SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

FORM 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 1996

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-4465

Sirco International Corp.
(Exact Name of Registrant as Specified in Its Charter)

New York 13-2511270
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization Identification No.)

24 Richmond Hill Avenue, Stamford Connecticut 06901
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, Including Area Code 203-359-4100

(Former Name, Former Address and Former Fiscal Year, if
Changed Since Last Report)

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 the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date: 1,309,700 shares of
Common Stock, par value $.10 per share, as of July 1, 1996.

PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements

Sirco International Corp. and Subsidiaries
Condensed Consolidated Balance Sheets

May 31, 1996 Nov. 30, 1995
(Unaudited) (See note)
----------- ----------

Assets
Current assets:
Cash and cash equivalents .................... $ 231,475 $ 176,241
Accounts receivable .......................... 2,703,644 2,184,468
Inventories .................................. 5,193,947 5,762,828
Prepaid expenses ............................. 494,896 257,809
Other current assets ......................... 75,298 276,815
------------ ------------
Total current assets ........................... 8,699,260 8,658,161

Property and equipment at cost ................. 1,569,513 1,777,894
Less accumulated depreciation .................. 921,785 1,128,045
------------ ------------
Net property and equipment ..................... 647,728 649,849
------------ ------------
Other assets ................................... 241,116 154,233
Investment in and advances to subsidiary ....... 540,497 540,497
------------ ------------
Total assets ................................... $ 10,128,601 $ 10,002,740
============ ============
Liabilities and stockholders' equity
Current liabilities:
Loans payable to financial institutions ...... $ 1,800,000 $ 2,323,279
Short-term loans payable-other ............... 429,277 571,205
Current maturities of long-term debt ......... 149,162 222,119
Accounts payable ............................. 3,241,739 2,866,658
Accrued expenses ............................. 1,518,003 1,532,253
------------ ------------
Total current liabilities ...................... 7,138,181 7,515,514

Sirco International Corp. and Subsidiaries
Condensed Consolidated Balance Sheets (Continued)

May 31, 1996 Nov. 30, 1995
(Unaudited) (See note)
----------- ----------

Long-term debt, less current maturities ........ 405,711 590,298

Stockholders' equity:
Common stock, $.10 par value;
10,000,000 share authorized, 1,315,000
issued (1996), 1,215,000 issued (1995) ....... 131,520 121,520
Preferred stock, $.10 par value;
1,000,000 authorized, none issued
Capital in excess of par value ............... 4,267,534 4,027,534
Retained earnings (deficit) .................. (1,197,850) (1,641,603)
Treasury stock at cost ....................... (27,500) (27,500)
Accumulated foreign translation adjustment ... (588,995) (583,023)
------------ ------------
Total stockholders' equity ..................... 2,584,709 1,896,928
------------ ------------
Total liabilities and stockholders' equity ..... $ 10,128,601 $ 10,002,740
============ ============

See notes to the condensed consolidated financial statements.

Note: The balance sheet at November 30, 1995 has been derived from the audited
financial statements at that date but does not include all the information and
footnotes required by generally accepted accounting principles.

Sirco International Corp. and Subsidiaries
Condensed Consolidated Statements of Operation

(Unaudited)

For the Six Months Ended For the Three Months Ended
---------------------------- -----------------------------
May 31, 1996 May 31, 1995 May 31, 1996 May 31, 1995
------------ ------------ ------------ ------------

Net sales ........................... $ 14,216,211 $ 10,106,586 $ 7,638,164 $5,681,094
Cost of goods sold .................. 10,358,190 7,659,887 5,651,974 3,837,546
------------ ------------ ------------ ------------
Gross profit ........................ 3,858,021 2,446,699 1,956,190 1,443,548

Selling, warehouse, general and
administrative expenses ........... 2,984,770 3,094,663 1,517,219 1,477,247
Loss on sale of handbag division .... 0 423,716 0 423,716
------------ ------------ ------------ ------------
2,984,770 3,518,379 1,517,219 1,900,963
------------ ------------ ------------ ------------
873,251 (1,071,680) 438,971 (457,415)
Other (income) expense:
Interest expense .................... 385,571 442,800 190,627 222,294
Interest income ..................... (31,482) (45,009) (7,379) (23,324)
Miscellaneous income, net ........... (98,347) (28,075) (49,693) (4,121)
------------ ------------ ------------ ------------
255,742 369,716 133,555 194,849
------------ ------------ ------------ ------------
Net income (loss) before income taxes 617,509 (1,441,396) 305,416 (652,264)
Provision for income taxes .......... 173,756 0 122,478 0
------------ ------------ ------------ ------------
Net income (loss) ................... $443,753 ($ 1,441,396) $182,938 ($652,264)
============ ============ ============ ==========

