage
of sales, these costs decreased to  72.7% in the second quarter of 1998 from
75.1% in the second quarter of 1997.  The decrease in costs as a percentage of
sales in the second quarter was primarily due to decreased clearance and
promotional sales.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses, (SG&A), are primarily 
non-occupancy store expenses and corporate overhead. As a percentage of 
sales, these costs decreased to 36.2% in the second quarter of 1998 from 
39.0% in the second quarter of 1997. The decrease in the costs as a 
percentage of sales in the second quarter was primarily due to efforts to 
control costs.

OPERATING INCOME

     As a result of the foregoing, the operating loss was $2,460,000 or 9.0% of
sales in the second quarter of 1998 versus $3,793,000 or 14.1% of sales in the
second quarter of 1997.


                                       8 of 14
<PAGE>

INTEREST AND OTHER, NET

     Interest and Other, Net remained at 0.1% of sales in the second quarter of
1998 compared to the second quarter of 1997.

NET LOSS

     As a result of the foregoing, the net loss decreased to $1,569,000 or 5.7%
of sales in the second quarter of 1998 from $2,327,000 or 8.7% of sales in the
second quarter of 1997.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary sources of capital in recent years have been net cash
flow from operations.  Seasonal working capital requirements have been met
through short-term bank borrowings.

     During the first six months of fiscal 1998, cash and investments 
decreased $19,453,000. This was primarily due to seasonal operating losses, 
(historically incurred in the first three fiscal quarters), an increase in 
merchandise inventories and fixtures for new stores, the pay down of capital 
lease and long-term debt obligations, and payments for new information 
systems and income taxes. Additionally, in fiscal 1997 the Board of Directors 
of the Company authorized the repurchase of up to $2,000,000 of the Company's 
outstanding common stock. Beginning in February 1998, the Company began 
repurchasing stock and as of the end of the second quarter of fiscal 1998 had 
purchased 120,100 shares for a total of $532,000.

     Compared to the second quarter in the prior year, cash and investments
decreased due to higher seasonal operating losses, purchasing more inventory and
equipment, lower accounts payable, stock repurchases and paydowns of long-term
debt and capital leases. This was offset in part by short-term borrowings.

     During the remainder of 1998, the Company plans to open 3 new stores and,
during the holiday season, approximately 20 temporary store locations. The
Company anticipates that cash for the remainder of 1998 will primarily be used
for capital expenditures and merchandise inventory for new stores and temporary
locations, a new point-of-sale system for the stores, repayment of debt, and to
purchase inventory for the Company's existing stores, particularly prior to and
during the peak holiday selling season.

     The Company has conducted a review of its computer systems to identify
those areas that could be affected by the Year 2000 issue.  The Company
presently believes, with the new merchandise and financial information system
placed in service in February 1998, the Year 2000 will not pose significant
operational problems.  The Company also believes that customers are not likely
to be affected by the Year 2000 issue.  There can be no guarantee that the
systems of other companies on which the Company's systems rely will be timely
converted and would not have an adverse effect on the Company's systems.  The
Company will utilize both internal and external resources to reprogram, or
replace, and test the software for the Year 2000 modifications.  The


                                       9 of 14
<PAGE>

Company does not expect expenditures related to the Year 2000 issue to be
material and as such, costs associated with Year 2000 have not and are not
expected to have a significant impact on the Company's results of operations,
liquidity, or capital resources. The Company is currently assessing the need for
a Year 2000 contingency plan.

     The Company had a credit facility agreement with a commercial bank, which
included a revolving line of credit for $12,000,000 which expired on June 1,
1998. The line of credit was also available for the issuance of commercial and
standby letters of credit up to $9,500,000 and $500,000 respectively. The
Company had a second credit facility with another commercial bank, which
included a revolving line of credit for $3,000,000 which expired on June 30,
1998. Commercial and standby letters of credit were also available up to
$3,000,000. The Company has replaced both facilities with a single facility at
one of the banks. The new credit facility agreement has a maximum total
availability of $23,000,000 during the increase period, which is from September
1, 1998 through December 31, 1998 and $12,000,000 for the rest of its term,
which is July 1, 1998 through August 31, 1998 and January 1, 1999 through June
30, 1999. The facility includes borrowing on a line of credit for up to
$23,000,000 during the increase period and $7,000,000 during the remainder of
the term. The facility is also available for the issuance of commercial and
stand-by letters of credit for up to $4,000,000 each during the increase period
and $8,000,000 each for the rest of the term. The total borrowings on the line
of credit and the letters of credit may not exceed $23,000,000 during the
increase period or $12,000,000 during the remainder of the term. There is a 60
consecutive day out of borrowing period for the line of credit between December
31, 1998 and the maturity date of the line of credit. The Company has the option
of choosing interest payable at a rate based on LIBOR plus 1.5% or a rate equal
to the bank's prime rate. The agreement contains restrictive covenants, which
include achieving quarterly earnings/loss targets, maintaining certain financial
ratios, and requiring bank consent for the payment of dividends. The Company was
in compliance with the bank covenants as of August 1, 1998.

     The Company believes that current cash and short-term investments together
with its cash flow from operations, long-term debt and funds available under its
credit facility agreement will be sufficient to fund the Company's operations
for the next 12 months.

INFLATION AND SEASONALITY

     The Company does not believe that its operations have been materially
affected by inflation during the three recent fiscal years or in 1998 to date.
However, there is no assurance that its business will not be affected by
inflation in the future.

