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 February 1, 1997

            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, 1997, 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 77 specialty department stores offering
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 1992, 1993, 1994, 1995 and 1996 relate  to
the  fiscal  years  of the Company ending  January  30,  1993,
January  29,  1994,  January 28, 1995, February  3,  1996  and
February 1, 1997, respectively.  Fiscal years 1992, 1993, 1994
and  1996  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 53-week period ended February 3, 1996.

      The  entire equity interest of Peebles Inc. was acquired
by  PHC  Retail Holding Company ("PHC Retail"), effective  May
27,  1995.   PHC  Retail is an affiliate of  Kelso  &  Company
("Kelso"), an investment firm located in New York,  New  York.
PHC Retail has no significant assets other than the shares  of
Peebles common stock, and had no operations prior to the  1995
Acquisition.  The  acquisition was  accounted  for  using  the
purchase  method  of  accounting,  and  accordingly,   a   new
accounting base year was established.  The acquisition has not
resulted  in,  and is not expected to result in any  deviation
from  the  Company's pre-acquisition strategic plans involving
store  operations, except that greater flexibility is afforded
through  the New Credit Agreement, as defined, and  the  added
financial  support  of Kelso as an equity  owner  within  that
agreement.

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 30,000  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 due to its  high  gross
     margins,   emphasis  on  cost  control  and   centralized
     operations.

     DELIVER FASHION TO SMALL COMMUNITIES.  Peebles strives to
     provide  its customers with a shopping experience similar
     to  that  found  in  a traditional mall-based  department
     store,  although with fewer merchandise categories.   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.    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 creating 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 space 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.
<PAGE>
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 presently  intends  to
     open  nine  new stores in 1997 and eleven new  stores  in
     1998.  As  of  April 1, 1997 the Company has  signed  six
     leases for stores scheduled to open in 1997, representing
     approximately  158,000  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 expects  to  relocate
     three  stores in 1997 to the desired shopping destination
     in that market.

     ACQUISITIONS.  The  Company  is  continually   evaluating
     acquisitions  of  both individual stores  and  groups  of
     stores.   In  1996, the Company acquired  ten  stores  in
     Ohio, Pennsylvania, Tennessee and Alabama.

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  30,000
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 77 stores currently in  operation,
53 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,    shoes,   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  1996,  a  majority of the merchandise  sold  by  the
Company  was  nationally  branded  merchandise.   Key   brands
featured by the Company include:

  Ladies                  Liz Claiborne,  Levi,
                          Etienne Aigner, Alfred Dunner, Oak Hill,
                          Koret, Monet, Hanes,  Goodman Knitting,
                          Playtex, Forecaster, Norton McNaughten,
                          Shadowline,  Pendleton,   Michael
                          Stevens,  Halmode Apparel, Michael Blake

  Men's                   Levi, Haggar, Bugle Boy,
                          Arrow, Van Heusen, Nike, Swank

  Young Men's and Juniors Levi,Bugle Boy, Currents Jeri-Jo, Byer of
                          California, Calvin Klein, Union Bay,
                          Lee, Polo, Bongo, Zeppelin, Fritzi of
                          California

  Children's              Buster Brown, Levi, Bugle
                          Boy, HealthTex, Oshkosh B'Gosh, William
                          Carter

  Shoes                   Reebok, Nike, Brown Shoe,
                          Keds, Fila, Nunn Bush, Nine West

  Home                    Springs, Pacific Home,
                          Fieldcrest, World Bazaars, Mikasa,

  Cosmetics               Estee Lauder, Elizabeth
                          Arden, Fashion Fair, Calvin Klein, Liz
                          Claiborne, Giorgio Beverly Hills,
                          Jessica McClintock, Aramis

      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  smaller  selling
space, Peebles tailors the merchandise selection at individual
stores.  The Company utilizes its knowledge of its markets and
customers developed over 105 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 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 Prices, Everyday".   With  this
program,  Peebles  prices merchandise as low  as  possible  in
order to enhance 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  Fashion,
Great Pricing" 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 1996,  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  1994, 1995 and
1996  were  2.5% and 2.6% and 2.5% 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  25  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 approximately
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 1994, 1995 and
1996,   Frederick  Atkins,  Inc.  was  the  Company's  largest
supplier,    accounting   for   retail   purchases    totaling
approximately  17.7%,  17.3%  and  14.7%,  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 held  in  bins
for  each  individual store.  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 distribution center is located on 31 acres
in   South   Hill,   Virginia,  adjacent  to   the   Company's
headquarters  and close to major interstates.   In  1992,  the
Company  renovated and expanded the distribution  center  from
85,000   square  feet  to  117,000  square  feet  and  further
automated  its  distribution process, including  an  extensive
network  of  conveyors and recycling equipment. In  1996,  the
Company  added  an  additional  30,000  square  feet  to   the
distribution   center.    This  expansion   allows   for   the
distribution center to service approximately 110  stores.  The
distribution  center currently operates one eight  hour  shift
daily.

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 functions as possible  at  the
corporate  level  so  that store level  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  also
manages  a  store.  Regional managers visit  their  stores  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.  The regional managers meet quarterly to
share information.

     The Company conducts a management training program, which
coordinates    instruction   at   the   Company's    corporate
headquarters facility with on-the-job experience.  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 CHARD

       In  1994,  1995  and  1996,  40.4%,  38.8%  and  37.2%,
respectively,  of  net  sales were made  using  the  Company's
proprietary credit card.  As of February 1, 1997, the  Company
had  approximately  632,662 credit  card  accounts,  of  which
184,009 were billed accounts.

     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.  Information regarding purchases
by  the  Company's credit card customers is  recorded  at  the
stores'  point-of-sale terminals and transmitted  directly  to
the  Company's  data processing center.  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.  Decisions  with  respect  to  the  opening  of   new
accounts, extensions of "instant credit," adjustments to bills
and  responses  to  customer inquiries are  made  by  Company-
trained   associates   located   at   Peebles'   headquarters.
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                    
                 ----------------------------    -----------------------------    
      <S>        <C>      <C>      <C>          <C>                <C>       <C>
                Charge             % of      Period-End Total               % of Total
     Years      Sales    Amount    Sales    Customer Receivables   Amount   Receivables   
     -----     -------   ------    -----     ----------------      ------   ----------
                                              
     1994....  $67,651   $  640     1.0          $29,742          $   930        3.1                      
     1995....   68,216      766     1.1           29,494              960        3.3
     1996....   72,086    1,192     1.7           33,286            1,224        3.7
       

</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 management 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  management
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  February  1,  1997, the Company had 1,165  full-time
employees  and  1,520  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,
Private  Expressions,  Meherrin  River  Outfitters,  Harmony
Grove and Sonoma Bay.

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.

<PAGE>

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 30,000 square feet.  The following table indicates the
location  of the Company's stores in operation as of April  1,
1997:

ALABAMA                   
   Alexander City       
   Albertville           
   Talladega           
DELAAWARE                   
   Rehoboth Beach           
   Seaford                 
KENTUCKY                   
   Hopkinsville            
   Madisonville            
MARYLAND                   
   Bowie                   
   Chestertown             
   Easton                  
   Eldersburg              
   Elkton                  
   Lexington Park          
   Prince Frederick        
   Salisbury               
   Waldorf                 
NEW JERSEY                 
   Rio Grande              
NEW YORK                   
   Geneva                  
   Auburn                  
   Rochester               
NORTH CAROLINA             
   Aberdeen                
   Charlotte               
   Eden                    
   Edenton                 
   Jacksonville            
   Monroe                  
   Marion                  
   Roxboro                 
   Statesville             
OHIO
   Alliance
   Chardon
   Madison
   Medina
PENNSYLVANIA
   Erie
   Gettysburg
   Meadeville
SOUTH CAROLINA
   Conway
   Florence
   Georgetown
   Myrtle Beach
TENNESSEE
   Columbia
   Cookeville
   Dyersburg
   Hermitage
   Humbolt
   Lawrenceburg
   Murfreesboro
   Winchester
VIRGINIA
   Ashland
   Appomattox
   Blackstone
   Christiansburg
   Colonial Heights
   Covington
   Emporia
   Front Royal
   Hayes
   Hampton
   Hopewell
   Lawrenceville
   Leesburg
   Lexington
   Luray
   Manassas
   Norfolk
   Onley
   Richmond
   Rocky Mount
   Smithfield
   South Hill
   Stafford
   Warrenton
   Waynesboro
   Williamsburg
   Woodbridge
   Woodstock
   Wytheville
   

     The Company owns the real estate upon which its Lawrenceville,
Virginia store is located.