Net income (loss) per share of common
stock:

Primary ........................... $0.34 ($1.19) $0.13 ($0.54)
============ ============ ============ ==========

Fully diluted ..................... $0.34 ($1.19) $0.13 ($0.54)
============ ============ ============ ==========
Weighted average number of shares of
common stock outstanding-primary
and fully diluted ................. 1,273,088 1,209,700 1,309,700 1,209,700
============ ============ ============ ==========

See notes to the condensed consolidated financial statements

Sirco International Corp. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)

For the Six Months Ended
May 31, 1996 May 31, 1995
------------ ------------

Cash flows from operating activities:
Net income (loss) ................................ $ 443,753 ($1,441,396)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:
Depreciation and amortization ................. 44,864 74,554
Provision for losses in accounts receivable ... 10,479 26,054
Gain on sale of property and equipment ........ (313) (35,234)
Restrictive covenant .......................... 0 7,777
Changes in operating assets and liabilities:
Accounts receivable .......................... (540,111) 515,097
Inventories .................................. 562,294 1,338,465
Prepaid expenses ............................. (237,394) (63,575)
Other current assets ......................... 201,517 7,511
Other assets ................................. (86,883) (131,122)
Accounts payable and accrued expenses ........ 366,321 (168,083)
----------- -----------
Net cash provided by operating activities ........ 764,527 130,048
----------- -----------

Cash flows from investing activities:
Proceeds from sale of property and equipment ..... 3,000 35,234
Purchase of property and equipment ............... (47,925) (8,996)
----------- -----------
Net cash (used in) provided by investing
activities ...................................... (44,925) 26,238
----------- -----------

Sirco International Corp. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)

For the Six Months Ended
May 31, 1996 May 31, 1995
------------ ------------

Cash flows from financing activities:
(Decrease) in loans payable to financial
institutions and short-term loan
payable-other .................................. (735,151) (732,211)
Proceeds from issuance of common stock ........... 250,000 0
Other non-current accrued expenses ............... 0 300,000
Repayment of long-term debt ...................... (181,052) (44,185)
----------- -----------
Net cash used in financing activities ............ (666,203) (476,396)
----------- -----------

Effect of exchange rate changes on cash .......... 1,835 (7,530)
----------- -----------
Increase (decrease) in cash and cash
equivalents .................................... 55,234 (327,640)
Cash and cash equivalents at beginning of
period ......................................... 176,241 955,869
----------- -----------
Cash and cash equivalents at the end of
period ......................................... $ 231,475 $ 628,229
=========== ===========

Supplemental disclosures of cash flow
information
Cash paid during the period for:
Interest ...................................... $ 360,689 $ 308,705
Income taxes .................................. $ 0 $ 0

See notes to the condensed consolidated financial statements.

SIRCO INTERNATIONAL CORP.

Notes To Condensed Consolidated Financial Statements (Unaudited)

Note 1-Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six month period ended May 31, 1996 are
not necessarily indicative of the results that may be expected for the year
ended November 30, 1996. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended November 30, 1995.

Note 2-Financing Arrangements

The Company has an agreement with a factor pursuant to which the Company sells
its accounts receivable to the factor on a pre-approved non-recourse basis.
Under the terms of the agreement, the factor advances funds to the Company on
the basis of invoice amounts. Interest on such advances is 1.75% per annum above
the prime rate. Additionally, the factor provides inventory financing to the
Company based on an advance rate of up to 40% of the inventory value. At May 31,
1996, the factor had advanced the Company approximately $1,800,000 for inventory
financing. Interest on such advances is 1.75% per annum above the prime rate. As
of May 31, 1996, the prime rate was 8.25%. The Company also pays a factoring
commission of .75% of each invoice amount, subject to a minimum of $96,000 per
annum.

On May 28, 1996, the Company's Canadian subsidiary renegotiated its financing
agreement with a Canadian bank. The agreement provides for a revolving loan in
the amount of approximately $876,000, with interest payable monthly at 1.25%
above the Canadian prime rate. The proceeds of this loan are utilized by the
Canadian subsidiary for purchasing inventory and financing day-to-day
operations. As of May 31, 1996, there were no borrowings under this facility and
the Canadian subsidiary had outstanding letters of credit totalling
approximately $402,000. Under the renegotiated financing agreement, the bank
also has outstanding two term loans to the Canadian subsidiary in amounts of
approximately $353,000 and $12,000 at May 31, 1996, with interest payable
monthly at 2.00% and 1.50%, respectively, above the Canadian prime rate. As of
May 31, 1996, the Canadian prime rate was 6.50%. Substantially all of the assets
of the Canadian subsidiary have been pledged as security for the revolving line
of credit and the term loans. Additionally, the Company has agreed to
subordinate its loan to its Canadian subsidiary to the amounts payable to the
bank. However, subject to on-going compliance with all other covenants of the
agreement, the subordinated loan may be repaid at $22,000 per month starting in
July 1996. At May 31, 1996, the subordinated loan amounted to approximately
$227,000.

inventory. Yashiro charges the Company a handling fee of 3% for each letter of
credit that is opened. Interest is payable to Yashiro monthly at 2% above the
prime rate. At May 31, 1996, the Company had direct borrowings under the
facility of approximately $421,000 and outstanding letters of credit amounting
to approximately $352,000.

