SECURITIES AND EXCHANGE COMMISSION
	                        Washington, D.C.  20549
                        	 _____________________

                             	FORM 10-K

             	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       	SECURITIES EXCHANGE ACT OF 1934 
 
                 	For the fiscal year ended January 31, 1998

                   	Commission file number     33-27126    

                             	PEEBLES INC.

             Virginia                    					54-0332635                 
    (State of incorporation)			  (I.R.S. Employer Identification No.) 
                                    	 	    

      One Peebles Street
     South Hill, Virginia				                            		23970-5001      
(Address of principal executive offices)    			            (Zip Code)


Registrant's telephone number, including area code (804) 447-5200

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

	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.  [X]

	State the aggregate market value of the voting stock held by non-affiliates of
the registrant $-0- (determined by including all shares of Peebles common 
stock owned by persons, (1) who hold less than 10% of the outstanding shares
of common stock and(2) are not an executive officer of the registrant. 
Aggregate value is based upon the estimated fair value of common stock as of
February 1, 1997.)

	As of April 1, 1998, 1,000 shares of common stock of Peebles Inc. were 
outstanding.
<PAGE>
                    DOCUMENTS INCORPORATED BY REFERENCE

	List hereunder the following documents if incorporated by reference and the
Part of the Form 10-K into which the document is incorporated:  (1) Any annual 
report to security holders; (2) Any proxy or information statement; and (3) Any
prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act 
of 1933. The listed documents should be clearly described for identification
purposes.
	
                                  NONE
<PAGE>
                                 PART I
ITEM 1.  BUSINESS.

GENERAL

	Peebles operates 84 specialty department stores offering predominately 
soft-apparel, fashion merchandise for the entire family and selected decorative
home accessories.  Founded in 1891, the Company operates primarily in smaller
communities in twelve predominately southeastern and mid-Atlantic states.  
Peebles positions itself as the leading fashion retailer in these communities, 
which typically do not have a traditional mall-based department store, and 
locates its stores in the primary shopping destinations in its markets.  
Peebles offers its customers consistent value by providing a broad assortment
of moderately priced national brands supplemented with quality private label 
merchandise.  Peebles' attractive stores and visual presentation, advertising 
and promotional programs further reinforce its image as the market's 
fashion leader.  

	References to 1993, 1994, 1995, 1996 and 1997 relate to the fiscal years of the
Company ending January 29, 1994, January 28, 1995, February 3, 1996, February
1, 1997 and January 31, 1998, respectively.  Fiscal years 1993, 1994, 1996 and 
1997 each include 52 weeks.  Results of operations for 1995 consisted of 
fifty-three weeks, with 17 weeks included in the four-month period ended May 27,
1995 and 36 weeks in the eight-month period ended February 3, 1996.  References
herein to 1995 relate to the fifty-three week period ended February 3, 1996.

	Peebles Inc. was acquired by PHC Retail Holding Company ("PHC Retail"), 
effective May 27, 1995.  PHC Retail, a closely held company, has no significant
assets other than the shares of Peebles common stock, and had no operations
prior to the acquisition. The acquisition was accounted for using the purchase
method of accounting, and accordingly, a new accounting base year was 
established.

OPERATING STRATEGY

	The following are key elements to Peebles operating strategy:

	Focus on Small Markets.  Peebles locates its stores in smaller communities that
 typically do not have a traditional mall-based department store, thereby 
 limiting competition and allowing Peebles to be the leading fashion retailer
 in these communities.  The Company believes its ability to successfully 
 operate in markets with as few as 5,000 households is an important competitive 
 advantage over large department stores, which generally cannot profitably 
 operate in such markets.  Peebles has operated in small communities for over 
 100 years and understands its markets and customers.

	Operate Small Stores with Lower Cost Structure.  Peebles, with its focus on 
 small communities, operates stores that are significantly smaller than the 
 traditional full-line department store.  Peebles' stores average 29,000 square
 feet and vary in size from 10,000 to 65,000 square feet.  The Company operates
 profitably despite its smaller stores and lower sales per square foot compared 
 with other department store companies by maintaining a merchandise assortment 
 conducive to consistently higher gross margins, emphasizing strict cost 
 controls and centralizing traditional "back office" store operations.

	Deliver Fashion to Small Communities.  Peebles strives to provide its customers
 with a shopping experience similar to that found in a larger, mall-based 
 department store.  Soft-apparel fashion merchandise is predominate on the 
 selling floor, as the Company emphasizes a broad selection of moderately-priced
 national brands and private label merchandise, which generally is not available
 through other retailers in the market.  Cosmetics and selected home accessories
 are the primary compliments to the apparel assortment, as fewer hard-line 
 merchandise categories are offered.  Peebles' attractive stores and visual 
 presentation, advertising and promotional programs further reinforce its 
 image as the market's fashion leader.

	Offer Value to Customers.  Peebles emphasizes value pricing and is less 
 promotional than traditional department stores.  It is the Company's strategy
 to use lower initial mark-ons and promote less, thereby maintaining a high 
 level of credibility with its customers.  Peebles' commitment to providing 
 value to its customers is integral to developing repeat customers, a critical 
 ingredient for success in smaller markets.

	Centralize Operations, but Tailor Merchandise Locally.  Peebles believes that
 centralized decision-making, controls and support functions are critical to 
 its cost-efficient operations and enable the Company's store personnel to 
 maximize the time devoted to selling.  In contrast, Peebles employs a 
 decentralized approach in merchandising its individual stores.  The merchandise
 mix is tailored to individual stores to cater to local tastes and preferences
 based on customer and sales associate feedback and sales trends.  Buyers and 
 store associates work together to optimize the use of Peebles' smaller selling
 spaces to meet customer demand and maximize sales.

	Adapt to Local Real Estate Opportunities.  Smaller stores and a flexible store
 format give the Company the ability to locate in a variety of new or existing 
 sites.  As a result, Peebles' growth is not dependent upon the development of 
 new malls.  Peebles attempts to position its stores in the primary shopping 
 destination in its markets, which are typically strip shopping centers 
 co-anchored by leading discount, grocery and drug retailers.  The Company also
 operates successfully in enclosed malls and downtown locations.

EXPANSION STRATEGY

	The Company has expanded by opening new stores, acquiring and converting stores
and groups of stores, and remodeling or relocating existing stores.  The Company
anticipates expanding its operations through the following:

	Opening New Stores.  The Company intends to open eleven new stores in 1998 and 
 twelve new stores in 1999. As of April 1, 1998 the Company has signed seven 
 leases for stores scheduled to open in 1998, representing approximately 150,000
 in total square footage.  The Company's new stores will be located in existing
 and contiguous markets where it can realize distribution efficiencies and where
 the Peebles concept and merchandise mix will correspond to local demographics.
 The Company explores a wider range of real estate options than retailers which 
 rely only on new shopping center development, and actively considers space 
 vacated by other retailers.

	Remodeling and Relocating Stores.  In addition to new store growth, the Company
 has an ongoing remodeling program, both upgrading existing stores and 
 reallocating selling space to provide its customers a pleasant, fashion-
 oriented shopping environment for the merchandise mix for that market.  The 
 Company successfully relocated three stores in 1997 to the desired shopping 
 destination in that market.  In 1998, remodeling and/or space reallocation are 
 planned for seven store locations to better meet customer preferences.

	Acquisitions.  The Company believes that from time to time opportunities may 
 arise for the acquisition of individual stores or groups of stores.  In 1997, 
 three of eight new store locations were acquired from a retailer exiting those 
 markets, and in 1996, ten of the 14 new stores were acquired.  The Company is 
 continually evaluating acquisitions of both individual stores and groups of 
 stores for opportunities to compliment or expand existing markets.

PEEBLES STORES

	Peebles stores are designed and managed to create an appealing shopping 
experience, foster customer convenience and maximize operating efficiency.  
The Company's stores range in size from 10,000 to 65,000 square feet and average
29,000 square feet, which is significantly smaller than the traditional full-
line department store.  The Company does not have a standard store format and 
instead adapts its stores to existing real estate opportunities.  The Company's 
stores feature a bright, modern and accessible layout with an emphasis on the 
visual presentation of merchandise.  The store layout is designed to draw the
customer through the store, creating opportunities for cross-selling.  

	The Company targets communities with between 10,000 and 25,000 households, 
although the Company operates profitably in markets with as few as 5,000 
households.  In addition, the Company enters larger markets and suburban areas 
with 25,000 to 40,000 households where the customer base and competitive factors
exhibit characteristics similar to markets where the Company's operating 
strategy has proven successful.  The Company prefers to locate its stores in 
strip shopping centers and enclosed malls where other anchors such as a 
leading grocery, discount and drug retailers will create a destination shopping
location.  Of the 84 stores currently in operation, 60 are located in strip 
shopping centers, 19 in enclosed malls and 5 in downtown locations.

MERCHANDISING  

	The Company's merchandise, approximately 80% of which is apparel, is targeted 
to middle income customers shopping for their families and homes.  The Company 
has fewer departments than a traditional full-line department store, but strives
to carry a wide assortment of merchandise within its targeted categories in 
order to appeal to a broad range of customers.  To position itself as the 
primary fashion retailer in the community with merchandise not found 
elsewhere in the market, the Company emphasizes moderately-priced national
brands, supplemented by a limited selection of prestige brand names and a 
selection of quality private label merchandise.  Peebles merchandise is fashion
responsive rather than fashion forward, limiting the Company's inventory 
exposure.  The Company's stores carry apparel for the entire family, accessories
and cosmetics, and decorative home accessories.

	Management believes that brand name merchandise is a significant attraction to 
its customers and intends to continue emphasizing such merchandise in its 
stores.  For example, the Company carries nationally branded cosmetics in as 
many of its stores as possible because Peebles is typically the only retailer in
the community where consumers can purchase that merchandise.  While the gross 
margins on cosmetics are typically lower than the Company's average gross 
margin, the availability of this merchandise generates store traffic which 
facilitates the sale of higher margin merchandise.

	In 1997, a majority of the merchandise sold by the Company was nationally 
branded merchandise.  Key brands featured by the Company include:

	Ladies............... 		Alfred Dunner, Koret, Kellwood, Liz Claiborne, Etienne
                         Aigner, Levi Strauss, Hanes, Oak Hill, Halmode Apparel,
                         Michael Blake, Woolrich, Jantzen, Pendleton, Playtex, 
                         Goodman Knitting, Item Eyes, Lee, E.M. Lawrence, LJJ, 
                         Forecaster of Boston, Monet, J.B.S. Limited, Ultra 
                         Dress, Periwinkle, Shadowline, Sally Lou Fashions, Trio
                         Knitting Mills, Totes, Rosetti Handbags, R G Barry 

	Men's	...............   Levi, Haggar, Nike, Van Heusen, Bugle Boy, Tropical 
                         Sportswear, Swank, Foria International, Nutmeg Mills
                        	Young Men's and Juniors		Levi, Calvin Klein, Union Bay,
                         Bugle Boy, JNCO by Revatex, Tommy Jeans/Pepe, Byer of 
                         California, Currants Jeri-Jo, Fritzi of California, 
                         Polo, Deummer Boy, Nike, Bongo

	Children's	..........  	William Carter, American Character, Gerson & Gerson, 
                         HealthTex, Buster Brown, Baby Togs

	Shoes	...............  	Reebok, Nike, Maxwell Shoe, Aerosoles, Wolverine World 
                         Wide, Brown Shoe, Nunn Bush, Keds, Candies

	Home	................   Springs, World Bazaars, Hugh Country Linens, 
                         Fieldcrest, Whiting, Mikasa, Westpoint-Stevens

	Cosmetics	..........	   Estee Lauder, Elizabeth Arden, Calvin Klein, Clinique,
                         Liz Claiborne, Giorgio Beverly Hills, Aramis, Fashion
                         Fair, Paul Sebastian

	As a complement to its national brand merchandise, the Company offers private 
label merchandise in selected departments to give its customers a wider range of
products.  Management believes that its private label merchandise provides value
to the Peebles customer by offering a quality merchandise alternative at prices
lower than national brands.  In addition, private label merchandise often has 
higher gross margins than brand name merchandise and allows the Company to avoid
direct price competition.

	In order to efficiently utilize its selling space, Peebles tailors the 
merchandise selection at individual stores.  The Company utilizes its knowledge
of its markets and customers developed over 106 years along with input from the
store managers and sales associates to allocate merchandise to the stores. The 
Company also maintains an inventory tracking system which provides daily
information as to sales and inventory levels by store, department, vendor, 
class, style, size and color.  Based on this information, the Company analyzes 
market trends, identifies fast or slow moving merchandise and makes reordering,
reallocation and pricing decisions on a daily basis.

	Peebles emphasizes value pricing and is less promotional than the traditional 
department store.  It is the Company's pricing strategy to use lower initial 
mark-ons and promote less, thereby maintaining a high level of credibility with
its customers.  Peebles' commitment to providing value to its customers is 
integral to creating repeat customers, a critical ingredient for success in 
smaller markets.  Peebles is committed to offering "Great Fashions, Great 
Prices, Everyday".  With this program, Peebles prices merchandise as low as 
possible in order to drive sales.  Products in this program are marketed through
special point of sale displays and are featured in the Company's advertising.

ADVERTISING AND PROMOTION

	The Company's advertising and promotion strategy is designed to support its
marketing goals of providing quality merchandise at value-oriented prices and
reinforces the Company's image as the leading fashion retailer in its markets. 
Peebles utilizes a direct mail program, which in part employs information 
obtained from its charge card program to target mailings to its charge card 
holders.  The Company emphasizes newspaper advertising and mailers rather than 
television and radio, due to the size and nature of the markets served.  Peebles
uses both black and white advertisements and full color mailers to highlight 
promotional items and events as well as products in its "Great Fashions, Great 
Prices, Everyday" program.

	In addition, the Company's advertising and promotional staff organizes special
events at the stores and arranges for all Grand Opening and Grand Reopening 
events.  In 1997, the Company continued as an associate sponsor of a racing team
in the NASCAR Busch Grand National stock car racing series, which the Company 
believes will increase its exposure in both existing and potential markets.

	The Company's net advertising expenses in 1995, 1996 and 1997 were 2.6%, 2.5% 
and 2.1% of net sales, respectively, which the Company believes is lower than 
traditional department stores due to emphasis on an everyday fair price policy
and a less promotional strategy.

PURCHASING AND DISTRIBUTION

	The Company employs 26 buyers and six merchandise managers who are responsible
for most merchandising decisions including purchasing, pricing, sales 
promotions, inventory allocations and markdowns.  While these decisions are made
centrally, the Company endeavors to refine its merchandise assortment to appeal
to the customers in each market.  Peebles' buying staff has developed specific 
knowledge with regard to purchasing, inventory and promotions for the Company's
smaller sized stores.  The merchandising group participates in an incentive plan
based on sales, gross margin dollars generated and inventory turnover.

	The Company places special emphasis on maintaining all merchandise in stock, 
particularly advertised and basic merchandise, to build and maintain credibility
with its customers.  By monitoring unit sale information by store, buyers are
able to quickly determine the styles, colors and sizes of merchandise to be 
reordered and distributed to individual stores.

	The Company purchases its merchandise from over 1,200 suppliers and is not 
dependent on any single source of supply.  The Company is a member of Frederick
Atkins, Inc., an international cooperative buying service.  This cooperative 
offers members merchandise purchasing opportunities, which the Company has taken
advantage of particularly in connection with its imported private label 
merchandise.  During 1995, 1996 and 1997, Frederick Atkins, Inc. was the 
Company's largest supplier, accounting for retail purchases totaling 
approximately 17%, 15% and 10%, respectively.  The Company believes it has a 
good relationship with Frederick Atkins, Inc. and is not aware of a situation in
which Frederick Atkins, Inc. would not continue to supply the Company.  In the 
event such a situation arose, the Company believes that it could avoid 
significant disruptions in its purchasing process or significant changes to its
merchandise mix through the use of other resources.  

	Virtually all merchandise is shipped directly from vendors to the Company's 
distribution center where it is inspected, sorted, marked, ticketed, packed and
shipped to the individual stores.  The Company does not warehouse merchandise 
and has a goal of processing goods through the distribution center in three 
days.  Merchandise is shipped to each store an average of twice a week on 
Company-owned trucks.

	The Company's 150,000 square foot distribution center is located on 31 acres in
South Hill, Virginia, adjacent to the Company's headquarters and close to major
interstates.  The distribution center features automated processing over an 
extensive network of conveyors and sortation equipment. The distribution center
currently operates one eight hour shift daily at which growth can be supported 
to  approximately 110 stores.

STORE OPERATIONS 
	
	The Company has structured its store operations to maintain what management
believes are key operating advantages including a thorough knowledge of its 
customer base, the ability to share information between the stores, and cost 
efficient operations through centralized decision making.

	Peebles performs as many traditional "back-office" functions as possible at the
corporate level so that store management and sales associates can spend most of
their time with customers.  Non-sales store personnel are kept to a minimum due
to control functions performed at the corporate offices, including sales 
associate scheduling, customer credit and marking merchandise.  All stores 
utilize a minimum 85% of their total payroll hours in a selling capacity. 
 

	Peebles encourages the participation of all store level management and sales 
associates in decision making, and management regularly solicits input and 
suggestions from its employees who are closest to the customer.  In addition to
its management information systems, Peebles stays in close contact with store
operations through its seven regional managers.  Each store manager reports to 
a regional manager, who may also manage a store.  Regional managers visit each 
store in their region at least once a month to review merchandise presentation,
personnel training and performance, enforcement of the Company's security 
procedures and adherence to Company operating procedures.  Each quarter, 
corporate merchandising and operations executives meet with the regional
managers to share information.

	The Company conducts a management training program, where on-the-job training
with seasoned store management and regional managers is coordinated with 
instruction at the Company's corporate headquarters.  The Company stresses 
promotion from within, and substantially all of the current store managers have
been selected in this manner.

	Most stores typically employ several assistant managers and approximately 30
sales associates, a number of whom are part-time.  All Peebles' store personnel,
including assistant store managers and sales associates, participate in 
incentive plans.  The Company uses periodic productivity reports and personal
reviews to apprise each employee of his or her performance.  

PEEBLES CHARGE CARD

	In 1995, 1996 and 1997, 38.8%, 37.1% and 34.3%, respectively, of net sales were
made using the Company's proprietary credit card.  As of January 31, 1998, the 
Company had approximately 620,000 credit card accounts, of which 158,000 were 
billed that month.

	Peebles' charge card sales represent an important element in its marketing 
strategy because the Company believes that Peebles charge card holders generally
constitute its most loyal and active customers.  Peebles charge transactions are
captured via store point-of-sale terminals and transmitted directly to the 
corporate credit mainframe computer system, where Peebles charge customer 
account information is updated.  This information is used to bill accounts as 
well as to provide marketing information regarding purchasing habits and 
merchandise preferences.  The Company uses this data to develop segmented 
advertising and promotional programs to reach specific groups of customers who
have established purchasing patterns for certain brands, departments and store 
locations.  

	Peebles administers all aspects of its credit card program in-house.  The 
extension of credit is governed by risk models and matrices, which are developed
and reviewed by corporate credit executives. Through a communication network 
linking the store locations to the corporate office and a credit bureau, 
in-store credit applications are scored within minutes and the actual 
credit limit is assigned and available for purchases.  Inquiries by Peebles 
charge customers and in-store associates are answered by a corporate customer 
service department.  Monthly customer statements are produced at the corporate 
office and when prepared for mailing, can be combined with selective promotional
material or delinquency notices.  Management believes this in-house credit 
program provides the Company with an important customer relations advantage over
competing retailers which administer their credit programs from remote 
processing locations or contract for such services from unrelated third parties.


	The Company's credit plans provide for the option of paying in full within 28
days of the billed date with no finance charge or with revolving credit terms. 
Terms of the short-term revolving charge accounts require customers to make 
minimum monthly payments in accordance with prescribed schedules.  Peebles bears
the risk of the collecting its credit card receivables.  Peebles' credit card 
program has had a positive impact on net income.

	The following table presents a summary of information relating to the Company's
charge card sales and receivables (in thousands):

<TABLE>
<CAPTION>
                          								              Period-End Allowance
     			         Net Bad Debt Expenses          For Doubtful Accounts    
                 _____________________          ______________________   

                                    % of        Period-End Total                 % of Total
       Years     Sales    Amount    Sales     Customer Receivables     Amount    Receivables  
        <C>       <C>      <C>       <C>              <C>                <C>        <C>    
       1995     68,216     766       1.1            29,494               960        3.3
       1996     72,086   1,192       1.7            33,286             1,224        3.7
       1997     74,657   1,327       1.8            32,981             1,400        4.2
</TABLE>

MANAGEMENT INFORMATION SYSTEMS

	The Company's management information systems provide the daily financial and 
merchandising information to make timely and effective pricing decisions and for
inventory control.  The Company is able to allocate its inventory effectively as
a result of its management information systems and can tailor the merchandise 
mix to meet the individual customer demands at each store.

	The Company maintains central information and data processing systems at its 
corporate headquarters.  Each of its stores is equipped with compatible point-of
-sale registers, which are polled every evening by the central system to gather
sales, accounts receivable and inventory information.  

	The Company's management information and data processing systems primarily use 
internally developed software.  The Company believes this allows management to
more closely control the quality, suitability and expense of information systems
and data processing.  The Company continues to make selected improvements in 
computer hardware technology as well as enhancements to software applications as
needed.  

