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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<Table>

[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
</Table>

MAZEL STORES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies: .......

(2) Aggregate number of securities to which transaction applies: ..........

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............

(4) Proposed maximum aggregate value of transaction: ......................

(5) Total fee paid: .......................................................

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid: ...............................................

(2) Form, Schedule or Registration Statement No.: .........................

(3) Filing Party: .........................................................

(4) Date Filed: ...........................................................

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2
[MAZEL STORES, INC. LOGO] 31000 AURORA ROAD
SOLON, OHIO 44139
(440) 248-5200
FAX (440) 349-4056

July 30, 2001

Dear Fellow Shareholder:

It is a pleasure to extend to you a cordial invitation to attend the 2001
Annual Meeting of Shareholders of Mazel Stores, Inc. This year's annual meeting
will be held at Mazel Stores, Inc. offices at 200 Helen Street, South
Plainfield, New Jersey, 07080, on Wednesday, September 5, 2001 at 9:00 a.m.

Shareholders will be asked to approve the election of Directors and to
ratify the appointment of auditors. Following the meeting, management will be
pleased to answer your questions regarding the Company. Please carefully review
the enclosed Proxy Statement.

I hope you will be able to attend this meeting in person. Whether or not
you expect to attend, I urge you to sign, date and return the enclosed proxy
card so that your shares will be represented.

I look forward to seeing you on September 5th.

Sincerely,

/s/ Peter J. Hayes

Peter J. Hayes,
Chief Executive Officer

MAZEL STORES, INC.
31000 Aurora Road
Solon, Ohio 44139

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held September 5, 2001

The Annual Meeting of Shareholders of Mazel Stores, Inc., an Ohio
corporation (the "Company"), will be held at Mazel Stores, Inc. at the Company's
offices at 200 Helen Street, South Plainfield, New Jersey, 07080, on Wednesday,
September 5, 2001 at 9:00 a.m.

The purposes of the meeting will be to:

1. Elect three Directors for a term expiring in 2004.

2. Ratify the appointment of KPMG LLP as auditors of the
Company for the fiscal year ending February 2, 2002.

3. Transact such other business as is properly brought before
the meeting.

Only holders of shares of Common Stock of record at the close of business
on July 23, 2001 will be entitled to notice of and to vote at the meeting. A
list of such shareholders will be open for examination by any shareholder at the
meeting.

ALL SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. TO ENSURE
YOUR REPRESENTATION AT THE MEETING, HOWEVER, PLEASE MARK, SIGN AND DATE YOUR
PROXY CARD AND RETURN IT WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
Any shareholder present at the meeting may withdraw his or her proxy and vote
personally on each matter brought before the meeting.

By Order of the Board of Directors

Marc H. Morgenstern
Secretary

Cleveland, Ohio
July 30, 2001

MAZEL STORES, INC.
31000 AURORA ROAD
SOLON, OHIO 44139

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

SOLICITATION AND REVOCABILITY OF PROXIES

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Mazel Stores, Inc. (the "Company") for use
at the Annual Meeting of Shareholders to be held at the time and place, and for
the purposes, set forth in the accompanying Notice of Annual Meeting of
Shareholders (the "Annual Meeting"). It is anticipated that the Proxy Statement
together with the proxy card and the fiscal 2000 Annual Report to Shareholders
will be mailed to the Company's shareholders commencing on July 30, 2001.

Pursuant to the Ohio General Corporation Law, a person has the power to
revoke its proxy at any time before it is exercised by (1) attending the Annual
Meeting and voting in person, (2) executing and delivering a proxy bearing a
later date, or (3) delivering written notice of revocation to the Secretary of
the Company prior to the Annual Meeting.

The Company will bear the cost of this solicitation of proxies, including
the charges and expenses of brokerage firms and others for forwarding
solicitation materials to beneficial owners of the Company's shares of Common
Stock (the "Common Shares"). In addition, proxies may be solicited by mail,
personal interview, or telephone by Directors, officers or employees of the
Company and its subsidiaries without additional compensation therefor.

PURPOSES OF ANNUAL MEETING

The Annual Meeting has been called for the purposes of (1) electing three
(3) Directors of the class whose three-year term of office will expire in 2004;
(2) ratifying the appointment of KPMG LLP as auditors of the Company for fiscal
2001; and (3) transacting such other business as may properly come before the
meeting.

The person named in the enclosed proxy has been selected by the Board of
Directors and will vote Common Shares represented by valid Board of Directors'
proxies. He has indicated that, unless otherwise indicated in the enclosed
proxy, he intends to vote for the election of the Director nominees named herein
and in favor of the proposal listed in Item 2 above.

VOTING SECURITIES

The close of business on July 23, 2001 has been fixed as the record date
for the determination of holders of record of the Common Shares of the Company
entitled to notice of and to vote at the Annual Meeting. On the record date,
9,117,093 Common Shares were outstanding and eligible to be voted at the Annual
Meeting. A quorum for the transaction of business at the Annual Meeting is a
majority of the outstanding Common Shares. Votes cast by proxy or in person at
the Annual Meeting will be tabulated by the election inspector appointed for the
Annual Meeting. The election of Directors and the proposal to ratify the
appointment of auditors require approval only by a plurality of the votes cast.
As a consequence, abstentions and broker non-votes will not be counted in
determining the outcome of the vote with respect to election of Directors or
appointment of the auditors.