      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 1994, 1995  and  1996,  the
Company's  aggregate  rental  payments  on  operating  leases  were
approximately   $6.4  million,  $7.2  million  and  $8.2   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  February 1, 1997 are derived from the Company's audited  financial
statements.   Effective May 20, 1996, Peebles Inc. acquired Carlisle  Retailers,
Inc.  ("CRI  Merger").  With  the  consummation  of  the  CRI  Merger,  Carlisle
Retailers, Inc. became a wholly owned subsidiary of Peebles Inc.  As  such,  the
financial  data for 1996 reflects the incremental sales and expenses related  to
this  acquisition.   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  eight-month period 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>
<CAPTION>
         (Dollars in thousands except per share and selected other data)
                                                                                
                                             Fiscal Years Ended
                                 January 30,    January 29,        January 28,
                                    1993            1994              1995
                              ---------------  ----------------- -------------
                                    ---        -----
     <S>                            <C>             <C>               <C>
 Income Statement Data:                                                 
      Net sales                   $140,943         $151,772         $167,662
      Cost of sales                 84,033           91,134           98,066
                                  --------         --------         --------
      Gross  margin                 56,910           60,638           69,596
      Selling, general and                                                  
        administrative expenses     37,717           40,320           45,205
      Depreciation and                                                      
        amortization                 5,557            6,029            6,729
      Stock option settlement         ---              ---              ---
      Asset revaluation               ---              ---              ---
                                  --------          -------         --------
      Operating income (loss)       13,636           14,289           17,662
      Other income (expenses)         (145)              (1)             131
      Interest expense               4,981            4,248            4,569
                                  --------          -------         -------- 
      Income (loss) before                                                  
        Income taxes (benefit)                                                        
        and Extraordinary item       8,510           10,040           13,224
      Income taxes (benefit)         3,952            4,513            5,747
                                  --------          -------         --------
      Income (loss) before                                                  
        Extraordinary item           4,558            5,527            7,477
      Extraordinary item                 -                -                -
                                  --------          -------         --------                           
      Net income (loss)            $ 4,558          $ 5,527          $ 7,477
     
     Net income (loss) per share   $  1.56          $  1.88          $  2.54
     
      Average common stock and
        Common stock equivalents
        outstanding              2,918,352        2,932,905        2,940,281
                                                                            
     Selected Other Data:                                                   
      Net sales per store 
         (000's) (1)               $ 2,744          $ 2,962          $ 3,189
      Selling sq. ft. per 
         store (1)                  25,000           26,000           26,000
      Net sales per selling
         sq. ft. (2)                  $111             $116             $117
      Comparable store net                                                   
     sales increase (decrease) (1)    (2.0%)            4.3%             4.6%
      
      Number of stores                                                       
       (end of period)                  49               54               58
      Total selling sq. ft.                                                  
        (end of period)          1,276,000        1,385,000        1,510,000
      Capital expenditures(000's)   $6,137           $7,372           $8,454
                                                                             
     Balance Sheet Data:           January 30,      January 29,        January 28,
                                      1993             1994              1995
                                  -----------      -------------    ---------------
                                                                                                                              
     Working capital               $ 41,226          $ 44,348         $ 49,872
     Net property and equipment      20,823            24,903           28,951
     Total assets                   137,543           143,727          148,954
     Total debt (3)                  44,662            46,207           41,955
     Stockholders' equity (4)        68,537            74,530           82,234
</TABLE>
<TABLE>
<CAPTION>
                                                                        

                                   Four Month Period     Eight Month Period     Fiscal Year Ended
                                         Ended                 Ended
                                     May 27, 1995         February 3, 1996       February 1, 1997
                                                             (Post 1995                  
                                                            Acquisition)
                                 --------------------  ---------------------  ---------------------
<S>                                       <C>                   <C>                    <C>
Income Statement Data:                                                                              
 Net sales                              $49,163              $126,501               $194,206
 Cost of sales                           29,935                72,994                116,236
                                       --------              --------               --------               
 Gross margin                            19,228                53,507                 77,970
 Selling, general and                                                                               
   administrative  expenses              14,639                33,275                 54,667
 Depreciation and amortization            2,349                 4,339                  7,574
 Stock option settlement                  3,089                   ---                    ---
 Asset revaluation                          ---                   ---                 20,782
                                       --------              --------               --------
 Operating income (loss)                   (849)               15,893                 (5,053)
 Other income (expenses)                     77                   (52)                   687
 Interest expense                         1,414                 6,565                  8,806
                                       --------              --------               --------                   
 Income (loss) before                                                                               
   income taxes (benefit) and                                                                       
   Extraordinary item                    (2,186)                9,276                (13,172) 
 Income taxes (benefit)                    (874)                4,246                  1,743
                                       --------              --------               --------                
 Income (loss) before                                                                               
   extraordinary item                    (1,312)                5,030                (14,915)

 Extraordinary item                        (216)                  ---                    ---
                                       --------              --------               --------   
 Net income (loss)                      $(1,528)               $5,030               $(14,915)
Net income (loss) per share             $  (.52)               $5,030               $(14,915)
 Average common stock and                                                                           
   common stock equivalents                                                                       
   outstanding                        2,942,600                 1,000                  1,000
                                                                                                    
                                            Twelve Month Data                                      
Selected Other Data:                      ----------------------                                   
 Net sales per store (000's) (1)                 $ 3,032                              $ 2,921  
 Selling sq. ft. per store  (1)                   26,300                               26,000  
 Net sales per selling sq.                          $112                                 $108
 Comparable store net sales                                                                           
   increase (decrease) (1)                          (1.0%)(5)                           (1.3%)(6)
 Number of stores                                                                                  
  (end of period)                                     65                                   77
 Total selling sq. ft.                                                                             
   (end of period)                             1,649,000                            1,893,000 
 Capital expenditures (000's)                     $8,094                               $8,783
                                                                                                   
Balance Sheet Data:                January 28, 1995       February 3, 1996      February 1, 1997
                                  ------------------     ------------------    ------------------
                                                             (Post 1995                            
                                                            Acquisition)
 Working capital                      $  49,872               $ 48,395               $ 58,213
 Net property and equipment              28,951                 33,308                 33,460
 Total assets                           148,954                165,553                163,568
 Total debt (3)                          41,955                 76,778                 90,962
 Stockholders' equity (4)                82,234                 64,338                 49,423
                                                                                                   

Selected Financial Data Footnote Legend
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.
</TABLE>

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-21 of this annual report on Form 10-K.


                                 
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     Information with respect to this Item is contained in the 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>
<CAPTION>
                                                                Years
        Name               Age        Position             with the Company
       ------              ---        ---------            ----------------
<S>                        <C>            <C>                    <C>
Michael F. Moorman         54   Chairman of the Board,            33
                                President and Chief Executive
                                Officer
Ronnie W. Palmore          48   Senior Vice President,            24
                                Merchandising and Assistant
                                Secretary
Russell A. Lundy, Sr.      61   Senior Vice President, Stores     43
E. Randolph Lail           41   Senior Vice President,             9
                                Finance, Chief Financial
                                Officer, Secretary and
                                Treasurer
Marvin H. Thomas, Jr.      41   Senior Vice President,            18
                                Operations
William C. DeRusha         47   Director                           5
Malcolm S. McDonald        58   Director                           5
Wellford L. Sanders, Jr.   51   Director                           4

Thomas R. Wall, IV         38   Director                           2
Frank T. Nickell           49   Director                           2

      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 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 Company.  Mr. DeRusha is a director of Heilig-
Meyers Company and Signet Banking Corporation.

      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 and Chief Executive  Officer
of  Signet Banking Corporation.  From May 25, 1996 to December
17,  1996,  Mr.  McDonald was President  and  Chief  Executive
Officer of Signet Banking Corporation.  Prior to May 25,  1996
he was President and Chief Operating Officer of Signet Banking
Corporation.  Mr.  McDonald is a director  of  Signet  Banking
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 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 General Partner
of  Kelso  since  1989. Mr. Wall is also  a  director  of  AMF
Holdings  Inc.,  CCA Holdings Corp., CCT Holdings  Corp.,  IXL
Holdings,  Inc., Mitchell Supreme Fuel Company,  Mosler  Inc.,
TransDigm, Inc. and Tyler Refrigeration Corporation.

      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., The Bear
and  Stearns  Companies Inc., Earle M. Jorgensen  Company  and
Tyler Refrigeration Corporation.