EMPLOYEES
 
	At January 31, 1998, the Company had 1,188 full-time employees and 1,716 
part-time employees.  None of the Company's employees is covered by a collective
bargaining agreement.  The Company considers its employee relations to be good.

COMPETITION

	The retail industry is highly competitive, with selection, price, quality, 
service, location and store environment being the principal competitive factors.
The Company competes with national and local retail stores, specialty apparel 
chains, department stores, discount stores and mail order merchandisers, many of
which have substantially greater financial and marketing resources than the 
Company.   Demographic changes may alter the character of the Company's markets,
which can result in increased competition from other retailers.

TRADEMARKS

	The Peebles name is registered as a trademark and a servicemark of the Company.
  Additionally, the Company has registered several merchandise labels as 
trademarks under which it sells quality merchandise such as Cape Classic TM, 
Private Expressions TM, Meherrin River Outfitters TM, Harmony Grove TM and 
Sonoma Bay TM.
 
REGULATION 

	The Company is subject to federal, state and local laws and regulations 
affecting retail department stores generally.  The Company believes that it is
in substantial compliance with these laws and regulations. 
 
ITEM 2.  PROPERTIES.

	All but one of the Company's stores are leased, and most of the leases contain
renewal options.  The stores range in size from 10,000 square feet to 65,000 
square feet, and average 29,000 square feet. The Company's stores and net 
selling square footage at January 31, 1998 was as follows:

<TABLE>
         State       Stores    Net SQ Ft       State    Stores    Net SQ Ft
          <S>          <C>        <C>           <C>       <C>        <C>
       Virginia        31       662,325        Ohio        4        79,181
       Tennessee       10       258,001        Delaware    3        80,611
       North Carolina   9       196,402        New York    3        84,983
       Maryland         8       250,838        Kentucky    2        61,918
       Pennsylvania     5       117,581        New Jersey  1        25,580
       South Carolina   4       108,658
       Alabama          4        77,564        Totals     84     2,003,642


</TABLE>

	Store leases provide for a base rent of between $1.00 and $6.00 per square foot
per year.  Most leases also have formulas requiring the payment of additional 
rent based on a percentage of net sales above specified levels.  In 1995, 1996 
and 1997, the Company's aggregate rental payments on operating leases were 
approximately $7.2 million, $8.2 million and $9.4 million, respectively. 
 
	The Company's corporate headquarters and distribution center facilities are 
located in South Hill, Virginia.  The Company owns the property subject to deeds
of trust and security interests granted in connection with the Company's credit
agreement. The Company believes the location provides the Company with adequate
undeveloped space to expand the corporate headquarters, distribution center or 
both to meet future growth requirements. 

ITEM 3.	LEGAL PROCEEDINGS.

	The Company is from time to time involved in routine litigation.  Based on 
consultations with legal counsel, the Company believes that none of the 
litigation in which it is currently involved is material to its financial 
condition or results of operations. 

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
           
              NONE
            
                             					PART II

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

MARKET INFORMATION

	All of the Company's common stock is owned by PHC Retail Holding Company.  
See Item 12. "Security Ownership of Certain Beneficial Owners and Management."
There is no existing market for the Common Stock, nor is the Common Stock listed
on any exchange.  All currently outstanding shares of common stock were issued 
pursuant to exemptions from registration under the Securities Act of 1933, as
amended (the "Act"), and any resales of such shares of Common Stock can only be
made pursuant to an effective registration statement or an exemption from the 
registration requirements of the Act.

DIVIDENDS

	The Company does not currently pay any dividends on its Common Stock.  The 
Company's credit agreement prohibits the payment of dividends absent the consent
of the lender.  Accordingly, the Company does not currently intend to declare
any dividends to the holders of the Common Stock in the foreseeable future.	

(This space intentionally left blank)
<PAGE>
Item 6.	  Selected Financial Data.

	The following selected historical financial data for Peebles for the five 
fiscal years ended January 31, 1998 are derived from the Company's audited 
financial statements.  Effective May 27, 1995, PHC Retail Holding Company 
("PHC Retail") acquired the entire equity interest of Peebles Inc. (the "1995 
Acquisition"). The 1995 Acquisition was accounted for as a purchase; and 
accordingly, a new basis of accounting was begun. As a result, the financial 
data for the periods subsequent to the 1995 Acquisition is not comparable to the
financial data for the prior periods. The Company was recapitalized effective 
January 31, 1992.  The data should be read in conjunction with the financial
statements, related notes and other financial information included herein. 

<TABLE>
(Dollars in thousands except per share and selected other data)
<CAPTION>
                                                   Four-Month     Eight-Month
                       Fiscal Years Ended         Period Ended    Period Ended     Fiscal Years Ended
                        January 29,  January 28,     May 27,        February 3,  February 1,  January 31, 
                           1994         1995          1995             1996         1997          1998              
                      ------------   ----------    ------------   -------------  ----------    ----------
                                        (Pre-1995 Acquisition)     (Post 1995 Acquisition)
<C>                          <C>                <C>                 <C>              <C>               <C>                <C>

INCOME STATEMENT DATA: 
 Net sales               $151,772     $167,662        $49,163       $126,501       $194,206      $217,694
 Cost of sales             91,134       98,066         29,935         72,994        116,236       130,820
                         --------     --------        -------       --------       --------      --------  
 Gross margin              60,638       69,596         19,228         53,507         77,970        86,874
 Selling, general and
  Administrative expenses  40,320       45,205         14,639         33,275         54,400        60,324
 Depreciation and 
  Amortization              6,029        6,729          2,349          4,339          7,499         6,648
 Stock option settlement      ---          ---          3,089            ---            ---           ---   
 Asset impairment             ---          ---            ---            ---         20,782           ---   
                         --------     --------         ------        -------        -------      -------- 
 Operating income (loss)   14,289       17,662           (849)        15,893         (4,711)       19,902
 Other income (expenses)      (1)          131             77            (52)           687           444
 Interest expense           4,248        4,569          1,414          6,565          9,148         9,609
                         --------     --------         ------        -------        -------       -------
 Income (loss) before
  income taxes (benefit) 
  and Extraordinary item   10,040       13,224         (2,186)         9,276        (13,172)       10,737
 Income taxes (benefit)     4,513        5,747           (874)         4,246          1,743         4,687
                         --------     --------         -------       -------        --------      --------  
 Income (loss) before
   extraordinary item       5,527        7,477         (1,312)         5,030        (14,915)        6,050
Extraordinary item              -            -           (216)           ---            ---           ---   
                         --------     --------        --------       -------        --------       -------    
Net income (loss)         $ 5,527      $ 7,477        $(1,528)      $  5,030       $(14,915)      $ 6,050
Net income (loss) 
 per share                $  1.88      $  2.54        $  (.52)      $  5,030       $(14,915)      $ 6,050

Average common stock and
 common stock equivalents 
 Outstanding            2,932,905    2,940,281      2,942,600          1,000          1,000         1,000


SELECTED OTHER DATA:                                                 Twelve Month Data
                                                                     -----------------
Net sales per 
   store (000's) (1)      $ 2,962      $ 3,189                $ 3,032                $ 2,921      $ 2,835
Selling sq. ft. per 
   store (1)               26,000       26,000                 26,300                 26,032       24,550
Net sales per selling 
   sq. ft. (2)               $116         $117                   $112                   $108         $113
Comparable store net sales
   increase (decrease) (1)   4.3%         4.6%            (5)   (1.0%)            (6)   (1.3%)        5.3%

Number of stores
 (end of period)              54           58                     65                      78          84

Total selling sq. ft.
 (end of period)       1,385,000     1,510,000               1,649,000               1,893,000   2,004,000

Capital expenditures
               (000's)    $7,372        $8,454                  $8,094                  $8,783     $10,226


<CAPTION>
BALANCE SHEET DATA:   January 29,     January 28,     February 3,      February 1,      January 31,
                          1994           1995            1996             1997             1998 
                      -----------     -----------    -----------       ------------     ----------- 
                                                               (Post 1995 Acquisition)
       <S>                  <C>           <C>             <C>                <C>            <C>
 Working capital         $ 44,348      $ 49,872         $ 48,395        $ 58,213           $ 62,889
 Net property 
   and equipment           24,903        28,951           33,308          33,460             38,749

 Total assets             143,727       148,954          165,553         163,568            172,456
 Total debt (3)            46,207        41,955           76,778          90,962             87,299
 Stockholders' equity (4)  74,530        82,234           64,338          49,423             55,473

</TABLE>

Selected Financial Data Footnote Legend
N/M*- Not meaningful.
1) Only reflects data for comparable stores.  Comparable stores for the current
   year are those stores which were open for the entire period in the 
   immediately preceding year.
2) Net sales per selling square feet per store is based on stores open one full
   year.  
3) Includes the long-term portion of the capital lease obligations and the 
   current portion of long-term debt.
4) Retained earnings, included in stockholders' equity has been adjusted to zero
   on February 1, 1992 and May 27, 1995. On February 1, 1992, an accumulated 
   deficit of $10,477 was eliminated in a quasi-reorganization resulting from
   the recapitalization of the Company.  On May 27, 1995, accumulated earnings
   of $16,022 were eliminated in purchase accounting.
5) Comparable store net sales decreased 1% comparing the 53-week period ended 
   February 3, 1996 versus the 52-week period ended January 28, 1995.  Comparing
   the 53-week period ended February 3, 1996 to the corresponding 53-week period
   ended February 4, 1995, comparable store net sales decreased 2%.
6) Comparable store net sales decreased 1.3% comparing the 52-week period ended
   February 1, 1997 versus the 53-week period ended February 3, 1996.  
   Comparable store net sales remained the same comparing the 52-week period 
   ended February 1, 1997 versus the 52 week period ended February 3, 1996.

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

	The discussion and analysis included under the caption "Management's Discussion
and Analysis of Financial Condition and Results of Operations" appears  on Page
F-14 of this annual report on Form 10-K.

	RECENT DEVELOPMENTS

None 

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

	Information with respect to this Item is contained in the consolidated 
financial statements indicated on the indices on Page F-0 of this annual report
on Form 10-K.

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

None.

(This space intentionally left blank)
<PAGE>

PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

	The Company's executive officers and directors, their ages, positions and years
with the Company are as follows:
<TABLE>
                                                                                           Years
  	Name                      	Age             	Position       	                         with the Company
---------------------       ------            ----------                               ----------------
   <S>                        <C>                 <C>                                        <C>
Michael F. Moorman            55      Chairman of the Board, President and Chief              34   
                                      Executive Officer
Ronnie W. Palmore             49      Senior Vice President, Merchandising and                25 
                                      Assistant Secretary              
Russell A. Lundy, Sr.         62      Senior Vice President, Stores                           44
E. Randolph Lail              42      Senior Vice President, Finance, Chief Financial         10 
                                      Officer, Secretary and Treasurer
Marvin H. Thomas, Jr.         42      Senior Vice President, Operations                       19
William C. DeRusha            48      Director                                                 6
Malcolm S. McDonald           59      Director                                                 6
Wellford L. Sanders, Jr.      52      Director                                                 5
Thomas R. Wall, IV            39      Director                                                 3
Frank T. Nickell              50      Director                                                 3
</TABLE>

	Michael F. Moorman has been Chairman of the Board, Chief Executive Officer, 
President and a Director of  PHC Retail since June 9, 1995 .  Mr. Moorman has
also been Chairman of the Board and a Director of the Company since September 
1989, Chief Executive Officer of the Company since May 1989 and President of the
Company since June 1988. Prior thereto, Mr. Moorman served as Chief Financial 
Officer and Treasurer of the Company from August 1989 to June 1992 and Secretary
of the Company from August 1989 to June 1990.  Mr. Moorman has been employed by
the Company in various positions since 1964.  Mr. Moorman has been a Director of
the Company since 1977.

	Ronnie W. Palmore has been Senior Vice President, Merchandising of  PHC Retail 
since June 9, 1995 and of the Company since September 1989 and Assistant 
Secretary of the Company since 1988.  Mr. Palmore served as Senior Vice 
President, Stores of the Company from June 1988 to August 1989 and has been 
employed by the Company in various positions since 1973.

	Russell A. Lundy, Sr. has been Senior Vice President, Stores of PHC Retail 
since June 9, 1995 and of the Company since September 1989.  Mr. Lundy served 
as Vice President, Stores of the Company from 1984 to August 1989 and has been 
employed by the Company in various positions since 1954.

	E. Randolph Lail has been Senior Vice President, Finance, Chief Financial 
Officer, Secretary and Treasurer of PHC Retail since June 9, 1995.  Mr. Lail has
also been Senior Vice President, Finance of the Company since June 1993, Chief 
Financial Officer and Treasurer of the Company since June 1992 and Secretary of
the Company since June 1990.   Mr. Lail served as Vice President, Finance of the
Company from June 1990 to June 1993 and as Controller of the Company from 
January 1988 to June 1990.  Mr. Lail is a Certified Public Accountant and has
 been employed by the Company since January 1988.

	Marvin H. Thomas, Jr. has been Senior Vice President, Operations of PHC Retail 
since June 9, 1995 and of the Company since June 1993. Mr. Thomas served as 
Vice President, Operations of the Company from June 1990 to June 1993 and Vice 
President, Merchandise Manager of the Company from May 1988 to June 1990.  Mr. 
Thomas has been employed by the Company in various positions since 1979. 

	William C. DeRusha has been a Director of PHC Retail since June 9, 1995 and of
the Company since March 1992. Mr. DeRusha is Chairman of the Board and Chief 
Executive Officer of Heilig-Meyers Furniture Company.  Mr. DeRusha is a director
of Heilig-Meyers Furniture Company and First Union National Bank VA/MD/DC.

	Malcolm S. McDonald has been a Director of PHC Retail since June 9, 1995 and 
of the Company since April 1992. Mr. McDonald is Chairman of the Board of First
Union National Bank VA/MD/DC.  From December 1996 until November 1997, Mr. 
McDonald was Chairman of the Board and Chief Executive Officer of Signet Banking
Corporation.  From May 1996 to December 1996, Mr. McDonald was President and 
Chief Executive Officer of Signet Banking Corporation.  Prior to May 1996 he was
President and Chief Operating Officer of Signet Banking Corporation.  Mr. 
McDonald is a director of First Union Corporation and American Trading and 
Production Corporation.

	Wellford L. Sanders, Jr. has been a Director of PHC Retail since June 9, 1995
and of the Company since February 1992.  Mr. Sanders is a Managing Director of 
Wheat First Union.  Until April 1996, Mr. Sanders was a partner in the law firm
of McGuire, Woods, Battle & Boothe, L.L.P.  Mr. Sanders is a director of 
Catherines Stores Corporation.

	Thomas R. Wall, IV has been a Director of PHC Retail and the Company since June
9, 1995.  Mr. Wall has been Managing Director of Kelso since 1990 and prior 
thereto a General Partner of Kelso since 1989. Mr. Wall is also a director of 
AMF Bowling Inc., CCA Holdings Corp., CCT Holdings Corp., Charter Communications
Long Beach, Inc., Consolidated Vision Group, Inc., Cypnus Publishing, Inc., 
Hillside Broadcasting of North Carolina, IXL Holdings, Inc., Mitchell Supreme 
Fuel Company, Mosler Inc., TransDigm, Inc. and 21st Century Newspapers, Inc.

	Frank T. Nickell has been a Director of PHC Retail and the Company since June 
9, 1995.  Mr. Nickell has been President and a director of Kelso since March 
1989. He is also a director of CCA Holdings Corp., CCT Holdings Corp., Charter 
Communications Long Beach, Inc., Earle M. Jorgensen Company, and The 
Bear and Stearns Companies Inc.

	Executive officers of Peebles are elected annually and serve at the discretion
of the Board of Directors.
	

DIRECTORS COMPENSATION

	Mr. DeRusha, Mr. McDonald and Mr. Sanders are paid an annual retainer of 
$20,000, payable quarterly in arrears, and are reimbursed for expenses incurred
in attending meetings of the Board of Directors. 
	
AGREEMENTS TO INDEMNIFY.
	
	Peebles has entered into agreements with each of the directors and officers of
Peebles pursuant to which Peebles agrees to indemnify such director or officer 
from claims, liabilities, damages, expenses, losses, costs, penalties or amounts
paid in settlement incurred by such director or officer and arising out of his 
capacity as a director, officer, employee and/or agent of the corporation of 
which he is a director or officer to the maximum extent provided by applicable 
law.  In addition, such director or officer shall be entitled to an advance of
expenses to the maximum extent authorized or permitted by law to meet the 
obligations indemnified against.  Such agreements also obligate the Company to 
purchase and maintain insurance for the benefit and on behalf of its directors 
and officers insuring against all liabilities that may be incurred by such 
director or officer, in or arising out of his capacity as a director, officer, 
employee and/or agent of the Company.
	

ITEM 11.   EXECUTIVE COMPENSATION

	The following tables set forth a summary of compensation paid by the Company to
its five highest paid executive officers (the "Named Executives") during 1995,
1996 and 1997.

<TABLE>
                                      Summary Compensation Table

                                      Annual Compensation                             Long-Term Compensation 
                                      -------------------                             ----------------------
                                                                                     Awards              Payout 
                                                                                     ------              ------ 
                                                                                          Number of 
                                                                   Other Annual            Options/        Long-term
    Name and                          Salary          Bonus         Compensation           Warrants      Incentive Plan  
Principal Position         Year       ($)(1)          ($)(2)          ($)(3)(4)             Granted         Payouts ($)
------------------         ----       ------          ------       -------------          -----------     -------------
<S>                        <C>          <C>             <C>              <C>                 <C>              <C>
Michael F. Moorman
Chairman of the Board,    1997    $  286,354      $  177,000      $        --                  --              --
President and Chief       1996       270,954              --               --                  --              --
Executive Officer         1995       261,050          17,800        1,133,400                  --              --

Ronnie W. Palmore
Senior Vice President,   1997     $  156,973     $    48,090      $        --                  --              --
Merchandising and        1996        150,838           8,050               --                  --              --
Assistant Secretary      1995        144,087          15,872          329,062                  --              --

Russell A. Lundy, Sr.    1997     $  126,200     $    41,237      $        --                  --              --
Senior Vice President,   1996        121,013          11,758               --                  --              --
Stores                   1995        115,538           8,297          224,062                  --              --

E. Randolph Lail
Senior Vice President,   1997     $  130,048     $    36,206      $     1,264                  --              --
Finance, CFO,            1996        122,254           9,375            1,268                  --              --
Secretary and Treasurer  1995        108,721           6,653          180,681                  --              --

Marvin H. Thomas, Jr.    1997    $    99,325     $    28,688            1,027                  --              --
Senior Vice President,   1996         95,425           6,382            1,030                  --              --
Operations               1995         90,806          10,412          159,370                  --              --
</TABLE>
_______________________________________

(1)	Salary amounts for 1995, 1996 and 1997 include tax-deferred contributions of
    compensation to the Company's 401(K) Profit Sharing Plan (the "401-K Plan").
    Salary compensation contributed to the 401-K Plan during 1995, 1996 and 1997
    for each of the Named Executives is Mr. Moorman $2,333, $5,520 and $4,367;
    Mr. Palmore $1,366, $3,098 and $4,150; Mr. Lundy $458, $0 and $2,233; Mr.
    Lail $2,168, $2,420 and $3,437; and Mr. Thomas $1,798, $1,879 and $2,573, 
    respectively.
(2)	Bonus amounts for each of the Named Executives include the accrued bonus 
    earned under the Company's annual incentive plans in 1995, 1996 and 1997 and
    include tax-deferred contributions of compensation to the 401-K Plan for 
    each of the Named Executives as follows: Mr. Moorman, $356, $0 and $5,310;
    Mr. Palmore, $317, $161 and $1,443; Mr. Lundy, $0, $0 and $1,237; Mr. Lail,
    $133, $188 and $1,086; and Mr. Thomas, $208 $128 and $861, respectively.
(3)	The amounts shown (in 1995, $1,618 and $1,520 for Mr. Lail and Mr. Thomas,
    respectively) reflect the current value of the benefit to Mr. Lail and Mr. 
    Thomas, respectively, of the portion of premiums paid by the Company with 
    respect to a split dollar insurance arrangement.  The benefit was determined
    for each year by calculating the time value of money (including the 
    applicable long term federal funds rate) of the premium paid by the Company
    in 1995 ($11,210 for Mr. Lail and $9,650 for Mr. Thomas); in 1996 and in 
    1997 ($18,729 for Mr. Lail and $15,221 for Mr. Thomas per year).
(4)	In connection with the 1995 Acquisition, the stock options outstanding under
    the 1995 Stock Option Plan vested.  The 1995 Acquisition mandated that all 
    options be settled for cash only, either for i) the difference between the
    $30 per share price paid by PHC Retail for the common stock of Peebles Inc.
    and the $23.75 exercise price, or ii) as specified by certain change of 
    control agreements.  The amounts included in 1995 are $1,133,400, $329,062, 
    $224,062, $179,063 and $157,850 for Mr. Moorman, Mr. Palmore, Mr. Lundy, Mr.
    Lail and Mr. Thomas, respectively.  These amounts include tax-deferred 
    contributions of compensation to the 401-K Plan of $3,136, $6,581, $3,581 
    and $3,157 for Mr. Moorman, Mr. Palmore, Mr. Lail and Mr. Thomas, 
    respectively.

<PAGE>
OPTION GRANT TABLE.     There were no options granted by the Company to the 
Named Executives during 1997.

