JG INDUSTRIES INC/IL/, 10-K, 1996-05-10

JG INDUSTRIES INC/IL/
10-K, 1996-05-10
FURNITURE STORES

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark
One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended January 27, 1996
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
COMMISSION FILE NO. 1-258

JG INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

ILLINOIS 36-1141010
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

1615 WEST CHICAGO AVENUE, 60622
CHICAGO, ILLINOIS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (312) 850-8000

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
COMMON STOCK, NO PAR VALUE CHICAGO STOCK EXCHANGE

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 ((S)229.405 of this chapter) is not contained herein,
and will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [_]

The aggregate market value of Common Stock held by nonaffiliates of the
Registrant on April 5, 1996 was approximately $2,565,607. On that date there
were 7,061,914 shares of Common Stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Parts I and III incorporate by reference certain information to be included
in Registrant's definitive Proxy Statement for the Annual Meeting of
Stockholders currently scheduled for August 6, 1996.

Index to Exhibits on Pages 36 through 40.

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<PAGE>

ITEM 1. BUSINESS

GENERAL INFORMATION

JG Industries, Inc. ("JG") is an Illinois corporation which was organized on
February 27, 1928. Effective July 23, 1985 the name of the company was changed
from Goldblatt Bros., Inc. to JG Industries, Inc. JG and its subsidiaries are
hereinafter collectively referred to as the Company. The Company's continuing
operations are comprised of thirteen discount department stores located in the
Chicago, Illinois vicinity and one in Indiana.

As of January 27, 1996, Jupiter Industries, Inc. ("Jupiter") was the owner
of 3,879,773 shares or approximately 55% of the Company's outstanding common
stock.

ACQUISITIONS, PUBLIC OFFERING AND DISPOSITIONS

On November 7, 1984, Gold Shoes, Inc. ("Gold Shoes") through its
subsidiaries acquired all of the outstanding capital stock of the Milgram-
Kagan Corporation ("M-K"), a retail shoe store operation which was based in a
suburb of Chicago, Illinois. At that time Gold Shoes was owned 80% by JG and
20% by Jupiter. The consideration paid was comprised of a fixed purchase price
of $9,800,000 and a contingent purchase price based upon future cash flow of
M-K as defined in the agreement. On November 24, 1992, M-K filed a voluntary
petition for reorganization under Chapter 11 of the United States Bankruptcy
Code ("the Code"). Under provisions of the Code, M-K operated its business as
a debtor-in-possession subject to the jurisdiction of the Bankruptcy Court
("the Court"). As a result of the filing and the placement of control of M-K's
operations under the jurisdiction of the Court, the Company discontinued
consolidation of M-K as of November 24, 1992. On March 3, 1993, the Court
approved the sale of all the remaining shoe stores and M-K ceased operation as
a retail shoe store business on March 16, 1993. Accordingly, the retail shoe
store segment was presented as a discontinued operation in the consolidated
financial statements.

Effective as of October 29, 1993, the Company sold to Jupiter its 80%
interest in Gold Shoes for $225,000. This sale reduced the Company's net
operating loss carryforward by the amount of Gold Shoes' net operating loss
carryforward of $6.5 million. The gain on the sale of $212,000 was recorded as
an increase to paid-in capital in fiscal 1994. The Company has no remaining
interest in Gold Shoes or its subsidiary, M-K.

On January 10, 1985, Sussex Group, Ltd. ("Sussex") acquired substantially
all of the assets and properties comprising Household Merchandising, Inc.'s
Furniture Group consisting of 32 retail furniture stores and five warehouses,
and the furniture contained therein. The three operating divisions included in
this acquisition were Huffman Koos, Barker Bros. and Colby's. The aggregate
consideration paid by Sussex for this acquisition was approximately
$38,000,000. At the time of the acquisition, Sussex was an indirect majority-
owned subsidiary of SGH, Inc. ("SGH") which was owned 80% by JG and 20% by
Jupiter.

On November 12, 1986, Sussex transferred the assets and liabilities of its
Huffman Koos division, along with approximately $22,200,000 of acquisition
indebtedness, to the newly formed Huffman Koos Inc. ("H-K"). In connection
with this transfer, H-K issued 2,200,000 shares (100%) of its common stock to
Sussex. On November 13, 1986, H-K issued 1,800,000 additional common shares to
the public in connection with an initial public offering, pursuant to the
terms of Amendment No. 3 to the Registration Statement on Form S-1 (File No.
33-7327) as filed with the Securities and Exchange Commission on November 13,
1986, leaving Sussex with 55% of the issued and outstanding shares. The net
proceeds of approximately $16,200,000 from the offering were used to repay a
substantial portion of the acquisition indebtedness which had been transferred
to H-K.

On April 15, 1987, Sussex sold certain assets and liabilities of its Colby's
division for approximately $6,650,000, net of certain contractual adjustments
between the parties. Proceeds received at the closing were used to reduce the
indebtedness of Sussex.

Effective August 1, 1989, Sussex sold all the net assets and properties of
its Barker Bros. division for approximately $17,338,000, net of expenses. A
portion of the proceeds was used to repay indebtedness of Sussex.

<PAGE>

At the Company's Annual Meeting of Shareholders on July 20, 1993, the
shareholders approved a 3,000,000 share increase to the Company's authorized
capital stock and an Agreement and Plan of Merger (the "Agreement") between
the Company and SGH. Under the terms of the Agreement, SGH was merged with and
into the Company, with the Company being the surviving corporation. The shares
of SGH owned by the Company were canceled and the shares of SGH owned by
Jupiter were converted into the right to receive 1,127,000 shares of the
Company's common stock.

The merger was completed on July 27, 1993 and the 1,127,000 shares of the
Company's common stock were issued to Jupiter on August 4, 1993. As a result
of this stock issuance, Jupiter's ownership interest in JG was increased from
approximately 46.4% to 55%.

Between fiscal 1989 and 1991, a subsidiary of JG acquired a total of 130,000
common shares of H-K for $339,000. During fiscal 1994, this subsidiary sold
40,000 shares of this H-K stock in the public market for approximately
$292,000. In addition, H-K purchased as treasury stock the remaining 90,000
shares of its common stock owned by this subsidiary for $495,000. As a result
of these sales JG recognized a gain of approximately $169,000 in fiscal 1994
representing the difference between the selling price of these shares and the
proportionate share of H-K's net equity represented by these shares.

Effective as of October 29, 1993, the Company, Sussex and Jupiter entered
into a Stock Purchase and Loan Agreement. Under the terms of the agreement,
the Company, through Sussex, borrowed $5,075,000 from Jupiter on October 29,
1993. The note was repaid per the terms of the agreement on February 4, 1994
by the transfer of 700,000 shares of H-K common stock from Sussex to Jupiter,
along with interest at the prime rate.

Effective November 30, 1994, Sussex and Jupiter entered into a Stock
Purchase Agreement whereby Sussex sold an additional 100,000 shares of H-K
common stock to Jupiter for $800,000.

As a result of the transfer and sale of the 800,000 shares, the Company
recognized a gain of $1,540,000 in fiscal 1995. This gain was recorded as an
increase to paid-in capital and represents the difference between the amount
of the note retired and cash received and the amount of H-K net equity
represented by these shares.

Effective May 23, 1995, Sussex and Jupiter entered into a Stock Purchase
Agreement whereby Sussex sold an additional 150,000 shares of H-K common stock
to Jupiter for $1,125,000. As a result of the sale of these shares, the
Company recognized a gain of $176,000. This gain was recorded as an increase
to paid-in capital and represents the difference between cash received and the
amount of H-K net equity represented by these shares. The Company used
$625,000 of the proceeds to make payments on JG's $7,125,000 term loan.

The Stock Purchase and Loan Agreement and Stock Purchase Agreement (the
"Agreements") contained a provision which allowed Sussex to repurchase any or
all of the 950,000 H-K shares for a purchase price ranging from $7.25 to $8.00
per share plus interest on such amount. The Agreements also contained a
provision which required Jupiter to vote the 950,000 H-K shares for the
election of a majority of the Board of Directors of H-K as Sussex shall
direct. As a result of this voting provision, the Company through Sussex,
retained effective control of H-K. The Company and Jupiter collectively owned
of record 2,200,000 of H-K shares, representing approximately 55.9% of the
total issued and outstanding H-K shares at October 27, 1995.

2
<PAGE>

purchase price of $7,000,000 plus interest of approximately $641,000, and
instructed Jupiter to tender the 950,000 H-K shares. As a result of the
repurchase, the Company recorded a $1,530,000 loss as a decrease to paid-in
capital. This loss represents the difference between the total cash due to
Jupiter and the amount of H-K equity represented by these shares. The Company
also recorded a receivable from Jupiter of approximately $1,265,000. This
receivable represents the difference between proceeds from the sale of
$8,906,000 and $7,641,000 owed to Jupiter by Sussex. The $6,295,000 gain on
sale of discontinued operations for the quarter ending October 28, 1995 is net
of applicable income tax of $349,000 and includes $42,000 of net income from
discontinued operations during the phase-out period from the measurement date
of September 25, 1995, net of reversal of income taxes provided in earlier
quarters.

On October 30, 1995, the Company used the proceeds from the transaction
received by Sussex to repay all debt outstanding under the Company's term loan
of approximately $6,250,000 plus interest, and to deposit $3,500,000 as
collateral on the Goldblatt's line of credit.

Additional information regarding the terms and financing relative to
acquisitions/dispositions is included in the notes to consolidated financial
statements.

Effective September 28, 1986, JG transferred the assets and liabilities of
its department store division to Goldblatt's Department Stores, Inc.
("Goldblatt's"), a new wholly-owned subsidiary.

As a result of the liquidation of M-K and the sale of H-K, the Company now
operates in one industry segment of the retail market which is defined as
Discount Department Stores. Following is a description of operations of this
segment.

DISCOUNT DEPARTMENT STORE OPERATIONS

Goldblatt's offers customers a diverse assortment of both nationally branded
and private label merchandise, emphasizing a full range of both soft and hard
line goods. The stores frequently feature special promotions of merchandise
purchased on advantageous terms. Soft line merchandise includes men's,
women's, children's and infant's wearing apparel and accessories. Hard line
merchandise includes textiles and domestics, televisions and electronics,
small appliances and housewares, cosmetics and notions, hardware, toys and
sporting goods. Over the past five years, soft line departments have provided
between 52% and 54% of owned sales. Goldblatt's also licenses jewelry, shoe,
millinery and optical departments for operation at certain of its stores, and
provides a shop-at-home service with respect to home improvement items.

The department stores maintain a centralized purchasing function, buying
goods direct from domestic and international manufacturers and through
wholesalers. No single vendor accounted for more than 3% of total department
store purchases during fiscal 1996. Supplier relationships are considered
strong and Goldblatt's continues to obtain favorable pricing and payment terms
on many purchases.

The department store business is seasonal with approximately 28% of total
sales occurring in the fourth quarter.

<TABLE>
<CAPTION>
BALANCE AT OPENED/PURCHASED CLOSED/SOLD BALANCE AT
DESCRIPTION BEGINNING OF YEAR STORES STORES END OF YEAR
----------- ----------------- ---------------- ----------- -----------
<S> <C> <C> <C> <C>
Discount
department
stores
Fiscal year
1994 13 1 14
Fiscal year
1995 14 14
Fiscal year
1996 14 14
</TABLE>

COMPETITION

The Company's discount department stores are highly competitive. The Company
competes with national and local retail establishments, both large and small,
for the patronage of its customers. Some of the largest retail merchandise
companies with substantially greater resources than the Company have outlets
located in the same areas in which the Company's subsidiaries operate. The
Company's overall promotional strategy is to emphasize quality merchandise at
competitive prices.