INFORMATION REGARDING THE BOARD OF DIRECTORS

GENERAL

The business of the Company is managed under the direction of the
Company's Board of Directors. The number of Directors is currently fixed at 10.
The Company's Amended and Restated Code of Regulations ("Code of Regulations")
divides the Board of Directors into three classes of three or four Directors
each. The Directors serve staggered terms of three years, with the members of
one class being elected each year, as follows: (i) Charles Bilezikian, Brady
Churches, and Robert Horne serve until the 2001 Annual Meeting; (ii) Reuven D.
Dessler, Mark J. Miller, William A. Shenk, and Ned L. Sherwood serve until the
2002 Annual Meeting; and (iii) Peter J. Hayes, Jacob Koval, and Jerry Sommers
serve until the 2003 Annual Meeting, and in each case until their respective
successors are elected and qualified.

The Board of Directors has established two standing committees: an Audit
Committee and Compensation Committee.

Audit Committee. The committee is chaired by Mr. Sherwood, operates
pursuant to a written charter (a copy of which is attached as Appendix A to this
Proxy Statement), and is responsible for monitoring and overseeing the Company's
internal controls and financial reporting processes, as well as the independent
audit of the Company's consolidated financial statements by the Company's
independent auditors, KPMG LLP. Each committee member is an "Independent
Director" as defined in Rule 4200(a)(15) of the National Association of
Securities Dealers, Inc. listing standards. As part of fulfilling its
responsibilities, the Audit Committee reviewed and discussed the audited
consolidated financial statements for fiscal 2000 with management and discussed
those matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees) with the Company's independent auditors.
The Audit Committee received the written disclosures and the letter required by
Independent Standards Board Standard No. 1 (Independence Discussions with Audit
Committee) from KPMG LLP and discussed that firm's independence with
representatives of the firm.

Based upon the Audit Committee's review of the audited consolidated
financial statements and its discussions with management and the Company's
independent auditors, the

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Audit Committee recommended that the Board of Directors include the audited
consolidated financial statements for the fiscal year ended February 3, 2001 in
the Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission.

Ned L. Sherwood, Chairman
Phillip Cohen
Charles Bilezikian

Compensation Committee. The Compensation Committee has the authority to:
(i) administer the Company's stock option plan and restricted stock plan; (ii)
review and monitor key employee compensation and benefits policies; and (iii)
administer the Company's management compensation plans. The Compensation
Committee consists of Messrs. Horne, Miller and Shenk.

The Board of Directors of the Company held seven meetings in fiscal 2000;
whereas the Audit and Compensation Committees each held one meeting during the
year. All Directors attended at least 75% of the Board and applicable committee
meetings held during fiscal 2000. In addition to holding regular Board and
committee meetings, the Board members also reviewed and considered matters and
documents and communicated with each other wholly apart from the meetings.
Several actions were taken by unanimous written consent.

COMPENSATION OF DIRECTORS

The Company pays each outside Director a fee of $15,000 for attendance at
four meetings per year, together with reimbursement of out-of-pocket expenses
incurred in connection with the Directors' attendance at such meetings. In
addition, each outside Director receives $1,500 per meeting for each meeting
attended in excess of four per year. No additional compensation is to be paid
for committee meetings held on the same day as a Board of Directors' meeting.
Officers of the Company who are also Directors will receive no additional
compensation for serving as Directors.

Each outside Director of the Company, upon their initial election as a
Director, received a stock option to purchase 15,000 Common Shares at the time
of their election to the Board. Director options vest ratably over a period of
five years and expire ten years from date of grant.

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7

PROPOSAL ONE
ELECTION OF DIRECTORS

The Board of Directors has nominated Charles Bilezikian, Brady Churches,
and Robert Horne, the Directors whose terms of office expire this year, to stand
for re-election as Directors. The three-year term will end upon the election of
Directors at the 2004 Annual Meeting of Shareholders.

At the Annual Meeting, the Common Shares represented by valid proxies,
unless otherwise specified, will be voted to re-elect the Directors. Each
individual nominated for election as a Director of the Company has agreed to
serve if elected. However, if any nominee becomes unable or unwilling to serve
if elected, the proxies will be voted for the election of such other person as
may be recommended by the Board of Directors. The Board of Directors has no
reason to believe that the persons listed as nominees will be unable or
unwilling to serve.

The Board of Directors recommends that each shareholder vote "FOR" the
Board of Directors' nominees.

PRINCIPAL OCCUPATION PAST FIVE YEARS, DIRECTOR
NAME OF DIRECTOR AGE OTHER DIRECTORSHIPS SINCE
- ---------------- --- ------------------- -----

NOMINEES FOR TERM EXPIRING IN 2004

Charles Bilezikian 64 President of Christmas Tree Shops, Inc., a New 1997
England-based specialty retailer of housewares and
gourmet foods since 1971.

Brady Churches 42 President of the Company since November 1996 1996
having served as President - Retail from
August 1995 until such date.

Robert Horne 42 Principal of ZS Fund L.P., a private investment firm, 1996
for over five years.

DIRECTORS WHOSE TERM EXPIRES IN 2002

Reuven D. Dessler 53 Chairman of the Board of the Company since November 1996
1996 and its Chief Executive Officer from November 1996
to May 2001. Mr. Dessler co-founded the Company in 1975
and served as its President until November 1996.

Mark Miller 48 President of RedTagBiz.com and Chief Merchandising 1999
Officer of Boom Buy, Inc. since 2000. Previously, Mr.
Miller held senior management positions for Value City
Department Stores,

4
8

Consolidated Stores Corporation, and MacFrugal's
Bargain Closeout's Inc.