OPTION EXERCISE TABLE.  The following table sets forth information concerning 
the exercise of stock options during 1997 by each of the Named Executives and 
the year end value of unexercised options.

                           Options Exercised in 1997
<TABLE>
							           		          Individual Grants            
                              -----------------
                                                              Number of Unexercised
                                                   Value        Options at Year end       Value of Unexercised In-the-
                                Shares Acquired    Realized          Exercisable/          Money Options at Year end
Name and Principal Position      on Exercise (1)     ($)       Unexercisable  (2)         Exercisable/ Unexercisable  ($)
---------------------------     ---------------    --------    ---------------------      -------------------------------
           <S>                       <C>             <C>               <C>                     <C>
Michael F. Moorman                    0              $0                 0                        $0
Chairman of the Board, President 
and Chief Executive Officer

Ronnie W. Palmore                     0               0                 0                         0
Senior Vice President, 
Merchandising, Assistant Secretary

Russell A. Lundy, Sr.                 0               0                 0                         0
Senior Vice President, Stores

E. Randolph Lail                      0               0                 0                         0 
Senior Vice President, Finance
Chief Financial Officer, Secretary 
and Treasurer

Marvin H. Thomas, Jr.                 0               0                 0                         0
Senior Vice President, Operations


</TABLE>
_______________________________________
	
(1)	There were no stock options exercised by the Named Executives in 1997.
(2)	There were no unexercised options at year end.

  	As of the fiscal year ended January 31, 1998 there were no projected 
long-term incentive payouts.  
<PAGE>
PENSION PLAN

	Through January 31, 1998, the Company provided one non-contributory qualified 
defined benefit pension plan, The Employees Retirement Plan of Peebles Inc. 
("Plan I"), which covered all employees of Peebles who (i) completed 1,000 hours
of service during a one-year period with Peebles and (ii) attained age 21 (a 
"Participant").  

 On November 19, 1997, the Board of Directors approved i) the adoption of The 
Employees Retirement Plan II of Peebles Inc. ("Plan II") to be effective 
February 1, 1998, and ii) the fifth amendment to Plan I.  Under this amendment,
the benefits of certain participants in Plan I are frozen at February 1, 1998 
(the "Curtailment Date"), and those same participants are spun-off to Plan II.
After the Curtailment Date, participation in Plan I and Plan II was closed to 
new employees.  Participants spun-off to Plan II are 100% vested in their 
accrued benefits as calculated on the Curtailment Date and will not accrue any 
additional benefit service.  Participants remaining in Plan I continue to accrue
retirement benefits.

 Retirement benefits are based on a Participant's years of benefit service and 
the earnings during the five consecutive calendar years which produce the 
highest average.  Earnings are limited to $160,000 in any one year and years of
benefit service are limited to 30.  A Participant is fully vested after 
completing five years of benefit service. Benefits are payable to vested 
Participants at normal retirement (age 65), early retirement (age 55), upon a 
vested Participant's permanent and total disability, or upon a vested 
Participant's termination of employment. 

	The Company makes contributions to Plan I equal to the contribution required to
satisfy minimum funding standards under ERISA. Contributions to the plan are 
determined on an actuarial basis without allocation to individuals or groups.  
The Board of Directors has directed the Trustee of Plan I to transfer assets and
liabilities attributable to the benefits of Plan II to the Trustee of Plan II as
of the Curtailment Date.

	The following table shows estimated annual retirement benefits payable to 
Participants upon normal retirement at age 65 under various assumptions as to 
final average annual earnings, date of retirement and years of continuous 
service without regard to the current earning limit of $160,000. 

		  Final                 Years of Service
 	 Average           
	  Salary            	15	    20     	25    	30      	35  

	$ 75,000........	$11,700	$15,600	$19,500	$23,400	 $23,400
	 100,000........	 16,575	 22,100	 27,625	 33,150	  33,150
	 125,000........	 21,450	 28,600	 35,750	 42,900	  42,900
	 150,000........	 26,325	 35,100	 43,875	 52,650	  52,650
	 175,000........	 31,200	 41,600	 52,000	 62,400	  62,400
	 200,000........	 36,075	 48,100	 60,125	 72,150	  72,150
	 225,000........	 40,950	 54,600	 68,250	 81,900	  81,900
	 250,000........	 45,825	 61,100	 76,375	 91,650	  91,650
	 300,000........	 55,575	 74,100	 92,625	111,150	 111,150
	 350,000........	 65,325	 87,100	108,875	130,650	 130,650
	 400,000........	 75,075	100,100	125,125	150,150	 150,150
	 450,000........	 84,825	113,100	141,375	169,650	 169,650
	  
	As of January 31, 1998, the credited years of service for Mr. Moorman, Mr. 
Palmore, Mr. Lundy, Sr., Mr. Thomas, Jr. and Mr. Lail were 34, 25, 44, 19 and
10, respectively.

	Peebles reserves the right at any time by action of its Board of Directors to
terminate either or both Plans.  On November 19, 1997, the Board of Directors
terminated Plan II effective May 1, 1998.  The Company intends to maintain Plan
I until all participants have either retired or otherwise separated from 
Peebles.  With the transfer of assets from Plan I, Plan II is fully funded 
and Peebles will not be required to make any further contributions to this plan.
Participants in Plan II will be paid their accrued benefits in a lump sum.  

	Peebles also maintains a supplemental executive retirement plan (the "SERP") 
for certain designated executives.  As of February 1, 1997, Mr. Moorman, and Mr.
Palmore,  were participants in this plan.  Retirement benefits payable under the
SERP are based on 60% of the participant's earnings (without regard to the 
current earnings limit of $160,000) during the five consecutive calendar years 
which produce the highest average, reduced by the sum of the participant's 
qualified defined benefit pension benefit (computed with regard to the 
applicable earnings limit) and the participant's social security benefits.

	Benefits under the SERP are fully vested upon the earlier of (1) the completion
of five years of service with the Company beginning with the date of 
participation in the SERP, (2) the participant's permanent disability, or (3) 
the date on which a change of control occurs.

	Retirement benefits are payable to vested participant's at normal retirement
(age 65), early retirement (age 55 with 20 years of service), upon permanent and
total disability, or upon a vested participant's termination of employment.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

	The Company has a Compensation Committee of the Board of Directors.  For 
1997, the Board of Directors established compensation for the Company's officers
for such year.  Michael F. Moorman, the sole officer or employee of the Company
who is also a member of the Board of Directors, made recommendations to the 
Board of Directors concerning executive compensation but did not otherwise 
participate in or vote upon the executive compensation decisions made by 
the Board of Directors for such year.  Mr. Moorman is not a member of the 
Compensation Committee.

CERTAIN RELATIONSHIPS

	Wellford L. Sanders, Jr., a member of the Board of Directors of the Company, 
was a partner through April 1997 in the law firm of McGuire, Woods, Battle & 
Boothe LLP, which rendered legal services to the Company during 1997.

	Frank T. Nickell and Thomas R. Wall, IV, members of the Board of Directors of 
the Company, are affiliated with Kelso, which rendered management services to 
the Company during 1997.

EMPLOYMENT AGREEMENTS

	Mr. Lail and Mr. Thomas participate in split dollar insurance arrangements with
the Company.  The executive owns, and therefore has a vested interest in, the 
cash surrender value of the policy in excess of the Company's premium 
investment.  At retirement, the executive can either use the cash value for 
retirement income or keep the death benefit or a combination of the two.  The 
Company would recover its cost at retirement.  In the event of a change in 
control, the executive would have a nonforfeitable right to the Company's share
of the cash surrender value of the policy.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

	All of the outstanding common stock of the Company is owned by PHC Retail. The
following table sets forth certain information regarding the beneficial 
ownership of Common Stock of PHC Retail, as of April 1, 1998, by (a) each person
known by the Company to be the beneficial owner of more than 5% of the 
outstanding shares of Common Stock, (b) each of the Company's directors and 
Named Executives who owns shares of Common Stock and (c) all directors and Named
Executives of the Company as a group.  Unless otherwise noted in the footnotes 
to the table, the persons named in the table have sole voting and investing 
power with respect to all shares of Common Stock indicated as being beneficially
owned by them.

CAPITAL STOCK OF PHC RETAIL
<TABLE>
                                          Shares of                         Shares of     
                                           Voting                           Nonvoting
                                           Common          Percent           Common          Percent
Name of Beneficial Owner (1)                Stock          of Class          Stock           of Class 
----------------------------              --------        ----------        ---------        ---------
<S>                                          <C>             <C>               <C>              <C>
Kelso Investment 
  Associates V, L.P. (2),(3)             1,803,693 (3)       91.22              0                0
Kelso Equity 
  Partners V, L.P.   (2),(3)                52,973            2.68              0                0
Michael F. Moorman (6)                      43,750            2.21              0                0
Ronnie W. Palmore (6)                       12,218               *              0                0
Russell A. Lundy, Sr. (6)                    8,438               *              0                0
E. Randolph Lail (6)                         5,550               *              0                0
Marvin H. Thomas, Jr. (6)                    4,578               *              0                0
William C. DeRusha                               0               0          2,000             8.17
Malcolm S. McDonald                              0               0          2,000             8.17
Wellford L. Sanders, Jr.                         0               0          2,500            10.22
Joseph S. Schuchert   (2),(3)            1,856,666 (3)       93.90              0                0
Frank T. Nickell   (2),(3)               1,873,514 (4)       94.76              0                0
George E. Matelich   (2),(3)             1,856,666 (3)       93.90              0                0
Thomas R. Wall, IV   (2),(3)             1,873,194 (5)       94.74              0                0
Michael B. Goldberg (2),(3)              1,856,666 (3)       93.90              0                0
All Directors and Named Executives
  as a group (10 persons) (6)            1,948,048           98.52          6,500            26.56
</TABLE>
____________________	
* Less than 1 Percent

(1)	The information as to beneficial ownership is based on statements furnished
    to the Company by the beneficial owners.  As used in this table, "beneficial
    ownership" means the sole or shared power to vote, or direct the voting of 
    a security, or the sole or shared investment power with respect to a 
    security (i.e., the power to dispose of , or direct the disposition of).
    A person is deemed as of any date to have "beneficial ownership" of any 
    security that such person has the right to acquire within 60 days after 
    such date.  For purposes of computing the percentage of outstanding shares
    held by each person named above, any security that such person has the right
    to acquire within 60 days of the date of calculation is deemed to be 
    outstanding but is not deemed to be outstanding for purposes of computing
    the percentage of any other person.
(2)	The business address for such person(s) is C/O Kelso & Company, 320 Park 
    Avenue, 24th Floor, New York, New York 10022.
(3) Messrs. Schuchert, Nickell, Matelich, Wall and Goldberg may be deemed to 
    share beneficial ownership of shares of PHC Common Stock owned of record by
    Kelso Investment Associates V, L.P. ("KIA V") and Kelso Equity Partners V, 
    L.P. ("KEP V"), by virtue of their status as general partners of such 
    partnerships.  Messrs. Schuchert, Nickell, Matelich, Wall and Goldberg 
    share investment and voting power with respect to securities owned by other
    Kelso affiliates.  Messrs. Schuchert, Nickell, Matelich, Wall and Goldberg 
    disclaim beneficial ownership of the shares of PHC Common Stock owned of 
    record by KIA V and KEP V and the securities owned by other Kelso 
    affiliates. 
(4) Includes 1,848 shares of PHC Common Stock held by trusts of which Mr. 
    Nickell is trustee, as to which shares Mr. Nickell disclaims beneficial 
    ownership.
(5) Includes 15,334 shares of PHC Common Stock held by trusts of which Mr. Wall
    is trustee, as to which shares Mr. Wall disclaims beneficial ownership.
(6) Includes unexercised vested stock options for the purchase of PHC Common 
    Stock in the amount of 8,750, 2,750, 1,938, 2,250, and 1,437 for Messrs. 
    Moorman, Palmore, Lundy, Lail and Thomas, respectively.

	ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
	 
	See "Item 10. Directors and Executive Officers of the Registrant" and "Item 11.
Executive Compensation" for a description of certain arrangements with respect
to present and former executive officers and directors of Peebles.
	
(This space intentionally left blank.) 
<PAGE>
                                		PART IV
	
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
	
		(a)	1.	Financial statements.
	
				Information with respect to this Item is contained in the consolidated 
financial statements indicated on the indices on page F-0 of this annual report
on Form 10-K. 
	
			2.	Financial statement schedules.
	
				Schedule II  Valuation and Qualifying Accounts appears in Note I on page F-
13 of this annual report on Form 10-K.  

				All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.
	
			3.	Exhibits.
	
				The exhibits listed on the accompanying index to exhibits are filed as part
of this Annual Report on Form 10-K.
	
		(b)	Reports on Form 8-K.
	     
			      	   NONE	
	
		(c)	Exhibits.
	
	2.1***		Form of Agreement and Plan of Merger dated April 3, 1995 among PHC 
         Retail Holding Company, Peebles Acquisition Corp. and Peebles Inc., 
         exclusive of exhibits and schedules.  The Registrant hereby undertakes 
         to furnish to the Commission supplementally upon request a copy of any
         omitted exhibit or schedule.
	3.1+		  Form of Amended and Restated Articles of Incorporation of Peebles Inc.
	3.2+	  	Form of Amended and Restated Bylaws of Peebles Inc.
	3.3***		Amendment to Amended and Restated Articles of Incorporation dated May 
         3, 1993
	3.4*+		 Amendment to Amended and Restated Bylaws of Peebles Inc.dated June 9,
         1995.
	3.5*+		 Amendment to Amended and Restated Articles of Incorporation dated June
         9,	1995
	10.1*+	 Credit Agreement dated June 9, 1995, by and amoung Peebles Inc. And 
         NatWest Bank, N.A.	as Agent (the "Agent"), and the financial 
         institutions named therein. (the "Credit Agreement")
	10.20*+	Form of A Term Note.
	10.21*+	Form of B Term Note.
	10.22*+	Form of Bridge Note.
	10.23*+	Form of Revolving Note.
	10.24*+	Form of Swingline Note.
	10.3*+	 Security Agreement made June 9, 1995 by and between Peebles Inc. and 
         the	Agent.
	10.4*+	 Trademark Security Agreement made June 9, 1995 by and between Peebles 
         Inc. and the Agent.
	10.5*+	 Guaranty Agreement made June 9, 1995 by and between PHC Retail Holding
         Company and the Agent.
	10.6*+	 Pledge Agreement made June 9, 1995 by and between PHC Retail Holding 	
			      Company and the Agent.
	10.62*+	Deed of Trust made June 9, 1995 by and between Peebles Inc., the 
         Trustee party	thereto and the Agent.
	10.63*+	First Amendment of the Credit Agreement dated September 15, 1995.
	10.64*+	Second Amendment and Limited Consent to the Credit Agreement dated 
         March		8, 1996.
	10.65		 Third Amendment to the Credit Agreement dated May 16, 1997.
	10.66		 Fourth Amendment to the Credit Agreement dated July 30, 1997.
	10.67		 Fifth Amendment to the Credit Agreement dated April 9, 1998.
	10.8***	Standard Service Agreement, as amended, dated January 17, 1995 between
         Frederick Atkins, Incorporated and Peebles Inc. 
	10.11*+	Form of Indemnification, Guarantee and Contribution Agreement dated as
         of August 23, 1995  PHC Retail Holding Company, Peebles Inc. and each
         of the directors and officers of Peebles Inc.
	21		    Subsidiaries of the Registrant.
	27		    Financial Data Schedule

	____________________________

	* 		Incorporated by reference from the Registration Statement of PBL and 
     Peebles on Form S-1 (Registration No. 33-27126), which was declared 
     effective by the Commission on July 14, 1989.

	**		Incorporated by reference from the Form 10-K of PBL and the Company for the
     fiscal year ended February 2, 1991.

	+		 Incorporated by reference from the Form 10-K of the Company for the fiscal 
     year ended February 1, 1992.
	
	++		Incorporated by reference from the Form 10-K of the Company for the fiscal
     year ended January 30, 1993.

	+++	Incorporated by reference from the Form 10-K of the Company for the fiscal
     year ended January 29, 1994.

	***	Incorporated by reference from the Form 10-K of the Company for the fiscal
  			year ended January 28, 1995.
	
	*+		Incorporated by reference from the Form 10-K of the Company for the fiscal
 				year ended February 1, 1996.

		(d)	Financial Statement Schedules

				Schedule II  Valuation and Qualifying Accounts appears in Note I on page 
F-13 of this annual report on Form 10-K.

				All other schedules for which provision is made in the applicable 
accounting regulation of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable and therefore have been 
omitted.

<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.
	
          PEEBLES INC.                          
 -----------------------------
         (Registrant)
	
	By    /s/  Michael F. Moorman         					Date: 	April 15, 1998
 --------------------------------
       Michael F. Moorman, President 
	      and Chief Executive Officer
	      (Principal Executive Officer)
	
	
	By   /s/  E. Randolph Lail             				Date: 	April 15, 1998
 -------------------------------  
	       E. Randolph Lail, Senior Vice President 
	       Finance, CFO, (Principal 
        Financial and Accounting 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.

 By  /s/  Wellford L. Sanders  			      				Date: 	April 15, 1998
 -------------------------------
     Wellford L. Sanders, Jr., Director	
	
	By  /s/ William C. DeRusha					         			Date: 	April 15, 1998
 -------------------------------
     William C. DeRusha, Director
	
	By  /s/ Malcolm S. McDonald 							        Date: 	April 15, 1998
 -------------------------------
     Malcolm S. McDonald, Director
	
	By  /s/ Frank T. Nickell							           	Date:	April 15, 1998
 -------------------------------
     Frank T. Nickell, Director

	By  /s/ Thomas R. Wall, IV				         				Date:	April 15, 1998
 -------------------------------
    Thomas R. Wall, IV, Director

		SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED 
PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT 
REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
	
<PAGE>

Audited Consolidated Financial Statements
PEEBLES INC. AND SUBSIDIARY
January  31, 1998



Report of Independent Auditors                        F-1

Consolidated Balance Sheet                            F-2

Statement of Consolidated Operations                  F-3

Statement of Consolidated Changes in 
  Stockholders' Equity                                F-4

Statement of Consolidated Cash Flows                  F-5

Notes to Consolidated Financial Statements            F-6

Management's Discussion and Analysis of 
  Financial Condition and Results of Operations       F-14



                              F-0
<PAGE>
Report of Ernst & Young LLP, Independent Auditors


Board of Directors
Peebles Inc.


We have audited the accompanying consolidated balance sheet of Peebles Inc. and
subsidiary as of January 31, 1998 and February 1, 1997, and the related 
consolidated statements of operations, changes in stockholders' equity, and cash
flows for the fiscal years ended January 31, 1998 and February 1, 1997, for the
eight-month period ended February 3, 1996 and the four-month period ended May 
27, 1995.  These financial statements reflect the new basis of accounting 
established by the acquisition of Peebles Inc. as described in Note A.  These 
financial statements are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these financial statements based on 
our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform 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.

As described in Note A to the financial statements, the Company reflected a new
basis of accounting on May 27, 1995 as a result of the 1995 Acquisition.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Peebles
Inc. and subsidiary at January 31, 1998 and February 1, 1997, and the 
consolidated results of their operations and their cash flows for the fiscal 
years ended January 31, 1998 and February 1, 1997, the eight-month period ended
February 3, 1996 and the four-month period ended May 27, 1995, in conformity 
with generally accepted accounting principles.



               /s/  Ernst & Young   
               -------------------

Richmond, Virginia
March 11, 1998, except for Note E as to which the date is April 9, 1998
                                 

                                    F-1
<PAGE>
CONSOLIDATED BALANCE SHEET
PEEBLES INC. AND SUBSIDIARY	
(dollars in thousands, except per share amounts)

                                  January 31, 1998        February 1, 1997
                                  ----------------        ----------------
ASSETS
CURRENT ASSETS
 Cash                                 $    432               $    228
 Accounts receivable, net               31,581                 32,062
 Merchandise inventories                57,967                 54,431
 Prepaid expenses                        1,145                  1,036
 Income taxes receivable                   303                     --
 Other                                     773                     69  
                                      --------               --------
TOTAL CURRENT ASSETS                    92,201                 87,826
PROPERTY AND EQUIPMENT
 Fixtures and equipmen                  50,588                 46,858
 Land and building                      10,348                  7,818
 Leasehold improvements                  1,725                  1,882 
                                      --------               --------
                                        62,661                 56,558
Accumulated depreciation 
  and amortization                      23,912                 23,098  
                                      --------               --------
                                        38,749                 33,460
OTHER ASSETS
 Excess of cost over net assets 
     acquired, net                      35,460                 36,069
Deferred financing costs, net            2,442                  2,808
Beneficial leaseholds, net                 897                  1,054
Sundry                                   2,707                  2,351
                                      --------               --------
                                        41,506                 42,282

                                      --------               --------
                                    $  172,456              $ 163,568 
                                    ==========              =========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable                    $   13,606              $  10,737
Accrued compensation and other 
 expenses                                5,055                  5,000
Income taxes payable                        --                    675
Deferred income taxes                    4,592                  2,934
Current maturities of long-term debt     4,653                  9,665
Other                                    1,406                    602
                                      --------               --------
      TOTAL CURRENT LIABILITIES         29,312                 29,613
LONG-TERM DEBT                          81,507                 79,950
LONG-TERM CAPITAL LEASE OBLIGATIONS      1,139                  1,347
DEFERRED INCOME TAXES                    5,025                  3,235
STOCKHOLDERS' EQUITY 
 Preferred stock--no par value, 
  authorized 1,000,000 shares, none 
  issued or outstanding                     --                     --
 Common stock--par value $.10 per 
  share, authorized 5,000,000 shares, 
  1,000 issued and outstanding               1                      1
 Additional capital                     59,307                 59,307
 Retained earnings (deficit):  
   accumulated from May 27, 1995        (3,835)                (9,885)
                                      ---------              --------- 
                                        55,473                 49,423
                                      ---------              ---------
                                    $  172,456             $  163,568
                                    ==========             ===========

See notes to consolidated financial statements.