3
<PAGE>

EMPLOYEES

The Company employs 973 people, comprised of 5 employees of JG and 968
employees of Goldblatt's. The Company believes that its relationship with its
employees is good.

ITEM 2. PROPERTIES

The Company owns and leases the retail merchandise stores, office and
warehouse locations described below. In the opinion of management, the
properties are suitable and adequate for the conduct of its business.

At April 23, 1996, Goldblatt's owns in fee four retail locations in Chicago,
Illinois. These four properties aggregate 647,100 gross square feet and are
subject to the Goldblatt's mortgage loan. Goldblatt's leases its other ten
retail locations, aggregating 794,300 gross square feet, with expirations,
excluding renewal options, ranging from 1996 to 2006. Eight stores have
renewal options of up to 25 years. Aggregate minimum rentals with respect to
the foregoing leasehold properties are approximately $2,224,000 annually.

ITEM 3. LEGAL PROCEEDINGS

No material legal proceedings are currently pending against the Company.

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

No matters were submitted to a vote of the Company's shareholders during the
last quarter of its fiscal year ending January 27, 1996.

EXECUTIVE OFFICERS OF THE COMPANY

The following table sets forth with respect to each executive officer of the
Company his name, age and all positions and offices with the Company held by
him since February 1, 1991. All positions and offices indicated have been
continuously held since the dates indicated below. The term of office of all
executive officers expires at the next annual meeting of directors (currently
scheduled for August 6, 1996) upon the election of their successors.

<TABLE>
<CAPTION>
NAME AGE POSITIONS AND OFFICES HELD AND PERIOD HELD
---- --- ------------------------------------------
<S> <C> <C>
William Hellman 75 Chairman of the Board since May 1993 and Chief Exec-
utive Officer since June 1983. President from June
1983 through May 1993. President of Goldblatt's De-
partment Stores, Inc. since May 1993 and from Janu-
ary 1986 to October 1990. Chief Executive Officer of
Sussex Group, Ltd. since March 1988. Chairman of the
Board of Huffman Koos Inc. from March 1988 to Octo-
ber 1995. Director of the Company since 1983.
Edward Ross 75 Vice Chairman of the Board since June 1985. Director
of the Company since 1983. Chairman, Chief Executive
Officer and Director of Jupiter Industries, Inc.
through November 13, 1995.
Philip Rootberg 78 Vice President since June 1985. Director of the Com-
pany since 1983. Senior Partner of Philip Rootberg &
Company, a public accounting firm. Senior Executive
Vice President and Director of Jupiter Industries,
Inc. through November 13, 1995.
Lionel Goldblatt 66 Vice President of the Company since June 1985. Di-
rector of the Company since 1959. Chairman of the
Board of Goldblatt's Department Stores, Inc. since
January 1986.
Clarence Farrar 61 President of the Company since May 1993 and Chief
Operating Officer of the Company since April 1990.
President of Goldblatt's Department Stores, Inc.
from April 1991 to May 1993, and Vice President
since June 1995 and from January 1986 to April 1991.
</TABLE>

4
<PAGE>

The executive officers are responsible for all major policy making functions
and all other corporate officers are responsible to, and are under the
supervision of, the executive officers. None of the above-named executive
officers are related.

Similar information for directors of the Company will be included under
"Election of Directors" in the Company's definitive proxy statement to be used
in connection with its annual meeting of stockholders currently scheduled to
be held on June 4, 1996 (the "Proxy Statement"), and such information is
incorporated herein by reference. The Company expects to file the Proxy
Statement with the Securities and Exchange Commission prior to May 24, 1996.

PART II

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

Although the Company's Common Stock is listed on the Chicago Stock Exchange
("CSE"), the volume of shares traded on the CSE was limited during the years
ended January 27, 1996 (fiscal 1996) and January 28, 1995 (fiscal 1995). The
Common Stock is also listed on the NASD Automated Quotation System, with a
trading symbol of JGIN. The following table lists the reported high and low
bid quotations as quoted on the NASD Automated Quotation System for each
quarterly period during fiscal 1996 and 1995. Such over-the-counter market
quotations reflect interdealer prices, without retail markup, markdown or
commission and may not necessarily represent actual transactions. The Company
has not paid dividends in any of the last five years. The Company's ability to
pay dividends is limited by the restrictions of issued redeemable preferred
stock and various debt agreements (see notes 4 & 5 of notes to consolidated
financial statements). There were approximately 2,491 holders of record of
Common Stock on April 5, 1996.

<TABLE>
<CAPTION>
PRICE RANGE
-----------
HIGH LOW
----- -----
<S> <C> <C>
Fiscal 1996
First Quarter............................................... $1.88 $1.44
Second Quarter.............................................. 1.63 1.13
Third Quarter............................................... 2.25 1.13
Fourth Quarter.............................................. 1.88 1.00
Fiscal 1995
First Quarter............................................... $2.13 $1.00
Second Quarter.............................................. 2.00 1.63
Third Quarter............................................... 2.00 1.25
Fourth Quarter.............................................. 1.94 1.44
</TABLE>

5
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

Following is selected financial data for the Company for each of the last
five fiscal years.

<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C>
Net sales from
continuing operations.. $ 72,964 $ 77,106 $ 76,900 $ 77,482 $ 70,726
Operating (loss) income. (2,871) (68) (2,501) 156 1,210
Loss from continuing
operations............. (4,103) (1,121) (3,621) (901) (55)
Income (loss) from
discontinued
operations............. 6,856 1,608 2,276 (6,738) (1,445)
Income (loss) before
extraordinary items.... 2,753 487 (1,346) (7,639) (1,500)
Net income (loss)....... 2,753 487 (1,346) (7,149) (1,500)
Net income (loss)
applicable to common
and common equivalent
shares................. 2,472 267 (1,527) (8,333) (2,861)
Per share income (loss)
applicable to common
and common equivalent
shares:
Loss from continuing
operations........... (.62) (.19) (.58) (.35) (.24)
Income (loss) before
extraordinary items.. .35 .04 (.23) (1.49) (.48)
Net income (loss)..... .35 .04 (.23) (1.41) (.48)
Total assets............ 25,315 76,007 73,004 66,888 68,844
Long-term obligations,
including capitalized
leases................. 2,776 11,269 21,466 18,107 12,337
Redeemable preferred
stock.................. 3,937 3,657 3,183 5,005 15,163
Weighted average number
of common and common
equivalent shares
outstanding............ 7,060,335 7,055,105 6,505,239 5,918,260 5,917,415
</TABLE>

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

Approximately $192,000 of net cash was used in operating activities during
the year ended January 27, 1996 compared to $6,151,000 of net cash provided in
the prior year. Accounts receivable decreased by $4,094,000 and the
undelivered sales liability decreased by $2,339,000 due to the record volume
of furniture delivery by Huffman Koos Inc. ("H-K") during the nine months
ended October 28, 1995. These deliveries generated cash receipts which were
used to decrease accrued expenses by $881,000. Approximately $1,500,000 of net
cash was used in investing activities due solely to capital expenditures as
described below. Approximately $12,844,000 was provided from the sale of H-K
stock, reduced by $1,017,000 of H-K cash at October 28, 1995. Approximately
$8,326,000 of net cash was used in financing activities due to scheduled debt
payments of approximately $2,287,000 and the repayment of all debt outstanding
under the Company's term loan of $6,250,000, offset by borrowings on the line
of credit of $200,000.

Goldblatt's Department Stores, Inc. ("Goldblatt's") spent approximately
$722,000 on capital expenditures during fiscal 1996 related to normal capital
maintenance. No new store openings are planned for Goldblatt's during fiscal
1997.

H-K spent approximately $810,000 on capital expenditures during the first
nine months of fiscal 1996, the majority of which related to the renovation of
its Bridgewater, New Jersey store. The remodeling was completed by May 1995 at
a total cost of approximately $410,000.

During fiscal 1995, Sussex Group, Ltd. ("Sussex, an indirect majority owned
subsidiary of the Company), transferred or sold a total of 800,000 shares of
H-K common stock to Jupiter Industries, Inc. ("Jupiter"). The transfer of
700,000 shares of this stock on February 4, 1994 was used to repay a
$5,075,000 note payable to Jupiter. The remaining 100,000 shares of H-K common
stock was sold to Jupiter on November 30, 1994 for $800,000. As a result of
the transfer and sale of the 800,000 shares, the Company recognized a gain of
$1,540,000 in fiscal 1995. This gain was recorded as an increase to paid-in
capital and represents the difference between the amount of the note retired
and cash received and the amount of H-K net equity represented by these
shares.

6
<PAGE>

Effective May 23, 1995, the Company through Sussex sold an additional
150,000 shares of H-K common stock to Jupiter for $1,125,000. As a result of
the sale of these shares, the Company recognized a gain of $176,000. This gain
was recorded as an increase to paid-in capital and represents the difference
between cash received and the amount of H-K net equity represented by these
shares. The Company used $625,000 of the proceeds from the May 23, 1995 stock
sale to make payments on JG's $7,125,000 term loan.

Pursuant to the terms of the various stock purchase agreements (the
"Agreements"), Sussex has been granted an option to repurchase any or all of
the 950,000 H-K shares for a purchase price ranging from $7.25 to $8.00 per
share plus interest on such amount. The Agreements also contained a provision
which required Jupiter to vote the 950,000 H-K shares for the election of a
majority of the Board of Directors of H-K as Sussex shall direct. As a result
of this voting provision, the Company through Sussex, retained effective
control of H-K. Jupiter and Sussex collectively owned of record 2,200,000 H-K
shares, representing approximately 55.9% of the total issued and outstanding
H-K shares at October 27, 1995.

Pursuant to an Agreement and Plan of Merger dated September 18, 1995,
stockholders of H-K stock received a tender offer from an unrelated third
party on September 25, 1995 to acquire all of the issued and outstanding H-K
shares at a per share purchase price of $9.375 in cash. Upon consummation of
the tender offer on October 27, 1995, Sussex sold the 1,250,000 H-K shares
held directly by it for an aggregate cash consideration of approximately
$11,719,000. On October 27, 1995, pursuant to an agreement dated September 18,
1995 between Jupiter and Sussex, Sussex also exercised its option to
repurchase the 950,000 H-K shares for the total purchase price of $7,000,000
plus interest of approximately $641,000, and instructed Jupiter to tender the
950,000 H-K shares. As a result of the repurchase, the Company recorded a
$1,530,000 loss as a decrease to paid-in capital. This loss represents the
difference between the total cash due to Jupiter and the amount of H-K equity
represented by these shares. The Company also recorded a receivable from
Jupiter of approximately $1,265,000. This receivable represents the difference
between proceeds from the sale of $8,906,000 and $7,641,000 owed to Jupiter by
Sussex. The $6,295,000 gain on sale of discontinued operations for the fiscal
year ending January 27, 1996 is net of applicable income tax of $349,000 and
includes $42,000 of net income from discontinued operations during the phase-
out period from the measurement date of September 25, 1995, net of reversal of
income taxes provided in earlier quarters.

The Company used the proceeds received from Sussex from the transaction to
repay all debt outstanding under the Company's term loan of $6,250,000 plus
interest and $3,500,000 was placed as collateral on the Goldblatt's line of
credit.

