content: -7-
  BA3DOCS1/0019611.04
               SECURITIES AND EXCHANGE COMMISSION
  
                      Washington, DC  20549
  
  
                            FORM 8-K
  
                         CURRENT REPORT
  
  
       Pursuant to Section 13 or 15(d) of the Securities
  Exchange Act of 1934
  
   Date of Report (Date of earliest event reported):  July 18,
                              1995
  
  
                   MERRY-GO-ROUND ENTERPRISES, INC.
     (Exact Name of Registrant as Specified in its Charter)
  
  
  Maryland                  1-10491                 52-0913402
  (State of               (Commission            (IRS Employer
  Incorporation)          File Number)     Identification No.)
  
  
  3300 Fashion Way, Joppa, Maryland                      21085
  (Address of Principal Executive Offices)          (Zip Code)
  
  Registrant's telephone number, including area  code:   (410)
  538-1000
  
  Item 5.        Other Events.
  
  I.  Debtor-In-Possession Financing
  
             The  Registrant and two of its subsidiaries,  MGR
  Distribution  Corporation,  and  Worths  Stores  Corp.,   as
  Borrowers,  (the "Borrowers") have entered into a Debtor-In-
  Possession Credit Agreement dated as of July 18,  1995  (the
  "Credit    Agreement")   with   General   Electric   Capital
  Corporation and Citicorp USA, as co-agents (the "Co-Agents")
  and the lenders named therein (the "Lenders").  The proceeds
  of  the  initial loans and letters of credit made under  the
  Credit  Agreement are to repay substantially all obligations
  and  terminate substantially all commitments in  respect  of
  the   credit  facilities  provided  by  a  Revolving  Credit
  Agreement  dated  as of January 14, 1994,  as  amended  (the
  "Previous Credit Agreement"), among the Registrant,  certain
  of its subsidiaries, the financial institutions from time to
  time  party thereto and The CIT Group/Business Credit, Inc.,
  as  agent,  and  any excess proceeds are to be  applied  for
  working  capital  and for other general corporate  purposes.
  The  Credit  Agreement  was approved by  the  United  States
  Bankruptcy  Court for the District of Maryland on  July  13,
  1995.    Concurrent  with  the  execution  of   the   Credit
  Agreement, the Registrant, MGR Distribution Corporation  and
  MGRR, Inc., entered into a Termination and Release Agreement
  with  The  CIT  Group/Business Credit, Inc. terminating  the
  Previous Credit Agreement.
  
             The  following  is  a brief  summary  of  certain
  portions  of  the Credit Agreement and is qualified  in  its
  entirety by reference to the Credit Agreement which is filed
  as  Exhibit 99.1 to this Form 8-K.  Pursuant to the terms of
  the  Credit  Agreement, the Lenders have agreed, subject  to
  the  limitations described below, to provide  the  Borrowers
  with a $90,000,000 revolving credit facility.
  
             Under  the  Credit Agreement, the  Borrowers  may
  borrow  in the form of cash borrowings, documentary  letters
  of  credit and standby letters of credit an aggregate of the
  lesser of $90,000,000 or the Borrowing Base described below.
  Letters  of  credit are further limited  to  the  lesser  of
  $75,000,000 for commercial letters of credit and $15,000,000
  for standby letters of credit or the Borrowing Base.
  