Note 3-Net Income (Loss) per Share

Net income (loss) per share of common stock is computed on the basis of the
weighted average number of shares outstanding plus the dilutive effect of stock
options.

Item 2. Management's Analysis and Discussion Of
Financial Condition and Results Of Operations

Three and Six Months Ended May 31, 1996 vs May 31, 1995

Results of Operations

Net sales for the three and six months ended May 31, 1996 increased by
approximately $2,357,000 and $4,109,000, respectively, to approximately
$7,638,000 for the three months ended May 31, 1996 and $14,216,000 for the six
months ended May 31, 1996, as compared to approximately $5,281,000 and
$10,107,000, respectively, reported for the comparable periods in 1995. Net
sales for the Company's Luggage and Backpack Divisions increased by
approximately $1,973,000 and $3,921,000 for the three and six months ended May
31, 1996, primarily due to significant increases in the net sales of FILA
products as discussed below. Net sales for the Company's Canadian subsidiary
increased by approximately $772,000 and $1,624,000 for the three and six months
ended May 31, 1996, due primarily to the continued strong sales of its Atlantic
luggage line. Included in the Company's net sales for the three and six months
ended May 31, 1995 were approximately $388,000 and $1,436,000 in net sales
attributable to the Company's former Handbag Division, which was sold in March
1995. The Company's overall gross profit for the three and six months ended May
31, 1996 increased to approximately $1,956,000 and $3,858,000, respectively,
from approximately $1,444,000 and $2,447,000, respectively, reported for the
comparable periods of 1995. The gross profit for the Company's Luggage and
Backpack Divisions and Canadian subsidiary increased to approximately $1,956,000
and $3,858,000, respectively, from approximately $1,334,000 and $2,260,000,
respectively, reported for the comparable periods of 1995. Gross profit
increases resulted primarily from the increased net sales of the Company
licensed products, which generally have higher profit margins than the Company's
other product lines. Included in the Company's gross profit for the three and
six months ended May 31, 1995 was approximately $109,000 and $186,000
attributable to the Company's former Handbag Division.

After extensive negotiations with FILA Sport S.P.A. ("FILA") in February 1996,
the Company and FILA entered into an agreement pursuant to which the Company
ceased shipping FILA product under the FILA license on June 30, 1996, subject to
certain rights with respect to liquidating the remaining inventory. Net sales of
the FILA product for the three and six months ended May 31, 1996 were
approximately $3,056,000 and $5,734,000, respectively, as compared to
approximately $729,000 and $1,219,000, respectively, reported for the comparable
periods of 1995. The Company shipped approximately $6,700,000 of FILA product in
fiscal 1996 prior to the June 30, 1996 cut off date. The Company believes

that the loss of the FILA trademark may have an adverse effect on the Company's
results of operations for the fiscal quarter ended August 31, 1996. However, the
Company expects that a significant portion of the net sales of FILA products
that would have been realized by the Company during the remaining term of the
FILA license will be replaced by sales of other licensed products incorporating
the recently-licensed "Perry Ellis", "Skechers", "Gold's Gym", and "Generra"
names, symbols and logos. Future net sales could be negatively impacted if sales
from new licenses or increases in sales under existing licenses do not replace
the sales of FILA products.

Selling, warehouse, and general and administrative expenses increased
approximately $40,000, to approximately $1,517,000 for the three months ended
May 31, 1996 from approximately $1,477,000 for the three months ended May
31,1995 and decreased approximately $110,000, to approximately $2,985,000 for
the six months ended May 31, 1996 from approximately $3,095,000 for the six
months ended May 31, 1995. Selling, warehouse, and general and administrative
expenses for the Company's Luggage and Backpack Divisions and Canadian
subsidiary increased approximately $155,000 and $575,000, respectively, for the
three and six months ended May 31, 1996. These increases in expenses are due
primarily to the corresponding increases in the Company's sales for these
periods. The major components of the increases are: 1) increased commission
expenses, 2) increased warehousing costs, 3) increased salary expense, and 4)
increased advertising costs. Included in the Company's expenses reported for the
three and six months ended May 31, 1995 were approximately $115,000 and
$685,000, respectively, of expenses attributable to the Company's former Handbag
Division.