The sale of H-K, as described in Note 2, gave rise to an obligation of the
Company under the Series A 9% Cumulative Preferred Stock Designations to
redeem all of the issued and outstanding shares of that class of stock. The
redemption price for all of the Series A Preferred Stock is $3,183,000 plus
unpaid accrued and additional dividends of $754,000. As discussed in Note 5, a
mandatory obligation to redeem shares of Series A Preferred Stock having a
liquidation value of at least $1,500,000 is scheduled to arise on May 1, 1996.
The Directors not affiliated with Jupiter, on recommendation of management of
the Company, have determined to defer any redemption of the Series A Preferred
Stock until such time as it may do so without materially adversely affecting
the financial condition of the Company, as contemplated by applicable state
law. Pending satisfaction of any such redemption obligation, in accordance
with the Preferred Stock Designations, the dividend rate on the Series A
Preferred Stock is increased from 9% to 12% per annum, compounded quarterly.
Jupiter is seeking redemption of the Series A Preferred Stock.

Effective January 27, 1996 Goldblatt's mortgage loan was amended changing
the maturity date to August 1, 1997 and modifying the financial covenants.
With the execution and delivery of this amendment a principal payment of
$400,000 was required. At January 27, 1996, Goldblatt's was in violation of
certain financial covenants. Effective January 27, 1996, Goldblatt's received
waivers on these violations from the lending institution.

7
<PAGE>

Effective February 22, 1996, Goldblatt's line of credit was amended. The
line is guaranteed by JG, and is collateralized by a Certificate of Deposit
("CD") in the amount of $3,500,000 held by the financial institution. Interest
is payable monthly at the CD rate plus 1%. As of January 27, 1996, Goldblatt's
was in default of the cash flow covenant which the financial institution has
waived. Goldblatt's had remaining availability of $3,289,000 under its line of
credit. The Company believes that Goldblatt's working capital and line of
credit will be adequate to fund current operations and service the Company's
debt through fiscal 1997.

RESULTS OF OPERATIONS

Year Ended January 27, 1996 (fiscal 1996)
vs. Year Ended January 28, 1995 (fiscal 1995)

Net sales from continuing operations decreased 5.4% as compared to the prior
year. This decrease in sales is attributable to:

a. A sluggish retail environment marked by a lack of consumer confidence.

b. Adverse weather conditions.

c. Increased competition resulting in the dilution of available market
share.

The Company's gross profit percentage decreased to 31.4% of sales from 32.4%
in the prior year. This decline was primarily the result of aggressive
promotional activity designed to offset the sales decrease. Merchandise margin
for the first two months of fiscal year 1997 was 33.5% of sales as compared to
31.7% in the prior year reflecting improved merchandise controls.

Selling, general, and administrative expenses ("SG&A") were slightly less
than the prior year but increased to 35.4% as a percentage of sales as
compared to 32.4% in the prior year due to declining store sales. Expenses for
the first two months of fiscal year 1997 decreased significantly due to an
expense reduction program implemented in February which will result in an
annual cost reduction of over $1,000,000 at JG and Goldblatt's. The full
impact of this program will be realized during the course of fiscal year 1997.

Inventory, at cost, was approximately $1,000,000 below the comparable 1995
level which was accomplished as a result of our merchandise control program.
It has also created a positive impact on cash flow.

Year Ended January 28, 1995 (fiscal 1995)
vs. Year Ended January 29, 1994 (fiscal 1994)

Net sales from continuing operations increased .3% over the prior year and
comparable store sales increased 2.7%.

The Company's gross profit percentage increased to 32.4% of sales from 30.8%
of sales in the prior year. This improvement was the result of lower markdowns
and slightly lower inventory shrinkage.

Selling, general and administrative expenses ("SG&A") decreased to 32.4% of
sales from 34.0% in the prior year. Goldblatt's SG&A decreased to 31.8% of
sales from 33.2% in the prior year. This decrease was the result of the cost
reduction program instituted at Goldblatt's in January 1994.

Interest expense decreased because of lower indebtedness at JG resulting
from the fiscal 1995 and 1994 debt repayments.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Company's consolidated financial statements and supplementary
information are listed in Part IV, Item 14, of this Report and begin on page
15.

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

None.

8
<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Certain of the information regarding executive officers required by this
Item is set forth under the caption "Executive Officers of the Company" in
Part I. Other information regarding executive officers, as well as the
required information for directors, will be contained in the Proxy Statement
and such information is incorporated herein by reference.

Compliance with Section 16(a) of the Securities Exchange Act:

Under Section 16(a) of the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder by the Securities and Exchange
Commission (the "SEC"), directors, officers and beneficial owners of more
than 10% of the Company's equity securities (each a "Reporting Person")
must file certain reports, known as Forms 3, 4 and 5, with the SEC upon the
occurrence of certain events, primarily the acquisition or disposition of
shares of Common Stock (or options to acquire Common Stock) by such
persons.

Form 3 is an Initial Statement of Beneficial Ownership, and is required
to be filed within 10 days of a person becoming a Reporting Person. Jupiter
Industries, Inc., became an owner of more than 10% of the Company's Common
Stock on February 7, 1994, so its Form 3 was due February 17, 1994, but it
was filed with the SEC one day late on February 18, 1994.

Form 4 is a Statement of Changes in Beneficial Ownership, and is required
to be filed within 10 days of the end of a month in which a Reporting
Person acquires or disposes of common Stock. Philip Rootberg, an officer
and director of the Company, filed one Form 4 late in fiscal 1995, 13 days
after such filing was required.

Based solely on a review of the Forms 3, 4 and 5 filed with the Company
and on certain representations made to the Company, the Company does not
know of any failures to file a required form or of any late filings under
Section 16(a) of the Securities Exchange Act other than those set forth
above.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item will be set forth in the Proxy
Statement and such information is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this Item will be set forth in the Proxy
Statement and such information is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item will be set forth in the Proxy
Statement and such information is incorporated herein by reference.

9
<PAGE>

PART IV

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

(a) The following documents are filed as part of this report:

<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
(1) CONSOLIDATED FINANCIAL STATEMENTS:
Report of Independent Accountants.................................. 15
Consolidated Balance Sheets, January 27, 1996 and January 28, 1995. 16
Consolidated Statements of Operations for the fiscal years ended
January 27, 1996, January 28, 1995 and January 29, 1994........... 17
Consolidated Statements of Common Stock and Other Shareholders'
Equity for the fiscal years ended January 27, 1996, January 28,
1995 and January 29, 1994......................................... 18
Consolidated Statements of Cash Flows for the fiscal years ended
January 27, 1996, January 28, 1995 and January 29, 1994........... 19
Notes to Consolidated Financial Statements......................... 20-30
(2) FINANCIAL STATEMENT SCHEDULE:
Schedule I --Condensed Financial Information of the Registrant..... 31-34
Schedules other than that listed above have been omitted since they
are either not applicable, not required or the information is
included elsewhere herein.
(3) THE INDEX TO EXHIBITS IS ON PAGES 36 THROUGH 40
</TABLE>

(b) Reports on Form 8-K.

Form 8K-A dated January 5, 1996 presenting proforma consolidated
statement of income for year ending January 28, 1995 assuming the
disposition of Huffman Koos Inc. occurred on January 30, 1994.

10
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Directors of JG Industries, Inc.

We have audited the consolidated financial statements and the financial
statement schedule of JG Industries, Inc. and Subsidiaries as listed in the
index on page 14 of this Form 10-K. These financial statements and the
financial statement schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and the financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of JG
Industries, Inc. and Subsidiaries as of January 27, 1996 and January 28, 1995,
and the consolidated results of their operations and their cash flows for each
of the three fiscal years in the period ended January 27, 1996 in conformity
with generally accepted accounting principles. In addition, in our opinion,
the financial statement schedule referred to above, when considered in
relation to the basic financial statements taken as a whole, presents fairly,
in all material respects, the information required to be included therein.

COOPERS & LYBRAND L.L.P.

Chicago, Illinois
April 23, 1996

11
<PAGE>

JG INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JANUARY 27, 1996 AND JANUARY 28, 1995
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
JANUARY 27, JANUARY 28,
ASSETS 1996 1995
------ ----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents............................ $ 3,792 $ 2,048
Receivables, net..................................... 350 23,983
Merchandise inventories.............................. 8,734 28,991
Other assets......................................... 335 1,193
------- -------
Total current assets............................... 13,211 56,215
------- -------
Land, buildings and equipment, at cost:
Land................................................. 2,466 2,848
Buildings............................................ 4,887 7,360
Leasehold improvements............................... 8,542 14,294
Furniture and fixtures............................... 7,755 10,485
------- -------
23,650 34,987
Less accumulated depreciation and amortization..... 14,347 18,638
------- -------
9,303 16,349
------- -------
Deferred income taxes.................................. 626
Leasehold rights, net.................................. 69 813
Due from Jupiter....................................... 1,265
Other assets........................................... 1,467 2,004
------- -------
$25,315 $76,007
======= =======
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
Current liabilities:
Notes Payable........................................ $ 200
Current portion of long-term debt.................... 627 $ 2,382
Accounts payable..................................... 3,875 11,887
Accrued liabilities.................................. 3,195 11,026
Undelivered sales liability.......................... 8,983
Deferred income taxes................................ 1,120
------- -------
Total current liabilities.......................... 7,897 35,398
------- -------
Long-term debt, less current portion................... 1,848 10,411
Other long-term liabilities............................ 928 858
Minority interest...................................... 1,173 17,268
Redeemable preferred stock, including accrued dividends
of $754 and $473, respectively........................ 3,937 3,656
Commitments and contingencies
Common stock and other shareholders' equity:
Common shares; no par value; authorized 10,000,000
shares; issued 7,217,311 and 7,209,311 shares,
respectively........................................ 11,246 11,242
Paid-in capital...................................... 4,775 6,129
Accumulated deficit.................................. (5,204) (7,676)
Treasury shares--155,322 and 154,438 shares at cost,
respectively........................................ (1,285) (1,279)
------- -------
Total common stock and other shareholders' equity.. 9,532 8,416
------- -------
$25,315 $76,007
======= =======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

12
<PAGE>

JG INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE FISCAL YEARS ENDED JANUARY 27, 1996,
JANUARY 28, 1995 AND JANUARY 29, 1994
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
FISCAL YEAR
--------------------------
1996 1995 1994
------- ------- --------
<S> <C> <C> <C>
Net sales from continuing operations............... $72,964 $77,106 $ 76,900
Cost of sales...................................... 50,029 52,158 53,239
------- ------- --------
Gross profit....................................... 22,935 24,948 23,661
Selling, general and administrative expenses....... 25,806 25,016 26,162
------- ------- --------
Operating loss from continuing operations.......... (2,871) (68) (2,501)
------- ------- --------
Other income (expense):
Interest income.................................. 169 108 90
Interest expense................................. (897) (971) (1,197)
(Loss) gain on sale of asset, net................ (3) 226
Loss on subsidiary stock transactions, net....... (23) (6) (98)
Minority interest in net income of subsidiaries.. (460) (164) (121)
------- ------- --------
(1,214) (1,033) (1,100)
------- ------- --------
Loss before income tax provision and discontinued
operations........................................ (4,085) (1,101) (3,601)
Income tax provision............................... 18 20 20
------- ------- --------
Loss before discontinued operations................ (4,103) (1,121) (3,621)
Discontinued operations:
Income from operations, net of applicable income
taxes........................................... 561 1,608 2,275
Gain on sale of discontinued operations,
including income during phase-out period, less
applicable income taxes......................... 6,295
------- ------- --------
Income from discontinued operations................ 6,856 1,608 2,275
------- ------- --------
Net income (loss).................................. $ 2,753 $ 487 $ (1,346)
======= ======= ========
Net income (loss) applicable to common and common
equivalent shares................................. $ 2,472 $ 267 $ (1,527)
======= ======= ========
Per share income (loss) applicable to common and
common equivalent shares:
Loss from continuing operations.................. $ (.62) $ (.19) $ (.58)
======= ======= ========
Net income (loss)................................ $ .35 $ .04 $ (.23)
======= ======= ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