            In  addition to any Borrower requesting  that  the
  Lenders  make  loans pursuant to the Credit  Agreement,  any
  Borrower  may request that letters of credit be  issued  for
  the  purpose of (i) providing the primary payment  mechanism
  in  connection with the purchase of any materials, goods  or
  services  in  the  ordinary course of business  ("Commercial
  Letters   of  Credit")  or  (ii)  supporting  (A)   workers'
  compensation  liabilities of the Borrowers or any  of  their
  subsidiaries, (B) the obligations of third party insurers of
  the Borrowers or any of their subsidiaries arising by virtue
  of  the  laws  of  any  jurisdiction requiring  third  party
  insurers, (C) obligations with respect to capital leases  or
  operating  leases  of  the Borrowers or their  subsidiaries,
  (D)  performance, payment deposit or surety  obligations  of
  Borrowers  or  any of their subsidiaries,  in  any  case  if
  required  by  law or governmental rule or regulation  or  in
  accordance  with  custom  and  practice  in  the   industry,
  (E) obligations of the Registrant to its new chief executive
  officer pursuant to an employment agreement, (F) obligations
  of  the  Borrowers or any of their subsidiaries to insurance
  companies   providing  insurance  to  Borrowers  and   their
  subsidiaries in an aggregate amount not to exceed $8,000,000
  at   any  time,  (G)  obligations  to  customs  and  revenue
  authorities to secure payment of custom duties in connection
  with the importation of goods, (H) certain obligations under
  the  Previous  Credit  Agreement and (I)  other  obligations
  determined acceptable by the Co-Agents and Citibank, N.A. as
  Issuing Lender ("Standby Letters of Credit"); provided  that
  Standby  Letters of Credit may not be issued for the purpose
  of   supporting  (a)  trade  payables  or  (b)  indebtedness
  constituting  "antecedent debt" (as that  term  is  used  in
  Section 547 of the United States Bankruptcy Code).
  
            The  Lenders' commitment to make loans  and  issue
  letters of credit expires on the earlier of (i) October  15,
  1996, (ii) the effective date of a plan of reorganization in
  the  cases  filed  by  the Registrant  and  certain  of  its
  subsidiaries  pursuant to Chapter 11 of the U.S.  Bankruptcy
  Code  (the  "Chapter  11  Cases"), and  (iii)  the  date  of
  termination  of  the  Lenders' commitments  pursuant  to  an
  "Event  of Default" as defined in the Credit Agreement  (the
  "Commitment Termination Date").
  
            Generally, no Standby Letter of Credit may have an
  expiration date later than the earlier of (a) the Commitment
  Termination Date and (b) the date which is one year from the
  date   of   issuance  of  such  Standby  Letter  of  Credit.
  Generally,  no  Commercial Letter  of  Credit  may  have  an
  expiration  date (x) later than the earlier of (i)  30  days
  prior  to the Commitment Termination Date and (ii) the  date
  which  is  180  days  from  the date  of  issuance  of  such
  Commercial  Letter  of  Credit  or  (y)  that  is  otherwise
  unacceptable to Issuing Lender in its reasonable discretion.
  
            The  Borrowing Base is defined as of any  date  of
  determination,   as  an  amount  equal  to  the   applicable
  percentage  of the "Eligible Inventory" (as defined  in  the
  Credit Agreement) determined at the lower of cost using  the
  retail   method  or  market.   For  the  fiscal  months   of
  September,   October  and  November  1995,  the   applicable
  percentage  used in the determination of the Borrowing  Base
  is  55% if both of the following conditions have been met to
  the  reasonable satisfaction of the Co-Agents: (a)  the  Co-
  Agents  shall  have  received an updated  appraisal  of  all
  inventory  of the Borrowers in form and substance  and  with
  results  satisfactory  to Co-Agents,  and  (b)  consolidated
  adjusted  earnings before interest, taxes, depreciation  and
  amortization, as defined in the Credit Agreement  ("EBITDA")
  as  of July 29, 1995 for the two fiscal quarter period  then
  ended shall be equal to or greater than the projected EBITDA
  for  such  period  set forth in the financial  plan  of  the
  Registrant  and  its subsidiaries.  The Co-Agents  shall  be
  entitled,  at  any  time,  to  (i)  establish,  increase  or
  decrease   reserves  against  Eligible  Inventory   or   the
  Borrowing Base, and (ii) impose additional requirements  (or
  eliminate  the  same) to the standards  of  eligibility  set
  forth  in  the definition of "Eligible Inventory,"  in  each
  case   in   the   exercise  of  their  reasonable   business
  discretion.
  