William A. Shenk 58 A private investor. Mr. Shenk served as an attorney 2001
in Columbus and Atlanta, and previously as Vice
President and General Counsel for Consolidated Stores
Corporation.

Ned L. Sherwood 51 Principal of ZS Fund L.P., a private investment firm, 1996
for over five years.

DIRECTORS WHOSE TERM EXPIRES IN 2003

Peter J. Hayes 58 Chief Executive Officer of the Company since May 2001
2001. From October 1999 until May 2001, Mr. Hayes
was President of Sales of RetailExchange.com, Inc.,
an internet B2B exchange; and from September 1995 to
October 1999, he was President and founder of Lemax
Hong Kong Ltd., a manufacturer and importer of
household ceramic products and citronella candles.

Jacob Koval 53 Executive Vice President - Wholesale of the Company from 1996
November 1996 to June 2001. Mr. Koval co-founded the
Company in 1975.

Jerry Sommers 50 Executive Vice President - Retail of the Company for 1996
over five years.

5
9

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

The following table sets forth certain current information with respect
to the beneficial ownership of the Common Shares as of June 30, 2001. Unless
otherwise indicated below, the persons named below have the sole voting and
investment power with respect to the number of shares set forth opposite their
names. All information with respect to beneficial ownership has been furnished
by the respective Director, officer or 5% or greater shareholder, as the case
may be.

Names and, where necessary, Number of Shares
Addresses of Beneficial Owners Beneficially Owned Percentage
- ------------------------------ ------------------ ----------

ZS Fund L.P. ...................................... 2,750,383 (1) 28.9%
54 Morris Lane, Scarsdale, NY 10583
Ned L. Sherwood ................................... 2,762,383 (2) 29.0
54 Morris Lane, Scarsdale, NY 10583
Robert Horne ...................................... 2,762,383 (2) 29.0
54 Morris Lane, Scarsdale, NY 10583
Mazel/D&K, Inc..................................... 2,058,105 (3) 21.6
31000 Aurora Road, Solon, Ohio 44139
Reuven D. Dessler.................................. 1,631,555 (4) 17.1
31000 Aurora Road, Solon, Ohio 44139
Jacob Koval........................................ 833,037 (5) 8.8
31000 Aurora Road, Solon, Ohio 44139
Dimensional Fund Advisors, Inc..................... 712,300 7.5
1299 Ocean Avenue, Santa Monica, CA 90401
William Shenk...................................... 631,758 6.6
3925 Gaffney Court, San Diego, CA 92130
Westport Asset Management.......................... 600,290 6.3
253 Riverside Avenue, Westport, CT 06880
Jerry Sommers...................................... 385,876 (6) 4.1
Brady Churches .................................... 378,404 (7) 4.0
Susan Atkinson..................................... 14,805 *
Charles Bilezikian................................. 27,000 (8) *
Mark Miller........................................ 3,000 (9) *
Peter J. Hayes..................................... 0 *

All Current Directors and 6,679,818 (10) 70.8
Executive Officers of the Company (11 Persons)

* Less than one percent.

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(1) The shares beneficially owned by ZS Fund L.P. include 1,992,001 shares
held by ZS Mazel L.P., 453,767 shares held by ZS Mazel II L.P., and
304,615 shares held by ZS Mazel, Inc. Messrs. Horne and Sherwood are
officers of ZS Fund L.P.
(2) Includes the shares beneficially owned by ZS Fund L.P. as officers and/or
equity owners of the entities holding such shares. Messrs. Sherwood and
Horne have voting power with respect to such shares. Except to the extent
of their equity interests in the entities holding such shares, Messrs.
Sherwood and Horne disclaim beneficial ownership in such shares. Also
includes 12,000 shares each subject to options currently exercisable or
exercisable within 60 days hereof.
(3) Mazel/D&K, Inc. is a corporation owned by Messrs. Dessler and Koval and
members of their families. Messrs. Dessler and Koval are the Directors
and officers of Mazel/D&K, Inc.
(4) Includes 1,372,304 shares owned by Mazel/D&K, Inc. for the benefit of Mr.
Dessler and family members and 70,800 shares subject to options currently
exercisable or exercisable within 60 days hereof.
(5) Includes 685,801 shares owned by Mazel/D&K, Inc. for the benefit of Mr.
Koval and family members and 30,120 shares subject to options currently
exercisable or exercisable within 60 days hereof.
(6) Includes 93,600 shares subject to options currently exercisable or
exercisable within 60 days hereof.
(7) Includes 84,400 shares subject to options currently exercisable or
exercisable within 60 days hereof.
(8) Includes 12,000 shares subject to options currently exercisable or
exercisable within 60 days hereof.
(9) Includes 3,000 shares subject to options currently exercisable or
exercisable within 60 days hereof.
(10) Includes 317,920 shares subject to options currently exercisable or
exercisable within 60 days hereof.