13
<PAGE>

JG INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMMON STOCK AND OTHER SHAREHOLDERS' EQUITY

FOR THE FISCAL YEARS ENDED JANUARY 27, 1996,
JANUARY 28, 1995 AND JANUARY 29, 1994
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
TOTAL
COMMON PAID-IN RETAINED TREASURY SHAREHOLDERS'
SHARES CAPITAL EARNINGS STOCK EQUITY
------- ------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balances, January 30, 1993..... $ 6,448 $4,277 $(6,416) $(1,278) $ 3,031
Net loss, fiscal 1994.......... (1,346) (1,346)
Forgiveness of subsidiary debt
by Jupiter.................... 100 100
Exercise of stock options for
10,000 common shares.......... 5 5
Purchase of 137 common shares..
Issuance of 1,127,000 shares to
Jupiter....................... 4,789 4,789
Gain on sale of subsidiary to
Jupiter....................... 212 212
Dividends accrued on redeemable
preferred stock............... (181) (181)
------- ------ ------- ------- -------
Balances, January 29, 1994..... 11,242 4,589 (7,943) (1,278) 6,610
Net income, fiscal 1995........ 487 487
Gain on sale of H-K stock to
Jupiter....................... 1,540 1,540
Purchase of 285 common shares.. (1) (1)
Dividends accrued on redeemable
preferred stock............... (220) (220)
------- ------ ------- ------- -------
Balances, January 28, 1995..... 11,242 6,129 (7,676) (1,279) 8,416
Net income, fiscal 1996........ 2,753 2,753
Gain on sale of H-K stock to
Jupiter....................... 176 176
Loss on purchase of H-K stock
from Jupiter.................. (1,530) (1,530)
Exercise of stock options for
8,000 common shares........... 4 4
Purchase of 884 common shares.. (6) (6)
Dividends accrued on redeemable
preferred stock............... (281) (281)
------- ------ ------- ------- -------
Balances, January 27, 1996..... $11,246 $4,775 $(5,204) $(1,285) $ 9,532
======= ====== ======= ======= =======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

14
<PAGE>

JG INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE FISCAL YEARS ENDED JANUARY 27, 1996,
JANUARY 28, 1995 AND JANUARY 29, 1994
(IN THOUSANDS)

<TABLE>
<CAPTION>
FISCAL YEAR
-----------------------
1996 1995 1994
------ ------ -------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss).................................... $2,753 $ 487 $(1,346)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization...................... 2,557 2,568 2,598
Deferred income taxes.............................. 23 494
Loss (gain) on subsidiary stock transactions, net.. 23 6 (128)
Minority interest in net income of subsidiaries.... 526 2,902 1,878
Gain on sale of assets and discontinued operations. (6,619)
Changes in assets and liabilities:
Accounts receivable................................ 4,238 (1,291) (2,473)
Merchandise inventories............................ 351 (1,246) (1,962)
Other assets (current)............................. 177 (60) (336)
Other assets (noncurrent).......................... (123) (87) (131)
Accounts payable and accrued liabilities........... (4,098) 2,378 2,954
------ ------ -------
Net cash (used in) provided by operating
activities...................................... (192) 6,151 1,054
------ ------ -------
Cash flows from investing activities:
Net proceeds from sale of assets and discontinued
operations.......................................... 11,827 800 503
Capital expenditures................................. (1,533) (2,087) (2,164)
Purchase of annuity contracts........................ (32) (40) (27)
------ ------ -------
Net cash provided by (used in) investing
activities...................................... 10,262 (1,327) (1,688)
------ ------ -------
Cash flows from financing activities:
Borrowings from affiliate............................ 5,075
Net short-term borrowings............................ 200 (250)
Principal payments of long-term debt................. (8,537) (2,525) (4,763)
Repayment of note payable to Jupiter................. (1,000)
Proceeds from issuance of long-term debt............. 1,500
Net (repayments) borrowings under revolving credit
loan................................................ (2,169) 950
Proceeds from exercise of stock options.............. 4 5
Proceeds from exercise of stock options at
subsidiary.......................................... 13 5 5
Purchase of treasury shares.......................... (6) (1)
------ ------ -------
Net cash (used in) provided by financing
activities...................................... (8,326) (4,690) 1,522
------ ------ -------
Net (decrease) increase in cash and cash equivalents... 1,744 134 888
Cash and cash equivalents at beginning of year......... 2,048 1,914 1,026
------ ------ -------
Cash and cash equivalents at end of year............... $3,792 $2,048 $ 1,914
====== ====== =======
Cash paid during the fiscal year for:
Interest............................................. $1,073 $1,257 $ 1,463
Income taxes......................................... 143 262 55
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

15
<PAGE>

JG INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A) Principles of Consolidation--The consolidated financial statements
include the accounts of JG Industries, Inc. (the "Company" or "JG") and
subsidiary companies that are majority owned or effectively controlled, one of
which had a January 31 fiscal year-end for all years. The Company's majority
owned subsidiaries include Goldblatt's Department Stores, Inc. ("Goldblatt's")
(the Company's discount department store division) and Sussex Group, Ltd.
("Sussex") which formerly controlled 56.0% of the outstanding common stock of
Huffman Koos Inc. ("H-K") (the Company's discontinued furniture division). H-K
has been accounted for as a discontinued operation in the accompanying
consolidated financial statements through October 28, 1995 when an unrelated
third party acquired all of the issued and outstanding H-K shares. The Company
is now engaged in retail merchandising operations in one continuing business
segment consisting of fourteen discount department stores primarily located in
the Chicago, Illinois vicinity. Significant intercompany accounts and
transactions have been eliminated.

Prior to July 23, 1993, Jupiter Industries, Inc. ("Jupiter") was the owner
of approximately 46.4% of the Company's outstanding common stock. At the
Company's Annual Meeting of Shareholders on July 20, 1993, the shareholders
approved a 3,000,000 share increase to the Company's authorized capital stock
and an Agreement and Plan of Merger (the "Agreement") between the Company and
SGH Inc. ("SGH", an indirect majority owner of Sussex) which was owned 80% by
JG and 20% by Jupiter. Under the terms of the Agreement, SGH was merged with
and into the Company, with the Company being the surviving corporation. The
shares of SGH owned by the Company were canceled and the shares of SGH owned
by Jupiter were converted into the right to receive 1,127,000 shares of the
Company's common stock. The merger was completed on July 23, 1993 and the
1,127,000 shares of the Company's common stock were issued to Jupiter on
August 4, 1993. As a result of this stock issuance, Jupiter's ownership
interest in JG was increased from approximately 46.4% to 55%.

B) Statement of Cash Flows--For purposes of the consolidated statement of
cash flows the Company considers all highly liquid investments purchased with
an original maturity of three months or less to be cash equivalents. As of
January 27, 1996 and January 28, 1995, cash and cash equivalents are
concentrated with banks located in the Midwest region of the United States.

C) Merchandise Inventories--Merchandise inventories are stated at the lower
of cost or market. Cost is determined on the last-in, first-out (LIFO) basis
for approximately 88% of the inventory using the retail method. The remaining
inventory is valued on the first-in, first-out (FIFO) basis using the retail
method. If the FIFO method had been used to value all inventories, cost would
have been $406,000 and $1,843,000 higher at January 27, 1996 and January 28,
1995, respectively.

D) Revenue Recognition--Due to the high percentage of special order sales
and the significant degree of expense which goes into obtaining such orders,
H-K recognizes revenue at the time a sales order is written. The related cost
of sales is recorded as a reduction of inventory for merchandise on hand or as
an undelivered sales liability for merchandise purchase commitments. H-K
charges results of operations and reduces accounts receivable for the
estimated gross profit on undelivered sales orders which may ultimately be
canceled. All direct selling, delivery and handling costs are charged to
results of operations when the sales order is written.

E) Land, Buildings and Equipment--Depreciation is computed using the
straight-line method over the following estimated useful lives of the assets:
buildings--25 to 30 years; leasehold improvements--up to 25 years, depending
on the applicable lease term; furniture, fixtures and equipment--3 to 12 1/2
years. Asset costs and related accumulated depreciation are eliminated from
the accounts when the asset is disposed of or at the end of its estimated
useful life. Expenditures for renewals and betterments are capitalized, while
costs of maintenance and repairs are charged to operations when incurred.

16
<PAGE>

JG INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
F) Leasehold Rights--Leasehold rights represent the value or cost of leases
acquired and improvements, principally related to the discontinued furniture
division. Amortization of the rights is computed using the straight-line
method over the terms of the related leases. Leasehold rights are shown net of
accumulated amortization of $31,000 at January 27, 1996 and $2,409,000 at
January 28, 1995.

G) Store Pre-Opening Costs--Noncapital expenditures incurred prior to the
opening of a new store are charged to expense in the year the store is opened.

H) Per Share Data--For fiscal 1996, 1995 and 1994, loss from continuing
operations and net income (loss) per common and common equivalent share are
computed based on the weighted average number of common shares outstanding of
7,060,335, 7,055,105, and 6,505,239, respectively. Common equivalent shares of
65,277, 74,994 and 85,250 in fiscal 1996, 1995 and 1994, respectively, are not
included as they would be anti-dilutive.

Income (loss) per share applicable to common shares for fiscal 1996, 1995
and 1994 is computed after recognition of the dividend requirements of
$281,000, $220,000 and $181,000, respectively, on the redeemable preferred
stock.

I) Income Taxes--The Company files a consolidated federal income tax return
with subsidiaries in which its ownership interest is 80% or greater. Thus, H-K
has not been included in the consolidated federal income tax return and was
required to file its federal income tax return on a separate entity basis.

The Company provides for income taxes in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income
Taxes". SFAS No. 109 requires the use of the liability method of accounting
for taxes, under which deferred tax assets and liabilities are recorded based
on the differences between the financial statement and tax bases of assets and
liabilities and the tax rates in effect when these differences are expected to
reverse. The principal assets and liabilities giving rise to such differences
are the different methods of accounting for inventory, depreciation and
certain accrued liabilities for tax and financial statement purposes and net
operating loss carryforwards. Deferred tax assets are reduced where
appropriate by a valuation allowance which reflects expectations of the extent
to which such assets will be realized.

J) Financial Instruments--The fair value of cash and cash equivalents is
assumed to approximate the carrying value of these assets due to the short
maturity of these instruments. The fair value of the Company's notes payable
and long-term debt is estimated to approximate the carrying value based upon
borrowing rates currently available to the Company for borrowings with similar
terms.

K) 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 reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at January 27,
1996 and January 28, 1995 and the reported amounts of revenues and expenses
during the three years ended January 27, 1996. Actual results could differ
from those estimates.

L) Reclassifications--Certain reclassifications have been made to January
28, 1995 amounts in order to conform to classifications at January 27, 1996.