                                          F-2
<PAGE>
STATEMENT OF CONSOLIDATED OPERATIONS
PEEBLES INC. AND SUBSIDIARY
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
                                        Fiscal Year             Fiscal Year           Eight-Month         Four-Month
                                           Ended                   Ended             Period Ended        Period Ended
                                     January 31, 1998        February 1, 1997      February 3, 1996      May 27, 1995
                                     -----------------       ----------------      -----------------     -------------
                                                                                                          (Prior to 1995
                                                                                                           Acquisition)     
  <S>                                       <C>                      <C>                  <C>                   <C>
NET SALES                            $    217,694              $    194,206          $  126,501           $   49,163

COSTS AND EXPENSES
  Cost of sales                           130,820                   116,236              72,994               29,935
  Selling, general and 
     administrative expenses               60,324                    54,400              33,275               14,639
  Stock option settlement                      --                        --                  --                3,089
  Depreciation and amortization             6,648                     7,499               4,339                2,349
  Asset revaluation                            --                    20,782                  --                   --
                                     ------------             -------------         -----------          -----------
OPERATING INCOME (LOSS)                    19,902                    (4,711)             15,893                 (849)

OTHER INCOME (EXPENSE)                        444                       687                 (52)                  77

INTEREST EXPENSE                            9,609                     9,148               6,565                1,414
                                     ------------             -------------         -----------          -----------
 INCOME (LOSS) BEFORE INCOME TAXES
  (BENEFIT) AND EXTRAORDINARY ITEM         10,737                   (13,172)              9,276               (2,186)

INCOME TAXES (BENEFIT)
  Current                                   1,238                     2,137               3,276                 (474)
  Deferred                                  3,449                      (394)                970                 (400)
                                     ------------             -------------         -----------          -----------
                                            4,687                     1,743               4,246                 (874)
                                     ------------             -------------         -----------          -----------
INCOME (LOSS) BEFORE
 EXTRAORDINARY ITEM                         6,050                   (14,915)              5,030               (1,312)

EXTRAORDINARY ITEM--DEBT REFINANCING           --                        --                  --                 (216)
                                     ------------             -------------         -----------          -----------
NET INCOME (LOSS)                      $    6,050              $    (14,915)         $    5,030           $   (1,528)
                                     ============             =============         ===========          ===========

NET INCOME (LOSS) PER SHARE            $    6,050              $    (14,915)         $    5,030           $     (.52)
                                     ============             =============         ===========          ===========
Weighted average common stock 
  outstanding                               1,000                     1,000               1,000            2,942,690
                                     ============             =============         ===========          ===========


</TABLE>
See notes to consolidated financial statements.
                                    F-3
<PAGE>
STATEMENT OF CONSOLIDATED CHANGES IN STOCKHOLDERS' EQUITY
 PEEBLES INC. AND SUBSIDIARY
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>

                                   Common Stock
                            --------------------------------
                                             Par          Additional         Retained 
                            Shares          Value          Capital           Earnings    
                            ------        --------        ----------        ---------
<S>                           <C>            <C>              <C>               <C>
BALANCE JANUARY 28, 1995   2,942,690       $   294         $ 64,390         $ 17,550

Net (loss)                        --            --               --           (1,528)
                          ----------      --------        ---------         ---------
Balance May 27, 1995, 
 prior to 1995 
 Acquisition               2,942,690           294           64,390           16,022

 1995 Acquisition 
   adjustments            (2,941,690)         (293)          (5,083)         (16,022)
                          ----------      --------        ---------         ---------
Balance May 27, 1995, 
 following 1995 
 Acquisition                   1,000             1           59,307               --

  Net income                      --            --               --            5,030
                          ----------      --------        ---------         ---------
BALANCE FEBRUARY 3, 1996       1,000             1           59,307            5,030

  Net (loss)                     --             --               --          (14,915)
                          ----------      --------        ---------         --------
BALANCE FEBRUARY 1, 1997       1,000             1           59,307           (9,885)
  
  Net income                     --             --               --            6,050
                          ----------      --------        ---------         ---------
BALANCE JANUARY 31, 1998       1,000       $     1         $ 59,307        $  (3,835)
                             =======         =====         ========        =========

</TABLE>
See notes to consolidated financial statements.
                                     F-4
<PAGE>

STATEMENT OF CONSOLIDATED CASH FLOWS
PEEBLES INC. AND SUBSIDIARY
(dollars in thousands)	
<TABLE>
<CAPTION>
                                Fiscal Year             Fiscal Year         Eight-Month      Four-Month
                                  Ended                   Ended             Period Ended    Period Ended
                              January 31, 1998        February 1, 1997   February 3, 1996   May 27, 1995
                             -----------------        ----------------   ----------------   -------------
<S>                                 <C>                     <C>                <C>                <C>
OPERATING ACTIVITIES
 Net income (loss)             $   6,050                $  (14,915)       $   5,030           $  (1,528)
 Adjustments to reconcile net 
  income to net cash provided 
  by operating activities:
  Depreciation                     4,710                     4,616            2,491               1,453
Amortization                       2,902                     3,842            2,502                 896
Deferred income taxes              3,449                      (394)             970                (400)
Provision for doubtful accounts    1,503                     1,192              531                 265
Extraordinary loss, net               --                        --               --                 216
LIFO/market reserve adjustment       250                        39             (970)              1,035
Asset revaluation                     --                    20,782               --                  --
Changes in operating assets and 
 liabilities net of effects from 
 acquisition adjustments
  Accounts receivable             (1,022)                   (1,527)           (2,199)             1,681
  Merchandise inventories         (3,786)                   (8,088)             (113)            (2,217)
  Accounts payable                 2,794                       780              (658)             1,893
  Other assets and liabilities    (1,762)                     (205)              692               (561)
                              -----------                 ---------         --------           ---------
NET CASH PROVIDED BY
 OPERATING ACTIVITIES             15,088                     6,122             8,276              2,733

INVESTING ACTIVITIES
 Acquisition of Peebles Inc.          --                        --                              (90,923)
 Acquisition of Carlisle 
   Retailers Inc.                     --                   (11,549)
 Purchase of property and 
   equipment                     (10,226)                   (8,783)           (5,683)            (2,411)
 Other                              (879)                     (219)               --                281
                              -----------                 ---------         ---------          ---------
NET CASH USED IN INVESTING 
 ACTIVITIES                      (11,105)                  (20,551)           (5,683)           (93,053)

FINANCING ACTIVITIES
 Proceeds from revolving 
  line of credit and 
  long-term debt                 324,662                   272,013           227,686             58,145
 Reduction in revolving 
  line of credit and 
  long-term debt                (328,441)                 (267,762)         (230,164)           (56,129)
 Proceeds from revolving 
  facilities-Acquisition 
  of Carlisle Retailers, Inc.         --                    10,213                --                 --
 Proceeds from acquisition debt       --                        --                --             76,390
 Retirement of pre-acquisition debt   --                        --                --            (40,917)
 Proceeds from equity                 --                        --                --             59,308
 Acquisition and financing fees       --                        --                --             (6,807)
                               ---------                 ---------          --------          ---------
NET CASH PROVIDED BY (USED IN)
 FINANCING ACTIVITIES             (3,779)                   14,464            (2,478)            89,990
                               ---------                 ---------          --------          ---------
INCREASE (DECREASE) IN CASH 
 AND CASH EQUIVALENTS                204                        35               115               (330)

Cash and cash equivalents 
 beginning of period                 228                       193                78                408
                               ---------                 ---------          --------          ---------
CASH AND CASH EQUIVALENTS 
 END OF PERIOD                 $     432                 $     228          $    193           $     78
                               =========                 =========          ========          =========
</TABLE>
See notes to consolidated financial statements.
                                        F-5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PEEBLES INC. AND SUBSIDIARY
January 31, 1998

(dollars in thousands, except per share amounts)
NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS:  Peebles operates retail department stores offering 
predominately soft-apparel, fashion merchandise for the entire family, and other
selected home accessories.  At January 31, 1998, the Company was operating 84 
stores located primarily in small and medium sized communities which typically
do not have a mall-based department store.  The stores serve communities in 12 
states, located predominately in the Southeast and Mid-Atlantic. 

ORGANIZATION AND BASIS OF FINANCIAL STATEMENT PRESENTATION:  Consolidation:  The
consolidated financial statements include the accounts of Peebles Inc. and 
Carlisle Retailers, Inc. (together "Peebles" or the "Company").  All significant
intercompany balances and transactions have been eliminated.

THE 1995 ACQUISITION:  Peebles Inc. was acquired by PHC Retail Holding Company
("PHC Retail") for approximately $136 million on May 27, 1995 in an acquisition
accounted for using the purchase method of accounting, and accordingly, a new 
accounting basis was begun.  PHC Retail, a closely held company, has no 
significant assets other than the entire equity interest of Peebles Inc. common
stock, $.10 par value (the "Common Stock") and had no operations prior to the 
1995 Acquisition.

ACQUISITION OF CARLISLE RETAILERS, INC.:  On May 20, 1996, Peebles Inc. acquired
Carlisle Retailers, Inc., an Ohio corporation, ("Carlisle's") for approximately
$11,549 in cash which included $6,311 to common shareholders of Carlisle, $3,458
to a financial services company for the majority of the outstanding Carlisle 
proprietary credit card accounts receivable portfolio, and $1,780 in acquisition
expenses (the "CRI Merger"). Carlisle's is now a wholly owned subsidiary of 
Peebles Inc.  The CRI Merger was accounted for using the purchase method of 
accounting, and as such, the purchase price was allocated to the fair value of 
tangible assets and the excess of cost over net assets acquired.

FISCAL YEAR: The Company's fiscal year ends on the Saturday nearest January 31.
Fiscal years 1997, 1996 and 1995, ended on January 31, 1998, February 1, 1997 
and February 3, 1996, respectively.  Results of operations for 1997 and 1996 
each consisted of  fifty-two weeks.  Results of operations for 1995 consisted of
fifty-three weeks, with 17 weeks included in the four-month period ended May 27,
1995 and 36 weeks in the eight-month period ended February 3, 1996. References 
to years relate to fiscal years rather than calendar years.  Certain amounts in
the 1996 consolidated financial statements have been reclassified to conform to
the fiscal 1997 presentation.

USE OF ESTIMATES:  The preparation of financial statements in conformity with 
generally accepted accounting principles requires management to make estimates 
and assumptions that affect the amounts reported in the financial statements and
accompanying notes.  Actual results could differ from those estimates.

STATEMENT OF CASH FLOWS:  Peebles considers all highly liquid investments with a
maturity of three months or less when purchased to be cash equivalents.  There 
were no cash equivalents at January 31, 1998 or February 1, 1997.

MERCHANDISE INVENTORIES: Merchandise inventories are accounted for by the retail
inventory method applied on a last in, first out ("LIFO") basis.

PROPERTY AND EQUIPMENT:  Property and equipment is stated on the basis of cost. 
Depreciation of property and equipment is provided primarily by the straight-
line method over their estimated useful lives of the related assets, generally 7
to 10 years for fixtures and equipment and 20 years for buildings.  The cost of
leasehold improvements is amortized over the shorter of their economic lives or
the terms of the leases by the straight-line method. Amortization of buildings 
under capital leases is computed by the straight- line method over the lease 
term and is included in depreciation and amortization expense.

STORE OPENING COSTS:  Store opening costs are charged to selling, general and 
administrative expenses as incurred.
                                      F-6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
PEEBLES INC. AND SUBSIDIARY

ADVERTISING COSTS:  Advertising costs, charged to selling, general and 
administrative expenses as incurred, aggregated $4,551, $4,917, $3,075 and 
$1,449 for 1997, 1996, the eight-month period ended February 3, 1996, and the
four-month period ended May 27, 1995, respectively.

LONG-LIVED ASSETS:  The Company periodically reviews the carrying value of long-
lived assets to determine if an impairment has occurred.  The primary indicators
of impairment are, but not limited to, significant changes in competition or 
demographics, recent historical operating profitability, projected profitability
and the related cash flows of each.  See Note D for 1996 details.

EXCESS OF COST OVER NET ASSETS ACQUIRED:  The excess of cost over net assets 
acquired ("Goodwill") is being amortized on a straight-line basis over a twenty-
five year period.  As described in Note D, allocated goodwill was reduced by 
$15,220 in 1996. Accumulated amortization at January 31, 1998 and February 1, 
1997 was $5,144 and $3,656, respectively.  

DEFERRED FINANCING COSTS:  Deferred financing costs are amortized by the 
interest method over a period consistent with the related financing.  
Amortization expense of $965, $884, $585 and $68 is included in interest expense
for 1997, 1996, the eight-month period ended February 3, 1996, and the four-
month period ended May 27, 1995,  respectively.  Accumulated amortization at 
January 31, 1998 and February 1, 1997 was $2,327 and $1,436, respectively.
 
BENEFICIAL LEASEHOLDS:  Amortization is provided by the straight-line basis over
the estimated composite useful lives of the related leases.  As described in 
Note D, beneficial leaseholds were reduced by a net $1,528 in 1996, after the 
elimination of accumulated amortization of $2,784. At January 31, 1998, 
accumulated amortization was $157.

INCOME TAXES:  Deferred income taxes are provided for temporary differences 
between income and expense for financial reporting purposes and for income tax 
purposes.

NET INCOME PER SHARE:  Net Income per share is based on the weighted-average 
number of shares outstanding.

NOTE B-ACCOUNTS RECEIVABLE

Accounts receivable are shown net of $1,400 and $1,224, representing the 
allowance for uncollectible accounts at January 31, 1998 and February 1, 1997, 
respectively.  The provision for doubtful accounts was $1,503, $1,192, $531 
and $265 for 1997, 1996, the eight-month period ended February 3, 1996, and the
four-month period ended May 27, 1995, respectively.  Finance charges on credit 
sales, included as a reduction of selling, general and administrative expenses, 
aggregated $5,089, $5,050, $3,175 and $1,643, for 1997, 1996, the eight-month 
period ended February 3, 1996, and the four-month period ended May 27, 1995,  
respectively.  As a service to its customers, the Company offers credit through
the use of its own charge card, certain major credit cards and a layaway plan. 
The Peebles' customer usually resides in the local community immediately 
surrounding the store location.  Peebles stores serve these local customers in 
Virginia, Maryland, North Carolina, South Carolina, Tennessee, Kentucky, 
Alabama, Delaware, New Jersey, Ohio, Pennsylvania and New York. The Company does
not require collateral from its customers.
                                       F-7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
PEEBLES INC. AND SUBSIDIARY
NOTE C-MERCHANDISE INVENTORIES
Consistent with the purchase method of accounting used in the 1995 Acquisition, 
the LIFO reserve was eliminated, the recorded value of merchandise inventories 
was increased to fair value (the "Fair Value Adjustment") and a new LIFO base 
year was established at May 27, 1995.  The net effect of the LIFO and market 
reserves adjusts inventory to the lower of LIFO cost and market.

Merchandise inventories consisted of the following:

                                         January 31, 1998     February 1, 1997
                                         ----------------     ----------------
Merchandise inventories at FIFO cost       $  51,234             $   47,448
Fair Value Adjustment                          7,436                  7,436
LIFO/market reserve                             (703)                  (453)
                                           ----------             ----------
Merchandise inventories at lower of cost
 or market                                 $  57,967             $   54,431
                                           ==========            ===========


NOTE D-ASSET REVALUATION
In 1996, the Company adopted Statement of Financial Accounting Standards 
("SFAS") No. 121, "Accounting for Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of".  The Company periodically reviews the carrying
value of long-lived assets to determine if impairment has occurred.  The primary
indicators of impairment are, but not limited to, significant changes in 
competition or demographics, recent historical operating profitability, 
projected profitability and the cash flows of each.  Projections are based on 
management's best estimates of future performance.

In the fourth quarter of 1996, on an individual store basis, increased 
competition and shifting demographics in certain markets, together with 
historical and projected store operations, indicated that the aggregate 
estimated undiscounted cash flows to be generated would be less than the current
carrying values of certain store assets, related intangibles and allocated 
goodwill.  As a result, fair value was calculated using a multiple of discounted
projected cash flows and carrying values were reduced as follows:

         Store fixtures and equipment               $   4,034
         Related beneficial leasehold                   1,528
         Allocated goodwill                            15,220
                                                  -----------
             Total asset revaluation                 $ 20,782
                                                  ===========

The fair value estimate is based on the best information available, including 
prices for similar assets or the results of valuation techniques such as 
discounting estimated future cash flows as if the decision to use the impaired 
asset was a new investment decision.

The asset revaluation reduced 1996 deferred income taxes by approximately 
$2,141.
                                    F-8
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
PEEBLES INC. AND SUBSIDIARY
NOTE E-LONG-TERM DEBT

Long-term debt consisted of the following:
                               
                             January 31, 1998          February 1, 1997
                             ----------------          ----------------
Senior Revolving Facility       $   32,000               $   43,000
Senior Term Note A                  15,275                   17,725
Senior Term Note B                  37,094                   27,475
Swingline Facility                   1,791                    1,415 
                                ----------               ----------
                                    86,160                   89,615
Less current maturities:
 Senior Term Notes A & B             4,083                    3,000
 Senior Revolving & Swingline 
  Facilities                           570                    6,665
                                ----------               ----------
Total current maturities             4,653                    9,665
                                ----------               ----------
                                $   81,507               $   79,950
                                ==========               ==========

The Company has a $127 million credit facility (the "Credit Agreement") which 
provides a Senior Term Facility, a Senior Revolving Facility, and a Swingline 
Facility.  Restrictive covenants prohibit the payment of cash dividends in any
fiscal year and the Credit Agreement is secured by a first priority security 
interest in substantially all the personal property and certain real property of
Peebles.  The Credit Agreement was amended on July 30, 1997, primarily to allow 
for the transfer of $10 million from the Senior Revolving Facility to Senior 
Term Note B.  The Credit Agreement was again amended on April 9, 1998 (the "1998
Amendment"), primarily to i) reduce principal payments on the senior term debt;
ii) reduce the interest rates on the senior debt; iii) increase the maximum 
borrowings under the Senior Revolving Facility to $75 million (from $65 million)
, and iv) extend the maturity dates of Senior Term Note A and the Senior 
Revolving Facility from June 9, 2000 to January 31, 2002 and June 9, 2002, 
respectively.

The Senior Term Facility includes two notes, Senior Term Note A and Senior Term
Note B, with original principal balances of $20 million and $30 million, 
respectively.  Senior Term Note A and Senior Term Note B bore interest during
1997 at LIBOR plus 2.75% and LIBOR plus 3.25%, respectively.  Under the 1998 
Amendment, Senior Term Note A and Senior Term Note B bear interest at LIBOR plus
2.25% and LIBOR plus 2.75%, respectively. Scheduled principal payments and 
interest are payable quarterly in arrears.  Senior Term Note A matures January 
31, 2002 and Senior Term Note B matures June 9, 2002.

The amount available under the Senior Revolving Facility (the "Revolver") is 
determined by a defined asset based formula with maximum borrowings limited to 
$75 million less outstanding amounts under letters of credit. The Revolver 
matures on June 9, 2002.  The Revolver has no specific paydown provisions.  The
Company classifies a portion of the Revolver outstanding balance as short-term,
if based on the projected operations during the next fiscal year, the Revolver 
outstanding balance is expected to be less at any fiscal month end than the 
outstanding balance at the fiscal year end.  The Company pays a fee of 1/2 of 1%
per annum on any unused portion of the Senior Revolving Facility. The Revolving 
Facility bore interest at LIBOR plus 2.75%.  Under the 1998 Amendment, the 
interest rate is LIBOR plus 2.25%.

The Company has a three-year interest rate protection agreement, expiring June,
1998, covering a principal amount of $40,000 against increases in the prime rate
above 7.5% per annum.  

Loans under the Swingline Facility are drawn and repaid daily based on the 
operating activity of the Company.  Aggregate amounts outstanding under the 
Swingline Facility cannot exceed $5 million.  Excess borrowings or funding 
outside these amounts revert to the Senior Revolving Facility.  The Swingline
Facility bears interest at prime plus 1-1/2% and has no LIBOR conversion option.

Aggregate principal payments on the long-term debt for the next five fiscal 
years are: 1998-- $4,653, 1999--$6,280, 2000--$7,500, 2001--$10,475, and 
2002--$57,252.

Peebles has commitments for letters of credit with a bank which totaled $172 and
$573 at January 31, 1998 and February 1, 1997, respectively.  The commitments 
expire August 1, 1998.