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11

EXECUTIVE OFFICERS' COMPENSATION

The following table sets forth certain information with respect to the
compensation earned during the fiscal years ended February 3, 2001, January 29,
2000, and January 30, 1999 respectively, by the Chief Executive Officer and
certain other named executive officers of the Company:

SUMMARY COMPENSATION TABLE

Name and Fiscal Annual Compensation Option All Other
Principal Position Year Salary Bonus Awards(#) Compensation
- ------------------ ---- ------- ----- --------- ------------

Reuven D. Dessler 2000 $ 491,394 $ - 54,000 $ 1,962
Chief Executive Officer 1999 466,220 187,451 - 1,334
1998 458,945 - - 1,231

Brady Churches 2000 441,252 - 22,000 1,703
President 1999 401,293 - 2,998
1998 394,531 104,438 - 2,677
-
Jacob Koval 2000 267,676 - 30,600 441
Executive Vice President - 1999 247,456 75,182 - 897
Wholesale 1998 246,088 - - 890

Jerry Sommers 2000 327,950 - 23,000 904
Executive Vice President - 1999 299,139 78,440 - 2,244
Retail 1998 290,952 - 15,000 1,999

Susan Atkinson 2000 215,144 - 20,500 32
Senior Vice President - 1999 208,741 32,200 - 520
Chief Financial Officer and 1998 150,337 - 10,000 1,128
Treasurer

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STOCK OPTION GRANTS IN FISCAL 2000

There following were stock option grants by the Company to executive
officers during the fiscal year ended February 3, 2001.

Number of % of Total (c)
Securities Options Potential Realizable Value at
Underlying Granted to Exercise or Assumed Annual Rates of Stock
Options Employees Base Price Expiration Price Appreciation for Option Term
Name Granted (#) In Fiscal 2000 ($/Share) Date 5% ($) 10% ($)
---- ----------- -------------- ----------- ---- ------ -------

Reuven Dessler 54,000 (a) 9.8 $9.25 03-14-10 $107,645 $231,818
Brady Churches 22,000 (a) 4.0 9.25 03-14-10 43,856 94,444
Jacob Koval 30,600 (a) 5.6 9.25 03-14-10 96,264 218,390
Jerry Sommers 23,000 (a) 4.2 9.25 03-14-10 133,797 339,069
Sue Atkinson 10,500 (a) 1.9 9.25 03-14-10 61,081 154,792
10,000 (b) 1.8 2.50 12-21-10 15,722 39,844

(a) Options are exercisable upon vesting 20% each year, commencing in March,
2001.
(b) Options are exercisable upon vesting 50% commencing in December, 2001, and
10% for each year thereafter.
(c) The potential realizable value that might be recognized upon the exercise of
the options immediately prior to the expiration of their term, assuming the
specified compounded rates of appreciation over the term of the option.
Shareholders of the Company, as a group, would realize $9,354,208 and
$23,705,399 at assumed annual rates of appreciation of 5% and 10%, respectively,
over the ten-year life of the options. There can be no assurance that the
amounts reflected in this table will be achieved.

AGGREGATED OPTION EXERCISES IN FISCAL 2000 AND FISCAL YEAR-END OPTION VALUES

The following table summarizes the fiscal year-end value of unexercised
options for each of the executive officers identified in the Summary
Compensation Table. No options were exercised by any executive officer in fiscal
2000.

Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
at February 3, 2001 (#) at February 2, 2001 ($)(1)
------------------------------ --------------------------

Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------

Reuven Dessler 60,000 69,000 $ 0 $ 0

Brady Churches 80,000 42,000 0 0

Jacob Koval 24,000 36,600 0 0

Jerry Sommers 86,000 52,000 0 0

Susan Atkinson 28,000 32,500 0 0

(1) The closing price of Mazel Stores, Inc. Common Shares on February 2,
2001, the last trading day prior to the fiscal year end, was $2.50.

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EMPLOYMENT ARRANGEMENTS

Peter J. Hayes entered into a three-year employment agreement effective
May 7, 2001 providing him an annual base salary of $550,000 (subject to annual
cost of living adjustments). Mr. Hayes is entitled to receive an annual bonus of
up to $250,000 per year, subject to the Company achieving pre-determined annual
performance target, with a minimum fiscal 2001 bonus of $100,000. Under the
employment agreement, Mr. Hayes received ten-year stock options for 500,000
Common Shares at an exercise price of $2.60; the options vest in 20% annual
increments commencing May 2002. Mr. Hayes is entitled to one year's salary in
the event of his termination without cause. He is also receiving $55,000 to
cover the relocation costs of his family.

Brady Churches has an employment agreement terminating on August 31, 2003
providing him a current annual base salary of $513,161 (subject to annual
cost-of-living adjustments). Mr. Churches is entitled to receive an annual bonus
up to 50.0% of his annual base salary, subject to the Company achieving
pre-determined annual performance targets. Under his agreement, Mr. Churches is
entitled to two-years' salary and bonus in the event of termination of his
employment without cause or in the event he elects to terminate employment
following a change in control.

Jerry Sommers has an employment agreement terminating on August 31, 2003
providing him a current annual base salary of $384,871 (subject to annual
cost-of-living adjustments). Mr. Sommers is entitled to receive an annual bonus
up to 50.0% of his annual base salary, subject to the Company achieving
pre-determined annual performance targets. Mr. Sommers is entitled to receive
two-years' salary and bonus in the event of termination of his employment
without cause or in the event he elects to terminate employment following a
change in control.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Act of 1934 requires the Company's
Directors, executive officers and persons who own 10% or more of the Company's
Common Shares to file reports of ownership and changes of ownership with the
Securities and Exchange Commission and the Company. Based upon a review of these
filings and written representations from such individuals, the Company
understands that all such filers have adhered to all applicable filing
requirements.