     The Company's business is subject to substantial seasonal variations in
demand. Historically, a significant portion of the Company's sales and
substantially all its net earnings have been realized during the fourth quarter
(which includes the November/December holiday season), and levels of sales and
net earnings have been significantly lower in the first three quarters, usually
resulting in losses in these quarters. If for any reason the Company's sales
were substantially below seasonal norms during the months of November and
December, the Company's annual results would be adversely affected. The
Company's quarterly results of operations may fluctuate significantly as a
result of comparable store sales levels, the timing of new store openings and
the amount of revenue contributed by new stores.


                                       10 of 14
<PAGE>

ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income", which
requires that an enterprise report, by major components and as a single total,
the change in its net assets during the period from non-owner sources; and No.
131, "Disclosures about Segments of an Enterprise and Related Information" which
establishes annual and interim reporting standards for an enterprise's operating
segments and related disclosures about its products, services, geographic area,
and major customers.  Adoption of these statements will not materially impact
the Company's financial position, results of operations or cash flows.  Both
statements are effective for fiscal years beginning after December 15, 1997,
with earlier application permitted.

FUTURE RESULTS

     This report contains forward-looking statements regarding, among other
matters, the Company's future strategy, store opening plans, merchandising
strategy and growth.  The forward-looking statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Act of 1995.
Forward-looking statements address matters which are subject to a number of
risks and uncertainties.  In addition to the general risks associated with the
operation of specialty retail stores in a highly competitive environment, the
success of the Company will depend on a variety of factors such as consumer
spending which is dependent on economic conditions affecting disposable consumer
income such as employment, business conditions, interest rates and taxation. The
Company's continued growth also depends upon the demand for its products, which
in turn is dependent upon various factors, such as the introduction and
acceptance of new products and the continued popularity of existing products, as
well as the timely supply of all merchandise. Reference is made to the Company's
filings with the Securities and Exchange Commission for further discussion of
risks and uncertainties regarding the Company's business.


PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

Effective June 5, 1998, Natural Wonders, Inc. reached a negotiated settlement of
the patent infringement claim disclosed in its Form 10-K for the year ended
1997. The current year impact of the settlement, including legal expenses and
reserves was approximately $525,000. This was recorded in the first quarter
ended May 2, 1998.


                                       11 of 14
<PAGE>

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

     The Company's Annual Meeting of Stockholders was held on June 10, 1998 at
its principal offices in Fremont, California. Of the shares outstanding as of
the record date, 7,592,686 shares were present at the meeting or represented by
proxies, representing approximately 93.0% of the total votes eligible to be
cast.

     At the meeting the stockholders voted to elect  two (2)  Class II directors
of the Company to each serve a three year term and until their successors are
duly elected and qualified.  The names of the Class II directors elected at the
Annual Meeting and the votes cast with respect to each individual are set forth
below.

<TABLE>
<CAPTION>
                                        For              Withheld
                                     ---------           --------
<S>                                  <C>                 <C>
     Peter G. Hanelt                 7,053,144            539,542
     Julius Jensen III               7,053,644            539,042

</TABLE>

     The following Class I directors continued to hold office:
     Peter L. Harris, David H. Folkman

     The following Class III director continued to hold office:
     Pearson C. Cummin III

The Company's stockholders also voted to approve the following:

     -    To amend the Company's 1993 Omnibus Stock Plan to increase the number
          of shares reserved for issuance thereunder from 2,000,000 to
          2,500,000; increase the number of shares of common stock underlying
          options granted to one optionee within any fiscal year from 100,000
          shares to 200,000 and to increase the limit on the number of shares of
          common stock underlying options granted in the form of a one-time
          grant from 200,000 shares to 700,000. There were 4,787,932 affirmative
          votes, 665,490 negative votes and 21,015 abstentions and 2,118,249
          broker non-votes.

     -    To amend the 1993 Outside Directors Stock Option Plan to increase the
          maximum number of shares of common stock from 150,000 to 250,000.
          There were 5,229,776 affirmative votes, 222,746 negative votes, 21,915
          abstentions and 2,118,249 broker non-votes.

     -    To ratify the appointment of Deloitte & Touche LLP as the Company's
          independent auditors for the fiscal year ending January 30, 1999.
          There were 7,582,163 affirmative votes, 7,208 negative votes, and
          3,315 abstentions.


                                       12 of 14
<PAGE>

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     a.   EXHIBITS

          Exhibit 10.28:  Credit Agreement entered into on July 1, 1998 between
          the Company and Wells Fargo Bank, National Association.

          Exhibit 11.1:  Computation of Per Share Loss

          Exhibit 27:  Financial Data Schedule

     b.   REPORTS ON FORM 8-K

          The Company filed a report on Form 8-K on June 16, 1998, which
          included a copy of a press release containing the announcement of the
          settlement of pending litigation and adjustment of previously reported
          first quarter results.


                                    13 of 14
<PAGE>
                                   SIGNATURE

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

Dated:  September 15, 1998
                                  NATURAL WONDERS, INC.
                                     (Registrant)



                                  /s/ Peter G. Hanelt
                                  -------------------------------
                                  Peter G. Hanelt,
                                  Acting Chief Executive Officer,
                                  Chief Financial Officer
                                  (Signing on behalf of the registrant and
                                  as Principal Accounting and Financial Officer)



                                    14 of 14