Peebles made cash interest payments of $8,311, $7,866, $6,353 and $973, for 
fiscal year 1997, 1996, the eight-month period ended February 3, 1996, and the 
four-month period ended May 27, 1995, respectively.
                                         F-9
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
PEEBLES INC. AND SUBSIDIARY
NOTE F-LEASES

The Company leases substantially all of its store locations under capital and 
operating leases with initial terms ranging from 1 to 25 years and renewal 
options of 1 to 10 years expiring at various dates through 2033.  Total rental 
expense under operating leases was as follows:
              
                  Fiscal Year       Fiscal Year     Eight-Month      Four-Month
                     Ended             Ended        Period Ended    Period Ended
               January 31, 1998  February 1, 1997 February 3, 1996 May 27, 1995
               ----------------  ---------------- ---------------- -------------
                                                                 (Prior to 1995 
                                                                    Acquisition)
Minimum           $   8,913        $   7,742        $    4,552      $    2,276
Contingent              483              453               275             138
                -----------       ----------        ----------      ----------
                  $   9,396        $   8,195        $    4,827      $    2,414
                ===========       ==========        ==========      ==========

Contingent rentals are based upon a percentage of annual sales in excess of 
specified amounts. Future minimum lease payments under capital leases and 
noncancellable operating leases at January 31, 1998 were as follows:

                                  Capital                   Operating
Fiscal Year                       Leases                      Leases      
-----------                       -------                   ----------
1998                              $   377                   $   8,467
1999                                  377                       8,114
2000                                  377                       7,591
2001                                  180                       7,175
2002                                  180                       6,453
Thereafter                            421                      40,650
                                  -------                   ---------
Total minimum lease payments        1,912                   $  78,450
Less:  amounts representing 
       interest                      (565)  
                                  --------
Present value of net minimum 
    lease payments, including 
    current maturities of $208, 
    with interest rates ranging 
    from 11.3% to 18.1%          $  1,347 
                                =========


NOTE G-EMPLOYEE BENEFIT PLANS

Defined Benefit Pension Plans:  Through January 31, 1998, the Company provided 
one defined benefit plan, The Employees Retirement Plan of Peebles Inc. ("Plan 
I") which covered substantially all employees.  Participation in Plan I is 
dependent on meeting certain age and service requirements.  On November 19, 
1997, the Board of Directors approved i) the adoption of The Employees 
Retirement Plan II of Peebles Inc. ("Plan II") to be effective February 1, 1998 
(the "Curtailment Date"), and ii) the fifth amendment to Plan I.  Under the 
amendment, the benefits of certain participants are frozen at the Curtailment 
Date and those participants spun-off to Plan II.  No employee will become a 
participant in either Plan I or Plan II after February 1, 1998.  Participants 
spun-off to Plan II will not accrue any benefit service after the Curtailment 
Date.  Plan II will be terminated effective as of May 1, 1998.  Plan II 
participants are 100% vested in their accrued benefits as calculated on the 
Curtailment Date.  

Participants in Plan I which were not spun-off to Plan II will continue to 
accrue benefits. Benefits under both Plan I and Plan II are based on total 
years of benefit service and the employee's compensation during the five 
consecutive calendar years which produce the highest average.

Peebles makes annual contributions to the Pension Plan equal to the contribution
required to satisfy minimum funding standards under ERISA.  The Board of 
Directors has directed the Trustee of Plan I to transfer assets and liabilities 
attributable to the benefits of Plan II participants to the trustee of Plan II 
as of the Curtailment Date.
                                   F-10
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
PEEBLES INC. AND SUBSIDIARY

NOTE G-EMPLOYEE BENEFIT PLANS--Continued
The net periodic pension cost of Plan I included the following components:
<TABLE>
<CAPTION>

                           Fiscal Year      Fiscal Year       Eight-Month        Four-Month
                             Ended             Ended          Period Ended      Peroid Ended 
                        January 31, 1998  February 1, 1997  February 3, 1996    May 27, 1995
                        ----------------  ----------------  ----------------    -------------
                                                                                (Prior to 1995 Acquisition)
<S>                            <C>              <C>                <C>                <C>
Service cost-benefits 
 earned during the period    $  372          $   345           $    207            $  104
Interest cost on projected 
 benefit obligation             501              543                332               166
Actual return on plan assets (1,632)            (109)              (649)             (324)
Net amortization and deferral 1,091             (460)               275               138
                            -------          --------           --------          --------
Net periodic pension cost   $   332          $   319           $    165            $   84
                            =======          ========           ========          ========

Net curtailment gain        $   231              N/A                N/A                N/A
                            =======
</TABLE>

The net curtailment gain has been calculated considering the estimated net 
decrease in projected benefit obligation, net of the elimination of capitalized
prior service costs.

The following table sets forth the Pension Plan's funded status and amounts 
recognized in Peebles balance sheet:

                                         January 31, 1998     February 1, 1997  

Actuarial present value of 
  benefit obligations:
  Accumulated benefit obligations 
  including vested benefits of 
   $5,756 and $5,316, respectively          $   (6,303)         $    (5,707)
                                            ===========         ============
  Projected benefit obligation              $   (7,465)         $    (7,299)
  Plan assets at fair value, 
  primarily listed stocks and U.S. 
  Government Treasury Bonds                      7,419                6,509
                                            -----------         ------------
  Projected benefit obligations in 
  excess of Plan assets                            (46)                (790)
  Prior service costs                               63                   73
  Unrecognized net (gain) loss                    (384)                 682
                                            -----------         ------------
Net pension liability recognized 
 in the balance sheet                       $     (367)         $       (35)
                                            ===========         ============

In calculating the present value of projected benefit obligations for 1997 and 
1996, a 4.5% and 4.4% weighted average rate of compensation increase was used,
respectively, and a weighted average discount rate of 7.25%.  The expected 
long-term rate of return on plan assets was 9% for 1997, 1996 and 1995.

THE PEEBLES INC. 401 (K) PROFIT SHARING PLAN: The Company maintains a qualified
profit sharing and retirement savings plan, which under Section 401 (k) of the 
Internal Revenue Code, allows tax deferred contributions from eligible employees
of up to 12% of their annual compensation.  The Company did not contribute to 
the plan in the prior three fiscal years.  Effective February 1, 1998, the 
Company will begin matching employee contributions up to 50% of an employee's 
first 6% of eligible compensation.

SUPPLEMENTAL BENEFITS PROGRAM:  The Company maintains a benefits program 
designed to provide certain key executives supplemental retirement income, such
that together with Social Security payments and amounts payable under Plan I, 
the executives will receive replacement income in retirement equal to 60% of 
final average compensation, as defined in Plan I.  The program is funded through
life insurance contracts covering the participating executives.  At January 31,
1998 and February 1, 1997, the Company had a net obligation of $75, recognized
in the balance sheet based upon a discount rate of 7.5% for 1997 and 1996.  The
Company recognized net expense related to the program of $213, $238, $146 and 
$73 in the fiscal years ended January 31, 1998, and February 1, 1997, the eight-
month period ended February 3, 1996 and the four-month period ended May 27,
1995, respectively.
                                   F-11
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
PEEBLES INC. AND SUBSIDIARY
NOTE H - INCOME TAXES

The provisions for income taxes consisted of the following:
<TABLE>
<CAPTION>
                        Fiscal Year       Fiscal Year      Eight-Month         Four-Month
                           Ended             Ended         Period Ended       Period Ended
                     January 31, 1998  February 1, 1997   February 3, 1996    May 27, 1995 
                     ----------------  ----------------   ----------------    -------------
                                                                               (Prior to 
                                                                              1995 Acquisition)
<S>                          <C>             <C>                 <C>               <C>    
Current:   Federal      $   1,089         $   1,591           $  2,703        $   (382)
           State              149               546                573             (92)

Deferred:  Federal          2,861              (214)               805            (323)
           State              588              (180)               165             (77)
                         --------          ---------          --------         --------
                        $   4,687          $   1,743          $  4,246         $  (874)
                        =========          =========          ========         ========
</TABLE>
Income taxes differ from the amounts computed by applying the applicable federal
statutory rates due to the following:
<TABLE>
<CAPTION>

                              Fiscal Year      Fiscal Year     Eight-Month     Four-Month
                                 Ended            Ended        Period Ended   Period Ended
                          January 31, 1998  February 1, 1997 February 3, 1996 May 27, 1995
                          ----------------  ---------------- ---------------- -------------
                                                                              (Prior to 1995 
                                                                              Acquisition)
<S>                               <C>              <C>                <C>           <C>
Taxes at the federal 
 statutory rate              $  3,650           $  (4,479)         $  3,248      $  (765)
Increases (decreases):
 State income taxes, net 
  of federal tax                  486                 232               469         (110)
 Amortization of purchase 
   accounting adjustments         478                 745               484          190
 Asset revaluation                 --               5,175                --           --
 Other                             73                  70                45         (189)
                             --------           ---------          --------      --------
                             $  4,687           $   1,743          $  4,246      $  (874)
                             ========           =========          ========      =======
</TABLE>
At January 31, 1998, the Company has net operating loss carryforwards of 
approximately $4,700 for income tax purposes, which expire in 2010.

Significant components of deferred tax liabilities and assets are as follows:

                                     January 31, 1998         February 1, 1997  
                                     ----------------         ----------------
Deferred tax liabilities:
 Inventory valuation                   $     3,092               $    3,404
 Depreciation and amortization               6,657                    4,843
 Accounts receivable valuation               2,052                       --
 Other                                         308                      318
                                       -----------               ----------
                                            12,109                    8,565
Deferred tax assets:
 Doubtful accounts                            (539)                    (471)
 Net operating loss carryforwards           (1,835)                  (1,925)
 Other                                        (118)                      --
                                       -----------               ----------
                                            (2,492)                  (2,396)
                                       -----------               ----------
Net deferred tax liabilities           $     9,617               $    6,169
                                       ===========               ==========

Peebles made cash income tax payments of $2,506, $2,100 and $2,782 for 1997,
1996 and 1995, respectively.
                                  F-12
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
PEEBLES INC. AND SUBSIDIARY

NOTE I - VALUATION AND QUALIFYING ACCOUNTS
Activity related to valuation and qualifying accounts is as follows:

                                   Allowance for Doubtful         Net LIFO/
                                        Accounts               Market Reserve   
                                  -----------------------      --------------
BALANCE JANUARY 28, 1995             $     930                    $   2,838
Charges to expense                         265                        1,035
Deductions - net write-off of 
 uncollectible accounts                   (265)                          --
                                     ---------                    ---------
BALANCE MAY 27, 1995                       930                        3,873
Purchase accounting elimination             --                       (3,873)
Charges to expense                         531                          414
Deductions - net write-off of 
 uncollectible accounts                   (501)                          --
                                     ---------                     --------
BALANCE FEBRUARY 3, 1996                   960                          414
Charges to expense                       1,192                           39
Increase due to Acquisition of 
 Carlisle Retailers, Inc.                  264                           --
Deductions - net write-off of 
 uncollectible accounts                 (1,192)                          --
                                     ---------                    ---------
BALANCE February 1, 1997                 1,224                          453
Charges to expense                       1,503                          250
Deductions - net write-off of 
 uncollectible accounts                 (1,327)                          --
                                     ---------                    ---------
BALANCE JANUARY 31, 1998             $   1,400                    $     703
                                     =========                    =========



NOTE J - QUARTERLY FINANCIAL DATA (UNAUDITED)
The acquisition of Carlisle Retailers, Inc. was completed on May 20, 1996.  
As a result, the second, third and fourth quarters of 1996 reflect the 
incremental sales and expenses related to this acquisition.  Operating income in
the fourth quarter of 1996 was affected by the asset revaluation in accordance
with SFAS No. 121 of $20,782.
(dollars in thousands)
<TABLE>
<CAPTION>
                                                       FISCAL  QUARTER                           
                                 First               Second            Third           Fourth    
                             1997      1996      1997     1996      1997    1996      1997     1996
<S>                          <C>       <C>        <C>     <C>         <C>     <C>     <C>      <C>    
Net Sales......            $45,150    $38,055  $49,808  $42,366    $52,411  $47,540  $70,325  $ 66,245

Cost of Sales..             28,262     22,607   29,515   24,805     32,077   29,462   40,966    39,362

Gross Margin..........      16,888     15,448   20,293   17,561     20,334   18,078   29,359    26,883

Operating Income (Loss)      2,192      2,183    3,490    2,757      3,156    1,899   11,064   (11,550)

Net Income (Loss).....          49        214      721      346        389     (194)   4,891   (15,281)

Net Income (Loss) Per Share $   49    $   214   $  721  $   346    $   389  $  (194) $ 4,891  $(15,281)

</TABLE>

                                       F-13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 
OPERATIONS

RESULTS OF OPERATIONS

Peebles operates specialty department stores primarily in small and medium sized
communities which do not typically have a mall-based department store.  The 
stores, located in twelve predominately Southeastern and Mid-Atlantic states, 
offer customers a broad selection of moderately-priced fashion merchandise and 
selected home accessories, which is generally not available through other 
retailers in the market.  The consolidated operations of the Company include the
results of 78 stores operating either the entire year or opened under the 
"Peebles" name and 6 stores belonging to its wholly-owned subsidiary, 
Carlisle's.  The name on these six stores was changed from Carlisle's to 
Peebles in August 1997.

The entire equity interest of Peebles Inc. was acquired by PHC Retail Holding 
Company, effective May 27, 1995.  The acquisition was accounted for using the 
purchase method of accounting and a new accounting basis was established.  
Accordingly, the audited financial statements present the Peebles Inc. results 
of operations for 1995 as the eight-month period ended February 3, 1996 and the
four-month period ended May 27, 1995.

Consolidated net sales and results of consolidated operations, expressed as 
percentages of net sales, are presented below for the 1997 and 1996 fiscal years
and the twelve-month period ended February 3, 1996.

(dollars in thousands)         1997         1996          1995    
Net sales                $   217,694   $   194,206   $   175,664
  % increase                   12.1%         10.6%          4.8%

Comparable stores % increase
  (decrease) in sales:
   52-week periods             5.3%      Even (0%)        (1.0%)
   52-week period ended 
    February 1, 1997 versus 
    53-week period ended 
    February 3, 1996           N/A          (1.3%)          N/A

Total stores                    84             77            65


Operations as a Percentage 
  of Net Sales:

Cost of sales                60.1%          59.9%          58.6%
Selling, general & 
 administrative expenses     27.7           28.0           27.3
Asset revaluation              --           10.7             --
Settlement of the 1993 
 Stock Option Plan             --             --            1.7
Depreciation and 
 amortization                 3.1            3.8            3.8
                            -----          -----           ----
Operating Income (Loss)       9.1           (2.4)           8.6

Interest Expense              4.4            4.7            4.5
Other income (expense)         .2             .4            (.1)
Provision for income taxes    2.1             .9            1.9
                            -----          -----           ----
Net Income (Loss)             2.8%          (7.7)%          2.1%

Net sales in 1997 grew $23,488, or 12.1%, over 1996 as net sales at comparable 
stores increased $9,085, or 5.3%, and net sales at non-comparable stores 
provided an increase of $14,403.  A comparable store has operations for the 
entire twelve-month period in both the current and previous fiscal years.  
Comparable store net sales, totaling $181,442, showed relative strength 
throughout 1997, with fiscal quarter increases over 1996 of 5.1%, 7.7%, 6.9% 
and 3.3% for the first through fourth fiscal quarters, respectively.

During 1997, the Company opened 8 new stores which contributed $8,964, or 4.1%,
to net sales, and closed 1 marginally profitable store.  All 8 new stores were 
opened as Peebles stores and are located in states where the Company has 
existing stores.  In 1996, the Company added a net total of 13 stores operating
for the entire year in 1997.  Of these 13 stores opened or acquired in 1996, 7 
new Peebles stores contributed $11,487, or 5.3%, to 1997 net sales and the six 
Carlisle's stores added $14,106, or 6.5% of total net sales.  

                                   F-14
<PAGE>
The Company's cost of sales were 60.1%, 59.9% and 58.6% in 1997, 1996 and 1995,
respectively.  The increases in 1997 and 1996 are primarily attributed to the 
new store locations, where market penetration promotions adversely impact gross
margin.  The company has increased the number of stores in operation at the 
respective fiscal year end from 65 in 1995 to 84 in 1997, a 29.2% increase.  In
addition, at the Carlisle stores, the inventory mix and pricing strategy 
required an adjustment from a narrow assortment and a high-low emphasis to a 
wider assortment and less promotional, every day fair pricing which resulted in
higher markdowns.  In June 1996, the Company began a twelve-month process to 
make these changes at a pace designed not to adversely impact customer 
expectations.  New stores generally attain the Company's mature store average 
gross margin in 24 to 36 months.

Selling, general and administrative ("SG&A") expenses were 27.7%, 28.0% and 
27.3% of net sales in 1997, 1996 and 1995, respectively.  In general, the 
opening of new stores with their higher occupancy, payroll and advertising 
expenses as a percentage of net sales than mature stores, results in increases 
to SG&A.  The 14 new stores opened and acquired during 1996 represented the 
Company's largest single year increase in number of store locations.  Also in 
1996, the Company completed an expansion to the distribution facility in South 
Hill, Virginia to accommodate growth and enhance processing efficiency.  In 
1997, the total net reduction in the advertising costs of opening 8 stores 
versus 14, cost controls over variable expenses and the realization of economies
of scale in the fixed SG&A expenses resulted in the decrease as a percentage of
net sales in comparison to 1996.

As discussed in Note D to the audited consolidated financial statements, the 
Company periodically reviews the carrying value of long-lived assets to 
determine if impairment has occurred, as defined under the provision of SFAS 
No. 121, "Accounting for Impairment of Long-Lived Assets and Long-Lived Assets 
to be Disposed Of".  In 1996, management determined that the aggregate estimated
undiscounted cash flows to be generated by certain store assets would be less
than the current carrying values of those assets, related intangibles and 
allocated Goodwill. As a result, fair value was calculated using a multiple of 
discounted projected cash flows and the Company increased operating expenses by 
$20,782, or 10.7% of 1996 net sales.  No impairment adjustment was considered to
be necessary in 1997.

In conjunction with the 1995 Acquisition, the Company settled a stock option 
plan and recorded additional compensation expense of $3,089 in 1995, or 1.7% of
1995 net sales.

Depreciation and amortization expense as a percentage of net sales was 3.1%, 
3.8% and 3.8% in 1997, 1996 and 1995, respectively.  The 1997 decrease is 
primarily attributed to less amortization expense on the intangible assets, 
Goodwill and beneficial leaseholds, resulting from the reduced carrying values 
after the impairment revaluation in 1996.  Capital expenditures increased 
depreciation expense, but the revaluation of certain store fixtures and 
equipment after the 1996 revaluation mitigated their impact.

As a result of the above factors, 1997 operating income was 9.1% of net sales, 
compared to an operating loss of 2.4% in 1996 and operating income of 8.6% in 
1995.  Adjusting for the effects of SFAS No. 121 revaluation in 1996 and the 
1995 non-recurring compensation expense, operating income would have totaled 
8.1% and 10.3% as a percentage of net sales for 1996 and 1995, respectively.

Interest expense as a percentage of net sales was 4.4%, 4.7% and 4.5% for 1997,
1996 and 1995, respectively.  The capital and inventory requirements of fewer 
new store locations in 1997 versus 1996, and the increase in 1996 debt to 
consummate the CRI Merger are primarily responsible for the current year 
decrease as a percentage of net sales.

In 1997, income taxes, current and deferred, totaled $4,687, an effective tax 
rate of 43.6%.  The effective tax rate is higher than the statutory rates 
because of non-deductible amortization expense.  In 1996, as a result of the 
asset revaluation, the Company recorded income tax expense of $1,743, even 
though experiencing a pre-tax loss $13,172.  The $20,782 gross revaluation 
write-down lowered deferred taxes by $2,141, as the Goodwill ($15,220 
impairment) and beneficial leaseholds ($1,528) are permanent book-tax 
differences.

The Company recorded an extraordinary loss, net of tax, of $216 at May 27, 1995,
related to the write-off of unamortized financing costs.

                                F-15
<PAGE>
As a result of the above factors, the Company had net income of 2.8% in 1997, a
net loss of 7.7% in 1996 and net income of 4.5% in 1995.  Adjusting for the 
effects of adopting SFAS No. 121 in 1996, net income would have been 3.0% as a 
percentage of net sales.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary cash requirements are for capital expenditures in 
connection with both the Company's new store expansion and remodeling program 
and for working capital needs.  The Company's primary sources of funds are 
cash flow from continuing operations, borrowings under the Credit Agreement and 
trade accounts payable.  The Company's inventory levels typically build 
throughout the fall, peaking during the Christmas selling season, while 
accounts receivable peak during December and decrease during the first quarter.
Capital expenditures typically occur evenly throughout the first three quarters
of each year.

The Company's operating activities provided net cash of $15.1 million, $6.1 
million and $11.0 million in 1997, 1996 and 1995, respectively.  Profitable 
operations were again the primary source of net cash in 1997.  The return on 
continuing operation's net assets grew to 20.8% in 1997 from 18.9% in 1996.  
Return on the continuing operation's net assets represents operating income as 
a percentage of the average investment in operating assets, calculated as:  i) 
current assets, plus ii) net property and equipment, less iii) current 
liabilities and capital leases.  In the 1996 percentage, the effects of the 
SFAS No. 121 asset revaluation have been added back to operating income.  The 
Company's working capital increased to $62.9 million at the close of 1997, up 
from $58.2 million at the close of 1996, as increases in merchandise inventory 
were partially offset by a decrease in net accounts receivable and an increase 
in trade accounts payable.