      On  December  23,  1992, Kelso and its  chief  executive
officer,  without admitting or denying the findings  contained
therein, consented to an administrative order in respect of  a
Commission  inquiry  relating to the  1990  acquisition  of  a
portfolio company by a Kelso affiliate.  The order found  that
Kelso's tender offer filing in connection with the acquisition
did  not  comply  fully  with  the Commission's  tender  offer
reporting  requirements,  and required  Kelso  and  its  chief
executive  officer  to comply with these requirements  in  the
future.

      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.



<PAGE>
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 1994, 1995 and 1996.


</TABLE>
<TABLE>
<CAPTION>
                           Summary Compensation Table
                                        
                          Annual Compensation              Long-Term Compensation
                       -------------------------        ---------------------------
                                                          Awards              Payout
                                                        -----------          ---------
                                                                     
                                                        Other Annual      Number of         Long-term  
          Name and                  Salary    Bonus     Compensation    Options/Warrants    Incentive
     Principal Position      Year   ($)(1)    ($)(2)      ($)(4)(5)        Granted (3)     Plan Payouts    
     -------------------     ----   ------   -------     -----------     ----------------  ------------
     <S>                      <C>   <C>         <C>         <C>               <C>               <C>
     Michael F. Moorman                                                               
     Chairman of the Board   1996  $268,011   $   --      $       -              --              --       
     President and Chief     1995   261,050   17,800      1,133,400              --              --           
     Executive Officer       1994   248,246  189,235             --          75,000              --               
                                                                                      
     Ronnie W. Palmore                                                                
     Senior Vice President,  1996   150,838    8,050             --              --              --
     Merchandising and       1995   144,087   15,872        329,062              --              --
     Assistant Secretary     1994   136,767   68,211             --          20,250              --
                                                                                      
     Russell A. Lundy, Sr.   1996   121,013   11,758             --              --              --
     Senior Vice President,  1995   115,538    8,297        224,062              --              --
     Stores                  1994   109,996   49,534             --          14,250              -- 
                                                                                     
     E. Randolph Lail        
     Senior Vice President   1996   122,254    9,375          1,268              --              --
     Finance, CFO            1995   108,721    6,653        180,681              --              --
     Secretary and Treasurer 1994    88,544   43,961          1,998          14,250              --
                                                                                           
     Marvin H. Thomas, Jr.   1996    95,425    6,382          1,030              --              --
     Senior Vice President   1995    90,806   10,412        159,370              --              --
     Operations              1994    81,894   28,958          1,900          10,856              --
                                 _______________________________________

</TABLE>

(1)  Salary  amounts for 1994, 1995 and 1996 include tax-deferred  contributions
     of  compensation  to the Company's 401(K) Profit Sharing Plan  (the  "401-K
     Plan"),  adopted in October 1993.  Salary compensation contributed  to  the
     401-K  Plan during 1994, 1995 and 1996 for each of the Named Executives  is
     Mr.  Moorman  $2,185  , $2,333 and $5,520; Mr. Palmore $2,129,  $1,366  and
     $3,098 ; Mr. Lundy $1,958, $458 and $0 ; Mr. Lail $1,621, $2,168 and $2,420
     , and Mr. Thomas $1,425, $1,798 and $1,879.
(2)  Bonus  amounts  for each of the Named Executives include the accrued  bonus
     paid  under  the Company's annual incentive plans in 1994, 1995  and  1996.
     The 1994, 1995 and 1996 bonus amounts include tax-deferred contributions of
     compensation  to  the 401-K Plan for each of the Named  Executives  as  Mr.
     Moorman,  $6,809, $3,897 and $356 , Mr. Palmore, $2,639, $1,364  and  $317,
     Mr.  Lundy, $1,806 $1,075 and $0 , Mr. Lail $1,033, $879 and $133, and  Mr.
     Thomas $971, $519 and $208.
(3)  In  1994,  the  stock  options were granted to certain  members  of  senior
     management under the 1993 Plan.
(4)  The  amounts shown in 1994 reflect the current value of the benefit to  Mr.
     Lail and Mr. Thomas, respectively of the portion of the premium paid by the
     Company  with  respect  to  a  split  dollar  insurance  arrangements  (see
     "Employment Agreements").  In 1995 and 1996, amounts of $1,618  and  $1,268
     are  included  for  Mr.  Lail and $1,520 and $1,030 are  included  and  Mr.
     Thomas,  respectively.   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 1994  and  1995
     ($11,210  for  Mr. Lail and $9,650 for Mr. Thomas per year)  and   in  1996
     ($18,729  for  Mr.  Lail and $15,221 for Mr. Thomas)  for  the  appropriate
     period.
(5)  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.
 
 OPTION  GRANT TABLE. There were no options granted by the Company  to
 the Named Executives during 1996.

                                 

OPTION   EXERCISE  TABLE.   The  following  table  sets  forth  information
concerning the exercise of stock options during 1996 by each of  the  Named
Executives and the year end value of unexercised options.
 <TABLE>
 <CAPTION>
                            Options Exercised in 1996
                                                           Individual Grants
                                                      --------------------------
                                                        Number of Unexercised                  
                                    Shares       Value    Options at Year end   Value of Unexcercised In-the-     
                                  acquired on   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 1996.
(2)  There were no unexercised options at year end.

      As  of the fiscal year ended February 1, 1997 there were no projected
long-term incentive payouts.

PENSION PLAN

      Peebles  maintains a qualified defined  benefit  pension
plan  that  covers all employees of Peebles who  (i)  complete
1,000  hours of service during a one-year period with  Peebles
and   (ii)  attain  age  21  (a  "Participant").  The  Company
contributes to the plan equal to the contribution,  determined
on  an  actuarial basis, to satisfy minimum funding  standards
under ERISA.

     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  following  table shows estimated annual  retirement
benefits  payable to Participants under the pension plan  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      $11,993   $15,990    $19,988    $23,985   $ 23,985
      100,000       16,868    22,490     28,113     33,735     33,735
      125,000       21,743    28,990     36,238     43,485     43,485
      150,000       26,618    35,490     44,363     53,235     53,235
      175,000       31,493    41,990     52,488     62,985     62,985
      200,000       36,368    48,490     60,613     72,735     72,735
      225,000       41,243    54,990     68,738     82,485     82,485
      250,000       46,118    61,490     76,863     92,235     92,235
      300,000       55,868    74,490     93,113    111,735    111,735
      350,000       65,618    87,490    109,363    131,235    131,235
      400,000       75,368   100,490    125,613    150,735    150,735
      450,000       85,118   113,490    141,863    170,235    170,235

     As of February 1, 1997, the credited years of service for
Mr.  Moorman, Mr. Palmore, Mr. Lundy, Sr., Mr. Thomas, Jr. and
Mr. Lail were 33, 24, 43, 18 and 9, respectively.

      Peebles reserves the right at any time by action of  its
Board  of  Directors  to  terminate  the  plan,  although   it
currently  has  no  intention  to  do  so.   If  the  plan  is
terminated and appropriately funded at such time, Peebles will
not  be required to make any further contributions to the plan
and  each participant shall become 100% vested in his  benefit
under  the plan.  Each Participant's benefit will be  paid  to
him  after termination of the plan according to the  terms  of
the plan.

      In  addition,  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  1996,  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, is a partner in the  law  firm  of
McGuire, Woods, Battle & Boothe, L.L.P., which rendered  legal
services to the Company during 1996.

      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 1996.

EMPLOYMENT AGREEMENTS

     During  1995, Peebles entered into employment  agreements
(the  "Employment Agreements") with twenty three  officers  of
Peebles  including Mr. Lundy and Mr. Thomas.   The  Employment
Agreements,   which  expire during 1997 provide  that  if  the
officer  is  terminated for any reason, other  than  for  good
cause,  he will be entitled to receive his salary at the  rate
in  effect immediately before such termination for the balance
of  the term of the Employment Agreement.  For purposes of the
Employment  Agreements,  good cause  is  defined  as  (a)  the
commission  of  a  serious  crime,  or  (b)  the  officer,  in
carrying  out  his duties under the Employment Agreements,  is
guilty  of  (i)  willful gross neglect, or (ii) willful  gross
misconduct  resulting in either case in material harm  to  the
Company or any of its subsidiaries.