2. STOCK TRANSACTIONS

During fiscal 1995, Sussex transferred or sold a total of 800,000 shares of
H-K common stock to Jupiter. The transfer of 700,000 shares of this stock on
February 3, 1996 was used to repay a $5,075,000 note payable to Jupiter. The
remaining 100,000 shares of H-K common stock was sold to Jupiter on November
30, 1994 for $800,000. As a result of the transfer and sale of the 800,000
shares, the Company recognized a gain of $1,540,000 in fiscal 1995. This gain
was recorded as an increase to paid-in capital and represents the difference
between the amount of the note retired and cash received and the amount of H-K
net equity represented by these shares.

17
<PAGE>

JG INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Pursuant to an Agreement and Plan of Merger dated September 18, 1995,
stockholders of H-K stock received a tender offer from an unrelated third
party on September 25, 1995 to acquire all of the issued and outstanding H-K
shares at a per share purchase price of $9.375 in cash. Upon consumption of
the tender offer on October 27, 1995, Sussex sold the 1,250,000 H-K shares
held directly by it for an aggregate cash consideration of approximately
$11,719,000. On October 27, 1995, pursuant to an agreement dated September 18,
1995 between Jupiter and Sussex, Sussex also exercised its option to
repurchase the 950,000 H-K shares for the total purchase price of $7,000,000
plus interest of approximately $641,000, and instructed Jupiter to tender the
950,000 H-K shares. As a result of the repurchase, the Company recorded a
$1,530,000 loss as a decrease to paid-in capital. This loss represents the
difference between the total cash due to Jupiter and the amount of H-K equity
represented by these shares. The Company also recorded a receivable from
Jupiter of approximately $1,265,000. This receivable represents the difference
between proceeds from the sale of $8,906,000 and $7,641,000 owed to Jupiter by
Sussex. The $6,295,000 gain on sale of discontinued operations for the year
ended January 27, 1996 is net of applicable income tax of $349,000 and
includes $42,000 of net income from discontinued operations during the phase-
out period from the measurement date of September 25, 1995, net of reversal of
income taxes provided in earlier quarters.

On October 30, 1995, the Company used proceeds received by Sussex from the
transaction to repay all debt outstanding under the Company's term loan of
approximately $6,250,000 plus interest, and to deposit $3,500,000 as
collateral on the Goldblatt's line of credit.

During fiscal 1996, options to purchase 13,400 shares of common stock of H-K
were exercised. A loss of $23,000 on the issuance of these shares was recorded
by the Company with an increase to minority interest as H-K's net book value
per share exceeded the option price. During fiscal 1995, options to purchase
4,400 shares of common stock of H-K were exercised. A loss of $6,000 was
recorded by the Company.

3. RECEIVABLES

Receivables in the consolidated balance sheets are shown net of the
allowances for cancellation of undelivered sales and doubtful accounts and
consist of the following at January 27, 1996 and January 28, 1995:

<TABLE>
<CAPTION>
FISCAL YEAR
------------
1996 1995
---- -------
(IN
THOUSANDS)
<S> <C> <C>
Accounts receivable--trade.................................... $100 $ 832
Undelivered trade accounts receivable......................... 22,462
Accounts receivable--other.................................... 292 1,073
---- -------
392 24,367
Less allowance for cancellations and doubtful accounts...... 42 384
---- -------
$350 $23,983
==== =======
</TABLE>

18
<PAGE>

JG INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
An analysis of the allowance for cancellation of undelivered sales and
doubtful accounts and the net provision charged to operations for fiscal 1996,
1995 and 1994 is as follows:

<TABLE>
<CAPTION>
FISCAL YEAR
----------------
1996 1995 1994
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Allowance for cancellations and doubtful accounts,
beginning of year.................................... $384 $452 $508
Accounts receivable written off....................... (45) (68) (56)
Reduction from sale of H-K............................ (297)
---- ---- ----
Allowance for cancellations and doubtful accounts, end
of year.............................................. $ 42 $384 $452
==== ==== ====
</TABLE>

At the time of delivery, undelivered trade accounts receivable are either
paid in cash by the customer or sold by the Company without recourse to an
unaffiliated third party. Undelivered trade accounts receivable are
concentrated with consumers located in the eastern region of the United
States.

4. NOTES PAYABLE AND LONG-TERM DEBT

Long-term debt at January 27, 1996 and January 28, 1995 is summarized as
follows (in thousands):

<TABLE>
<CAPTION>
BALANCE
---------------
DESCRIPTION 1/27/96 1/28/95 INTEREST RATE
----------- ------- ------- --------------------
<S> <C> <C> <C>
JG:
Term loan......................... $ 0 $ 7,125 Prime rate plus 3/4%
Notes payable to former
shareholders of M-K.............. 0 530 Non-interest bearing
H-K:
Mortgage Loan..................... 0 1,687 7.75%
Term loan......................... 0 750 5.41%
Goldblatt's:........................ 2,475 2,701 9%
------ -------
Mortgage loan..................... 2,475 12,793
Less current maturities .......... 627 2,382
------ -------
$1,848 $10,411
====== =======
</TABLE>

The prime rate applicable to notes payable and long-term debt was 8.5% at
January 27, 1996 and January 28, 1995.

Pursuant to the terms of its Preferred Stock Designations, substantially all
of the net worth of the Company is restricted as to the payment of dividends.
Approximately $8,000,000 of consolidated net assets of subsidiaries are
restricted as to transfer to the Company by the provisions of the various debt
agreements and Redeemable Preferred Stock Designations.

Long-term debt maturing within each of the five fiscal years subsequent to
January 27, 1996 is as follows (in thousands):

The loan agreement requires maintenance of certain financial covenants
including minimum tangible net worth and cash flow requirements. As of January
27, 1996, Goldblatt's was in violation of certain financial

19
<PAGE>

JG INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
covenants. Effective January 27, 1996, the financial institution granted
Goldblatt's waivers on the violations, modified the financial covenants and
extended the maturity date from December 26, 1996 to August 1, 1997. With the
execution and delivery of the amendment, a principal payment of $400,000 was
made subsequent to year-end. As of January 27, 1996, the loan requires monthly
payments of $19,000, plus interest. The loan is collateralized by certain real
estate assets (net book value of $2,505,000 and $2,525,000 at January 27, 1996
and January 28, 1995, respectively).

As of January 28, 1995, Goldblatt's had a $2,500,000 revolving line of
credit with a financial institution. During fiscal 1996, the line of credit
was increased to $3,500,000 and extended through May 1, 1996. During fiscal
1996, interest was payable at the prime rate plus .50%. The line of credit
agreement required the maintenance of certain financial ratios. As of January
27, 1996, Goldblatt's was in violation of a certain financial covenant.
Subsequent to year-end, the financial institution has granted Goldblatt's a
waiver of this covenant effective January 27, 1996. Furthermore, the financial
institution extended the line of credit through May 1, 1997 and removed the
financial covenants. Interest is payable at the certificate of deposit rate
plus 1%. The line is guaranteed by JG and is collateralized by a certificate
of deposit and commercial paper, total of $3,500,000 at January 27, 1996. The
amount of the collateral is restricted to the extent of outstanding borrowings
on the line, which is $200,000 at January 27, 1996. The availability of the
line at January 27, 1996 has been further reduced by $11,000 for outstanding
letters of credit for overseas purchases. The line of credit agreement
restricts the transfer of assets to the Company.

The weighted average interest rate on short-term borrowings for fiscal 1996,
1995 and 1994 were 9.30%, 7.14% and 6.36%, respectively.

5. REDEEMABLE PREFERRED STOCK

Redeemable Preferred Stock outstanding as of January 27, 1996 and January
28, 1995 consists of 445 shares of Series "A" 9% Cumulative Preferred Stock
with a face and liquidation value of $3,183,000. All shares are held by
Jupiter.

The Preferred Stock Designations require cumulative dividends, include
various financial covenants and have limited voting rights. An event of
default, as defined in the Preferred Stock Designations, makes the accumulated
dividends and face value outstanding at that time due in its entirety.

Effective January 31, 1993, Jupiter waived the future dividend requirements
on the outstanding Series "A" Cumulative Preferred Stock of JG, except for a
face value of $3,000,000 on which dividends are payable at the prime rate.
Jupiter may revoke this waiver prospectively at any time in the future.
Accordingly, the Company has accrued dividends payable in accordance with the
waivers. In addition, pursuant to the amended Preferred Stock Designations,
certain dividend payments have been made in-kind through the issuance of 43
additional shares of Preferred Stock in fiscal 1993. A minimum annual
redemption of $1,500,000 is required beginning in fiscal 1997, with complete
redemption in fiscal 1998.

The sale of H-K, as described in Note 2, gave rise to an obligation of the
Company under the Series A 9% Cumulative Preferred Stock Designations to
redeem all of the issued and outstanding shares of that class of stock. The
redemption price for all of the Series A Preferred Stock is approximately
$3,183,000 plus unpaid accrued and additional dividends of $754,000. As
discussed above, a mandatory obligation to redeem shares of Series A Preferred
Stock having a liquidation value of at least $1,500,000 is scheduled to arise
on May 1, 1996. The Directors not affiliated with Jupiter, on recommendation
of management of the Company, have determined to defer any redemption of the
Series A Preferred Stock until such time as it may do so without materially
adversely affecting the financial condition of the Company. Pending
satisfaction of any such redemption obligations, in accordance with the
Preferred Stock Designations, the dividend rate on the Series A Preferred
Stock is increased from 9% to 12% per annum, compounded quarterly. Jupiter is
seeking redemption of the Series A Preferred Stock.

20
<PAGE>

JG INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

6. INCOME TAXES

The income tax provisions before minority interest are comprised of the
following:

<TABLE>
<CAPTION>
FISCAL YEAR
--------------
1996 1995 1994
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Current: Federal........................................... $ 99 $ 60
State.................................................. $18 73 48
Deferred................................................... 494
--- ---- ----
$18 $666 $108
=== ==== ====
</TABLE>

The Company has net operating loss carryforwards which are used to offset
taxable income for federal purposes, excluding income of H-K which was
reported on a separate entity basis and a portion of taxable income subject to
alternative minimum tax. H-K had its own net operating loss carryforwards
which were used to offset its separate company taxable income. A portion of
taxable income for state tax purposes was also offset by net operating loss
carryforwards. For fiscal 1995 and 1994, the realization of the tax benefit of
net operating loss carryforwards of $1,889,000 and $1,564,000, respectively,
are treated as a reduction of the income tax provision.

Following is a reconciliation of the difference between the statutory
federal income tax rate and the effective income tax rate on income from
continuing operations before minority interest as reflected in the
accompanying consolidated statements of operations:

<TABLE>
<CAPTION>
FISCAL YEAR
--------------------
1996 1995 1994
----- ----- -----
<S> <C> <C> <C>
Provision at the statutory tax rate................. (34.0)% 34.0% 34.0%
State income taxes, net............................. .5 5.6 29.0
Utilization of net operating loss carryforwards..... (48.4) 29.8
Change in valuation allowance....................... 34.0 25.2 (75.9)
----- ----- -----
.5% 16.4% 16.9%
===== ===== =====
</TABLE>

At January 27, 1996, the Company has net operating loss carryforwards of
approximately $30,607,000 available to offset future taxable income for
federal income tax purposes. These carryforwards expire principally in fiscal
1997 through 2011.