Net cash used in investing activities, exclusive of the CRI Merger and the 1995
Acquisition, was $11.1 million, $9.0 million and $7.8 million in 1997, 1996 and
1995, respectively.  In 1997, capital expenditures for the purchase of property
and equipment totaled $10.2 million.  Included in this total are the capital 
expenditures for eight new store locations opened in 1997, totaling some $3.6 
million, and the relocation of three stores where capital expenditures totaled 
$3.1 million.  Existing stores accounted for the remainder, and included capital
expenditures to i) change the signage and fixturing from "Carlisle's" to 
"Peebles" in six stores, ii) upgrade register systems in certain stores, iii) 
add new Clinique cosmetic fixtures to those stores now carrying this 
merchandise, and iv) general enhancements to existing store fixturing and visual
display.

In 1997, cash was used to reduce outstanding debt by a net of $3.8 million.  
Exclusive of the CRI Merger in 1996 and the 1995 Acquisition transactions, the 
Company drew cash from the revolving debt of some $4.3 million net in 1996, 
and cash was used to reduce outstanding debt by a net of $.5 million in 1995.  

In 1998, the Company's capital expenditures are expected to total approximately
$11.5 million, which reflect the opening of eleven new store locations at 
approximately $5.0 million and the major remodeling and space re-allocation of 
seven stores at $2.0 million.  As of March 1998, the Company had signed leases 
for seven new store locations, four of which will open in Spring 1998.  The 
Company expects to continue to lease its stores, and the average new store is 
anticipated to average approximately 22,500 square feet but may vary depending 
on the market and real estate availability .  Based on historical experience, 
the Company estimates that the cost of opening a new store will include capital
expenditures of approximately $425,000 for leasehold improvements and fixtures 
and approximately $425,000 for initial inventory, approximately one-third of 
which is normally financed through vendor credit.  Accounts receivable for new 
stores typically build to 15% of net sales or approximately $300,000 within 24 
months of the store opening.  The Company may also incur capital expenditures to
acquire existing stores.  The distribution center expansion is expected to serve
the Company's growth to 110 store locations.

The Company finances its operations, capital expenditures, and debt service 
payments with funds available under the Senior Revolving Facility.  The maximum
amount available under the Senior Revolving Facility is $75 million less amounts
outstanding under letters of credit.  The actual amount available is determined
by an asset based formula.

F-16
<PAGE>
SEASONALITY AND INFLATION 

As a retailer offering predominately soft-apparel and selected home accessories,
the Company's business is seasonal, although less heavily weighted in the fourth
quarter than retailers with comparable offerings of merchandise.  Over the past 
three fiscal years, quarterly sales as a percentage of total sales have been 
consistent at approximately 20%, 22%, 24% and 34% for the first through fourth 
quarters, respectively.  Peebles' positioning of its stores in small to medium 
sized communities with limited competition, along with the Company's 
less-promotional, every day fair value, pricing strategy, produces operations 
less dependent on the fourth quarter.  However, the third and fourth quarters 
are bolstered by the important back-to-school and Christmas holiday selling 
seasons.  

The Company does not believe that inflation has had a material effect on its 
results of operations during the past three fiscal years.  Peebles uses the 
retail inventory method applied on a LIFO basis in accounting for its 
inventories.  Under this method, the cost of products sold reported in the 
financial statements approximates current costs and thus reduces the likelihood 
of a material impact that increases costs.  However, there can be no assurance 
that the Company's business will not be impacted by inflation in the future.

YEAR 2000 TECHNOLOGICAL ISSUES
In 1997, the Company began a comprehensive analysis of its information systems
to determine the impact of date-related processing when the year changes to 2000
and the systems do not recognize this year as greater than 1999.  The Company's 
primary information systems are on two IBM AS400 mainframes, with the majority 
of the software developed internally.  Packaged software and certain PC systems
serve as supplemental support to the mainframe systems.  The costs associated 
with this evaluation, and the costs of any necessary modifications to the 
software will be expensed as incurred.  Although the comprehensive analysis will
not be completed until the second quarter of 1998, management currently 
anticipates the costs to ensure year 2000 compliance will primarily be in the 
form of additional payroll cost and will not be material to the operations of 
the Company. Year 2000 compliance is expected by the first quarter of 1999.

FORWARD-LOOKING STATEMENTS

Certain statements in this annual report are forward-looking, based on the 
Company's evaluation of historical information and judgments on future events, 
based on the best information available at the time.  Underlying these 
statements are risks and uncertainties which could cause actual results to 
differ materially from those forward-looking statements.  These risks and 
uncertainties include, but are not limited to: i) consumer demand for the 
Company's soft-apparel merchandise; ii) competitive and consumer demographic 
shifts within the Company's markets; iii) the Company's access to, and cost of, 
capital; iv) the Company's ability to locate and open new store locations on a 
timely and profitable basis; and v) the successful management of inventory 
levels, related costs and selling, general and administrative costs.
                                     F-17
<PAGE>
                                  	EXHIBIT INDEX

Exhibit				                                            						 Page
  No.                     				Description                   	Number
		 
2.1***			  Form of Agreement and Plan of Merger dated April 3, 1995 among PHC 
           Retail Holding Company, Peebles Acquisition Corp. and Peebles Inc., 
           exclusive of exhibits and schedules.  The Registrant hereby 
           undertakes to furnish to the Commission supplementally upon request 
           a copy of any omitted exhibit or schedule.
3.1+			    Form of Amended and Restated Articles of Incorporation of Peebles 
           Inc.
3.2+			    Form of Amended and Restated Bylaws of Peebles Inc.
3.3***			  Amendment to Amended and Restated Articles of Incorporation dated 
           May 3, 1993
3.4*+			   Amendment to Amended and Restated Bylaws of Peebles Inc.dated June 9,
           1995.
3.5*+			   Amendment to Amended and Restated Articles of Incorporation dated 
           June 9, 1995
10.1*+		   Credit Agreement dated June 9, 1995, by and amoung Peebles Inc. And 
           NatWest Bank, N.A.	as Agent (the "Agent"), and the financial 
           institutions named therein. (the "Credit Agreement")
10.20*+		  Form of A Term Note.
10.21*+		  Form of B Term Note.
10.22*+		  Form of Bridge Note.
10.23*+		  Form of Revolving Note.
10.24*+		  Form of Swingline Note.
10.3*+		   Security Agreement made June 9, 1995 by and between Peebles Inc. and 
           the Agent.
10.4*+		   Trademark Security Agreement made June 9, 1995 by and between 
           Peebles Inc. and the Agent.
10.5*+		   Guaranty Agreement made June 9, 1995 by and between PHC Retail 
           Holding Company and the Agent.
10.6*+		   Pledge Agreement made June 9, 1995 by and between PHC Retail 
           Holding Company and the Agent.
10.62*+		  Deed of Trust made June 9, 1995 by and between Peebles Inc., the 
           Trustee party thereto and the Agent.
10.63*+		  First Amendment of the Credit Agreement dated September 15, 1995.
10.64*+		  Second Amendment and Limited Consent to the Credit Agreement dated 
           March 8, 1996.
10.65			   Third Amendment to the Credit Agreement dated May 16, 1997.
10.66		   	Fourth Amendment to the Credit Agreement dated July 30, 1997.
10.67*			  Fifth Amendment to the Credit Agreement dated April 9, 1998.
10.8***		  Standard Service Agreement, as amended, dated January 17, 1995 
           between Frederick Atkins, Incorporated and Peebles Inc. 
10.11*+		  Form of Indemnification, Guarantee and Contribution Agreement 
           dated as of August 23, 1995  PHC Retail Holding Company, Peebles 
           Inc. and each of the directors and officers of Peebles Inc.
21			      Subsidiaries of the Registrant.
27			      Financial Data Schedule

	____________________________


	*		Incorporated by reference from the Registration Statement of PBL and 
Peebles on Form S-1 (Registration No. 33-27126), which was declared 
effective by the Commission on July 14, 1989.

	**		Incorporated by reference from the Form 10-K of PBL and the 
Company for the fiscal year ended February 2, 1991.

	+		Incorporated by reference from the Form 10-K of the Company for the 
fiscal year ended February 1, 1992.
	
	++		Incorporated by reference from the Form 10-K of the Company for the 
fiscal year ended January 30, 1993.

	+++		Incorporated by reference from the Form 10-K of the Company for the 
fiscal year ended January 29, 1994.

	***		Incorporated by reference from the Form 10-K of the Company for the 
fiscal year ended January 28, 1995.
	
	*+		Incorporated by reference from the Form 10-K of the Company for the 
fiscal year ended February 1, 1996.

<PAGE>
Exhibit 10.65
	THIRD AMENDMENT AND
	LIMITED CONSENT TO
	CREDIT AGREEMENT

THIS THIRD AMENDMENT AND LIMITED CONSENT TO CREDIT AGREEMENT, dated as of May 
16, 1997 (this "Amendment"), is by and among Peebles Inc., a Virginia 
corporation (the "Borrower"), the undersigned financial institutions in their 
capacities as lenders (the "Lenders"), Societe Generale, Southwest Agency and 
Internationale Nederlanden (U.S.) Capital Corporation, as co-agents 
(the "Co-Agents"), and Fleet Bank, N.A. (formerly known as NatWest Bank N.A.),
as agent (the "Agent") for the Lenders.  

	RECITALS:

WHEREAS, the Borrower, the Agent, the Co-Agents and the Lenders are parties to 
that certain Credit Agreement, dated as of June 9, 1995, as amended by that 
certain First Amendment of Credit Agreement, dated as of September 15, 1995, by
and among the Borrower, the Agent, the Co-Agents and the Lenders and that 
certain Second Amendment and Limited Consent to Credit Agreement, dated as of 
March 8, 1996, by and among the Borrower, the Agent, the Co-Agents and the 
Lenders (and as further amended, restated, supplemented or otherwise modified 
from time to time, collectively, the "Credit Agreement"); and

WHEREAS, the Borrower, the Agent, the Co-Agents and the Lenders desire to amend 
certain provisions of the Credit Agreement on the terms and conditions set forth
herein; and

WHEREAS, the Borrower requests that the Agent, the Co-Agents and the Lenders 
consent to a certain action under the Credit Agreement on the terms and 
conditions set forth herein;

NOW THEREFORE, in consideration of the premises and of the mutual covenants 
herein contained, the parties hereto agree as follows:

SECTION 1.  Defined Terms.  Unless otherwise defined herein, all capitalized 
terms used herein have the meanings assigned to such terms in the Credit 
Agreement.

SECTION 2.  Amendments to the Credit Agreement.  The Credit Agreement is, as of
the date hereof, hereby amended as follows:

(a)	The definition of "Projections" appearing in Section 10 of the Credit 
Agreement is hereby deleted in its entirety and the following is hereby inserted
in lieu thereof:

"Projections" shall have the meaning provided in Section 5.22(i) for the period 
from the Initial Borrowing Date to and including the fiscal year ended January 
31, 1997 and shall mean the projected financial statements for the Borrower and
its Subsidiaries dated April 14, 1997 for the period from the fiscal year 
commenced February 1, 1997 to and including the fiscal year ending January 31, 
2001."

(b)	Section 8.11 of the Credit Agreement is hereby deleted in its entirety and 
the following is hereby inserted in lieu thereof:

"8.11  Minimum Consolidated EBITDA.  The Borrower will not permit Consolidated 
EBITDA for any Test Period ending at the end of any fiscal quarter of the 
Borrower on or about the dates set forth below (with each such date being 
adjusted to correspond to the Borrower's actual fiscal quarter end) to be less 
than the amount set forth opposite such fiscal quarter:

Fiscal Quarter                                Amount   

Fiscal quarter ended July 31, 1995        $19,855,000 
Fiscal quarter ended October 31, 1995     $20,478,000 
Fiscal quarter ended January 31, 1996     $20,849,000 
Fiscal quarter ended April 30, 1996       $21,301,000 
Fiscal quarter ended July 31, 1996        $21,913,000 
Fiscal quarter ended October 31, 1996     $22,539,000 
Fiscal quarter ended January 31, 1997     $23,634,000 
Fiscal quarter ended April 30, 1997       $22,200,000 
Fiscal quarter ended July 31, 1997        $23,175,000 
Fiscal quarter ended October 31, 1997     $25,125,000 
Fiscal quarter ended January 31, 1998     $24,500,000 
Fiscal quarter ended April 30, 1998       $23,525,000 
Fiscal quarter ended July 31, 1998        $24,100,000 
Fiscal quarter ended October 31, 1998     $24,625,000 
Fiscal quarter ended January 31, 1999     $25,725,000 
Fiscal quarter ended April 30, 1999       $26,150,000 
Fiscal quarter ended July 31, 1999        $26,750,000 
Fiscal quarter ended October 31, 1999     $27,350,000 
Fiscal quarter ended January 31, 2000     $28,525,000 
Fiscal quarter ended April 30, 2000       $29,075,000 
Fiscal quarter ended July 31, 2000        $30,150,000 
Fiscal quarter ended October 31, 2000     $30,950,000 
Fiscal quarter ended January 31, 2001     $31,775,000 
Fiscal quarter ended April 30, 2001       $32,650,000 
Fiscal quarter ended July 31, 2001        $33,500,000 
Fiscal quarter ended October 31, 2001     $34,400,000 
Fiscal quarter ended January 31, 2002     $35,250,000 
Fiscal quarter ended April 30, 2002       $36,225,000"

 (c)	Section 8.12 of the Credit Agreement is hereby deleted in its entirety and 
the following is hereby inserted in lieu thereof:

"8.12 Leverage Ratio.  The Borrower will not permit the Leverage Ratio as of the
end of any fiscal quarter of the Borrower on or about the dates set forth below
(with each such date being adjusted to correspond to the Borrower's actual 
fiscal quarter end) to be more than the ratio set forth opposite such fiscal 
quarter:

Fiscal Quarter                                  Ratio
 
Fiscal quarter ended July 31, 1995            4.21 to 1.00 
Fiscal quarter ended October 31, 1995         4.46 to 1.00 
Fiscal quarter ended January 31, 1996         4.05 to 1.00 
Fiscal quarter ended April 30, 1996           4.18 to 1.00 
Fiscal quarter ended July 31, 1996            4.01 to 1.00 
Fiscal quarter ended October 31, 1996         4.28 to 1.00 
Fiscal quarter ended January 31, 1997         3.72 to 1.00 
Fiscal quarter ended April 30, 1997           4.03 to 1.00 
Fiscal quarter ended July 31, 1997            3.74 to 1.00 
Fiscal quarter ended October 31, 1997         3.82 to 1.00 
Fiscal quarter ended January 31, 1998         3.34 to 1.00 
Fiscal quarter ended April 30, 1998           3.67 to 1.00 
Fiscal quarter ended July 31, 1998            3.67 to 1.00 
Fiscal quarter ended October 31, 1998         3.96 to 1.00 
Fiscal quarter ended January 31, 1999         3.16 to 1.00 
Fiscal quarter ended April 30, 1999           3.28 to 1.00 
Fiscal quarter ended July 31, 1999            3.27 to 1.00 
Fiscal quarter ended October 31, 1999         3.52 to 1.00 
Fiscal quarter ended January 31, 2000         2.78 to 1.00 
Fiscal quarter ended April 30, 2000           2.87 to 1.00 
Fiscal quarter ended July 31, 2000            2.94 to 1.00 
Fiscal quarter ended October 31, 2000         3.16 to 1.00 
Fiscal quarter ended January 31, 2001         2.56 to 1.00 
Fiscal quarter ended April 30, 2001           2.62 to 1.00 
Fiscal quarter ended July 31, 2001            2.65 to 1.00 
Fiscal quarter ended October 31, 2001         2.85 to 1.00 
Fiscal quarter ended January 31, 2002         2.32 to 1.00 
Fiscal quarter ended April 30, 2002           2.37 to 1.00"

(d)	Section 8.13 of the Credit Agreement is hereby deleted in its entirety and 
the following is hereby inserted in lieu thereof:

"8.13 Interest Coverage Ratio.  The Borrower will not permit the Interest 
Coverage Ratio as of the end of any fiscal quarter of the Borrower on or about 
the dates set forth below (with each such date being adjusted to correspond to 
the Borrower's actual fiscal quarter end) to be less than the ratio set forth 
opposite such fiscal quarter:

Fiscal Quarter                                  Ratio

Fiscal quarter ended July 31, 1995           3.57 to 1.00 
Fiscal quarter ended October 31, 1995        2.95 to 1.00 
Fiscal quarter ended January 31, 1996        2.56 to 1.00 
Fiscal quarter ended April 30, 1996          2.22 to 1.00 
Fiscal quarter ended July 31, 1996           2.26 to 1.00 
Fiscal quarter ended October 31, 1996        2.29 to 1.00 
Fiscal quarter ended January 31, 1997        2.38 to 1.00 
Fiscal quarter ended April 30, 1997          2.60 to 1.00 
Fiscal quarter ended July 31, 1997           2.70 to 1.00 
Fiscal quarter ended October 31, 1997        2.80 to 1.00 
Fiscal quarter ended January 31, 1998        2.80 to 1.00 
Fiscal quarter ended April 30, 1998          2.80 to 1.00 
Fiscal quarter ended July 31, 1998           2.90 to 1.00 
Fiscal quarter ended October 31, 1998        3.00 to 1.00 
Fiscal quarter ended January 31, 1999        3.20 to 1.00 
Fiscal quarter ended April 30, 1999          3.30 to 1.00 
Fiscal quarter ended July 31, 1999           3.30 to 1.00 
Fiscal quarter ended October 31, 1999        3.40 to 1.00 
Fiscal quarter ended January 31, 2000        3.60 to 1.00 
Fiscal quarter ended April 30, 2000          3.70 to 1.00 
Fiscal quarter ended July 31, 2000           3.80 to 1.00 
Fiscal quarter ended October 31, 2000        3.90 to 1.00 
Fiscal quarter ended January 31, 2001        4.00 to 1.00 
Fiscal quarter ended April 30, 2001          4.20 to 1.00 
Fiscal quarter ended July 31, 2001           4.30 to 1.00 
Fiscal quarter ended October 31, 2001        4.40 to 1.00 
Fiscal quarter ended January 31, 2002        4.50 to 1.00 
Fiscal quarter ended April 30, 2002          4.60 to 1.00"

SECTION 3.  Limited Consent.  The Agent, the Co-Agents and the Lenders hereby 
consent to the Borrower incurring additional Consolidated Capital Expenditures 
pursuant to Section 8.05(c) of the Credit Agreement for the fiscal year 
commencing February 1, 1998 and ending January 31, 1999 in the aggregate amount
of $7,096,000, thereby waiving the effect of the EBITDA Shortfall for the fiscal
year ended January 31, 1997 on the calculation of additional Consolidated 
Capital Expenditures for the fiscal year commencing February 1, 1998 and ending 
January 31, 1999 pursuant to the proviso set forth at the end of Section 8.05(c)
of the Credit Agreement.  The consent by the Agent, the Co-Agents and the 
Lenders as described above shall not operate as a consent or waiver of (i) any 
other right, power or remedy of the Agent, the Co-Agents or the Lenders under 
the Loan Documents or (ii) any other Event of Default under the Credit 
Agreement.  Such consent is only applicable and shall only be effective in the 
specific instance and for the specific purpose for which made or given.

SECTION 4.  Representations and Warranties of the Borrower.  The Borrower 
represents and warrants to the Agent, the Co-Agents and the Lenders:

(a)	The representations and warranties contained in the Credit Agreement and 
the other Loan Documents are true and correct in all material respects at and as
of the date hereof as though made on and as of the date hereof (except to the 
extent specifically made with regard to a particular date).

(b)	No Event of Default or Default has occurred and is continuing.

(c)	The execution, delivery and performance of this Amendment has been 
duly authorized by all necessary action on the part of, and duly executed and 
delivered by, the Borrower, and this Amendment is a legal, valid and binding 
obligation of the Borrower enforceable against the Borrower in accordance with 
its terms, except as the enforcement thereof may be subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws 
affecting creditors' rights generally and general principles of equity 
(regardless of whether such enforcement is sought in a proceeding in equity or
at law).

(d)	The execution, delivery and performance of this Amendment do not conflict 
with or result in a breach by the Borrower of any term of any material contract,
loan agreement, indenture or other agreement or instrument to which the Borrower
is a party or is subject. 

SECTION 5.  Execution in Counterparts.  This Amendment may be executed in 
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the 
same instrument.  

SECTION 6.  Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, 
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE 
STATE OF NEW YORK, WITHOUT REGARD TO THE INTERNAL CONFLICTS OF 
LAWS PROVISIONS THEREOF.

SECTION 7.  Amendment; Reaffirmation of Loan Documents.  The parties hereto 
agree and acknowledge that nothing contained in this Amendment in any manner or
respect limits or terminates any of the provisions of the Credit Agreement or 
the other Loan Documents other than as expressly set forth herein and further 
agree and acknowledge that the Credit Agreement and each of the other Loan 
Documents remain and continue in full force and effect and are hereby ratified 
and reaffirmed in all respects.

SECTION 8.  Headings.  Section headings in this Amendment are included herein 
for convenience of reference only and shall not constitute a part of this 
Amendment for any other purposes.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly 
executed by their respective officers thereunto duly authorized as of the date 
above first written.

PEEBLES INC.