     In addition, 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, 1997, 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>
<CAPTION>

                                            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    92.39          0       0
Kelso Equity Partners V,L.P. (2),(3)            52,973     2.71          0       0
Michael F. Moorman (6)                          40,833     2.07          0       0
Ronnie W. Palmore (6)                           11,301        *          0       0
Russell A. Lundy, Sr. (6)                        7,792        *          0       0
E. Randolph Lail (6)                             4,800        *          0       0
Marvin H. Thomas, Jr. (6)                        4,100        *          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    95.11          0       0
Frank T. Nickell   (2),(3)                   1,873,514(4) 95.97          0       0
George E. Matelich (2),(3)                   1,856,666    95.11          0       0
Thomas R. Wall, IV (2),(3)                   1,873,194    95.95          0       0
Michael B. Goldberg (2),(3)                  1,856,666    95.11          0       0
All Directors and Named Executives                                             
  as a group (10 persons) (6)                1,942,340    98.70      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 Goldburg 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 unexcercised vested stock options for the purchase of
     PHC Common Stock in the amount of 5,833, 1,833, 1,292, 1,500, and
     959 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 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-19 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
     4.2*      Form of Warrant Agreement between PBL
               Acquisition Corp. and the Warrant Agent
     4.3*      Form of Warrant Certificate (included in the
               Warrant Agreement filed as Exhibit 4.2 hereto).
     10.1*+    Credit Agreement dated June 9, 1995, by
               and among 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.
     10.61*+   Equity Contribution Agreement made June 9,
               1995 by and between Kelso & 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.
     10.8***   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.
     10.16***  Form of Employment Agreement, dated March 30,
               1995 entered into by Peebles Inc.and fourteen executives
               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-19 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.

                                 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:     May 1, 1997
          --------------------------
          Michael F. Moorman, President
          and Chief Executive Officer
          (Principal Executive Officer)


     By   /s/  E. Randolph Lail              Date:     May 1, 1997
          -------------------------
          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, Jr.         Date:     May 1, 1997
         -------------------------------
         Wellford L. Sanders, Jr., Director

     By  /s/ William C. DeRusha               Date:     May 1, 1997
         -------------------------------
         William C. DeRusha, Director

     By  /s/ Malcolm S. McDonald              Date:     May 1, 1997
         -------------------------------
         Malcolm S. McDonald, Director

     By  /s/ Frank T. Nickell                 Date:     May 1, 1997
         -------------------------------
         Frank T. Nickell, Director

     By  /s/ Thomas R. Wall                   Date:     May 1, 1997
         -------------------------------
         Thomas R. Wall, IV, Director


<PAGE>
             Audited Consolidated Financial Statements
                    PEEBLES INC. AND SUBSIDIARY
                         February  1, 1997



Report of Independent Auditors                           F-1
                                                         
Consolidated Balance Sheet                               F-2
                                                         
Statement of Consolidated Operations                     F-3
                                                         
Statement of Consolidated Changes in Stockholders'       F-4
Equity
                                                         
Statement of Consolidated Cash Flows                     F-5
                                                         
Notes to Consolidated Financial Statements               F-6
                                                         
Management's Discussion and Analysis of Financial        F-15
Condition and Results of Operations






Report of Ernst & Young LLP, Independent Auditors


Board of Directors
Peebles Inc.


We  have  audited the accompanying consolidated balance sheets  of
Peebles Inc. and subsidiary as of February 1, 1997 and February 3, 
1996, and  the related   consolidated  statements  of  operations,
changes   in stockholders'  equity, and cash flows for the  fiscal
year  ended February  1,  1997, for the eight-month period ended  
February  3, 1996  and  the four-month period ended May 27, 1995, 
and  for  the fiscal  year  ended January 28, 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  financial
position  of Peebles  Inc. and subsidiary at February 1, 1997 and
February  3, 1996,  and the consolidated results of their operations
and  their cash  flows for the fiscal year ended February 1, 1997, 
the eight-month  period  ended  February 3, 1996 and the  four-month
period ended  May  27,  1995, and for the fiscal year ended  January  28,
1995, in conformity with generally accepted accounting principles.



               /s/  Ernst & Young


Richmond, Virginia
March 13, 1997
                                     <PAGE>
                           CONSOLIDATED BALANCE SHEET

PEEBLES INC. AND SUBSIDIARY
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>

                                           February 1, 1997    February 3, 1996
                                           ----------------    ---------------- 
<S>                                              <C>                    <C>
     ASSETS                                                    
     CURRENT ASSETS                                                  
      Cash                                   $      228             $    193
      Accounts receivable, net                   32,062               28,534
      Merchandise inventories                    54,431               42,684
      Prepaid expenses                            1,036                  386
      Other                                          69                   62
                                             ----------           ----------
     TOTAL CURRENT ASSETS                        87,826               71,859
                                                                     
     PROPERTY AND EQUIPMENT                                          
      Fixtures and equipment                     46,858               43,089
      Land and building                           7,818                7,785
      Leasehold improvements                      1,882                1,595
                                             ----------           ----------   
                                                 56,558               52,469
      Accumulated depreciation and                                   
        amortization                             23,098               19,161
                                             ----------           ----------
                                                 33,460               33,308
                                                                     
     OTHER ASSETS                                                    
      Excess of cost over net assets     
         acquired, net                           36,069               51,129  
      Deferred financing costs, net               2,808                3,659
      Beneficial leaseholds, net                  1,054                2,960
      Sundry                                      2,351                2,638
                                             ----------           ----------   
                                                 42,282               60,386
                                             ----------           ----------
                                                      -                   --
                                             $  163,568           $  165,553
     LIABILITIES AND STOCKHOLDERS' EQUITY                            
     CURRENT LIABILITIES                                             
      Accounts payable                       $   10,737           $    9,957
      Accrued compensation and other expenses     5,000                3,955
      Income taxes payable                          675                  855
      Deferred income taxes                       2,934                2,788
      Current maturities of long-term debt        9,665                5,377
      Other                                         602                  532
                                              ---------           ----------
     TOTAL CURRENT LIABILITIES                   29,613               23,464
     LONG-TERM DEBT                              79,950               69,774
     LONG-TERM CAPITAL LEASE OBLIGATIONS          1,347                1,627
     DEFERRED INCOME TAXES                        3,235                6,350
     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;             (9,885)                5,030   
                                              ---------            ---------
                                                 49,423               64,338
                                                                     
                                             $  163,568           $  165,553
     See notes to consolidated financial                             
     statements.
     </TABLE>
     
     <PAGE>
                      STATEMENT OF CONSOLIDATED OPERATIONS

PEEBLES INC. AND SUBSIDIARY
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
                               
                                     Fiscal Year      Eight-Month      Four-Month       Fiscal Year      
                                        Ended        Period Ended     Period Ended        Ended              
                                  February 1, 1997  February 3, 1996  May 27, 1995   January 28, 1995
                                  ----------------  ----------------  ------------   ----------------
                                                                      (Prior to 1995 Acquisition)
<S>                                          <C>            <C>          <C>             <C>
NET SALES                           $    194,206     $   126,501        $  49,163       $  167,662          
COSTS AND EXPENSES
   Cost of sales                         116,236          72,994           29,935           98,066         
   Selling, general and 
    administrative expenses               54,667          33,275           14,639           45,205  
   Stock option settlement                    --              --            3,089               -- 
   Depreciation and amortization           7,574           4,339            2,349            6,729       
   Asset revaluation                      20,782              --               --               --            
                                      ----------      ----------       ----------       ----------
OPERATING INCOME (LOSS)                   (5,053)         15,893             (849)          17,662   

OTHER INCOME (EXPENSE)                       687             (52)              77              131 

INTEREST EXPENSE                           8,806           6,565            1,414            4,569
                                      ----------      ----------       ----------       ---------- 
INCOME (LOSS) BEFORE INCOME TAXES   
(BENEFIT) AND EXTRAORDINARY ITEM         (13,172)          9,276           (2,186)          13,224

INCOME TAXES (BENEFIT)                                                                       
Current                                    2,137           3,276             (474)           5,297  
Deferred                                    (394)            970             (400)             450        
                                      ----------      ----------       ----------       ----------
                                           1,743           4,246             (874)           5,747
                                      ----------      ----------       ----------       ---------- 
INCOME (LOSS) BEFORE
   EXTRAORDINARY ITEM                    (14,915)          5,030            (1,312)          7,477   
                                                                                             
EXTRAORDINARY ITEM--DEBT                                          
   REFINANCING                                 -               -              (216)             --
                                      ----------      ----------        ----------      ----------
NET INCOME (LOSS)                     $  (14,915)     $    5,030        $   (1,528)      $   7,477
                                     ============    ===========        ===========     ==========
NET INCOME (LOSS) PER SHARE           $  (14,915)     $    5,030        $     (.52)      $    2.54
                                     ============    ===========        ===========     ==========

Average common stock and common                                                              
stock equivalents outstanding              1,000           1,000          2,942,690      2,940,281
                                     ============    ===========        ===========    ===========
                                                                                             

</TABLE>
See notes to consolidated financial statements.
        