            Each  loan  shall  bear  interest  on  the  unpaid
  principal amount thereof from the date made through maturity
  at  a rate per annum equal to the sum of the "Base Rate" (as
  defined  in  the  Credit Agreement) plus  one  and  one-half
  percent  (1.5%) per annum.  The Base Rate is  defined  as  a
  fluctuating interest rate per annum in effect from  time  to
  time,  which rate is equal to the highest of:  (i) the  rate
  of  interest announced publicly by Citibank, N.A. from  time
  to  time,  as Citibank, N.A.'s base rate; (ii)  the  sum  of
  (a)  1/2  of  1%  per annum, plus (b) the rate  obtained  by
  dividing  (1)  the  latest  three-week  moving  average   of
  secondary market morning offering rates in the United States
  for  three-month  certificates of deposit  of  major  United
  States money market banks by (2) a percentage equal to  100%
  minus  the average of the daily percentages specified during
  such  three-week  period by the Board of  Governors  of  the
  Federal  Reserve  System (or any successor) for  determining
  the  maximum reserve requirement (including, but not limited
  to,  any  emergency supplemental or other  marginal  reserve
  requirement) for Citibank, N.A. with respect to  liabilities
  consisting of or including (among other liabilities)  three-
  month  U.S. dollar non-personal time deposits in the  United
  States,  plus (c) the average during such three-week  period
  of  the annual assessment rates estimated by Citibank,  N.A.
  for  determining the then current annual assessment  payable
  by   Citibank,   N.A.  to  the  Federal  Deposit   Insurance
  Corporation  for insuring U.S. dollar deposits of  Citibank,
  N.A.  in  the United States; and (iii) 1/2 of 1%  per  annum
  above  the  "Federal Funds Rate" (as defined in  the  Credit
  Agreement).
  
            The  Credit  Agreement provides for  a  letter  of
  credit  fee  equal to 2.25% per annum of the  average  daily
  maximum  amount  available to be drawn  under  such  Standby
  Letter of Credit, and a letter of credit fee equal to  2.00%
  per  annum  of the aggregate maximum amount outstanding  for
  all Commercial Letters of Credit.
  
            The Credit Agreement also provides for the payment
  of  commitment fees equal to (i) the average  of  the  daily
  excess  of the commitments over the sum of (a) the aggregate
  principal amount of loans outstanding plus (b) the letter of
  credit  usage multiplied by (ii) 1/2 of 1% per  annum.   The
  Borrowers  have also agreed to pay to the Co-Agents  certain
  other  fees  due and payable pursuant to a Fee Letter  dated
  June 9, 1995, by and among the Registrant and the Co-Agents.
  
            The Credit Agreement provides that all obligations
  under   the   loan   documents  shall   constitute   allowed
  administrative  expense  claims  in  the  Chapter  11  Cases
  against each Borrower and the subsidiaries of the Registrant
  which  have executed and delivered a guaranty (collectively,
  the  "Credit Parties") which are debtors in the  Chapter  11
  Cases  with  priority under Section 364(c)(1) of the  United
  States Bankruptcy Code over any and all other administrative
  expenses  of the kind specified or ordered pursuant  to  any
  provision  of  the United States Bankruptcy  Code;  provided
  that, upon the occurrence and during the continuation of  an
  "Event  of Default" (as defined in the Credit Agreement)  or
  the  exercise  by  any  Co-Agent, General  Electric  Capital
  Corporation,  as  secured  party ("Secured  Party")  or  any
  Lender  of  its  remedies after an Event  of  Default,  such
  claims  shall  be subject to:  (i) unpaid professional  fees
  and expenses allowed in the Chapter 11 Cases in an aggregate
  amount  not  to exceed $5,000,000; and (ii) fees payable  to
  the  United States Trustee pursuant to 28 U.S.C. 1930(a)(6).
  In  addition, the Borrowers and certain subsidiaries of  the
  Registrant  that  have executed a guaranty have  granted  to
  Secured  Party, on behalf of the Lenders, a first or  second
  priority  interest in substantially all of their  assets  as
  set  forth  in a Pledge and Security Agreement  and  certain
  other documents.
  