10
14

COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors is generally
responsible for determining the nature and amount of compensation for executive
officers. All decisions by the Compensation Committee are reviewed and approved
by the full Board of Directors. The Compensation Committee met once in fiscal
2000.

The Company's compensation philosophy ties a significant portion of
executive compensation to the Company's success in meeting specified profit
growth and performance goals and to appreciation in the Company's stock price.
The Company's compensation objectives include attracting and retaining the best
possible executive talent, motivating executive officers to achieve the
Company's performance objectives, rewarding individual performance and
contributions, and linking executive and shareholder interests through
equity-based plans.

The Company's executive compensation consists of three key components:
base salary, annual bonus and stock options and restricted stock awards, each of
which is intended to complement the others and, taken together, to satisfy the
Company's compensation objectives.

BASE SALARY. The Company has historically had employment agreements with
each of the Company's executive officers. These agreements set forth annual
salaries for the executives that were established through negotiations with the
officers, giving consideration to the salaries of executives of other growth
retailers of similar size. New agreements were negotiated for Messrs. Churches
and Sommers during fiscal 2000.

ANNUAL BONUS. The Company has established a management incentive bonus
plan that bases an executive's annual bonus on specified profit growth and
performance goals and to appreciation in the Company's stock price established
by the Compensation Committee at the beginning of the fiscal year. The plan
provided for graduated bonus payments dependent on the percentage of the
targeted goals achieved. Inasmuch as the targeted goals for fiscal 2000 were not
fully achieved, no bonuses were paid under the plan.

STOCK-RELATED COMPENSATION. The Compensation Committee believes that
equity-based compensation ensures that the Company's executives have a
continuing stake in the long-term success of the Company. Stock option awards
contain vesting provisions that ensures the executives have a financial
incentive to remain with the Company during the vesting period and beyond. In
determining the size of option awards, the Committee looks at several
measurements, including the value of options awarded to individuals in
comparable position in peer group companies, individual and Company performance
against plan, the number of shares and options currently held by the officer and
the relative proportion of long-term incentives within the total compensation
mix. An aggregate of 140,100 stock options were awarded to executives in March
2000, and 10,000 stock options were awarded in December 2000.

11
15

COMPENSATION OF CHIEF EXECUTIVE OFFICER. The Committee uses the same
procedures described above for the other executive officers in setting the
annual salary, bonus, and stock-incentive awards for the Chief Executive
Officer.

COMPENSATION COMMITTEE:
Robert Horne, Chairman
Mark Miller
William A. Shenk

12
16

CERTAIN TRANSACTIONS

Messrs. Dessler and Koval are partners in Aurora Road Realty Development
Company, a partnership that leases the office and warehouse facility located in
Solon, Ohio, to the Company. Messrs. Dessler and Koval own 40.0% and 6.0%
interests, respectively, in such partnership. The Company made rent payments
totaling $1,930,000 pursuant to the lease for fiscal 2000. Messrs. Dessler and
Koval are also minority shareholders in entities that operate public warehouses
in which the Company periodically leases space. The Company believes the
payments under the leases are on terms no less favorable to the Company than
could be obtained from unrelated parties.

The Company's warehouse in South Plainfield, New Jersey is leased from a
limited liability company in which Messrs. Dessler and Koval own approximately
34% and 10% membership interest, respectively. Neither Mr. Dessler or Mr. Koval
is involved in the management of the lessor and the Company believes the terms
are no less favorable than could be obtained from unrelated parties.

The Company made loans to executives and other individuals in December
1996 to provide for payment of tax obligations arising from the issuance of
Common Shares to such individuals at the time of the Company's IPO. The balances
as of February 3, 2001 were $1,067,071, $752,285 and $70,152 to Mr. Dessler, Mr.
Koval and Ms. Atkinson, respectively. Such loans are to be repaid on the earlier
of five years from the effective date of the loan or thirty (30) days following
the officer's voluntary termination of employment. The loans are subject to
prepayment in the event of the individual's sale of Common Shares, but only to
the extent of net sale proceeds. The loans bear interest at the applicable
federal rate.

Christmas Tree Shops, Inc., a New England-based retailer of which Mr.
Bilezikian is President and founder, is a customer of the Company's wholesale
division. The dollar amount of purchases by the Christmas Tree Shops is not
"material" (as defined in SEC Regulation S-K, Item 404(b)) to either the Company
or Christmas Tree Shops.

13
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SHAREHOLDER RETURN PERFORMANCE PRESENTATION

Set forth below is a line graph comparing the cumulative total
shareholder return on the Company's Common Shares against the cumulative total
return of the Nasdaq U.S. Composite Index and the Nasdaq Retail Trade Stock
Index from the date of the Company's IPO in November 1996 through January 2001.

The stock price performance graph below shall not be deemed incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into and filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference and shall not otherwise
be deemed filed under such Acts.