The components of the net deferred tax assets and liabilities as of January
27, 1996 and January 28, 1995 are as follows:

<TABLE>
<CAPTION>
1996 1995
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Inventory........................................... $ 214 $ 647
Accruals and other liabilities...................... 311 654
Property, plant and equipment....................... 626
Alternative Minimum Tax credit...................... 349
Net operating loss carryforwards.................... 11,937 20,885
-------- --------
12,811 22,812
Valuation allowance................................. (11,954) (18,466)
-------- --------
857 4,346
-------- --------
Deferred tax liabilities:
Receivables......................................... 4,046
Inventory........................................... 98
Property, plant and equipment....................... 857 696
-------- --------
857 4,840
-------- --------
Net deferred tax liabilities........................ $ -- $ 494
======== ========
</TABLE>

21
<PAGE>

JG INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
7. LEASE COMMITMENTS

The following table presents the future minimum lease commitments for all
operating leases that have initial or remaining noncancelable terms in excess
of one year. The leases expire in fiscal 1997 to 2006 and have various renewal
options.

<TABLE>
<CAPTION>
FISCAL OPERATING
YEAR LEASES
------ --------------
(IN THOUSANDS)
<S> <C>
1997..................... $ 2,224
1998..................... 2,265
1999..................... 2,101
2000..................... 2,017
2001..................... 2,028
Thereafter............... 7,075
-------
Total minimum lease
payments.............. $17,710
=======
</TABLE>

Certain store leases contain contingent rental provisions based on retail
sales. Rent expense, net of insignificant sublease income, for fiscal years
1996, 1995 and 1994 was $2,368,000, $6,493,000 and $5,720,000, respectively,
including contingent rentals of $174,000, $149,000 and $127,000.

8. DISCONTINUED OPERATIONS, SALE OF ASSETS AND STORE CLOSINGS

As a result of the sale of H-K, as described in Note 2, previously issued
consolidated statements of operations have been restated to reflect H-K as a
discontinued operation.

Summarized results of H-K business were as follows (excluding the impact of
minority interest and management fees allocated to H-K on the Company's
financial statements):

<TABLE>
<CAPTION>
FISCAL YEAR
------------------------
1996 1995 1994
------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Net sales....................................... $84,807 $119,089 $99,373
Costs and expenses.............................. 84,675 114,097 95,252
------- -------- -------
Income before income taxes.................... 132 4,992 4,121
Income taxes.................................... 53 646 88
------- -------- -------
Net income...................................... $ 79 $ 4,346 $ 4,033
======= ======== =======
</TABLE>

Net assets of the discontinued business were as follows:

<TABLE>
<CAPTION>
OCTOBER 28, JANUARY 28,
1995 1995
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents........................ $ 1,017 $ 1,630
Receivables, net................................. 19,395 23,728
Merchandise, inventories......................... 19,906 19,325
Land, buildings and equipment net of accumulated
depreciation.................................... 5,634 5,566
Other assets..................................... 2,355 2,669
Current Liabilities.............................. (21,101) (26,513)
Long-term debt, net of current portion........... (2,271) (1,562)
-------- --------
Net assets of the discontinued business........ $ 24,935 $ 24,843
======== ========
</TABLE>

22
<PAGE>

JG INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
9. PENSION, PROFIT-SHARING AND EMPLOYEE BENEFIT PLANS

The Company and its subsidiary have defined contribution plans which
substantially all non-union employees may join after completing one year and
1,000 hours of service. Annually, the companies contribute a discretionary
amount determined by their respective Boards of Directors and participants may
voluntarily contribute varying percentages of their compensation.

Approximately $137,000, $325,000 and $288,000 of expenses relating to these
plans are included in the consolidated statements of operations in fiscal
1996, 1995, and 1994, respectively. All plans are qualified under provisions
of the Internal Revenue Code.

10. STOCK OPTION PLAN

Information for the fiscal years ended January 29, 1994, January 28, 1995
and January 27, 1996 with respect to options under the Company's Plans is as
follows:

<TABLE>
<CAPTION>
NUMBER OF OPTION PRICE
SHARES PER SHARE
--------- -------------
<S> <C> <C>
Shares under Option:
January 30, 1993................................ 116,500 $ .50
Granted....................................... 5,000 2.25
Exercised..................................... (10,000) .50
-------
January 29, 1994................................ 111,500 .50 to 2.25
Granted....................................... 58,000 1.31 to 1.63
Expired/Canceled.............................. (6,000) .50 to 2.25
-------
January 28, 1995................................ 163,500 .50 to 1.63
Exercised..................................... (8,000) .50
Expired/Canceled.............................. (7,000) .50 to 1.31
-------
January 27, 1996................................ 148,500 .50 to 1.63
=======
</TABLE>

All options are exercisable for a 10-year period beginning on the date of
the grant.

No compensation expense has been recognized by the Company as all options
were granted at the market price of the stock on the date of the grants.

11. FOURTH QUARTER ADJUSTMENTS

Results of continuing operations in the fourth quarter of fiscal 1996, 1995
and 1994 were increased by year end adjustments of approximately $666,000,
$716,000 and $525,000, respectively, which related primarily to adjustments to
inventory and certain miscellaneous accruals.

12. SUPPLEMENTARY INFORMATION

Accrued liabilities in the consolidated balance sheets include sales tax
payable of $152,000 and $2,347,000 at January 27, 1996 and January 28, 1995,
respectively.

Charges to selling, general and administrative expenses for fiscal 1996,
1995 and 1994, include the following:

<TABLE>
<CAPTION>
FISCAL YEAR
--------------------
1996 1995 1994
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Advertising costs................................... $1,571 $1,647 $1,682
Real estate and personal property taxes............. 1,282 1,303 1,235
</TABLE>

23
<PAGE>

JG INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)
Advertising costs are expensed when incurred.

13. RELATED PARTY TRANSACTIONS

Through July 31, 1993, a subsidiary of the Company was required to pay a
management fee to Jupiter of 4.5% of Sussex's cumulative income before federal
income taxes. The fees recorded were $11,000 in fiscal 1994.

Jupiter owns a portion of the company from which annuity contracts were
purchased in fiscal 1996, 1995 and 1994. The total value of the contracts of
$1,301,000 and $1,180,000 is included in other assets at January 27, 1996 and
January 28, 1995, respectively. The annuity contract was purchased to secure
payments under certain contractual obligations for future services to the
chief executive officer of the Company. In addition, the Company earned
interest of $90,000, $82,000, and $74,000 on these annuity contracts during
fiscal 1996, 1995, and 1994, respectively.

24
<PAGE>

SCHEDULE I

JG INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

CONDENSED BALANCE SHEETS

JANUARY 27, 1996 AND JANUARY 28, 1995
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
JANUARY 27, JANUARY 28,
ASSETS 1996 1996
------ ----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents............................ $ 3,792 $ 50
Receivables.......................................... 4 --
Other assets......................................... 22 45
------- -------
Total current assets............................... 3,818 95
------- -------
Investments in and advances to subsidiaries, at equity. 10,874 20,086
Equipment, at cost, net of accumulated depreciation.... 87 99
Other assets........................................... 105 197
------- -------
$14,884 $20,477
======= =======
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt.................... $ 1,280
Accounts payable and accrued liabilities............. $ 1,415 750
------- -------
Total current liabilities.......................... 1,415 2,030
------- -------
Long-term debt, less current portion................... 6,375
Redeemable preferred stock, including accrued dividends
of $754 and $473, respectively........................ 3,937 3,656
Commitments and contingencies
Common stock and other shareholders' equity:
Common shares, no par value; authorized 10,000,000
shares; issued 7,209,311 shares..................... 11,246 11,242
Paid in capital...................................... 4,775 6,129
Accumulated deficit.................................. (5,204) (7,676)
Treasury stock, 154,438 and 154,153 shares at cost,
respectively........................................ (1,285) (1,279)
------- -------
Total common stock and other shareholders' equity.. 9,532 8,416
------- -------
$14,884 $20,477
======= =======
</TABLE>

The accompanying notes are an integral part of the condensed financial informa-
tion of the Registrant.

25
<PAGE>

SCHEDULE I

JG INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

CONDENSED STATEMENTS OF OPERATIONS

FOR THE FISCAL YEARS ENDED JANUARY 27, 1996,
JANUARY 28, 1995 AND JANUARY 29, 1994
(IN THOUSANDS)

<TABLE>
<CAPTION>
FISCAL YEAR
-------------------------
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Corporate management fee............................ $ 1,190 $ 1,392 $ 1,135
Selling, general and administrative expenses........ 1,357 1,221 1,244
------- ------- -------
Operating (loss) income........................... (167) 171 (109)
Interest expense, net............................... (429) (1,011) (855)
Intercompany interest expense, net.................. (1,418) (417) (268)
------- ------- -------
Loss before equity in net income (loss) of
subsidiaries..................................... (2,014) (1,257) (1,232)
Equity in net (loss) income of subsidiaries......... (2,089) 136 (2,390)
Equity in net income of discontinued operations..... 6,856 1,608 2,276
------- ------- -------
Net income (loss)................................. 2,753 487 (1,346)
Accumulated deficit, beginning of year.............. (7,676) (7,943) (6,416)
Cash dividends accrued on redeemable preferred
stock.............................................. (281) (220) (181)
------- ------- -------
Accumulated deficit, end of year.................... $(5,204) $(7,676) $(7,943)
======= ======= =======
</TABLE>

The accompanying notes are an integral part of the condensed financial
information of the Registrant.

26
<PAGE>

SCHEDULE I

JG INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE FISCAL YEARS ENDED JANUARY 27, 1996,
JANUARY 28, 1995 AND JANUARY 29, 1994

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FISCAL YEAR
-------------------------
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)................................. $ 2,753 $ 487 $(1,346)
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Equity in net (income) loss of subsidiaries..... (4,667) (1,744) 114
Depreciation.................................... 130 13 40
Gain on sale of asset........................... (100)
Change in assets and liabilities:
Accounts Receivable............................. (4)
Other assets (current).......................... 23 (9) (5)
Other assets (non-current)...................... (25) (6) (34)
Accounts payable and accrued liabilities........ 665 338 65
------- ------- -------
Net cash used in operating activities......... (1,225) (921) (1,166)
------- ------- -------
Cash flows from investing activities:
Capital expenditures.............................. (1) (5) (16)
Proceeds from sale of assets...................... 225
Dividends received from subsidiaries, net......... 7
Investments in and advances from subsidiaries,
net.............................................. 12,624 2,247 5,802
------- ------- -------
Net cash provided by investing activities..... 12,623 2,242 6,018
------- ------- -------
Cash flows from financing activities:
Principal payments of long-term debt.............. (7,655) (1,280) (4,850)
Proceeds from exercise of stock options........... 4 5
Purchase of treasury shares....................... (5)
------- ------- -------
Net cash used in financing activities......... (7,656) (1,280) (4,845)
------- ------- -------
Net increase in cash and cash equivalents........... 3,742 41 7
Cash and cash equivalents at beginning of year...... 50 9 2
------- ------- -------
Cash and cash equivalents at end of year............ $ 3,792 $ 50 $ 9
======= ======= =======
Cash paid (received) during the fiscal year for:
Interest.......................................... $ 642 $ 988 $ 1,075
Income taxes...................................... (14) 14 (1)
</TABLE>

The accompanying notes are an integral part of the condensed financial
information of the Registrant.

27
<PAGE>

SCHEDULE I

JG INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

NOTES TO CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

1. NOTES PAYABLE AND REDEEMABLE PREFERRED STOCK

Information with respect to indebtedness and Redeemable Preferred Stock of
the Registrant and indebtedness of subsidiaries guaranteed by the Registrant
is summarized in notes 4 and 5 of notes to consolidated financial statements.