            The   Credit   Agreement  requires  that   certain
  financial  tests be met or exceeded, including with  respect
  to  (i)  EBITDA,  (ii) the ratio of EBITDA to  "Consolidated
  Fixed Charges," and (iii) "Consolidated Net Worth," each  as
  defined  in  the Credit Agreement.  In addition, the  Credit
  Agreement  establishes certain restrictions on the Borrowers
  including  the  maintenance  of a  cash  management  system,
  indebtedness,   guarantees,  liens,  capital   expenditures,
  investments,  dividends,  asset  dispositions,  and  maximum
  restructuring fees and disbursements.
  
            
            
  II.  Change in Management
  
            On July 11, 1995, the Registrant announced the
  election of Richard Crystal as Chief Executive Officer,
  President and Director.  Stephen Wertheimer was appointed
  Chairman of the Board of Directors.  In connection with
  these appointments, Thomas Shull and James Kenney resigned
  as Chairman, Chief Executive Officer, and President and
  Chief Operating Officer, respectively.
  
  
  
  Item 7.        Financial Statements and Exhibits
  
  (c)  Exhibits
  
             99.1  Debtor-In-Possession Credit Agreement dated
  as of July 18, 1995
  
              99.2   Press  Releases  Announcing   Change   in
  Management  dated                        June 28,  1995  and
  July 11, 1995
  
                           SIGNATURES
                                
            Pursuant to the requirements of the Securities
  Exchange Act of 1934, as amended, the Registrant has duly
  caused this report to be signed on its behalf by the
  undersigned hereunto duly authorized.
  
                             MERRY-GO-ROUND ENTERPRISES, INC.
  
  August 8, 1995                By:  /s/ Isaac Kaufman
                                Isaac Kaufman
                                Executive Vice President,
                                Secretary and Treasurer
                                
                                     (Principal Financial
                                Officer)
                                
                          EXHIBIT INDEX
                                
  99.1      Debtor-In-Possession Credit Agreement dated as  of
            July 18, 1995
            
  99.2       Press  Releases Announcing Change  in  Management
  dated June 28, 1995                and July 11, 1995
metadata_documents: [{"type": "8-K", "sequence": "1", "secsgml_size_bytes": 14112}]
text: -7-
  BA3DOCS1/0019611.04
               SECURITIES AND EXCHANGE COMMISSION
  
                      Washington, DC  20549
  
                            FORM 8-K
  
                         CURRENT REPORT
  
       Pursuant to Section 13 or 15(d) of the Securities
  Exchange Act of 1934
  
   Date of Report (Date of earliest event reported):  July 18,
                              1995
  
                   MERRY-GO-ROUND ENTERPRISES, INC.
     (Exact Name of Registrant as Specified in its Charter)
  
  Maryland                  1-10491                 52-0913402
  (State of               (Commission            (IRS Employer
  Incorporation)          File Number)     Identification No.)
  
  3300 Fashion Way, Joppa, Maryland                      21085
  (Address of Principal Executive Offices)          (Zip Code)
  
  Registrant's telephone number, including area  code:   (410)
  538-1000
  
  Item 5.        Other Events.
  
  I.  Debtor-In-Possession Financing
  
             The  Registrant and two of its subsidiaries,  MGR
  Distribution  Corporation,  and  Worths  Stores  Corp.,   as
  Borrowers,  (the "Borrowers") have entered into a Debtor-In-
  Possession Credit Agreement dated as of July 18,  1995  (the
  "Credit    Agreement")   with   General   Electric   Capital
  Corporation and Citicorp USA, as co-agents (the "Co-Agents")
  and the lenders named therein (the "Lenders").  The proceeds
  of  the  initial loans and letters of credit made under  the
  Credit  Agreement are to repay substantially all obligations
  and  terminate substantially all commitments in  respect  of
  the   credit  facilities  provided  by  a  Revolving  Credit
  Agreement  dated  as of January 14, 1994,  as  amended  (the
  "Previous Credit Agreement"), among the Registrant,  certain
  of its subsidiaries, the financial institutions from time to
  time  party thereto and The CIT Group/Business Credit, Inc.,
  as  agent,  and  any excess proceeds are to be  applied  for
  working  capital  and for other general corporate  purposes.
  The  Credit  Agreement  was approved by  the  United  States
  Bankruptcy  Court for the District of Maryland on  July  13,
  1995.    Concurrent  with  the  execution  of   the   Credit
  Agreement, the Registrant, MGR Distribution Corporation  and
  MGRR, Inc., entered into a Termination and Release Agreement
  with  The  CIT  Group/Business Credit, Inc. terminating  the
  Previous Credit Agreement.
  