By:					

Name:					

Title:					

FLEET BANK, N.A. (formerly known as 
NatWest Bank N.A.), individually and as 
Agent

By:					

Name:					

Title:					



SOCIETE GENERALE, SOUTHWEST 
AGENCY, individually and as Co-Agent

By:					

Name:					

Title:					

INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION,
individually and as Co-Agent	

By:					

Name:					

Title:					


VAN KAMPEN AMERICAN CAPITAL 
PRIME RATE INCOME TRUST

By:					

Name:					

Title:					



THE SUMITOMO BANK, LTD., 
CHICAGO BRANCH

By:					

Name:					

Title:					


PILGRIM AMERICA PRIME RATE 
TRUST

By:					

Name:					

Title:					



By:					

Name:					

Title:					

<PAGE>
Exhibit 10.66

	FOURTH AMENDMENT TO CREDIT AGREEMENT

THIS FOURTH AMENDMENT TO CREDIT AGREEMENT, dated as of July 
30, 1997 (this "Amendment"), is by and among Peebles Inc., a 
Virginia corporation (the "Borrower"), the undersigned financial 
institutions in their capacities as lenders (the "Lenders"), 
Societe Generale, Southwest Agency, as co-agent (the "Co-Agent"), 
and Fleet Bank, N.A. (formerly known as NatWest Bank N.A.), as 
agent (the "Agent") for the Lenders.  

	RECITALS:

WHEREAS, the Borrower, the Agent, the Co-Agent and the 
Lenders are parties to that certain Credit Agreement, dated as of 
June 9, 1995, as amended by that certain First Amendment of 
Credit Agreement, dated as of September 15, 1995, by and among 
the Borrower, the Agent, the Co-Agent and the Lenders, that 
certain Second Amendment and Limited Consent to Credit Agreement, 
dated as of March 8, 1996, by and among the Borrower, the Agent, 
the Co-Agent and the Lenders and that certain Third Amendment and 
Limited Consent to Credit Agreement, dated as of May 16, 1997, by 
and among the Borrower, the Agent, the Co-Agent and the Lenders 
(and as further amended, restated, supplemented or otherwise 
modified and in effect from time to time, collectively, the 
"Credit Agreement"), pursuant to which the Lenders have provided 
to the Borrower credit facilities and other financial 
accommodations; and

WHEREAS, the Borrower has requested that the Agent, the Co-
Agent and the Lenders amend the Credit Agreement in certain 
respects as set forth herein, and the Agent, the Co-Agent and the 
Lenders are agreeable to the same, subject to the terms and 
conditions hereof;

NOW THEREFORE, in consideration of the premises and of the 
mutual covenants contained herein, and other good and valuable 
consideration, the receipt and adequacy of which are hereby 
acknowledged, the parties hereto hereby agree as follows:

SECTION 1.  Defined Terms.  Unless otherwise defined herein, 
all capitalized terms used herein have the meanings assigned to 
such terms in the Credit Agreement.

SECTION 2.  Amendments to the Credit Agreement.  The Credit 
Agreement is, as of the Effective Date (as defined below), hereby 
amended as follows:

(a)	The definition of "Borrowing Base" appearing in 
Section 10 of the Credit Agreement is hereby amended by deleting 
such definition in its entirety and inserting the following in 
lieu thereof:

""Borrowing Base" shall mean, as of any date of 
determination, the sum of (i) 85% of the book value of all 
Eligible Accounts of the Borrower and the Subsidiary 
Guarantors plus (ii) the lesser of (A) 60% of the value 
(determined at the lower of cost (calculated on a first-in, 
first-out basis) or market) of all Eligible Inventory of the 
Borrower and the Subsidiary Guarantors or (B) 40% of all 
Eligible Inventory of the Borrower and the Subsidiary 
Guarantors valued at the retail price of such Eligible 
Inventory as then being offered to the Borrower's customers 
(net of any applicable discounts) in the ordinary course of 
business.  The Borrowing Base shall be determined on a 
consolidated basis in accordance with GAAP and as set forth 
in the last Borrowing Base Certificate delivered by the 
Borrower pursuant to Section 5.22 or 7.01(g) as the case may 
be, provided that the Borrowing Base shall be zero at any 
time when a Default (to the extent arising from a failure to 
deliver a Borrowing Base Certificate under Section 7.01(g)) 
has occurred and is continuing."

(b)	The following definition shall be inserted between 
the definitions of "Contingent Obligations" and "Credit Card 
Agreement" appearing in Section 10 of the Credit Agreement:

""Conversion Date" shall mean July 30, 1997."

(c)	The following definition shall be inserted between 
the definitions of "Fixed Charge Coverage Ratio" and "GAAP" 
appearing in Section 10 of the Credit Agreement:

""Fleet Bank" shall mean Fleet Bank, N.A. (formerly 
known as NatWest Bank N.A.), in its individual capacity, and 
its successors."
 
(d)	Schedule 1.01 of the Credit Agreement is hereby 
amended by deleting such Schedule in its entirety and replacing 
it with Schedule 1.01 attached to this Amendment.

(e)	Section 1.01(b) of the Credit Agreement is hereby 
amended by deleting such subsection in its entirety and inserting 
the following in lieu thereof:

"(b)	Loans under the B Term Facility (each a "B Term 
Loan" and, collectively, the "B Term Loans") (i) shall be 
made pursuant to (A) a drawing by the Borrower on the 
Initial Borrowing Date and (B) a pro rata repayment to the 
Lenders of $10,000,000 in principal amount of outstanding 
Revolving Loans owing to the Lenders by a $10,000,000 
principal amount B Term Loan made by Fleet Bank to the 
Borrower on the Conversion Date, (ii) shall be made and 
initially maintained as Borrowings of Base Rate Loans 
(subject to the option to convert such B Term Loans pursuant 
to Section 1.06) and (iii) shall not exceed in aggregate 
principal amount for any Lender at the time of occurrence 
thereof the B Term Commitment, if any, of such Lender.  Once 
repaid, B Term Loans borrowed hereunder may not be 
reborrowed."

(f)	Section 1.01(d) of the Credit Agreement is hereby 
amended by adding the following sentence at the end thereof:

"The Borrower, the Agent, the Co-Agent and all of the 
Lenders agree and acknowledge that, as of the Conversion 
Date, $10,000,000 in principal amount of outstanding 
Revolving Loans owing to the Lenders will be repaid pro rata 
from the proceeds of a $10,000,000 principal amount B Term 
Loan made by Fleet Bank to the Borrower pursuant to Section 
1.01(b)."

(g)	Section 4.02(A)(b)(ii) of the Credit Agreement is 
hereby amended by deleting such subsection in its entirety and 
inserting the following in lieu thereof:

"(ii) The Borrower shall be required to repay the 
principal amount of B Term Loans on each date set forth 
below as set forth opposite such date:

Repayment Date				Amount

July 31, 1995					$75,000
October 31, 1995				$75,000
January 31, 1996				$75,000
April 30, 1996					$75,000
July 31, 1996					$75,000
October 31, 1996				$75,000
January 31, 1997				$75,000
April 30, 1997					$75,000
July 31, 1997					$102,000
October 31, 1997				$102,000
January 31, 1998				$102,000
April 30, 1998					$102,000
July 31, 1998					$102,000
October 31, 1998				$102,000
January 31, 1999				$102,000
April 30, 1999					$102,000
July 31, 1999					$1,229,000
October 31, 1999				$1,229,000
January 31, 2000				$1,229,000
April 30, 2000					$1,229,000
July 31, 2000					$4,095,000
October 31, 2000				$4,095,000
January 31, 2001				$4,095,000
April 30, 2001					$4,095,000
July 31, 2001					$4,504,000
October 31, 2001				$4,504,000
January 31, 2002				$4,504,000
Final Maturity Date				$3,776,000 or the 
then outstanding
principal amount of B 
Term Loans"

SECTION 3.	Amendment Fee.  In consideration of the execution 
of this Amendment by the Agent, the Co-Agent and the Lenders, the 
Borrower hereby agrees to pay a fee of $2,500 (the "Amendment 
Fee") to each Lender.

SECTION 4.  Representations and Warranties of the Borrower. 
 The Borrower represents and warrants to the Agent, the Co-Agent 
and the Lenders:

(a)	the representations and warranties contained in 
the Credit Agreement (as amended hereby) and the other Loan 
Documents are true and correct in all material respects at 
and as of the date hereof as though made on and as of the 
date hereof (except to the extent specifically made with 
regard to a particular date);

(b)	no Event of Default or Default has occurred and is 
continuing;

(c)	the execution, delivery and performance of this 
Amendment has been duly authorized by all necessary action 
on the part of, and duly executed and delivered by, the 
Borrower, and this Amendment is a legal, valid and binding 
obligation of the Borrower enforceable against the Borrower 
in accordance with its terms, except as the enforcement 
thereof may be subject to the effect of any applicable 
bankruptcy, insolvency, reorganization, moratorium or 
similar laws affecting creditors' rights generally and 
general principles of equity (regardless of whether such 
enforcement is sought in a proceeding in equity or at law); 
and

(d)	the execution, delivery and performance of this 
Amendment do not conflict with or result in a breach by the 
Borrower of any term of any material contract, loan 
agreement, indenture or other agreement or instrument to 
which the Borrower is a party or is subject. 

SECTION 5.  Conditions Precedent to Effectiveness of 
Amendment.  This Amendment shall become effective on the date 
(the "Effective Date") each of the following conditions precedent 
is satisfied:

(a)	the Borrower, the Agent, the Co-Agent and all of 
the Lenders shall have executed and delivered this 
Amendment;

(b)	the Borrower shall have executed and delivered to 
Fleet Bank a new B Term Note in the principal amount of 
outstanding B Term Loans owing to Fleet Bank on the 
Effective Date; promptly following the Effective Date and 
its receipt of a new B Term Note, Fleet Bank shall deliver 
its original B Term Note to the Agent for cancellation and, 
upon its receipt and cancellation thereof, the Agent shall 
return such B Term Note to the Borrower;

(c)	the Borrower shall have paid in full the Amendment 
Fee for each Lender to the Agent for distribution to each 
Lender; and

(d)	the pro rata repayment of $10,000,000 in principal 
amount of outstanding Revolving Loans owing to the Lenders with 
the proceeds of a $10,000,000 principal amount B Term Loan made 
by Fleet Bank to the Borrower shall have occurred.

SECTION 6.  Execution in Counterparts.  This Amendment may 
be executed in counterparts, each of which when so executed and 
delivered shall be deemed to be an original and all of which 
taken together shall constitute but one and the same instrument. 

SECTION 7.  Governing Law.  THIS AMENDMENT SHALL BE GOVERNED 
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF 
THE STATE OF NEW YORK, WITHOUT REGARD TO THE INTERNAL CONFLICTS 
OF LAWS PROVISIONS THEREOF.

SECTION 8.  Effect of Amendment; Reaffirmation of Loan 
Documents.  The parties hereto agree and acknowledge that (i) 
nothing contained in this Amendment in any manner or respect 
limits or terminates any of the provisions of the Credit 
Agreement or the other Loan Documents other than as expressly set 
forth herein and (ii) the Credit Agreement (as amended hereby) 
and each of the other Loan Documents remain and continue in full 
force and effect and are hereby ratified and reaffirmed in all 
respects.

SECTION 9.  Headings.  Section headings in this Amendment 
are included herein for convenience of reference only and shall 
not constitute a part of this Amendment for any other purposes.

	[signature page follows]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this 
Amendment to be duly executed by their respective officers 
thereunto duly authorized as of the date above first written.


PEEBLES INC.


By:					

Name:				
	

Title:				
	

FLEET BANK, N.A. (formerly 
known as NatWest Bank N.A.), 
individually and as Agent

By:					

Name:				
	

Title:				
	



SOCIETE GENERALE, SOUTHWEST 
AGENCY, individually and as 
Co-Agent

By:					

Name:				
	

Title:				
	

THE SUMITOMO BANK, LIMITED,
CHICAGO BRANCH

By:					

Name:				
	

Title:				
	


VAN KAMPEN AMERICAN CAPITAL 
PRIME RATE INCOME TRUST

By:					

Name:				
	

Title:				
	



By:					

Name:				
	

Title:				
	


PILGRIM AMERICA PRIME RATE 
TRUST

By:					

Name:				
	

Title:				
	



	SCHEDULE 1.01



COMMITMENTS

<TABLE>
<CAPTION>


                         A Term        B Term         Bridge         Revolving
Lender                 Commitment    Commitment      Commitment      Commitment
<S>                           <C>          <C>         <C>              <C>
Fleet Bank, N.A. 
(formerly known as 
NatWest Bank N.A.)   $6,764,000.00  $20,046,400.00  $6,623,286.00  $37,017,500.00

Societe Generale, 
Southwest Agency     $3,420,000.00           $0.00          $0.00  $20,293,000.00

Van Kampen American 
Capital Prime Rate 
Income Trust                 $0.00  $11,572,440.00          $0.00           $0.00 

The Sumitomo Bank, 
Ltd., Chicago Branch $2,366,000.00           $0.00          $0.00   $7,689,500.00

Pilgrim America Prime 
Rate Trust           $7,450,000.00   $8,381,160.00          $0.00           $0.00 

TOTAL:              $20,000,000.00  $40,000,000.00  $6,623,286.00  $65,000,000.00
</TABLE>

<PAGE>
Exhibit 10.67
FIFTH AMENDMENT
TO CREDIT AGREEMENT

THIS FIFTH AMENDMENT TO CREDIT AGREEMENT, dated as of April 9, 1998 
(this "Amendment"), is by and among Peebles Inc., a Virginia corporation (the 
"Borrower"), PHC Retail Holding Company, a Delaware corporation ("Holdings"), 
Carlisle Retailers, Inc., an Ohio corporation ("Carlisle"), the undersigned 
financial institutions in their capacities as lenders (the "Lenders"), Societe 
Generale, Southwest Agency, as co-agent (the "Co-Agent"), and Fleet Bank, N.A. 
(formerly known as NatWest Bank N.A.), as agent (the "Agent") for the Lenders.  

	RECITALS:

WHEREAS, the Borrower, the Agent, the Co-Agent and the Lenders are parties to 
that certain Credit Agreement dated as of June 9, 1995, as amended by the First
Amendment of Credit Agreement dated as of September 15, 1995, the Second 
Amendment and Limited Consent to Credit Agreement dated as of March 8, 1996, the
Third Amendment and Limited Consent to Credit Agreement dated as of May 16, 1997
and the Fourth Amendment to Credit Agreement dated as of July 30, 1997 (as so 
amended and as further amended, restated, supplemented or otherwise modified and
in effect from time to time, collectively, the "Credit Agreement"), pursuant to
which the Lenders have provided to the Borrower credit facilities and other 
financial accommodations; and

WHEREAS, the Borrower has requested that the Agent, the Co-Agent and the Lenders
amend the Credit Agreement in certain respects as set forth herein, and the 
Agent, the Co-Agent and the Lenders are agreeable to the same, subject to the 
terms and conditions hereof;

NOW THEREFORE, in consideration of the premises and of the mutual covenants 
contained herein, and other good and valuable consideration, the receipt and 
adequacy of which are hereby acknowledged, the parties hereto hereby agree as 
follows:

SECTION 1.  Defined Terms.  Unless otherwise defined herein, all capitalized 
terms used herein have the meanings assigned to such terms in the Credit 
Agreement.

SECTION 2.  Amendments to the Credit Agreement.  The Credit Agreement is, as of
the Effective Date (as defined below), hereby amended as follows:

(a)  Section 1.05(b) of the Credit Agreement is amended by deleting "the Expiry 
Date" appearing in clause (iv) of such Section and substituting therefor "the A
Term Loan Maturity Date".

(b)  Section 1.08(c) of the Credit Agreement is amended by inserting "for 
Revolving Loans" immediately after "Applicable Base Rate Margin" appearing in 
clause 
(ii) of such Section.  

(c)  Section 1.09(a) of the Credit Agreement is amended by deleting clause (v) 
of such Section in its entirety and substituting therefor the following:

"(v) no Interest Period shall extend beyond the Expiry Date (in the case of 
Revolving Loans), the A Term Loan Maturity Date (in the case of A Term 
Loans) or the Final Maturity Date (in the case of B Term Loans);"

(d) Section 3.01(a) of the Credit Agreement is amended by deleting "1/2 of 1% 
per annum on the daily average of such Lender's Unutilized Revolving Commitment"
appearing in such Section and substituting therefor "the Applicable Commitment 
Fee".

(e) Section 3.03(e) of the Credit Agreement is amended by deleting such Section 
in its entirety and substituting therefor the following:

"(e)  Intentionally Omitted."

(f)  Section 4.02(A)(b)(i) of the Credit Agreement is amended by deleting such 
Section in its entirely and substituting therefore the following:

"(i) On each date set forth below, the Borrower shall be required to 
repay the principal amount of A Term Loans set forth opposite such date 
(each such repayment, together with each repayment of B Term Loans 
required by clause (b)(ii) below, a "Scheduled Repayment"):


Repayment Date                      Amount

July 31, 1995                       $250,000
October 31, 1995                    $250,000
January 31, 1996                    $250,000
April 30, 1996                      $250,000
July 31, 1996                       $425,000
October 31, 1996                    $425,000
January 31, 1997                    $425,000
April 30, 1997                      $425,000
July 31, 1997                       $675,000
October 31, 1997                    $675,000
January 31, 1998                    $675,000
April 30, 1998                      $918,750
July 31, 1998                       $918,750
October 31, 1998                    $918,750
January 31, 1999                    $918,750
April 30, 1999                    $1,000,000
July 31, 1999                     $1,000,000
October 31, 1999                  $1,000,000
January 31, 2000                  $1,000,000
April 30, 2000                    $1,000,000
July 31, 2000                     $1,000,000
October 31, 2000                  $1,000,000
January 31, 2001                  $1,000,000
April 30, 2001                      $900,000
July 31, 2001                       $900,000
October 31, 2001                    $900,000

A Term Loan Maturity Date
$900,000 or the then outstanding
principal amount of A Term Loans"

(g)  Section 4.02(A)(b)(ii) of the Credit Agreement is amended by deleting such
     Section in its entirety and substituting therefor the following:

"(ii) The Borrower shall be required to repay the principal amount of B Term 
Loans on each date set forth below as set forth opposite such date:

Repayment Date				Amount

July 31, 1995					$75,000
October 31, 1995				$75,000
January 31, 1996				$75,000
April 30, 1996					$75,000
July 31, 1996					$75,000
October 31, 1996				$75,000
January 31, 1997				$75,000
April 30, 1997					$75,000
July 31, 1997					$102,000
October 31, 1997				$102,000
January 31, 1998				$102,000
April 30, 1998					$102,000
July 31, 1998					$102,000
October 31, 1998				$102,000
January 31, 1999				$102,000
April 30, 1999					$570,000
July 31, 1999					$570,000
October 31, 1999				$570,000
January 31, 2000				$570,000
April 30, 2000					$875,000
July 31, 2000					$875,000
October 31, 2000				$875,000
January 31, 2001				$875,000
April 30, 2001					1,718,750
July 31, 2001					$1,718,750
October 31, 2001				$1,718,750
January 31, 2002				$1,718,750
Final Maturity Date				$24,031,000 or the then outstanding
principal amount of B Term Loans"

(h)  Section 8.05 of the Credit Agreement is amended by deleting such Section in
 its entirety and substituting therefor the following:

"8.05  Capital Expenditures.  (a)  The Borrower will not, and will not permit 
any of its Subsidiaries to, incur Consolidated Capital Expenditures; provided, 
however, that the Borrower and the Subsidiary Guarantors may make Consolidated 
Capital Expenditures  during each fiscal year set forth below (taken as one 
accounting period, with each such period being adjusted to correspond to the 
Borrower's actual fiscal year) so long as the aggregate amount of such 
Consolidated Capital Expenditures does not exceed for any period set forth 
below, the amount set forth opposite such period:

Period                                                Amount
January 29, 1995 - February 3, 1996                 $9,318,000
February 4, 1996 - January 31, 1997                $10,804,000
February 1, 1997 - January 31, 1998                $11,792,000
February 1, 1998 - January 31, 1999                $11,503,000
February 1, 1999 - January 31, 2000                $12,260,000
February 1, 2000 - January 31, 2001                $13,306,000
February 1, 2001 - January 31, 2002                $13,278,000
February 1, 2002 - January 31, 2003                $17,314,750


provided, further, in the event that Consolidated EBITDA for any Test Period is
less than Projected EBITDA for such Test Period, the amount of such additional 
Consolidated Capital Expenditures permitted to be made pursuant to this Section
8.05(a) during the four consecutive fiscal quarters of the Borrower commencing
on the anniversary of the last day of such Test Period shall be reduced as 
follows:  (i) if the EBITDA Shortfall Percentage is equal to or greater than 
95%, then no reduction shall occur; (ii) if the EBITDA Shortfall Percentage is 
equal to or greater than 90% but less than 95%, then by an amount equal to 
$600,000; and (iii) if the EBITDA Shortfall Percentage is less than 
90%, then by an amount equal to (x) the EBITDA Shortfall for such Test Period 
multiplied by (y) 150%.

 (b)	In the event that the maximum amount which is permitted to be expended in 
respect of Consolidated Capital Expenditures during any fiscal year pursuant to 
Section 8.05(a) (without giving effect to this clause (b)) is not fully expended
during such fiscal year, the maximum amount which may be expended in respect of
Consolidated Capital Expenditures during the immediately succeeding fiscal year
pursuant to Section 8.05(a) shall be increased by such unutilized amount 
provided that such increase shall not exceed $1,000,000 in any fiscal year."

(i)  Section 9.11 of the Credit Agreement is amended by deleting such Section in
its entirety and substituting therefor the following:

"9.11 Intentionally Omitted;"

(j)  Section 10 of the Credit Agreement is amended by inserting the following 
new definitions in their appropriate alphabetical order:

""A Term Loan Maturity Date" shall mean January 31, 2002.