<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 29, 1994                  2,933,562   $ 293   $ 64,174    $ 10,063
Common stock issued in redemption of                                        
 common Stock Warrants                        6,391       1        151          10
Common stock issued upon exercise of                                        
 common stock options                         2,737       -         65          -
  Net income                                      -       -          -       7,477
                                          ---------   -----    -------    --------
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         
  Aquisition                                  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)
                                          =========  ======    =======    =======

See notes to consolidated financial statements.
</TABLE>

<PAGE>
                      STATEMENT OF CONSOLIDATED CASH FLOWS

PEEBLES INC. AND SUBSIDIARY
(dollars in thousands)
<TABLE>
<CAPTION>

                                                Fiscal Year      Eight-Month      Four-Month     Fiscal Year
                                                   Ended         Period Ended    Period Ended       Ended
                                             February 1, 1997  February 3, 1996  May 27, 1995  January 28, 1995
                                             ----------------  ----------------  ------------- ----------------
                                                                                  (Prior to 1995 Aquisition)
<S>                                                  <C>               <C>           <C>              <C>
OPERATING ACTIVITIES                                                        
  Net income (loss)                             $  (14,915)       $   5,030        $  (1,528)    $   7,477
  Adjustments to reconcile net income to net                                                               
    cash provided by operating activities:                                                                        
     Depreciation                                    4,616            2,491            1,453         3,677
     Amortization                                    3,842            2,502              896         3,508
     Deferred income taxes                            (394)             970             (400)          450
     Provision for doubtful accounts                 1,192              531              265           620
     Extraordinary loss, net                             -                -              216             -
     LIFO reserve adjustment                            39             (970)           1,035          (182)
     Asset revaluation                              20,782                -                -             -
     Changes in operating assets and liabilities                                                              
       net of effects from acquisition adjustments                                                                     
         Accounts receivable                        (1,527)          (2,199)           1,681         (1,046)
         Merchandise inventories                    (8,088)            (113)          (2,217)        (2,869)
         Accounts payable                              780             (658)           1,893          1,416
         Other assets and liabilities                 (205)             692             (561)            19
                                                -----------       ---------      -----------     ----------
  NET CASH PROVIDED BY OPERATING ACTIVITIES          6,122            8,276            2,733         13,070
                                                                                                         
INVESTING ACTIVITIES                                                                                     
  Acquisition of Peebles Inc.                            -                -          (90,923)             -
  Acquisition of Carlisle Retailers Inc.           (11,549)                                              
  Purchase of property and equipment                (8,783)          (5,683)          (2,411)        (8,454)
  Other                                               (219)               -              281           (257)
                                              ------------        ---------      -----------     ----------
  NET CASH USED IN INVESTING ACTIVITIES            (20,551)          (5,683)         (93,053)        (8,711)
FINANCING ACTIVITIES                                                                                     
  Proceeds from revolving line of credit and  
    long-term debt                                 272,013          227,686           58,145        173,754
  Reduction in revolving line of credit and       (267,762)        (230,164)         (56,129)      (177,804)
    long-term debt
  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                            14,464           (2,478)          89,990         (4,050)
                                                                                                         
  INCREASE (DECREASE) IN CASH AND CASH                                                                     
    EQUIVALENTS                                         35              115             (330)           309
                                                                                                         
Cash and cash equivalents beginning of period          193               78              408             99
                                              ------------      -----------      -----------     ----------
CASH AND CASH EQUIVALENTS END OF PERIOD       $        228     $       193       $        78     $      408
                                              =============    ============      ===========     ==========
                                                                                                         
                                                                                                         
</TABLE>
See notes to consolidated financial statements.

<PAGE>
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PEEBLES INC. AND SUBSIDIARY
February 1, 1997
(dollars in thousands, except per share amounts)

NOTE A.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Organization and Basis of Financial Statement:  The 1995
Acquisition:  Peebles Inc. was acquired by PHC Retail Holding
Company ("PHC Retail") for approximately $136 million, which
included acquisition related expenses of approximately $5.6
million and the refinancing of existing debt (the "1995
Acquisition").  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.  The 1995
Acquisition was accounted for using the purchase method of
accounting with an effective date of May 27, 1995, and
accordingly, a new accounting basis was begun.
    As a result of the debt refinancing related to the 1995
Acquisition, Peebles Inc. recorded an extraordinary loss of $216,
net of $144 income tax benefit, in the four-month period ended May
27, 1995 as financing costs capitalized in periods prior to the
1995 Acquisition were written-off.
    As a result of the 1995 Acquisition and due to certain change in
control provisions of the 1993 Stock Option Plan, all outstanding
options at May 27, 1995 vested. The 1995 Acquisition mandated that
all options would be settled for cash only.  Accordingly, 432,699
options were settled for $3,089, which has been included as an
operating expense in the four-month period ended May 27, 1995.
    Acquisition of Carlisle Retailers, Inc.:  On May 20, 1996, a
merger (the "CRI Merger") was consummated whereby Carlisle
Retailers, Inc. ("Carlisle"), an Ohio corporation, became a wholly
owned subsidiary of Peebles Inc.  The $11,549 cash purchase price
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 acquisition was funded
primarily by proceeds from the Senior Revolving Facility.  The CRI
Merger has been accounted for using the purchase method of
accounting.  The purchase price was allocated as follows:

        Purchase price                                      $11,549
        Tangible net assets acquired:
          Accounts receivable, net                    $3,330
          Merchandise inventories, net                 3,698
          Fixed assets, net                              244
          Other assets                                 2,367
          Operating liabilities                         (849)
                                                   ---------
             Total tangible net assets                       8,790
                                                           -------
          Excess of cost over net assets acquired           $2,759
          
     The excess of cost over net assets acquired is being amortized
over a twenty-five year period beginning May 20, 1996.
     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.
     Fiscal  Year:  The  Company's fiscal year  ends  on  the  Saturday
nearest  January 31.  Fiscal years 1996, 1995, and 1994, ended  on
February  1,  1997,  February  3,  1996,  and  January  28,  1995,
respectively.  Results  of  operations  for  1996  and  1994  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.
Nature  of  Operations: Peebles currently operates  77  department
stores  offering  predominately soft-apparel, fashion  merchandise
for  the entire family, and other selected home accessories.   The
Company  operates primarily in small and medium sized communities,
which  typically do not have a mall-based department store, in  12
predominately Southeastern and Mid-Atlantic States.
  
PEEBLES INC. AND SUBSIDIARY

  NOTE A_SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- Continued

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.

Quasi-Reorganization:   As a result of a recapitalization  of  the
Company  completed  January 31, 1992, a  quasi-reorganization  was
implemented  as  of February 1, 1992.  An accumulated  deficit  of
$10,477 was transferred to additional capital on that date.

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
February 1, 1997 or February 3, 1996.

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 the 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.

Advertising Costs:  Advertising costs, charged to selling, general
and administrative expenses as incurred, aggregated $4,917,
$3,075, $1,449, and $4,255 for 1996, the eight-month period ended
February 3, 1996, the four-month period ended May 27, 1995, and
1994, respectively.

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.   The   Company
periodically  analyzes  the  value  of  net  assets  acquired   to
determine  whether  any impairment in value  of  such  assets  has
occurred.   The primary indicators of recoverability used  by  the
Company  are  current or forecasted profitability of  the  related
acquired assets as compared to their carrying values. As described
in  Note  D,  allocated goodwill was reduced by $15,220  in  1996.
Accumulated amortization at February 1, 1997 and February 3,  1996
was $3,656 and $1,401, respectively.

Deferred  Financing Costs:  Deferred financing costs are amortized
by  the  interest method over a period consistent with the related
financing.  Amortization expense of $884, $585, $68, and  $457  is
included  in  interest  expense for 1996, the  eight-month  period
ended  February 3, 1996, the four-month period ended May 27, 1995,
and  1994, respectively.  Accumulated amortization at February  1,
1997 and February 3, 1996 was $1,436 and $585, 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   February   3,   1996
accumulated amortization was $2,438.

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 and common  stock  equivalents
outstanding.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
PEEBLES INC. AND SUBSIDIARY
NOTE B_ACCOUNTS RECEIVABLE
Accounts receivable are shown net of $1,224 and $960, representing
the  allowance for uncollectible accounts at February 1, 1997  and
February  3,  1996,  respectively.   The  provision  for  doubtful
accounts  was  $1,192, $531, $265, and $620 for 1996,  the  eight-
month  period ended February 3, 1996, the four-month period  ended
May  27, 1995, and 1994, respectively.  Finance charges on  credit
sales,   included   as  a  reduction  of  selling,   general   and
administrative  expenses, aggregated $5,050, $3,175,  $1,643,  and
$4,818,  for 1996, the eight-month period ended February 3,  1996,
the four-month period ended May 27, 1995, and 1994, 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.