             The  following  is  a brief  summary  of  certain
  portions  of  the Credit Agreement and is qualified  in  its
  entirety by reference to the Credit Agreement which is filed
  as  Exhibit 99.1 to this Form 8-K.  Pursuant to the terms of
  the  Credit  Agreement, the Lenders have agreed, subject  to
  the  limitations described below, to provide  the  Borrowers
  with a $90,000,000 revolving credit facility.
  
             Under  the  Credit Agreement, the  Borrowers  may
  borrow  in the form of cash borrowings, documentary  letters
  of  credit and standby letters of credit an aggregate of the
  lesser of $90,000,000 or the Borrowing Base described below.
  Letters  of  credit are further limited  to  the  lesser  of
  $75,000,000 for commercial letters of credit and $15,000,000
  for standby letters of credit or the Borrowing Base.
  
            In  addition to any Borrower requesting  that  the
  Lenders  make  loans pursuant to the Credit  Agreement,  any
  Borrower  may request that letters of credit be  issued  for
  the  purpose of (i) providing the primary payment  mechanism
  in  connection with the purchase of any materials, goods  or
  services  in  the  ordinary course of business  ("Commercial
  Letters   of  Credit")  or  (ii)  supporting  (A)   workers'
  compensation  liabilities of the Borrowers or any  of  their
  subsidiaries, (B) the obligations of third party insurers of
  the Borrowers or any of their subsidiaries arising by virtue
  of  the  laws  of  any  jurisdiction requiring  third  party
  insurers, (C) obligations with respect to capital leases  or
  operating  leases  of  the Borrowers or their  subsidiaries,
  (D)  performance, payment deposit or surety  obligations  of
  Borrowers  or  any of their subsidiaries,  in  any  case  if
  required  by  law or governmental rule or regulation  or  in
  accordance  with  custom  and  practice  in  the   industry,
  (E) obligations of the Registrant to its new chief executive
  officer pursuant to an employment agreement, (F) obligations
  of  the  Borrowers or any of their subsidiaries to insurance
  companies   providing  insurance  to  Borrowers  and   their
  subsidiaries in an aggregate amount not to exceed $8,000,000
  at   any  time,  (G)  obligations  to  customs  and  revenue
  authorities to secure payment of custom duties in connection
  with the importation of goods, (H) certain obligations under
  the  Previous  Credit  Agreement and (I)  other  obligations
  determined acceptable by the Co-Agents and Citibank, N.A. as
  Issuing Lender ("Standby Letters of Credit"); provided  that
  Standby  Letters of Credit may not be issued for the purpose
  of   supporting  (a)  trade  payables  or  (b)  indebtedness
  constituting  "antecedent debt" (as that  term  is  used  in
  Section 547 of the United States Bankruptcy Code).
  
            The  Lenders' commitment to make loans  and  issue
  letters of credit expires on the earlier of (i) October  15,
  1996, (ii) the effective date of a plan of reorganization in
  the  cases  filed  by  the Registrant  and  certain  of  its
  subsidiaries  pursuant to Chapter 11 of the U.S.  Bankruptcy
  Code  (the  "Chapter  11  Cases"), and  (iii)  the  date  of
  termination  of  the  Lenders' commitments  pursuant  to  an
  "Event  of Default" as defined in the Credit Agreement  (the
  "Commitment Termination Date").
  