Included in the Company's operating results for the three and six months ended
May 31, 1995 was a one-time charge of approximately $424,000 attributable to the
loss on the sale of the Company's former Handbag Division in March 1995 to Bueno
of California, Inc., an affiliate of the Yashiro Company, Inc., the Company's
former parent.

Interest expense decreased for the three and six months ended May 31, 1996 by
approximately $32,000 and $57,000, respectively, from the comparable periods in
1995. This decrease is attributable to lower borrowings and lower interest
rates.

Liquidity and Capital Resources

The Company had cash and cash equivalents of approximately $231,000, and working
capital of approximately $1,561,000, at May 31, 1996. During the first half of
1996, the Company's operating activities provided approximately $765,000 in cash
flow as compared to $130,000 in cash flow provided in the comparable
period of the prior year.

Investing activities in the six months ended May 31, 1996, and May 31, 1995 did
not significantly impact the Company's cash flows. In 1996, investing activities
used approximately $45,000 of net cash for the purchase of property and
equipment. In 1995, investing activities provided approximately $26,000 of net
cash from the sale of property and equipment.

Financing activities for the six months ended May 31, 1996 used approximately
$666,000 of cash. Approximately $735,000 of cash was used to repay short-term
debt, and approximately $181,000 of cash was used to repay long-term debt.
During the six months ended May 31, 1996, the Company received $250,000 of
proceeds from the issuance of common stock. Financing activities in the six
months ended May 31, 1995 used approximately $476,000 of cash. Approximately
$732,000 was used to repay short-term debt, and approximately $44,000 was used

to repay long-term debt. Other financing activities during the six months ended
May 31, 1995, included a $300,000 accrual of non-current expenses.

On May 28, 1996, the Company's Canadian subsidiary renegotiated its financing
agreement with a Canadian bank. The agreement provides for a revolving loan in
the amount of approximately $876,000, with interest payable monthly at 1.25%
above the Canadian prime rate. The proceeds of this loan are utilized by the
Canadian subsidiary for purchasing inventory and financing day-to-day
operations. As of May 31, 1996, their were no borrowings under this facility and
the Canadian subsidiary had outstanding letters of credit totalling
approximately $402,000. Under the renegotiated financing agreement, the bank
also has outstanding two term loans to the Canadian subsidiary in amounts of
approximately $353,000 and $12,000 at May 31, 1996, with interest payable
monthly at 2.00% and 1.50%, respectively, above the Canadian prime rate. As of
May 31, 1996, the Canadian prime rate was 6.50%. Substantially all of the assets
of the Canadian subsidiary have been pledged as security for the revolving line
of credit and the term loans. Additionally, the Company has agreed to
subordinate its loan to its Canadian subsidiary to the amounts payable to the
bank. However, subject to on-going compliance with all other covenants of the
agreement, the subordinated loan may be repaid at $22,000 per month starting in
July 1996. At May 31, 1996, the subordinated loan amounted to approximately
$227,000.

In March 1995, the Company entered into an agreement with Yashiro Co., Inc.
("Yashiro"), pursuant to which Yashiro agreed to issue or cause to be issued,
until March 20, 1997, unsecured trade letters of credit in an aggregate amount
of up to the lesser of $1,200,000 or 35% of the book value of the Company's
inventory. Yashiro charges the Company a handling fee of 3% for each letter of
credit that is opened. Interest is payable to Yashiro monthly at 2% above the
prime rate. At May 31, 1996, the Company had direct borrowings under the
facility of approximately $421,000 and outstanding letters of credit amounting
to approximately $352,000.

There were approximately $48,000 in capital expenditures during the first six
months of 1996. The Company presently anticipates that it will expend an
additional $200,000 for capital improvements during fiscal 1996. A substantial
portion of capital expenditures are related to the Company's new showroom in New
York City.

Management believes that its cash and cash equivalents, lines of credit,
factoring of accounts receivable and cash flows generated from operations will
be sufficient to meet its liquidity and capital requirements for the next twelve
months.

SIRCO INTERNATIONAL CORP.

PART II-OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits.

10.1-- Credit Agreement.

Credit agreement dated May 28, 1996 between Sirco
International (Canada) Limited and the National Bank
of Canada.

27-- Financial Data Schedule.

(b) Reports on Form 8-K
None.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Sirco International Corp.

July 11, 1996 By: /s/ Joel Dupre
- ------------- -------------------------
Date Joel Dupre
Chairman of the Board and
Chief Executive Officer

July 11, 1996 By: /s/ Gandolfo J. Verra
- ------------- -------------------------
Date Gandolfo J. Verra
Controller and Assistant
Secretary
(Chief Accounting Officer)