2. DIVIDEND RESTRICTIONS

Restrictions contained in certain loan agreements with financial
institutions limit the payment of cash dividends to the Registrant by its
consolidated subsidiaries. Dividends are limited to payments from Goldblatt's
subject to certain net worth requirements.

28
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

JG Industries, Inc.

/s/ William Hellman
By __________________________________
William Hellman
Chairman and Chief
Executive Officer
Dated: May 8, 1996

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.

<S> <C> <C>
/s/ William Hellman Chairman and Chief Executive Date: May 8, 1996
____________________________________ Officer
William Hellman
Directors:
/s/ Peter C.B. Bynoe Director Date: May 8, 1996
____________________________________
Peter C.B. Bynoe

/s/ Sheldon Collen Director Date: May 8, 1996
____________________________________
Sheldon Collen

/s/ Max Dressler Director Date: May 8, 1996
____________________________________
Max Dressler

/s/ Lionel Goldblatt Director Date: May 8, 1996
____________________________________
Lionel Goldblatt

/s/ William Hellman Director Date: May 8, 1996
____________________________________
William Hellman

/s/ Charles Jamison Director Date: May 8, 1996
____________________________________
Charles Jamison

/s/ Michael Kurzman Director Date: May 8, 1996
____________________________________
Michael Kurzman

/s/ Philip Rootberg Director Date: May 8, 1996
____________________________________
Philip Rootberg

/s/ Edward Ross Director Date: May 8, 1996
____________________________________
Edward Ross

/s/ Wallace W. Schroeder Director Date: May 8, 1996
____________________________________
Wallace W. Schroeder
</TABLE>

29
<PAGE>

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT DESCRIPTION NUMBER
------- -------------------- ----------
<C> <S> <C>
2.1 Disclosure Statement of the Company, dated July 6,
1983, filed by the Company with the Bankruptcy Court
and delivered to the Company's creditors and sharehold-
ers, which describes the Plan of Reorganization as an
Exhibit. (Previously filed as Exhibit 2.1 to the Cur-
rent Report on Form 8-K dated October 14, 1983 and is
incorporated herein by reference.)
2.2 Stock Purchase Agreement, dated as of October 1, 1984,
among Goldblatt Bros., Inc., The Jupiter Corporation
and JGM Holdings, Inc., and Marvin Kagan, Robert D.
Berk, Dennis R. McGarvy, Theodore Lazaraton and Paul
Homer, as Trustee of the Marvin Kagan Irrevocable Trust
Agreement U/T/A, dated May 20, 1983, relating to the
stock purchase of all of the outstanding stock of
Milgram-Kagan Corporation by the Company. (Previously
filed as Exhibit 2.1 to the Current Report on Form 8-K
dated November 7, 1984, and is incorporated herein by
reference.)
2.3 First Amendment to Stock Purchase Agreement, dated as
of February 28, 1985. (Previously filed as Exhibit 2.3
to the 1986 10-K and is incorporated herein by refer-
ence.)
2.4 Purchase and Sale Agreement, dated as of September 29,
1984 (the "Purchase and Sale Agreement"), by and be-
tween Jay Sixteen Corporation (now known as Sussex
Group, Ltd. after name change) and Household Merchan-
dising, Inc. and Huffman Koos Company. (Previously
filed as Exhibit 2.1 to the Current Report on Form 8-K,
dated January 10, 1985 (the "1985 8-K"), and is incor-
porated herein by reference.)
2.5 First Amendment to Purchase and Sale Agreement, dated
as of January 4, 1985. (Previously filed as Exhibit 2.2
to the 1985 8-K and is incorporated herein by refer-
ence.)
2.6 Second Amendment to Purchase and Sale Agreement, dated
as of January 9, 1985. (Previously filed as Exhibit 2.3
to the 1985 8-K and is incorporated herein by refer-
ence.)
2.7 Purchase and Sale Agreement, dated as of March 8, 1985,
by and between Sussex Group, Ltd. and McMahan's Valley
Stores. (Previously filed as Exhibit 2.6 to the 1986
10-K and is incorporated herein by reference.)
2.8 First Amendment to Purchase and Sale Agreement, dated
April 1, 1985. (Previously filed as Exhibit 2.7 to the
1986 10-K and is incorporated herein by reference.)
2.9 Agreement for the Purchase and Sale of Assets, dated
April 15, 1987, by and between Sussex Group, Ltd. and
RBK Furniture, Inc. (Previously filed as Exhibit 2.9 to
the 1987 10-K and is incorporated herein by reference.)
2.10 Stock Purchase Agreement, dated September 30, 1985, by
and among Milgram-Kagan Corporation, a Delaware Corpo-
ration, and William A. Wiss individually, and as
Trustee under Living Trust of William A. Wiss, and Al-
vin Steinman and Marvin Talan. (Previously filed as Ex-
hibit 2.8 to the 1986 10-K and is incorporated herein
by reference.)
2.11 Agreement and Plan of Reorganization, dated October 10,
1986, by and between JG Industries, Inc. and
Goldblatt's Department Stores, Inc. (Previously filed
as Exhibit 2.11 to the 1987 10-K and is incorporated
herein by reference.)
2.12 Agreement and Plan of Reorganization, dated September
25, 1987 by and among the following: JG Industries,
Inc., an Illinois corporation; JGM Holdings, Inc., a
Delaware corporation; The Jupiter Corporation, a Dela-
ware corporation; Milgram-Kagan Corporation, a Delaware
corporation; and the following individuals: Marvin Ka-
gan, Dennis R. McGarvy, Theodore Lazaraton, Paul Homer,
as Trustee of the Marvin Kagan Irrevocable Trust Agree-
ment U/T/A dated May 20, 1983 and Marvin Kagan, as
Trustee. (Previously filed as Exhibit 2.12 to the 1988
10-K and is incorporated herein by reference.)
</TABLE>

30
<PAGE>

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT DESCRIPTION NUMBER
------- -------------------- ----------
<C> <S> <C>
2.13 Stock Purchase Agreement, dated February 15, 1988, by
and among Sussex Group Holding Company and Michael L.
Silverman and Sydney Selati. (Previously filed as Ex-
hibit 2.13 to the 1988 10-K and is incorporated herein
by reference.)
2.14 Purchase Agreement, dated as of March 16, 1988 by and
between Ward White U.S.A. Holdings, Inc., a Delaware
corporation, Charles Kushins, Inc., a Delaware corpora-
tion, Milgram-Kagan Corporation, a Delaware corporation
and Kushins Acquisition, Inc., a Delaware corporation.
(Previously filed as Exhibit 2.14 to the April 30, 1988
10-Q and is incorporated herein by reference.)
2.15 Purchase and Sale Agreement, dated as of June 29, 1989
by and between BBD Acquisition Corporation, a Delaware
corporation, Sussex Group, Ltd., a Delaware corporation
and JG Industries, Inc., an Illinois corporation. (Pre-
viously filed as Exhibit 2.1 to the August 10, 1989 8-K
and is incorporated herein by reference.)
2.16 First Amendment to Purchase and Sale Agreement, dated
as of August 1, 1989. (Previously filed as Exhibit 2.2
to the August 10, 1989 8-K and is incorporated herein
by reference.)
2.17 Termination Agreement, dated September 7, 1990 by and
among Marvin Kagan, Milgram-Kagan Corporation, a Dela-
ware corporation, The Jupiter Corporation, an Illinois
corporation, JG Industries, Inc., an Illinois corpora-
tion, J. Kagan Corporation, an Illinois corporation,
JJJ Shoe Corp., an Illinois corporation, Gold Shoes,
Inc., an Illinois corporation, and JGM Holdings, Inc.,
a Delaware corporation. (Previously filed as Exhibit
2.17 to the 1991 10-K and is incorporated herein by
reference.)
2.18 Purchase and Sale Agreement, dated as of October 13,
1992 by and among JG Industries, Inc., Westinghouse
Credit Corporation and The Jupiter Corporation. (Previ-
ously filed as Exhibit 10.1 to the October 13, 1992 8-K
and is incorporated herein by reference.)
2.19 Settlement Agreement, dated as of January 30, 1993 by
and among JG Industries, Inc., The Jupiter Corporation,
JGM Holdings, Inc., Theodore Lazaraton and Dennis
McGarvy. (Previously filed as Exhibit 2.19 to the 1993
10-K and is incorporated herein by reference.)
2.20 Memorandum of Settlement, dated as of January 30, 1993
by and among JG Industries, Inc., The Jupiter Corpora-
tion, JGM Holdings, Inc., Marvin Kagan and Paul Homer,
Trustee of The Marvin Kagan Irrevocable Trust. (Previ-
ously filed as Exhibit 2.20 to the 1993 10-K and is in-
corporated herein by reference.)
2.21 Agreement and Plan of Merger, dated July 20, 1993, be-
tween SGH, Inc. and JG Industries, Inc. (Previously
filed in preliminary form as Exhibit A to the June 22,
1993 Notice of Annual Meeting of Shareholders and Proxy
Statement).
2.22 Stock Purchase and Loan Agreement, dated as of November
3, 1993 (but effective October 29, 1993), among The Ju-
piter Corporation, Sussex Group Ltd., and JG Indus-
tries, Inc.
2.23 First Amendment to Stock Purchase and Loan Agreement,
dated as of November 29, 1994, among Sussex Group,
Ltd., Jupiter Industries, Inc., and JG Industries, Inc.
(Previously filed as Exhibit 2.23 to the October 29,
1994 10-Q and is incorporated herein by reference.)
2.24 Stock Purchase Agreement, dated as of November 29,
1994, between Jupiter Industries, Inc. and Sussex
Group, Ltd. (Previously filed as Exhibit 2.24 to the
October 29, 1994 10-Q and is incorporated herein by
reference).
2.25 Agreement and Plan of Merger, dated as of September 18,
1995, among Huffman Koos, Inc., HK Acquisition Company,
Inc. and Breuner's Home Furnishings Corporation. (Pre-
viously filed as Exhibit 2.1 to the September 18, 1995
8-K and is incorporated herein by reference.)
</TABLE>