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 market reserve adjusts inventory to the  lower  of
LIFO cost and market.

Merchandise inventories consisted of the following:
<TABLE>
<CAPTION>
                                      February 1, 1997  February 3, 1996  January 28, 1995
                                                                          (Prior to 1995
                                                                           Acquisition)
 <S>                                            <C>            <C>             <C>
 Merchandise inventories at FIFO cost     $  47,448       $   35,662        $   33,332
 Fair Value Adjustment                        7,436            7,436            14,209
 LIFO reserve                                   366              449            (2,838)
                                        -----------       ----------        ----------
 Merchandise inventories at LIFO cost        55,250           43,547            44,703
 Market reserve                                (819)            (863)                -
                                        -----------       ----------        ----------
 Merchandise inventories at lower                                                
 of cost or market                       $   54,431        $  42,684        $   44,703

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".  Under
the provisions of SFAS No. 121, long-lived assets should be
reviewed for impairment when circumstances indicate that the
carrying amount of those assets, together with any related
identifiable intangible assets and allocated goodwill, might not
be recoverable, through future operations or sale.  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 leaseholds          1,528
       Allocated goodwill                    15,220
                                         ----------
        Total asset revaluation             $20,782

The asset revaluation reduced deferred income taxes by
approximately $2,141.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
PEEBLES INC. AND SUBSIDIARY

NOTE E_LONG-TERM DEBT

Long-term debt consisted of the following:
                                
                                  February 1, 1997    February 3, 1996
                                  ----------------    ----------------             
   1995 Senior Revolving Facility    $  43,000           $  25,000
   Senior Term Note A                   17,725              19,250
   Senior Term Note B                   27,475              27,775
   Swingline Facility                    1,415               3,126
                                    ----------           ---------
                                        89,615              75,151
   Less current maturities               9,665               5,377
                                    ----------           ---------
                                     $  79,950           $  69,774

On  June  9, 1995, the Company entered into a $120 million  credit
facility  (the  "1995  Credit  Agreement")  to  i)  refinance  the
existing  debt  under  the pre-acquisition Credit  Agreement,  ii)
provide  the  additional funding necessary to  complete  the  1995
Acquisition,  and  iii)  provide working  capital  and  funds  for
capital  expenditures. The 1995 Credit Agreement is secured  by  a
first priority security interest in substantially all the personal
property  and certain real property of Peebles.  The  1995  Credit
Agreement  provides  a Senior Term Facility,  a  Senior  Revolving
Facility   (the  "1995  Revolving  Facility"),  and  a  "Swingline
Facility".   Restrictive covenants prohibit the  payment  of  cash
dividends in any fiscal year.

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 each require quarterly payments,  coinciding
with  the  Company's  fiscal quarters,  of  principal  (increasing
annually  from the current $425 and $75 per quarter, respectively)
and  interest in arrears through maturity.  Senior Term Note A and
Senior  Term Note B mature on June 9, 2000 and 2002, respectively.
Senior  Term Note A and Senior Term Note B bear interest at  LIBOR
plus  2.75% and LIBOR plus 3.25%, respectively.  Prior to November
1995,  Senior Term Note A and Senior Term Note B bore interest  at
prime plus 1-1/2% and prime plus 2%, respectively.

The  amount available under the 1995 Senior Revolving Facility  is
determined   by  a  defined  asset  based  formula  with   maximum
borrowings  limited to $65 million less outstanding amounts  under
letters of credit.  The Company pays a fee of 1/2 of 1% per  annum
on  any unused portion of the 1995 Senior Revolving Facility.  The
1995 Senior Revolving Facility matures on June 9, 2000 and has  no
specific  paydown provisions.  On May 20, 1996, the  Company  drew
approximately $10,200 to consummate the CRI Merger.  Based on  the
anticipated  operations of the Company in the  succeeding  twelve-
month  period,  $37,500  and  $24,600  were  considered  long-term
obligations   at   February  1,  1997  and   February   3,   1996,
respectively.  During  1996,  the Senior  Revolving  Facility  was
converted to an annual interest rate of LIBOR plus 2.75% from  the
prime plus 1-1/2% rate effective during 1995.

In  compliance  with the 1995 Credit Agreement,  the  Company  has
entered  into  a  three-year  interest rate  protection  agreement
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
1995  Senior Revolving Facility.  The Swingline Facility currently
bears  interest  at prime plus 1-1/2% and has no LIBOR  conversion
option.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
PEEBLES INC. AND SUBSIDIARY

NOTE E_LONG-TERM DEBT - Continued

Peebles  has commitments for letters of credit with a  bank  which
totaled  $573 and $307 at February 1, 1997 and February  3,  1996,
respectively.  Approximately  $397 expire  during  1997,  and  the
remainder expires August 1, 1998.

Peebles  made cash interest payments of $7,866, $6,353, $973,  and
$4,091 for fiscal year 1996, the eight-month period ended February
3,  1996, the four-month period ended May 27, 1995, and the fiscal
year 1994, respectively.

Aggregate  principal payments on long-term debt for the next  five
fiscal years are: 1997--$9,665, 1998-- $6,375, 1999--$10,125 ,2000-
-$49,250 and 2001--$12,900.

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:


</TABLE>
<TABLE>
<CAPTION>
                       Fiscal Year     Eight-Month      Four-Month     Fiscal Year
                          Ended       Period Ended      Period Ended       Ended
                   February 1, 1997  February 3, 1996   May 27, 1995  January 28, 1995
                   ----------------  ----------------   ------------  ----------------
                                                        (Prior to 1995 Acquisition)
   <S>                   <C>               <C>               <C>           <C>
   Minimum            $   7,742         $  4,552         $  2,276         $  5,915
                                    
   Contingent               453              275              138              531
                     ----------       ----------        ---------       ----------
                      $   8,195       $    4,827         $  2,414         $  6,446
</TABLE>

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 February 1,
1997 were as follows:


                                       Capital      Operating
   Fiscal Year                         Leases        Leases
   -----------                         -------      ---------
   1997                                $   487       $  7,612
   1998                                    377          7,267
   1999                                    377          7,077
   2000                                    377          6,577
   2001                                    180          6,106
   Thereafter                              602         39,098
                                     ---------      ---------
   Total minimum lease payments          2,400       $ 73,737
   Less:  amounts representing interest   (773)
                                     ---------
   Present value of net minimum lease                    
   payments, including current 
   maturities of $280, with interest
   rates ranging from 11.3% to 18.1%   $ 1,627
                                     =========
                                                          

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
PEEBLES INC. AND SUBSIDIARY


NOTE G_EMPLOYEE BENEFIT PLANS

The  Employees  Retirement  Plan of  Peebles  Inc.:   The  Company
provides a defined benefit pension plan (the "Pension Plan") which
covers substantially all employees.  Participation is dependent on
meeting  certain age and service requirements. Benefits 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.
<PAGE>

Net periodic pension cost included the following components:
<TABLE>
<CAPTION>

                                        Fiscal Year     Eight-Month      Four-Month        Fiscal  Year
                                          Ended         Period Ended     Period Ended        Ended
                                     February 1, 1997  February 3, 1996  May 27, 1995    January 28, 1995       
                                     ----------------  ----------------  ------------   ----------------- 
                                                                         (Prior to 1995 Acquisition)
   <S>                                       <C>             <C>            <C>              <C>
   Service cost-benefits earned during    
      the period                         $   345         $    207          $    104        $   323
   Interest cost on projected benefit           
      obligation                             543              332               166            448
   Actual return on plan assets             (109)            (649)             (324)           177
   Net amortization and deferral            (460)             275               138           (804)
                                        ---------         --------         --------        -------
   Net periodic pension cost             $   319         $    165          $     84        $   144
   </TABLE>                                                                     
The following table sets forth the Pension Plan's funded status and amounts
recognized in Peebles balance sheet:
<TABLE>
                                                     February 1, 1997  February 3, 1996
                                                     ---------------   ----------------
    <S>                                                    <C>              <C>                         
  Actuarial present value of benefit obligations:                    
     Accumulated benefit obligations including                                        
     vested benefits of $5,316 and $5,677,                                         
     respectively                                        $  (5,707)      $   (6,147)
                                                         ----------      ----------
  Projected benefit obligation                           $  (7,299)      $   (7,770)
  Plan assets at fair value, primarily listed                                      
     Stocks and U.S. Government Treasury Bonds               6,509            7,062
                                                         ----------      ----------  
  Plan assets in excess (deficient) of projected                                   
     Benefit obligations                                      (790)            (708)
  Prior service costs                                           73                -
  Unrecognized net loss                                        682              992
                                                         ----------      ----------
  Net pension asset (liability) recognized in the       
     balance sheet                                       $     (35)      $      284
  </TABLE>                                                                    

In  calculating the present value of projected benefit obligations
for  1996  and  1995, a 4.41% and 5.0% weighted  average  rate  of
compensation   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 1996, 1995 and 1994.