            Generally, no Standby Letter of Credit may have an
  expiration date later than the earlier of (a) the Commitment
  Termination Date and (b) the date which is one year from the
  date   of   issuance  of  such  Standby  Letter  of  Credit.
  Generally,  no  Commercial Letter  of  Credit  may  have  an
  expiration  date (x) later than the earlier of (i)  30  days
  prior  to the Commitment Termination Date and (ii) the  date
  which  is  180  days  from  the date  of  issuance  of  such
  Commercial  Letter  of  Credit  or  (y)  that  is  otherwise
  unacceptable to Issuing Lender in its reasonable discretion.
  
            The  Borrowing Base is defined as of any  date  of
  determination,   as  an  amount  equal  to  the   applicable
  percentage  of the "Eligible Inventory" (as defined  in  the
  Credit Agreement) determined at the lower of cost using  the
  retail   method  or  market.   For  the  fiscal  months   of
  September,   October  and  November  1995,  the   applicable
  percentage  used in the determination of the Borrowing  Base
  is  55% if both of the following conditions have been met to
  the  reasonable satisfaction of the Co-Agents: (a)  the  Co-
  Agents  shall  have  received an updated  appraisal  of  all
  inventory  of the Borrowers in form and substance  and  with
  results  satisfactory  to Co-Agents,  and  (b)  consolidated
  adjusted  earnings before interest, taxes, depreciation  and
  amortization, as defined in the Credit Agreement  ("EBITDA")
  as  of July 29, 1995 for the two fiscal quarter period  then
  ended shall be equal to or greater than the projected EBITDA
  for  such  period  set forth in the financial  plan  of  the
  Registrant  and  its subsidiaries.  The Co-Agents  shall  be
  entitled,  at  any  time,  to  (i)  establish,  increase  or
  decrease   reserves  against  Eligible  Inventory   or   the
  Borrowing Base, and (ii) impose additional requirements  (or
  eliminate  the  same) to the standards  of  eligibility  set
  forth  in  the definition of "Eligible Inventory,"  in  each
  case   in   the   exercise  of  their  reasonable   business
  discretion.
  
            Each  loan  shall  bear  interest  on  the  unpaid
  principal amount thereof from the date made through maturity
  at  a rate per annum equal to the sum of the "Base Rate" (as
  defined  in  the  Credit Agreement) plus  one  and  one-half
  percent  (1.5%) per annum.  The Base Rate is  defined  as  a
  fluctuating interest rate per annum in effect from  time  to
  time,  which rate is equal to the highest of:  (i) the  rate
  of  interest announced publicly by Citibank, N.A. from  time
  to  time,  as Citibank, N.A.'s base rate; (ii)  the  sum  of
  (a)  1/2  of  1%  per annum, plus (b) the rate  obtained  by
  dividing  (1)  the  latest  three-week  moving  average   of
  secondary market morning offering rates in the United States
  for  three-month  certificates of deposit  of  major  United
  States money market banks by (2) a percentage equal to  100%
  minus  the average of the daily percentages specified during
  such  three-week  period by the Board of  Governors  of  the
  Federal  Reserve  System (or any successor) for  determining
  the  maximum reserve requirement (including, but not limited
  to,  any  emergency supplemental or other  marginal  reserve
  requirement) for Citibank, N.A. with respect to  liabilities
  consisting of or including (among other liabilities)  three-
  month  U.S. dollar non-personal time deposits in the  United
  States,  plus (c) the average during such three-week  period
  of  the annual assessment rates estimated by Citibank,  N.A.
  for  determining the then current annual assessment  payable
  by   Citibank,   N.A.  to  the  Federal  Deposit   Insurance
  Corporation  for insuring U.S. dollar deposits of  Citibank,
  N.A.  in  the United States; and (iii) 1/2 of 1%  per  annum
  above  the  "Federal Funds Rate" (as defined in  the  Credit
  Agreement).
  
            The  Credit  Agreement provides for  a  letter  of
  credit  fee  equal to 2.25% per annum of the  average  daily
  maximum  amount  available to be drawn  under  such  Standby
  Letter of Credit, and a letter of credit fee equal to  2.00%
  per  annum  of the aggregate maximum amount outstanding  for
  all Commercial Letters of Credit.
  