- --------------------------------------------------------------------------------
COMPARISON OF CUMULATIVE TOTAL RETURNS
Mazel Stores, Inc., Nasdaq Retail Trade Stock Index and
Nasdaq U.S. Composite Index
- --------------------------------------------------------------------------------

[PERFORMANCE GRAPH]

- --------------------------------------------------------------------------------
From November 29, 1996 through January 31, 2001
- --------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------------------------
11/29/96 1/31/97 1/31/98 1/31/99 1/31/00 1/31/01
- ---------------------------------------------------------------------------------------------------------------------------

Mazel Stores, Inc. $100.00 $164.06 $ 86.72 $ 95.31 $ 56.64 $15.63
- ---------------------------------------------------------------------------------------------------------------------------
Nasdaq Retail $100.00 $ 97.67 $113.92 $139.68 $113.61 $88.03
Trade Index
- ---------------------------------------------------------------------------------------------------------------------------
Nasdaq U.S. $100.00 $107.01 $126.25 $197.62 $308.85 $216.65
Composite Index
- ---------------------------------------------------------------------------------------------------------------------------

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PROPOSAL TWO
INDEPENDENT AUDITORS

The Board of Directors, upon the recommendation of the Audit Committee,
has selected KPMG LLP as auditors for the fiscal year ending February 2, 2002.
The Board of Directors requests the ratification of the appointment of KPMG LLP
by the shareholders at the Annual Meeting. The Board of Directors recommends
that each shareholder vote "FOR" ratification of KPMG LLP as auditors for fiscal
2001.

Aggregate fees billed for the audit of the Company's annual financial
statements and quarterly reviews of the financial statements in fiscal 2000 were
$125,000.

All non-audit aggregate fees billed for professional services rendered
during fiscal year 2000, including fees relating to the audit of the Company's
employee benefit plan, totaled $7,000. The Audit Committee has considered
whether the provision of services for these fees is compatible with maintaining
the independent accountants' independence and has determined that such services
have not adversely affected KPMG LLP's independence.

KPMG LLP has audited the Company's financial statements for each fiscal
year since the fiscal year ended December 31, 1987. Representatives of KPMG LLP
are expected to be present at the meeting with the opportunity to make a
statement if they desire to do so, and are expected to be available to respond
to appropriate questions.

OTHER MATTERS

The Board of Directors of the Company is not aware that any matters other
than those listed in the Notice of Annual Meeting of Shareholders is to be
presented for action at the meeting. If any of the Board's nominees are
unavailable for election as a Director or any other matter should properly come
before the meeting, it is intended that votes will be cast pursuant to the proxy
in respect thereto in accordance with the best judgment of the person or persons
acting as proxies.

SHAREHOLDERS' PROPOSALS

The deadline for shareholders to submit proposals to be considered for
inclusion in the Proxy Statement for the 2002 Annual Meeting of Shareholders is
expected to be December 31, 2001.

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OTHER INFORMATION

The Company's fiscal 2000 Annual Report is being mailed to shareholders
with this Notice of the Annual Meeting of Shareholders and Proxy Statement.

MARC H. MORGENSTERN
Secretary

By Order of the Board of Directors
July 30, 2001

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APPENDIX A

MAZEL STORES, INC.
AUDIT COMMITTEE CHARTER
-----------------------

I. PURPOSE

The Audit Committee ("Committee") will assist the Board of Directors
("Board") in fulfilling its oversight responsibilities. The Committee will
review the financial reporting process, the system of internal control, the
audit process, and the Company's process for monitoring compliance with laws and
regulations. Consistent with this function, the Committee shall encourage
continuous improvement of, and shall foster adherence to, the Company's
policies, procedures and practices at all levels. In performing its duties, the
Committee will maintain effective working relationships with the Board,
management and the independent accountants. To effectively perform his or her
role, each Committee member will obtain an understanding of the detailed
responsibilities of Committee membership as well as the Company's business,
operations and risks.

The Committee's primary duties and responsibilities are to:

- Serve as an independent and objective party to provide a degree of
oversight over the Company's financial reporting process and
systems of internal controls;

- Review and appraise the audit efforts of the Company's independent
accountants, whom are ultimately accountable to the Committee and
the Board;

- Provide an open avenue of communication among the independent
accountants, financial and senior management and the Board; and

- Ensure the independence of the Company's independent accountants.

The Committee will primarily fill these responsibilities by carrying out
the activities enumerated in Section V of this Charter.

II. COMPOSITION AND TERM

The Committee shall be comprised of three or more directors as determined
by the Board, each of whom shall be independent directors, and free from any
relationship that would interfere with the exercise of his or her independent
judgment as a member of the Committee. All members of the Committee shall be
able to read and understand fundamental financial statements, including the
Company's balance sheet, income statement and cash flow statement and have a
working familiarity with basic finance and accounting practices. At least one
member of the Committee shall have past employment experience in finance or
accounting, requisite professional certification in accounting or any other
comparable experience or background that results in the individual's financial
sophistication, including being or having been a chief

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executive officer, chief financial officer or other senior officer with
financial oversight responsibilities.

For purposes of this Charter, the definition of independence includes the
absence of any relationship with the Company that may interfere with the
exercise of independence from management and the Company. In addition, the
following restrictions apply to every Committee member:

(a) A director who is an employee (including non-employee
executive officers) of the Company or any of its affiliates may not serve
on the Committee until three years following the termination of his or
her employment. In the event the employment relationship is with a former
parent or predecessor of the Company, the director could serve on the
Committee after three years following the termination of the relationship
between the Company and the former parent or predecessor;

(b) A director who has accepted any compensation from the Company
or its affiliates in excess of $60,000 during the previous fiscal year,
other than compensation for Board services, benefits under a
tax-qualified retirement plan or non-discretionary compensation may not
serve on the Committee;

(c) A director who has been a partner, controlling shareholder or
executive officer of an organization that has a business relationship
that involves payments (other than those which arise solely from
investments in the Company's securities) that exceed 5% of the
organization's or the Company's consolidated gross revenues for that
year, or $200,000, whichever is greater, in any of the past three years
may not serve on the Committee;

"Business Relationships" can include commercial, industrial,
banking, consulting, legal, accounting and other relationships. A
director can have this relationship directly with the Company, or the
director can be a partner, officer or employee of an organization that
has such a relationship. The director may serve on the Committee after
three years following the termination of: (1) the relationship between
the organization with which the director is affiliated and the Company,
(2) the relationship between the director and his or her partnership
status, shareholder interest or executive officer position, or (3) the
direct business relationship between the director and the Company.