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 does not currently
contribute to the plan.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
PEEBLES INC. AND SUBSIDIARY

NOTE G_EMPLOYEE BENEFIT PLANS--Continued

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 the Pension Plan, the
executives will receive replacement income in retirement equal to
60% of final average compensation, as defined in the Pension Plan.
The program is funded through life insurance contracts covering
the participating executives.  At February 1, 1997 and February 3,
1996, the Company had a net obligation of $75 and $65,
respectively, recognized in the balance sheet based upon a
discount rate of 7.5% for 1996 and 1995.  The Company recognized
net expense related to the program of $238, $146 and $73 in the
fiscal year ended February 1, 1997, the eight-month period ended
February 3, 1996 and the four-month period ended May 27, 1995,
respectively.

NOTE H - INCOME TAXES

The provisions for income taxes consisted of the following:
<TABLE>
                       Fiscal Year       Eight-Month       Four-Month      Fiscal Year
                          Ended         Period Ended      Period Ended        Ended
                     February 1, 1997  February 3, 1996   May 27, 1995   January 28, 1995
                     ---------------   ----------------  -------------  -----------------
                                                          (Prior to 1995 Acquisition)
<S>                        <C>               <C>              <C>              <C> 
 Current:   Federal    $   1,591          $  2,703         $  (382)        $   4,354
            State            546               573             (92)              943
 Deferred:  Federal         (214)              805            (323)              371
            State           (180)              165             (77)               79
                       ---------          --------         --------        --------- 
                       $   1,743          $  4,246         $  (874)        $   5,747
</TABLE>

Income taxes differ from the amounts computed by applying the applicable
federal statutory rates due to the following:
<TABLE>
                                        Fiscal Year       Eight-Month       Four-Month          Fiscal Year
                                           Ended          Period Ended      Period Ended          Ended
                                     February 1, 1997   February 3, 1996    May 27, 1995    January 28, 1995
                                     ----------------   ----------------   -------------    ----------------  
   <S>                                        <C>             <C>              <C>             <C>
                                                                             (Prior to 1995 Acquisition)
 Taxes at the federal statutory rate     $  (4,479)         $  3,248         $  (765)          $ 4,628
 Increases (decreases):                                                                            
 State income taxes, net of federal tax        232               469            (110)              676
 Amortization of purchase 
   accounting adjustments                      745               484             190               574
 Asset revaluation                           5,175                 -               -                 -
 Other                                          70                45            (189)             (131)
                                        ----------          --------         --------         ---------
                                         $   1,743          $  4,246         $  (874)          $ 5,747
 </TABLE>                                                                    
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
PEEBLES INC. AND SUBSIDIARY

NOTE H - INCOME TAXES--Continued

At February 1, 1997, the Company has net operating loss
carryforwards of approximately $5,000 for income tax purposes,
which primarily expire in 2010.

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

                              
                              February 1, 1997   February 3, 1996
                              ----------------   -----------------  
 Deferred tax liabilities:                        
  Inventory valuation             $  3,404           $  3,158
  Depreciation and amortization      4,843              6,255
  Other                                318                110
                                  --------           --------
                                     8,565              9,523
  Deferred tax assets:                                  
  Doubtful accounts                   (471)              (370)
  Net operating loss carryforwards  (1,925)             
  Other                                   -               (15)
                                   --------           --------
                                    (2,396)              (385)
                                   --------           --------
  Net deferred tax liabilities    $  6,169           $  9,138

Peebles made cash income tax payments of $2,100, $2,782, and
$6,183 for 1996, 1995 and 1994, respectively.

NOTE I - VALUATION AND QUALIFYING ACCOUNTS

Activity related to valuation and qualifying accounts is as
follows:
                                      Allowance for        
                                         Doubtful
                                         Accounts     LIFO Reserve
                                      -------------   ------------
Balance January 29, 1994                      950         3,020
  Charges to expense                          620          (182)
  Deductions - net write-off of         
    uncollectible accounts                   (640)            -
                                        ---------     ---------
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         (449)
  Deductions - net write-off of              
    uncollectible accounts                    (501)           -
                                         ---------    ---------
Balance February 3, 1996                       960         (449)
  Charges to expense                         1,192           83
  Increase due to Acquisition of       
    Carlisle Retailers, Inc.                   264            -
  Deductions - net write-off of
    uncollectible accounts                  (1,192)           -
                                        ----------   ----------
Balance February 1, 1997                 $   1,224   $     (366)
                                        ==========   ===========

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
PEEBLES INC. AND SUBSIDIARY

NOTE J - QUARTERLY FINANCIAL DATA (UNAUDITED)

The 1995 Acquisition was effective May 27, 1995.  As a result, the first
quarter of 1995, and the first fiscal month of the second quarter of 1995
reflect operating results prior to the 1995 Acquisition.  Operating income in
the second quarter of 1995 was reduced by $3,089 related to the settlement of
the 1993 Stock Option Plan.  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.
                 
<TABLE>
                                        FISCAL QUARTER
                                       ----------------
                               First             Second               Third              Fourth
                           1996      1995      1996    1995       1996     1995      1996     1995
                         -----------------   ---------------    ---------------   -----------------
<S>                        <C>      <C>       <C>      <C>       <C>       <C>       <C>      <C>    
Net Sales                 $38,055  $36,518   $42,366  $38,963   $47,540  $42,562   $66,245  $57,621
Cost of Sales              22,607   21,585    24,805   23,508    29,462   25,093    39,362   32,743
Gross Margin               15,448   14,933    17,561   15,455    18,078   17,469    26,883   24,878
Operating Income(Loss)      2,183    2,341     2,757     (875)    1,899    3,296   (11,892)  10,282
Net Income (Loss)                                                                           
  before extraordinary item   214      837       346   (1,690)     (194)     560   (15,281)   4,011
Net Income (Loss) Per Share                                                                          
  before extraordinary item $ 214   $  .28    $  346  $ (1.87)   $ (194)  $  560  $(15,281) $ 4,011

</TABLE>

 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.

With the consummation of the CRI Merger on May 20, 1996, seven
stores of Carlisle Retailers, Inc. became a wholly owned
subsidiary of Peebles Inc.  These seven stores are included in the
consolidated results of operations beginning May 20, 1996.  One
Carlisle store was closed in January 1997, consistent with the
Company's plan of acquisition.

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
1996 and 1994 fiscal years and the twelve-month period ended
February 3, 1996.

(dollars in thousands)                    1996       1995     1994
                                         ------     ------   -------          
Net sales                               $194,206   $175,664  $167,662
% increase                                  10.6%      4.8%    10.5%
                                                                  
Comparable stores % increase                                      
(decrease) in sales:
 52-week 1996 vs. 53-week 1995            (1.3%)     (1.0%)     4.6%
 52 week periods ended February 1,                                
   1997 and February 3, 1996             Even(0%)      N/A       N/A
Total stores                                 77        65       58
                                                                  
Operations as a Percentage of Net Sales:
  Cost of sales                            59.9%      58.6%     58.5%
  Selling, general & administrative    
    expenses                               28.1       27.3      27.0
  Asset revaluation                        10.7          -         -
  Settlement of the 1993 Stock Option Plan    -        1.7         -
  Depreciation and amortization             3.9        3.8       4.0
                                          -----       ----     -----
    Operating Income (Loss)                (2.6)       8.6      10.5
  Interest Expense                          4.5        4.5       2.7
  Other income (expense)                     .4        (.1)       .1
  Provision for income taxes                 .9        1.9       3.4
                                           -----      -----    -----
Net Income (Loss)                          (7.7)%      2.1%      4.5%

Net sales in 1996 increased over 1995 as the Company opened or
acquired fourteen new store locations during the year, closed two, and had
a full year of operations from seven new stores opened in 1995.
The Carlisle stores acquired in the CRI Merger provided
approximately $12,683 in net sales, representing some 68% of the
1996 increase over 1995.  In September 1996, the Company began
operations as Peebles at three store locations purchased from the
Belk Companies ("Belk").  In conjunction with this purchase, the
Company agreed to sell one store location to Belk.  The three
former Belk stores acquired contributed $2,255 to 1996 net sales.
The store sold had contributed $1,438 through September 1996.