31
<PAGE>

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT DESCRIPTION NUMBER
------- -------------------- ----------
<C> <S> <C>
2.26 Stockholders' Agreement, dated September 18, 1995,
among HK Acquisition Company, Inc., Breuner's Home Fur-
nishings Corporation, Jupiter Industries, Inc. and Sus-
sex Group, Ltd. (Previously filed as Exhibit 2.2 to the
September 18, 1995 8-K and is incorporated herein by
reference.)
3.1 Articles of Amendment and Restated Articles to the Ar-
ticles of Incorporation of the Company. (Previously
filed as Exhibit 3.1 to the July 28, 1990 10-Q and is
incorporated herein by reference.)
3.2 By-Laws of the Company, as amended on April 29, 1992.
(Previously filed as Exhibit 3.3 to the April 25, 1992
10-Q and is incorporated herein by reference.)
4.1 Certificate of the Voting Powers, Designations, Prefer-
ences and Relative, Participating, Optional or Other
Rights, and the Qualifications, Limitations or Restric-
tions thereof, of the Series A 9% Cumulative Preferred
Stock of the Company. (Previously filed as Exhibit 4.1
to the July 28, 1990 10-Q and is incorporated herein by
reference.)
4.2 First Amendment to Certificate of the Voting Powers,
Designations, Preferences and Relative, Participating,
Optional or Other Rights, and the Qualifications, Limi-
tations or Restrictions thereof, of the Series A 9% Cu-
mulative Preferred Stock of the Company. (Previously
filed as Exhibit 4.2 to the 1991 10-K and is incorpo-
rated herein by reference.)
4.3 Second Amendment to Certificate of the Voting Powers,
Designations, Preferences and Relative, Participating,
Optional or Other Rights, and the Qualifications, Limi-
tations or Restrictions thereof, of the Series A 9% Cu-
mulative Preferred Stock of the Company. (Previously
filed as Exhibit 4.3 to the July 25, 1992 10-Q and is
incorporated herein by reference.)
4.4 Third Amendment to Certificate of the Voting Powers,
Designations, preferences and Relative, Participating,
Optional or Other Rights, and the Qualifications, Limi-
tations or Restrictions thereof, of the Series A 9% Cu-
mulative Preferred Stock of the Company. (Previously
filed as Exhibit 4.1 to the October 13, 1992 8-K and is
incorporated herein by reference.)
10.1 Amended and Restated Employment Agreement dated, June
1, 1983, between the Company and William Hellman. (Pre-
viously filed as Exhibit 10.1 to the 1984 10-K and is
incorporated herein by reference.)
10.2 First Amendment to Amended and Restated Employment
Agreement, dated August 8, 1985, between the Company
and William Hellman. (Previously filed as Exhibit 10.2
to the 1986 10-K and is incorporated herein by refer-
ence.)
10.3 Guaranty of The Jupiter Corporation, dated as of June
1, 1983 relative to the Amended and Restated Employment
Agreement, dated as of June 1, 1983, by and between the
Company and William Hellman. (Previously filed as Ex-
hibit 10.2 to the 1985 10-K and is incorporated herein
by reference.)
10.4 Second Amendment to Amended and Restated Employment
Agreement, including a Stock Purchase and Sale Agree-
ment, dated July 23, 1986, between the Company and Wil-
liam Hellman. (Previously filed as Exhibit 10.4 to the
Company's July 26, 1986 10-Q and is incorporated herein
by reference.)
10.5 Employment Agreement, dated June 1, 1983, between the
Company and Lionel H. Goldblatt. (Previously filed as
Exhibit 10.2 to the 1984 10-K and is incorporated
herein by reference.)
10.6 Amendment to Employment Agreement, dated July 22, 1987
between and among the Company, Goldblatt's Department
Stores, Inc. and Lionel H. Goldblatt. (Previously filed
as Exhibit 10.6 to the 1988 10-K and is incorporated
herein by reference.)
</TABLE>

32
<PAGE>

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT DESCRIPTION NUMBER
------- -------------------- ----------
<C> <S> <C>
10.7 Incentive Stock Option and Non-Statutory Stock Option
Agreement. (Previously filed as Exhibit 4.2 to the
Company's Registration Statement on Form S-8, dated
September 29, 1984, and is incorporated herein by ref-
erence.)
10.8 1983 Stock Option and Stock Appreciation Rights Plan.
(Previously filed as Exhibit 10.4 to the 1984 10-K and
is incorporated herein by reference.)
10.9 1988 Stock Option Plan (Previously filed as Exhibit
10.9 to the 1989 10-K and is incorporated herein by
reference.)
10.10 Third Amendment to Amended and Restated Employment
Agreement, dated October 3, 1988, between the Company
and William Hellman. (Previously filed as Exhibit 10.10
to the 1989 10-K and is incorporated herein by refer-
ence.)
10.11 Fourth Amendment to Amended and Restated Employment
Agreement, dated March 28, 1989, between the Company
and William Hellman. (Previously filed as Exhibit 10.11
to the 1989 10-K and is incorporated herein by refer-
ence.)
10.12 Fourth Amendment to Employment Agreement, dated April
6, 1988 between and among the Company, Goldblatt's De-
partment Stores, Inc. and Lionel H. Goldblatt. (Previ-
ously filed as Exhibit 10.12 to the 1989 10-K and is
incorporated herein by reference.)
10.13 Fifth Amendment to Employment Agreement, dated March
28, 1989 between and among the Company, Goldblatt's De-
partment Stores, Inc. and Lionel H. Goldblatt. (Previ-
ously filed as Exhibit 10.13 to the 1989 10-K and is
incorporated herein by reference.)
10.14 Fifth Amendment to Amended and Restated Employment
Agreement, dated January 25, 1991 between the Company
and William Hellman. (Previously filed as Exhibit 10.14
to the 1991 10-K and is incorporated herein by refer-
ence.)
10.15 Sixth Amendment to Employment Agreement, dated January
28, 1991 between and among the Company, Goldblatt's De-
partment Stores, Inc. and Lionel H. Goldblatt. (Previ-
ously filed as Exhibit 10.15 to the 1991 10-K and is
incorporated herein by reference.)
10.16 Seventh Amendment to Employment Agreement, dated Febru-
ary 18, 1992 between and among the Company, Goldblatt's
Department Stores, Inc. and Lionel H. Goldblatt. (Pre-
viously filed as Exhibit 10.16 to the 1992 10-K and is
incorporated herein by reference.)
10.17 Sixth Amendment to Amended and Restated Employment
Agreement, dated April 27, 1992, between the Company
and William Hellman. (Previously filed as Exhibit 10.17
to the April 25, 1992 10-Q and is incorporated herein
by reference.)
10.18 Eighth Amendment to Employment Agreement, dated Febru-
ary 23, 1994 between and among the Company, Goldblatt's
Department Stores, Inc. and Lionel H. Goldblatt.
10.19 Eighth Amendment to Amended and Restated Employment
Agreement, dated May 26, 1994, between the Company and
William Hellman. (Previously filed as Exhibit 10.19 to
the April 30, 1994 10-Q and is incorporated herein by
reference.)
10.20 Ninth Amendment to Employment Agreement, dated April
19, 1995, between and among the Company, Goldblatt's
Department Stores, Inc. and Lionel H. Goldblatt. (Pre-
viously filed as Exhibit 10.20 to the January 28, 1995
10-K and is incorporated herein by reference.)
10.21 Ninth Amendment to Amended and Restated Employment
Agreement, dated June 12, 1995, between the Company,
Goldblatt's Department Stores, Inc. and William
Hellman.
22.1 List of Subsidiaries.
24.1 Consent of Coopers & Lybrand L.L.P., Independent Ac-
countants.
</TABLE>

33
<PAGE>

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT DESCRIPTION NUMBER
------- -------------------- ----------
<C> <S> <C>
28.1 Supplemental Agreement, dated as of June 17, 1983, be-
tween the Company, Goldblatt Subsidiary, Inc. ("GS"),
Jupiter Subsidiary A. Inc. ("JSA"), J.G. Investments
("JG") and J. Gold Corporation, together with a modifi-
cation dated September 30, 1983. (Previously filed as
Exhibit 28.1 to the 1983 8-K and is incorporated herein
by reference.)
28.2 Agreement and Plan of Merger, dated September 30, 1983,
between JSA and GS. (Previously filed as Exhibit 28.2
to the 1983 8-K and is incorporated herein by refer-
ence.)
</TABLE>

<PAGE>

NINTH AMENDMENT TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AGREEMENT, entered into as of the 12th day of June, 1995, between JG
INDUSTRIES, INC. ("JG"), an Illinois corporation, GOLDBLATT'S DEPARTMENT
STORES, INC. ("Goldblatt's"), an Illinois Corporation (collectively, the
"Employer") and WILLIAM HELLMAN (the "Employee").

WHEREAS, Employee has been employed by Employer in an executive capacity
pursuant to an Amended and Restated Employment Agreement dated as of the first
day of June, 1983, as amended (the "Employment Agreement"), and

WHEREAS, Employer and Employee desire to further amend the Employment
Agreement in certain respects as hereinafter stated;

ACCORDINGLY, the Employment Agreement be and hereby is amended in the
following respect:

1. New Termination Date. The Employment Period shall terminate on July
31, 1996.

2. Adjustment of Annuity Contracts. Notwithstanding anything stated to
the contrary in subparagraph (i) of paragraph 20, the annuity contracts
shall in the aggregate as of August 1, 1996, yield a monthly annuity of
$15,750.00 for a period of ten years.

3. Severance Payment upon a Sale of Goldblatt's. In the event that during
the Employment Period the business of Goldblatt's Department Stores, Inc.,
is sold or a sale pursuant to a definitive sale agreement entered into
during the Employment Period is consummated within 180 days after the
expiration of the Employment Period, Employer shall pay to Employee
concurrently with the closing of such a sale a severance payment in an
amount equal to one year's salary as set forth in paragraph 3(a) (to wit:
$340,000).

4. Termination of Employment Agreement. In the event the closing of a
sale described in paragraph 3 hereof occurs within the Employment Period:

(a) And JG has prior thereto sold its interest in Huffman Koos, Inc.
("H-K"), Employer shall pay to Employee, in cash, a lump sum equal to
the balance remaining on his annual salary for the unexpired portion of
the Employment Period concurrently with the closing; provided, however,

(b) That in the event JG then continues to own an interest in H-K,
the Employment Agreement shall continue in full force and effect and
salary shall continue to be paid in installments as currently provided.
If a sale of H-K is subsequently closed during the Employment Period,
the balance of Employee's annual salary shall be paid in a lump sum
concurrently with the closing.

5. Effect of Amendment. All other paragraphs of the Employment Agreement,
as heretofore amended, shall remain unchanged and shall continue in full
force and effect.

IN WITNESS WHEREOF, the Employee and the Employer have executed this Ninth
Amendment to Amended and Restated Employment Agreement as of the date first
written above.

-------------------------------------
William Hellman

JG Industries, Inc.

By: _________________________________

Its: ________________________________

Goldblatt's Department Stores, Inc.

By: _________________________________

Its: ________________________________

<PAGE>

EXHIBIT 22.1

LIST OF SUBSIDIARIES

Goldblatt's Department Stores, Inc.

Capital & Vermont Realty Corporation

Goldblatt Subsidiary, Inc.

GBI Belmont Central, Inc.

Sussex Group Holding Company

Sussex Group, Ltd.

<PAGE>

EXHIBIT 24.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the Registration Statement
of JG Industries, Inc. and Subsidiaries on Form S-8 of our report dated April
23, 1996 on our audits of the consolidated financial statements and the
financial statement schedule of JG Industries, Inc. and Subsidiaries as of
January 27, 1996 and January 28, 1995, and for each of the three fiscal years
in the period ended January 27, 1996, which report is included in this Annual
Report on Form 10-K.

COOPERS & LYBRAND L.L.P.

Chicago, Illinois
May 8, 1996

<PAGE>

<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
the JG Industries, Inc. 10-K for Fiscal 1996 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-27-1996
<PERIOD-START> JAN-29-1995
<PERIOD-END> JAN-27-1996
<CASH> 3,792
<SECURITIES> 0
<RECEIVABLES> 350
<ALLOWANCES> 0
<INVENTORY> 8,734
<CURRENT-ASSETS> 13,211
<PP&E> 23,650
<DEPRECIATION> 14,347
<TOTAL-ASSETS> 25,315
<CURRENT-LIABILITIES> 7,897
<BONDS> 0
<COMMON> 11,246
3,937
0
<OTHER-SE> (1,714)
<TOTAL-LIABILITY-AND-EQUITY> 25,315
<SALES> 72,964
<TOTAL-REVENUES> 72,964
<CGS> 50,029
<TOTAL-COSTS> 50,029
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 897
<INCOME-PRETAX> (4,085)
<INCOME-TAX> 18
<INCOME-CONTINUING> (4,103)
<DISCONTINUED> 6,856
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,753
<EPS-PRIMARY> .35
<EPS-DILUTED> 0

</TABLE>