(d) A director who is employed as an executive of another
corporation where any of the Company's executives serves on that
corporation's compensation committee may not serve on the Committee; and

(e) A director who is an immediate family member of an executive
officer of the Company or any of its affiliates cannot serve on the
Committee until three years after the termination of such employment
relationship, subject to the Board's ability to override this
restriction. Immediate family members include spouses, parents, children,

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siblings, mothers-in-law and fathers-in-law, sons and daughters-in-law,
brothers and sisters-in-law and anyone (other than employees) who share
such person's home.

The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chairman of the Audit Committee is appointed by
the Board, the members of the Committee may designate a Chairman by majority
vote of the Committee members. The Committee may appoint separate counsel or
advisors as necessary.

III. MEETINGS

The Committee shall meet annually, or more frequently as circumstances
dictate. The Committee shall meet at least annually with management and the
independent accountants in separate sessions to discuss matters that the
Committee or each of these groups believes should be discussed privately.

Minutes of each meeting are to be prepared and sent to Committee members
and also the Board members who are not members of the Committee. The minutes, as
finally approved shall be placed in the corporate minute books of the Company by
the Secretary of the Company. Copies will be provided to the independent
accountants.

If the Committee deems it necessary, it may meet in executive sessions.
Members of the Committee and the Committee's Secretary as appointed by the
Chairman of the Committee, and only those advisors and members of management
designated by a Committee member shall attend executive sessions.

IV. AUTHORITY

In addition to performing the responsibilities and duties as contained in
Section V of this Charter, the Committee may, or at the Board's request,
investigate any financial and/or accounting activity of the Company. The
Committee is empowered with Board authority to execute such investigations
including the ability to retain third parties having special competence as
necessary to assist the Committee in fulfilling its responsibilities.

V. RESPONSIBILITIES AND DUTIES

There are certain responsibilities and duties the Committee shall observe
in fulfilling its obligation under the Charter. These responsibilities and
duties are included here in summary form.

INTERNAL CONTROL

(a) Evaluate whether management is setting the appropriate tone at the
top by communicating the importance of internal control and ensuring that all
individuals possess an understanding of their roles and responsibilities;

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(b) Obtain reports on the extent to which auditors review computer
systems and applications, the security of such systems and applications, and the
contingency plan for processing financial information in the event of a systems
breakdown;

(c) Inquire about whether internal control recommendations made by
auditors and whether they have been implemented by management; and

(d) Instruct the independent accountants to keep the Committee informed
about fraud, illegal acts, deficiencies in internal control, and certain other
matters.

FINANCIAL REPORTING

General

(a) Review significant accounting and reporting issues, including recent
professional and regulatory pronouncements, and understand their impact on the
financial statements; and

(b) Ask management and the auditors about significant risks and exposures
and the plans to monitor, control and minimize such risks and exposures.

Annual Financial Statements

(a) Review the annual financial statements and determine whether they are
complete and consistent with the information known to members of the Committee,
and assess whether the financial statements reflect appropriate accounting
principles;

(b) Pay particular attention to complex and/or unusual transactions,
i.e., restructuring charges and derivative disclosures;

(c) Focus on judgmental areas such as those involving valuation of assets
and liabilities, including, for example, the accounting for and disclosure of
obsolete or slow-moving inventory; loan losses; warranty, product, and
environmental liability; litigation reserves; and other commitments and
contingencies;

(d) Meet with management and the independent accountants to review the
financial statements and the results of the audit;

(e) Request, where appropriate, an analysis by the independent
accountants about significant financial reporting issues and judgments made in
the preparation of the financial statements;

(f) Consider management's handling of proposed audit adjustments
identified by the independent accountants;

(g) Review the Management Discussion & Analysis and other sections of the
annual report before its release and consider whether the information is
adequate and consistent with Committee members' knowledge about the Company and
its operations; and

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(h) Instruct the independent accountants to communicate certain required
matters to the Committee.

INTERIM FINANCIAL STATEMENTS

(a) Review management's preparation and summarization of quarterly
financial information, the extent to which the independent accountants review
quarterly financial information, and whether the independent accountants' review
is performed on a pre- or post-review basis;

(b) Require independent accounts to review the financial information
included in the Company's quarterly financial statements before the Company
files its quarterly reports with the Securities and Exchange Commission ("SEC");

(c) Meet with management and, if a pre-issuance review was completed,
with the independent accountants, either telephonically or in person, to discuss
the interim financial statements and the results of the review. (This may be
done by the committee chairperson or the entire committee);

(d) To gain insight into the fairness of the interim statements and
disclosures, obtain explanations from management and from the independent
accountants on whether:

- Actual financial results for the quarter or interim period
varied significantly from budgeted or projected results;

- Changes in financial ratios and relationships in the
interim financial statements are consistent with changes in
the Company's operations and financing practices;

- Generally accepted accounting principles have been
consistently applied;

- There are any actual or proposed changes in accounting or
financial reporting practices;

- There are any significant or unusual events or
transactions;

- The Company's financial and operating controls are
functioning effectively;

- The Company has complied with the terms of loan agreements
or security indentures; and

- The interim financial statements contain adequate and
appropriate disclosures.