Net sales at comparable stores, stores opened the entire twelve
months in both the current and previous fiscal years, declined
approximately $2,071, or 1.3%, when comparing 52-week fiscal 1996
to 53-week fiscal 1995.  When comparing the 52-week periods ended
February 1, 1997 and February 3, 1996, net sales at these
comparable stores remained the same.  Comparable store sales were
weakest in the second and third fiscal quarters of 1996, adversely
impacted by Hurricane Bertha in July, Hurricane Fran in September
and an unseasonably cool summer. Comparable store sales recovered
in the fourth fiscal quarter, increasing approximately 1.8% over
the comparable quarter in 1995.  The majority of the increase
noted in the fourth fiscal quarter came in January, where prior
year sales were adversely impacted by severe snowstorms.

The Company's cost of sales increased in 1996 to 59.9%, up from
58.6% in 1995 and 58.5% in 1994.  The current year increase is
primarily attributed to a) the new store locations, where opening
promotions adversely impact gross margin; b) the Carlisle stores,
where the inventory mix and pricing strategy were adjusted from a
narrow assortment and a high-low emphasis to a wider assortment
and less promotional, every day fair pricing; and c) higher
clearance markdowns resulting from the weaker sales described
above.

Selling, general and administrative ("SG&A") expenses increased to
28.1% of 1996 net sales, up from 27.3% and 27.0% in 1995 and 1994,
respectively.  This increase is primarily due to the opening of
new stores, which typically have higher occupancy, payroll and
advertising expenses as a percentage of net sales as compared to
mature stores.  The 14 new stores opened and acquired during 1996
represented the Company's largest single year increase in number
of store locations.  During 1996, the Company completed an
expansion to the distribution facility in South Hill, Virginia to
accommodate current and future growth.  While adding to SG&A in
1996, future efficiencies in processing and economies of
scale are expected in succeeding fiscal years.

As discussed in Note D to the audited consolidated financial
statements, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for Impairment of Long-
Lived Assets and Long-Lived Assets to be Disposed Of" in the first
fiscal quarter of 1996.  Management assessed, on an individual
store basis, increased competition, shifting demographics,
projected store operations and historical store operations through
the fourth fiscal quarter and determined that the aggregate
estimated undiscounted cash flows to be generated would be less
than the current carrying values of the store assets, related
intangibles and allocated excess of cost over net assets acquired
("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, as i) selected store
fixtures and equipment were reduced $4,034; ii) related beneficial
leaseholds were reduced a net $1,528; and iii) the allocated
Goodwill was reduced by $15,220.  Deferred taxes decreased by
$2,141, for a resulting decrease in net income of $18,641.

As discussed in Note A to the audited consolidated financial
statements, the Company recorded compensation expense of $3,089 in
1995, representing 1.7% of 1995 total net sales, for the
settlement of the 1993 Stock Option Plan.  This non-recurring
expense recognized in 1995 represents the entire liability of the
Company under the 1993 Stock Option Plan.

Depreciation and amortization expense as a percentage of net sales
was 3.9%, 3.8% and 4.0% in 1996, 1995 and 1994, respectively.
Depreciation expense has increased to 2.4% in 1996, up from 2.2%
in both 1995 and 1994, as capital expenditures have increased due
to the new store openings and distribution center expansion.
Amortization expense has been affected by purchase accounting
adjustments related to the 1995 Acquisition and the CRI Merger.

As a result of the above factors, the Company had an operating
loss in 1996 of 2.6%, compared to operating income of 8.6% and
10.5% in 1995 and 1994, respectively.  Adjusting for the effects
of the asset revaluation in accordance with SFAS No. 121 in 1996
and the 1995 non-recurring compensation expense related to the 
settlement of the 1993 Stock Option Plan, 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 4.5% for both
1996 and 1995, up from 2.7% in 1994.  The general increase from
1994 to 1995 resulted from a combination of increased debt assumed
in connection with the 1995 Acquisition and a higher prime lending
rate throughout 1995 in comparison to 1994.  The 1995 Credit
Agreement increased outstanding borrowings at the date of
acquisition by approximately $35.5 million.  In 1996, the Company
increased the outstanding balance of the Senior Revolving Facility
by approximately $10.2 million to consummate the CRI Merger.  In
addition, the inventory requirements of the new store locations
required additional funding.  Interest expense did increase from
$7,979 in 1995 to $8,806 in 1996, but did not increase
proportionately to debt, primarily due to the conversion from
prime lending rates in 1995 to LIBOR based rates in 1996, as
described in Note E to the audited consolidated financial
statements.

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 related to the pre-1995 Acquisition Credit Agreement.

As a result of the above factors, the Company had a 1996 net loss
of 7.7% as a percentage of net sales, compared to 1995 net income
of 2.1%, and 4.5% in 1994.  Adjusting for the effect of the asset
revaluation in accordance with SFAS No. 121 in 1996, net income 
would have been 1.9% 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.

Operating activities provided net cash of $6.1 million, $11.0
million, and $13.1 million in 1996, 1995 and 1994, respectively.
Profitable operations continued to be the source of net cash in
1996.  The write down associated with the asset revaluation in
accordance with SFAS No.121 was a non-cash transaction.  In 1996, 
the merchandise inventory requirements and the funding of accounts 
receivable at the new store locations represented the primary decrease
in the net cash provided by operating activities.  This impact, together
with current assets acquired in the CRI Merger, increased the
Company's working capital to $58.2 million at the close of 1996,
up from $48.3 million at 1995.  The settlement of the 1993 Stock
Option Plan in 1995 required some $3.1 million of operating cash,
which together with the increased cash payments of interest
expense, primarily accounted for the decline in net cash generated
by operations in comparison to 1994.

Net cash used in investing activities, exclusive of the CRI Merger
and the 1995 Acquisition, was $8.8 million, $8.1 million, and $8.7
million in 1996, 1995 and 1994, respectively.  In 1996, capital
expenditures included $2.1 million for new stores, $1.1 million in
the acquired Carlisle stores, and $3.2 million related to the
distribution center expansion.  In 1995 and 1994, new store
capital expenditures were $4.3 million and $2.6 million,
respectively, and an additional $1.8 million and $3.4 million,
respectively, for major store remodelings.  No major store
remodelings were performed in 1996.

Exclusive of the CRI Merger and the 1995 Acquisition transactions,
the Company drew net cash from the revolving debt of some $4.3 million
in 1996, primarily to fund the new store growth.  In 1995,
cash was used to reduce outstanding debt by a net of $.5 million.
In the four-month period prior to the 1995 Acquisition,  Peebles
had funded operating and investing activities with $2.0 million in
net proceeds from revolving debt.  To facilitate the 1995
Acquisition, the pre-acquisition debt was refinanced, providing
the Company $35.5 in net incremental cash and increasing debt by
the same amount.  In the eight-month period following the 1995
Acquisition, the Company used cash to reduce outstanding debt by a
net $2.5 million.  In 1994, outstanding debt was reduced using
cash of $4.1 million.

In 1997, the Company's capital expenditures are expected to total
approximately $10.9 million, which reflect the opening of nine new
store locations at approximately $3.8 million and the relocation
of four existing stores at $2.2 million.  As of March 1997, the
Company had signed leases for six new store locations, three of
which will open in Spring 1997.  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 $65 million less amounts outstanding under
letters of credit.  The actual amount available is determined by
an asset based formula, adjusted for seasonal working capital
requirements.

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.









<PAGE>


                         EXHIBIT INDEX

Exhibit
  No.                    Description

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
4.2*      Form of Warrant Agreement between PBL Acquisition
          Corp. and the Warrant Agent
4.3*      Form of Warrant Certificate (included in the Warrant
          Agreement filed as Exhibit 4.2 hereto).
10.1*+    Credit Agreement dated June 9, 1995, by and among 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.
10.61*+   Equity Contribution Agreement made June 9, 1995 by and
          between Kelso & 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.
10.8***   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.
10.16***  Form of Employment Agreement, dated March 30, 1995 entered into
          by Peebles Inc.and fourteen executives 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 21

                  SUBSIDIARIES OF THE REGISTRANT

         Name of Subsidiary            Jurisdiction in which organized 
     -------------------------        --------------------------------
     Carlisle Retailers, Inc.                      Ohio