BRADLEES INC
SC 13D/A, 1999-03-25
VARIETY STORES
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<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  SCHEDULE 13D

                    Under the Securities Exchange Act of 1934
                               (Amendment No. 2)*

                                 Bradlees, Inc.

                                (Name of Issuer)

                                  Common Stock

                         (Title of Class of Securities)

                                    104499207

                                 (CUSIP Number)

Mr. J. Ezra Merkin                          With a copy to:
Gabriel Capital, L.P.                       Lawrence G. Goodman, Esq.
450 Park Avenue, Ste. 3201                  Swidler Berlin Shereff Friedman, LLP
New York, New York  10022                   919 Third Avenue
(212) 838-7200                              New York, New York 10022
                                            (212) 758-9500
- --------------------------------------------------------------------------------
            (Name, Address and Telephone Number of Person Authorized
                     to Receive Notices and Communications)

                                 March 18, 1999
                    -----------------------------------------
                     (Date of Event which Requires Filing of
                                 this Statement)

If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
statement because of Rule 13d-1(b) (3) or (4), check the following: [ ].

Note: One copy and an EDGAR version of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).



<PAGE>




                                  SCHEDULE 13D

CUSIP No.  104499207                             Page    2    of    6    Pages
           ---------                                   -----      -----

1        NAME OF REPORTING PERSON
         S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

                  Gabriel Capital Corporation

2        CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*             (a) |X|
                                                                       (b) |_|
3        SEC USE ONLY

4        SOURCE OF FUNDS*

         OO

5        CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED

         PURSUANT TO ITEMS 2(d) or 2(e)                                    |_|

6        CITIZENSHIP OR PLACE OF ORGANIZATION

         Delaware

      NUMBER OF        7     SOLE VOTING POWER
       SHARES
    BENEFICIALLY
      OWNED BY         8     SHARED VOTING POWER
       EACH                  2,051,290
     REPORTING
      PERSON           9     SOLE DISPOSITIVE POWER
       WITH

                      10     SHARED DISPOSITIVE POWER
                                2,051,290

11       AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
         PERSON

         2,051,290

12       CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
         CERTAIN SHARES*                                                   |_|

13       PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
                       20.1%

14       TYPE OF REPORTING PERSON*
                       CO


                      *SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING
EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.


<PAGE>


                                  SCHEDULE 13D

CUSIP No.  104499207                             Page    3    of    6    Pages
           ---------                                   -----      -----


1        NAME OF REPORTING PERSON
         S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

                  J. Ezra Merkin

2        CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*             (a)  |X|
                                                                       (b)  |_|
3        SEC USE ONLY

4        SOURCE OF FUNDS*

         OO

5        CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED

         PURSUANT TO ITEMS 2(d) or 2(e)                                    |_|

6        CITIZENSHIP OR PLACE OF ORGANIZATION

         United States

      NUMBER OF        7     SOLE VOTING POWER
       SHARES                1,390,471
    BENEFICIALLY
      OWNED BY         8     SHARED VOTING POWER
       EACH                  2,051,290
     REPORTING
      PERSON           9     SOLE DISPOSITIVE POWER
       WITH                  1,390,471

                       10    SHARED DISPOSITIVE POWER
                             2,051,290

11       AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
         PERSON

                        3,441,761

12       CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
         CERTAIN SHARES*                                                   |_|

13       PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
                        33.7%

14       TYPE OF REPORTING PERSON*

                        IN


                      *SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING
EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.


<PAGE>


                                  SCHEDULE 13D

         This Amendment No. 2 to the Statement on Schedule 13D amends and
supplements the Statement on Schedule 13D relating to the event date of March 4,
1999 (the "Schedule 13D") and Amendment No. 1 to the Schedule 13D relating to
the event date of March 16, 1999, filed by Gabriel Capital Corporation (f/k/a
Ariel Management Corp.), a Delaware corporation ("Gabriel Capital") and the
Investment Advisor of Ariel Fund Limited, a Cayman Islands corporation, and J.
Ezra Merkin, the General Partner of Gabriel Capital L.P., a Delaware limited
partnership (collectively, the "Reporting Persons") relating to the Common Stock
(the "Common Stock") of Bradlees, Inc. (the "Issuer"). The address of the Issuer
is One Bradlees Circle, P.O. Box 9051, Braintree, MA 02184. Capitalized terms
used herein shall have the meanings assigned thereto in the Schedule 13D.

Item 1.           Interest in Securities of the Issuer
                  ------------------------------------

                  (a) and (b) Gabriel Capital, as Investment Advisor to Ariel
Fund, has the power to vote and to direct the voting of and the power to dispose
and direct the disposition of the 2,051,290 shares of Common Stock issuable to
Ariel Fund. Accordingly, Gabriel Capital may be deemed to be the beneficial
owner of 2,051,290 shares of Common Stock, or 20.1% of the outstanding shares of
Common Stock.

                  As the General Partner of Gabriel, Merkin has the power to
vote and to direct the voting of and the power to dispose and direct the
disposition of the 1,390,471 shares of Common Stock issuable to Gabriel. In
addition, as the sole shareholder and president of Gabriel Capital, Merkin may
be deemed to have the power to vote and to direct the voting of and the power to
dispose and direct the disposition of the 2,051,290 shares of Common Stock
issuable to Ariel Fund. Accordingly, Merkin may be deemed to be the beneficial
owner of 3,441,761 shares of Common Stock, or 33.7% of the outstanding shares of
Common Stock.

                  In addition, Gabriel and Gabriel Capital may be entitled to
receive up to an additional 162,312 and 239,451 shares of Common Stock,
respectively, in the Issuer's bankruptcy proceeding in exchange for $8,115,619
and $11,972,546 principal amount of trade claims, respectively.

                  The number of shares beneficially owned by each of the
Reporting Persons and the percentage of outstanding shares represented thereby,
have been computed in accordance with Rule 13d-3 under the Securities Exchange
Act of 1934, as amended. The ownership of the Reporting Persons is based on
10,225,711 outstanding shares of Common Stock of the Issuer as of February 2,
1999, as reported in the Issuer's Prospectus dated February 24, 1999.

                  (c) The transactions in the Common Stock by the Reporting
Persons since the filing of Amendment No. 1 to the Schedule 13D are set forth on
Annex A hereto.

                  (d)      Not Applicable.

                  (e)      Not Applicable.



                                     Page 4


<PAGE>



Signature
- ---------

                  After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.

                                        GABRIEL CAPITAL CORPORATION

                                        By: /s/ J. Ezra Merkin
                                            ------------------
                                            Name: J. Ezra Merkin
                                            Title: President


                                        /s/ J. Ezra Merkin
                                        ------------------
                                        J. EZRA MERKIN

Dated: March 23, 1999






                                     Page 5


<PAGE>



                                     Annex A

         Purchasers and Sales of Shares of Common Stock since the Filing of the
Schedule 13D.

                                      Aggregate Share      Number of Shares
                                      ---------------      ----------------
       Date      Price Per Share         Amount         Ariel Fund     Gabriel
       ----      ---------------         ------         ----------     -------
     3/17/99*        $3.3125            100,000           59,600       40,400

     3/18/99*         3.1875            123,837           73,807       50,030

     3/19/99*         3.3125            100,000           59,600       40,400

     3/22/99*         3.4128            152,400           40,830       61,570

     3/22/99*         3.50               50,000           29,800       20,200


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

*        Market sale.




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