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(e) Ensure that the independent accountants communicate required matters
to the Committee.

COMPLIANCE WITH LAWS AND REGULATIONS

(a) Review the effectiveness of the system for monitoring compliance with
laws and regulations and the results of management's investigation and follow-up
(including disciplinary action) on any fraudulent acts or accounting
irregularities;

(b) Periodically obtain updates from management, counsel, and tax
director regarding compliance of the Company and its affiliates and regarding
legal matters that may have a material impact on financial statements;

(c) Obtain reports from management, auditors and counsel concerning
regulatory compliance matters and assurance that they have been considered in
the preparation of the financial statements; and

(d) Review the findings of any examinations by regulatory agencies.

AUDIT

(a) Articulate the independent accountants' ultimate accountability to
the Board and the Committee;

(b) Review the independent accountants' proposed audit scope and
approach;

(c) Review and evaluate the performance of the independent accountants
and recommend to the Board the appointment or discharge of the independent
accountants;

(d) Review and discuss the independence of the independent accountants,
the nonaudit services provided and the auditors' disclosures concerning and
assertion of their independence in accordance with professional or required
governmental standards; and

(e) Discuss matters identified in applicable standards regarding the
conduct of the audit.

OTHER RESPONSIBILITIES

(a) Review significant findings and recommendations made by the
independent accountants and discuss them on a timely basis;

(b) Review annual engagement proposal for retention of the independent
accountants and make recommendations to the Board concerning their fees;

(c) Review, with the Company's counsel, any legal matters that could have
a significant impact on the Company's financial statements;

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(d) Review the policies and procedures in effect for considering
officers' expenses and perquisites;

(e) If necessary, institute special investigations and, if appropriate,
hire special counsel or experts to assist;

(f) Perform other oversight functions as requested by the Board;

(g) Annually review and (if appropriate) update the Charter, subject to
Board approval of changes;

(h) Review with management and the independent accountants new opinions
and releases from the Financial Accounting Standards Board ("FASB") and SEC,
together with prospective new accounting rules and policies to the extent
applicable to the Company;

(i) Apprise the Board of significant developments in the course of
performing the above duties through minutes and special presentations as
necessary;

(j) Ensure the independence of the independent accountants;

(k) Recommend any changes in the duties of the Committee to the Board;
and

(l) The Committee and the Board have the ultimate authority and
responsibility to recommend the retention or replacement of the independent
accountants and provide a written summary of the basis for replacement
recommendations to the Board.

REPORTING RESPONSIBILITIES

(a) Regularly update the Board about Committee activities and make
appropriate recommendations;

(b) Review for inclusion in the proxy statements the disclosures about
the audit committee and functioning required under applicable SEC rules.

ETHICS COMPLIANCE

(a) Review the Company's Policies and Procedures which include ethical
conduct and the Company's system to enforce these policies and procedures; and

(b) Ensure that management has the proper review system to ensure that
the Company's financial statements, reports and other financial information
disseminated to governmental organizations and the public satisfy legal
requirements.

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PROXY

Mazel Stores, Inc.
Annual Meeting of Shareholders
September 5, 2001

The undersigned shareholder of MAZEL STORES, INC. (the "Company") hereby
appoints Marc H. Morgenstern, with full power of substitution and revocation, as
Proxy to represent and vote all the Common Shares of the Company held of record
by the undersigned at the above-stated Annual Meeting and at any adjournment(s)
thereof with all of the powers the undersigned would possess if present, as
specified on the reverse side.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE REVERSE SIDE HEREOF.
UNMARKED PROXIES WILL BE VOTED IN FAVOR OF EACH OF THE MATTERS LISTED ON THE
REVERSE SIDE UNLESS SPECIFIED TO THE CONTRARY. THE PROXY WILL USE HIS DISCRETION
WITH RESPECT TO ANY MATTER REFERRED TO IN ITEM (3). THIS PROXY IS REVOCABLE AT
ANY TIME BEFORE IT IS EXERCISED.

The undersigned hereby acknowledges receipt of the Notice of Meeting and
Proxy Statement dated July 30, 2001 for the Annual Meeting of Shareholders.

(CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE)

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Please sign, date and mail your
proxy card back as soon as possible!

ANNUAL MEETING OF SHAREHOLDERS
MAZEL STORES, INC.
SEPTEMBER 5, 2001

Please Detach and Mail in the Envelope Provided

[ X ] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE

For Withhold
Item 1. Election of directors [ ] [ ]

Nominees: Charles Bilezikian Brady Churches Robert Horne

WITHHELD FOR: (Write that nominee's name in the space provided below)

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

For Against Abstain

Item 2. Approval of the appointment of KPMG LLP [ ] [ ] [ ]
as auditors for the fiscal year ending February 2, 2002

Item 3. Upon such other business as may be properly come before said
meeting or any adjournment thereof.

The Board of Directors recommends a vote FOR the nominees and FOR proposal 2.

SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.

CHANGE OF ADDRESS, COMMENTS AT LEFT [ ]

I PLAN TO ATTEND THE MEETING [ ]

I DO NOT PLAN TO ATTEND THE MEETING [ ]

SIGNATURE(S)____________________________________ DATE__________, 2001

NOTE: Please sign EXACTLY as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.