            The Credit Agreement also provides for the payment
  of  commitment fees equal to (i) the average  of  the  daily
  excess  of the commitments over the sum of (a) the aggregate
  principal amount of loans outstanding plus (b) the letter of
  credit  usage multiplied by (ii) 1/2 of 1% per  annum.   The
  Borrowers  have also agreed to pay to the Co-Agents  certain
  other  fees  due and payable pursuant to a Fee Letter  dated
  June 9, 1995, by and among the Registrant and the Co-Agents.
  
            The Credit Agreement provides that all obligations
  under   the   loan   documents  shall   constitute   allowed
  administrative  expense  claims  in  the  Chapter  11  Cases
  against each Borrower and the subsidiaries of the Registrant
  which  have executed and delivered a guaranty (collectively,
  the  "Credit Parties") which are debtors in the  Chapter  11
  Cases  with  priority under Section 364(c)(1) of the  United
  States Bankruptcy Code over any and all other administrative
  expenses  of the kind specified or ordered pursuant  to  any
  provision  of  the United States Bankruptcy  Code;  provided
  that, upon the occurrence and during the continuation of  an
  "Event  of Default" (as defined in the Credit Agreement)  or
  the  exercise  by  any  Co-Agent, General  Electric  Capital
  Corporation,  as  secured  party ("Secured  Party")  or  any
  Lender  of  its  remedies after an Event  of  Default,  such
  claims  shall  be subject to:  (i) unpaid professional  fees
  and expenses allowed in the Chapter 11 Cases in an aggregate
  amount  not  to exceed $5,000,000; and (ii) fees payable  to
  the  United States Trustee pursuant to 28 U.S.C. 1930(a)(6).
  In  addition, the Borrowers and certain subsidiaries of  the
  Registrant  that  have executed a guaranty have  granted  to
  Secured  Party, on behalf of the Lenders, a first or  second
  priority  interest in substantially all of their  assets  as
  set  forth  in a Pledge and Security Agreement  and  certain
  other documents.
  
            The   Credit   Agreement  requires  that   certain
  financial  tests be met or exceeded, including with  respect
  to  (i)  EBITDA,  (ii) the ratio of EBITDA to  "Consolidated
  Fixed Charges," and (iii) "Consolidated Net Worth," each  as
  defined  in  the Credit Agreement.  In addition, the  Credit
  Agreement  establishes certain restrictions on the Borrowers
  including  the  maintenance  of a  cash  management  system,
  indebtedness,   guarantees,  liens,  capital   expenditures,
  investments,  dividends,  asset  dispositions,  and  maximum
  restructuring fees and disbursements.
  
            
            
  II.  Change in Management
  
            On July 11, 1995, the Registrant announced the
  election of Richard Crystal as Chief Executive Officer,
  President and Director.  Stephen Wertheimer was appointed
  Chairman of the Board of Directors.  In connection with
  these appointments, Thomas Shull and James Kenney resigned
  as Chairman, Chief Executive Officer, and President and
  Chief Operating Officer, respectively.
  
  Item 7.        Financial Statements and Exhibits
  
  (c)  Exhibits
  
             99.1  Debtor-In-Possession Credit Agreement dated
  as of July 18, 1995
  
              99.2   Press  Releases  Announcing   Change   in
  Management  dated                        June 28,  1995  and
  July 11, 1995
  
                           SIGNATURES
                                
            Pursuant to the requirements of the Securities
  Exchange Act of 1934, as amended, the Registrant has duly
  caused this report to be signed on its behalf by the
  undersigned hereunto duly authorized.
  
                             MERRY-GO-ROUND ENTERPRISES, INC.
  
  August 8, 1995                By:  /s/ Isaac Kaufman
                                Isaac Kaufman
                                Executive Vice President,
                                Secretary and Treasurer
                                
                                     (Principal Financial
                                Officer)
                                
                          EXHIBIT INDEX
                                
  99.1      Debtor-In-Possession Credit Agreement dated as  of
            July 18, 1995
            
  99.2       Press  Releases Announcing Change  in  Management
  dated June 28, 1995                and July 11, 1995