"Adjustment Date" shall mean (a) the second Business Day following receipt by 
the Agent of both (i) the financial statements required to be delivered pursuant
to Section 7.1(b) after the end of each of the first three fiscal quarters of 
each fiscal year of the Borrower and pursuant to Section 7.1(a) after the end of
each fiscal year of the Borrower, as the case may be, for the most recently 
completed fiscal period and (ii) the compliance certificate required pursuant to
Section 7.01(e) with respect to such financial statements or (b) if such 
compliance certificate and financial statements have not been delivered in a 
timely manner, the date upon which such compliance certificate and financial 
statements were due; provided, however, that in the event that the Adjustment 
Date is determined in accordance with the provisions of clause (b) of this 
definition, then the date which is two (2) Business Days following the date of 
receipt of the financial statements and compliance certificate referenced in 
clause (a) of this definition also shall be deemed to constitute an Adjustment 
Date; and provided further, that the first Adjustment Date shall not occur 
until the deliveries referenced in clause (a) of this definition are made for 
the fiscal quarter ended April 30, 1998.

"Applicable Commitment Fee" shall mean the rates per annum set forth below 
under the column heading opposite the Level of Total Leverage Ratio determined 
on the most recent Adjustment Date:


	Level                                        Applicable 
                                              Commitment 
                                                 Fee
Level I:  Total Leverage Ratio less  
than 2.00 to 1.00                                	.25%

Level II:  Total Leverage Ratio equal 
to or greater than 2.00 to 1.00 but 
less than 2.75 to 1.00                           	.375%

Level III:  Total Leverage Ratio 
equal to or greater than 2.75 to 1.00             .50%

; provided, however, that for purposes of this definition (a) the Applicable 
Commitment Fee commencing on the Fifth Amendment Effective Date shall be that 
set forth opposite Level III above until the first Adjustment Date for which the
Total Leverage Ratio falls within a different Level, (b) the Applicable 
Commitment Fee determined for any Adjustment Date shall remain in effect until 
a subsequent Adjustment Date for which the Total Leverage Ratio falls within a 
different Level, (c) if the financial statements and related compliance 
certificate for any fiscal period are not delivered by the date due pursuant 
to Sections 7.01(a), (b) and (e), the Applicable Commitment Fee shall be that 
set forth above opposite Level III until the subsequent Adjustment Date, and 
(d) the Applicable Commitment Fee shall be that set forth above opposite Level
III at all times when there shall exist a Default or Event of Default under 
Section 9.01 or any other Event of Default."

"Fifth Amendment Effective Date" shall mean April 9, 1998.

"Total Leverage Ratio" shall mean, for any Adjustment Date, the ratio of (i) 
the aggregate amount of all Indebtedness of the Borrower and its Subsidiaries 
on such date, determined on a consolidated basis as determined in accordance 
with GAAP, to (ii) Consolidated EBITDA of the Borrower and its Subsidiaries for
the Test Period ended on such date (taken as one accounting period)."

(k)  Section 10 of the Credit Agreement is further amended by deleting the 
definition of "Applicable Base Rate Margin" appearing in such Section in its 
entirety and substituting therefore the following:

""Applicable Base Rate Margin" shall mean the rates per annum set forth below 
under the relevant column heading opposite the Level of Total Leverage Ratio 
determined on the most recent Adjustment Date:


	Level                           Applicable          Applicable
                                 Base Rate           Base Rate
                                 Margin for          Margin for B
                                 Revolving           Term Loans
                                 Loans and A 
                                 Term Loans

Level I:  Total Leverage Ratio 
less than 2.00 to 1.00              	.50%               1.25%

Level II:  Total Leverage Ratio 
equal to or greater than 2.00 
to 1.00 but less than 2.75 to 
1.00                                	.75%               1.50%

Level III:  Total Leverage Ratio 
equal to or greater than 2.75 
to 1.00                            	1.00%               1.50%

; provided, however, that for purposes of this definition (a) the Applicable 
Base Rate  Margin commencing on the Fifth Amendment Effective Date shall be that
set forth opposite Level III above until the first Adjustment Date for which the
Total Leverage Ratio falls within a different Level, (b) the Applicable Base 
Rate Margin determined for any Adjustment Date shall remain in effect until a 
subsequent Adjustment Date for which the Total Leverage Ratio falls within a 
different Level, (c) if the financial statements and related compliance 
certificate for any fiscal period are not delivered by the date due pursuant to
Sections 7.01(a), (b) and (e), the Applicable Base Rate Margin shall be that set
forth above opposite Level III until the subsequent Adjustment Date, and (d) the
Applicable Base Rate Margin shall be that set forth above opposite Level III at
all times when there shall exist a Default or Event of Default under Section 
9.01 or any other Event of Default."

(l)  Section 10 of the Credit Agreement is further amended by deleting the 
definition of "Applicable Eurodollar Margin" appearing in such Section in its 
entirety and substituting therefor the following:

""Applicable Eurodollar Margin" shall mean the rates per annum set forth below 
under the relevant column heading opposite the Level of Total Leverage Ratio 
determined on the most recent Adjustment Date:


	Level                                    Applicable      Applicable 
                                          Eurodollar      Eurodollar
                                          Margin for      Margin for B
                                          Revolving       Term Loans
                                          Loans and A 
                                          Term Loans

Level I:  Total Leverage Ratio less 
than 2.00 to 1.00                           	1.75%          2.25%

Level II:  Total Leverage Ratio equal 
to or greater than 2.00 to 1.00 but 
less than 2.75 to 1.00                      	2.00%          2.50%

Level III:  Total Leverage Ratio 
equal to or greater than 2.75 to 1.00       	2.25%          2.75%

; provided, however, that for purposes of this definition (a) the Applicable 
Eurodollar Margin commencing on the Fifth Amendment Effective Date shall be 
that set forth opposite Level III above until the first Adjustment Date for 
which the Total Leverage Ratio falls within a different Level, (b) the 
Applicable Eurodollar Margin determined for any Adjustment Date shall remain in
effect until a subsequent Adjustment Date for which the Total Leverage Ratio 
falls within a different Level, (c) if the financial statements and related 
compliance certificate for any fiscal period are not delivered by the date due 
pursuant to Sections 7.01(a), (b) and (e), the Applicable Eurodollar Margin 
shall be that set forth above opposite Level III until the subsequent Adjustment
Date, and (d) the Applicable Eurodollar Margin shall be that set forth above 
opposite Level III at all times when there shall exist a Default or Event of 
Default under Section 9.01 or any other Event of Default."

(m)  Section 10 of the Credit Agreement is further amended by deleting the 
definition of "Expiry Date" appearing in such Section in its entirety and 
substituting therefor the following:

""Expiry Date" shall mean June 9, 2002."

(n)  Section 10 of the Credit Agreement is further amended by deleting the 
definition of "Margin Reduction Discount" appearing in such Section in its 
entirety.

(o)  Section 10 of the Credit Agreement is further amended by deleting the 
definition of "Projections" appearing in such Section in its entirety and 
substituting therefor the following:

""Projections" shall have the meaning provided in Section 5.22(i) for the period
from the Initial Borrowing Date to and including the fiscal year ended January 
31, 1997, and shall mean (i) the projected financial statements for the Borrower
and its Subsidiaries dated April 14, 1997 for the period from the fiscal year 
commenced February 1, 1997 to and including the fiscal year ending January 31, 
1998 and (ii) the projected financial statements for the Borrower and its 
Subsidiaries dated February 5, 1998 for the period from the fiscal year 
commenced February 1, 1998 to and including the fiscal year ending 
January 31, 2002."

(p)  Section 12.12 of the Credit Agreement is amended by inserting ", the A 
Term Loan Maturity Date" immediately following "the Final Maturity Date" 
appearing in clause (i) of such Section. 

(q)  Schedule 1.01 of the Credit Agreement is amended by deleting such Schedule
in its entirety and substituting therefor Schedule 1.01 attached to this 
Amendment.

(r)  Exhibit 7.01(e) of the Credit Agreement is amended by deleting such Exhibit
in its entirety and substituting therefore Exhibit 7.01(e) attached to this 
Amendment.

SECTION 3.	Termination of the Equity Contribution Agreement.  The Agent, the 
Co-Agent and the Lenders hereby agree that, effective as of the Effective Date,
the Equity Contribution Agreement shall be terminated and of no further force 
and effect, and Kelso shall have no further obligations thereunder.

SECTION 4.  Representations and Warranties of the Borrower.  The Borrower 
represents and warrants to the Agent, the Co-Agent and the Lenders:

(a)  the representations and warranties contained in the Credit Agreement (as 
amended hereby) and the other Loan Documents are true and correct in all 
material respects at and as of the date hereof as though made on and as of the 
date hereof (except to the extent specifically made with regard to a particular
date);

(b)  no Event of Default or Default has occurred and is continuing;

(c)  the execution, delivery and performance of this Amendment has been duly 
authorized by all necessary action on the part of, and duly executed and 
delivered by, the Borrower, and this Amendment is a legal, valid and binding 
obligation of the Borrower enforceable against the Borrower in accordance with 
its terms, except as the enforcement thereof may be subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws 
affecting creditors' rights generally and general principles of equity 
(regardless of whether such enforcement is sought in a proceeding in equity or 
at law); and

 (d)  the execution, delivery and performance of this Amendment do not conflict
with or result in a breach by the Borrower of any term of any material contract,
loan agreement, indenture or other agreement or instrument to which the Borrower
is a party or is subject. 

SECTION 5.  Conditions Precedent to Effectiveness of Amendment.  This Amendment
shall become effective on the date (the "Effective Date") each of the following
conditions precedent is satisfied:

(a)  the Borrower, the Agent, the Co-Agent and all of the Lenders shall have 
executed and delivered this Amendment;

(b)  the Borrower shall have executed and delivered to the Agent for each Lender
with a Revolving Commitment a new Revolving Note in the amount of such Lender's
Revolving Commitment;

(c)  the Agent shall have received from the Borrower an opinion of McGuire Woods
Battle & Bothe LLP, counsel to the Borrower, in form and substance satisfactory
to the Agent;

(d)  the Agent shall have received from the Borrower an incumbency certificate 
dated the Effective Date, signed by the President or any Vice-President of the 
Borrower and attested to by a Secretary or any Assistant Secretary of the 
Borrower, together with copies of the certificate of incorporation and by-laws 
of the Borrower and resolutions of the Board of Directors of the 
Borrower authorizing the execution, delivery and performance of this Amendment 
and the transactions contemplated hereby, in each case certified by the 
Secretary or any Assistant Secretary of the Borrower, and all in form and 
substance satisfactory to the Agent;

(e)  the Agent shall have received payment of all fees and expenses separately 
agreed to by the Borrower, including the payment of the fees and disbursements 
of Winston & Strawn in connection with the execution and delivery of this 
Amendment; and

(f)  the Agent shall have received from the Borrower such certificates and other
opinions with respect hereto as the Agent may reasonably require.

SECTION 6.  Consent of Guarantors.  Each of Holdings and Carlisle hereby 
acknowledges and consents to this Amendment and the terms and provisions hereof,
and hereby confirms that the Holdings Guaranty and the Holdings Pledge 
Agreement, in the case of Holdings, and the Security Agreement dated as of May 
20, 1996 between Carlisle and the Agent and the Guaranty dated as of May 20, 
1996 by Carlisle in favor of the Agent and the Lenders, in the case of Carlisle,
and each other Loan Document to which it is a party is and shall continue to be
in full force and effect and is hereby ratified and confirmed in all respects 
except that, upon the occurrence of the Effective Date, all references in such 
Loan Documents to the Credit Agreement, "thereunder", "thereof", or words of 
like import shall mean the Credit Agreement as amended by this Amendment.

SECTION 7.  Execution in Counterparts.  This Amendment may be executed in 
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the 
same instrument.  

SECTION 8.  Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND 
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE 
STATE OF NEW YORK, WITHOUT REGARD TO THE INTERNAL CONFLICTS OF 
LAWS PROVISIONS THEREOF.

SECTION 9.  Effect of Amendment; Reaffirmation of Loan Documents.  The parties 
hereto agree and acknowledge that (i) nothing contained in this Amendment in any
manner or respect limits or terminates any of the provisions of the Credit 
Agreement or the other Loan Documents other than as expressly set forth herein 
and (ii) the Credit Agreement (as amended hereby) and each of the other Loan 
Documents remain and continue in full force and effect and are hereby ratified 
and reaffirmed in all respects.

SECTION 10.  Headings.  Section headings in this Amendment are included herein 
for convenience of reference only and shall not constitute a part of this 
Amendment for any other purposes.

SECTION 11.  Successors and Assigns.  This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and 
assigns.

	[signature pages follow]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly 
executed by their respective officers thereunto duly authorized as of the date
above first written.



PEEBLES INC.

By:					
Name:					
Title:					

PHC RETAIL HOLDING COMPANY

By:					
Name:					
Title:					


CARLISLE RETAILERS, INC.

By:					
Name:					
Title:					



FLEET BANK, N.A. (formerly known as 
NatWest Bank N.A.), individually and as 
Agent

By:					
Name:					
Title:					


VAN KAMPEN AMERICAN CAPITAL 
PRIME RATE INCOME TRUST

By:					
Name:					
Title:					


SOCIETE GENERALE, SOUTHWEST 
AGENCY, individually and as Co-Agent

By:					
Name:					
Title:					



PILGRIM AMERICA PRIME RATE 
TRUST

By:					
Name:					
Title:						



AMSOUTH BANK


By:					
Name:					
Title:					




SUNTRUST BANK, ATLANTA


By:					
Name:					
Title:					

	SCHEDULE 1.01



COMMITMENTS




                                                         Revolving
Lender                   A Term Loans    B Term Loans    Commitment

Fleet Bank, N.A.          $2,111,005   $11,171,229.04   $27,712,500

Societe Generale, 
 Southwest Agency         $2,612,025                    $23,415,000

Van Kampen American 
 Capital Prime Rate 
 Income Trust                           $10,731,702.23

AmSouth Bank             $1,807,032.50                $ 8,872,500

Pilgrim America Prime 
 Rate Trust              $5,689,937.50 $  7,772,268.73

SunTrust Bank, Atlanta   $3,055,000    $  7,418,800   $15,000,000

TOTAL:                  $15,275,000    $ 37,094,000   $75,000,000



EXHIBIT 7.01 (e)

COMPLIANCE CERTIFICATE


The undersigned, being the chief financial officer of Peebles Inc., a Virginia 
corporation (the "Borrower"), pursuant to that certain Credit Agreement dated 
as of June 9, 1995, as amended (as so amended and as further amended, restated,
supplemented or otherwise modified from time to time, collectively, the "Credit
Agreement"; capitalized terms used but not otherwise defined herein have the 
meanings ascribed to such terms in the Credit Agreement) by and among the 
Borrower, Fleet Bank, N.A. (formerly known as NatWest Bank N.A.), as agent (the 
"Agent"), Societe Generale, Southwest Agency and Internationale Nederlanden 
(U.S.) Capital Corporation, as co-agent (the "Co-Agent"), and the Lenders party
thereto, hereby certifies on behalf of the Borrower that:

(i)		The Borrower has complied and is in compliance with all the terms, 
covenants and conditions of the Credit Agreement, except as set forth on 
Schedule I hereto;

(ii)		There exists no Default or Event of Default under the Credit Agreement, 
except as set forth below;

(iii)		The representations and warranties contained in the Credit Agreement and 
in the other Loan Documents are true and correct in all material respects on the
date hereof; and

(iv)		Schedule I attached hereto sets forth financial data and computations 
evidencing compliance with the covenants set forth in Sections 
8.02, 8.03, 8.04, 8.05, 8.06, 8.08, 8.10, 8.11, 8.12 and 8.13 of the 
Credit Agreement, all of which data and computations are true, 
complete and correct.

Described below are the exceptions, if any, to paragraph (ii) by listing, in 
detail, the nature of the condition or event, the period during which it has 
existed and the action which the Borrower has taken, is taking, or proposes to 
take with respect to each such condition or event:

________________________________________________________

________________________________________________________

________________________________________________________

________________________________________________________
The foregoing certifications, together with the computations set forth in 
Schedule I hereto and the financial statements delivered with this Compliance 
Certificate in support hereof, are made and delivered this ____ day of 
__________, ____.

PEEBLES INC.


By:                                                   
Name:                                                  
Title:                                                 	 

	Schedule I



Section 8.02(e) -- Consolidation, Merger, Sale or Purchase of Assets, etc.

Asset Sales for the applicable fiscal year

(a)	Permitted Asset Sales*                                   $500,000

(b) Actual Asset Sales made pursuant to                      $ 
    Section 8.02(e) for the applicable 
    fiscal year

*Note:  must also demonstrate that (i) each such sale is in an amount at least 
equal to the fair market value thereof and for proceeds consisting solely of 
not less than 80% cash, (ii) seller indebtedness is evidenced by promissory 
notes which notes shall be pledged and delivered to Agent pursuant to a pledge
agreement in form and substance satisfactory to Agent and (iii) the Net Cash 
Proceeds of any such sale are applied to repay the Loans to the extent required
by Section 4.02(A)(c)

Section 8.03 -- Liens

1.	Section 8.03(i)

(a)	Permitted aggregate Indebtedness secured 
    by purchase money Liens                               $500,000

(b)	Actual aggregate Indebtedness secured by purchase 
    money Liens under Section 8.03(i)                     $

Section 8.04 -- Indebtedness

1.	Section 8.04(c)

(a)	Actual aggregate Capital Lease Obligations 
    under all Capital Leases under Section 8.04(c)        $

2. Section 8.04(f)

(a)	Permitted aggregate additional Indebtedness           $500,000

(b)	Actual aggregate additional 
    Indebtedness under Section 8.04(f)                    $                


Section 8.05 -- Capital Expenditures

1.	Section 8.05(a) and (b)

(a)	Permitted aggregate Consolidated Capital 
    Expenditures for the applicable fiscal year plus 
    lesser of (i) unutilized amount from the 
    immediately preceding fiscal year or 
    (ii) $1,000,000                                     $                



 (b)	Actual aggregate Consolidated Capital 
     Expenditures for the applicable fiscal year 
     under Section 8.05(a)                              $                

 (c) Consolidated EBITDA for Test Period 
     from             , 19     to _______, 19           $
                
 (d)	Projected EBITDA for Test Period in (c) above      $                

 (e) EBITDA Shortfall for Test Period in (c) above      $                

 (f)	Amount of reduction in Section 8.05(a) - 
     Capital Expenditures calculated pursuant to 
     Section 8.05(a) (attach calculations)              $                


Section 8.06 -- Advances, Investments and Loans

1.	Investments in additional retail stores for 
   the applicable period                                $                

Section 8.08 -- Capital Stock and Dividends

1.	Permitted amount of cash dividends to 
   Holdings to redeem or repurchase 
   Common Stock during the applicable calendar year     $
                
2.	Actual amount of cash dividends to Holdings 
   to redeem or repurchase Common Stock during the 
   applicable calendar year under Section 8.08(a)(ii)   $                

Section 8.10 -- Fixed Charge Coverage Ratio

1.	Required Fixed Charge Coverage Ratio for the 
   applicable Test Period                               1.0 to 1.0

2.	Actual Fixed Charge Coverage Ratio for the 
   applicable Test Period:

(a)	Consolidated EBITDA plus aggregate payments 
    (including, without limitation, any property 
    taxes paid as additional rent or lease payments) by the 
    Borrower under agreements to rent or lease any real 
    or personal property (exclusive of Capitalized 
    Lease Obligations) minus Consolidated Capital 
    Expenditures                                        $                


(b)	Consolidated Fixed Charges                          $                

(c)	Ratio of (a) to (b)                              to 1.0

Section 8.11 -- Minimum Consolidated EBITDA

1.	Required minimum Consolidated EBITDA for 
   the applicable Test Period                          $                


2.	Actual Consolidated EBITDA for the 
   applicable Test Period                             $                

Section 8.12 -- Leverage Ratio

1.	Required Leverage Ratio for the 
   applicable Test Period                             to 1.0



2.	Actual Leverage Ratio for the 
   applicable Test Period:

(a)	Consolidated Senior Debt at the end 
    of the applicable Test Period                     $                

(b)	Consolidated EBITDA for the applicable 
    Test Period                                       $                

(c)	Ratio of (a) to (b)                               to 1.0

Section 8.13 -- Interest Coverage Ratio

1.	Required Interest Coverage Ratio for the 
   applicable Test Period                             $               

2.	Actual Interest Coverage Ratio for the 
   applicable Test Period:

(a)	Consolidated EBITDA for the applicable 
    Test Period                                       $                

(b) Consolidated Interest Expense for the 
    applicable Test Period                            $                

(c)	Ratio of (a) to (b)                             to 1.0

Total Leverage Ratio

  1.	Actual Total Leverage Ratio for 
     the applicable Test Period

 (a)	Consolidated total Indebtedness at the 
     end of the applicable Test Period                 $                

 (b)	Consolidated EBITDA for the applicable 
     Test Period                                       $                

 (c)	Ratio of (a) to (b)                            to 1.0

<PAGE>
Exhibit 21
Subsidiaries of Registrant

             Name of Subsidiary         Jurisdiction in which organized    

          Carlisle Retailers, Inc.                  Ohio

<PAGE>
Exhibit 27
Financial Data Schedule