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SCHEDULE 14A
(RULE 14a)
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:

[ ] 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 sec.240.14a-11(c) or sec.240.14a-12

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. LETTERHEAD]

May 7, 1998

Dear Fellow Shareholder:

It is a pleasure to extend to you a cordial invitation to attend the
1998 Annual Meeting of Shareholders of Mazel Stores, Inc. This year's annual
meeting will be held on June 4, 1998.

Shareholders will be asked to approve the election of Directors, to
ratify the appointment of auditors and to approve an amendment to the 1996 Stock
Option Plan. In addition, we will present a report on the operations and
activities of the Company. 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 June 4th.

Sincerely,

Reuven D. Dessler
Chairman of the Board

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

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 4, 1998

The Annual Meeting of Shareholders of Mazel Stores, Inc., an Ohio
corporation (the "Company"), will be held at The Cleveland Marriott East, 3663
Park East Drive, Beachwood, Ohio 44122 on Thursday, June 4, 1998 at 10:00 a.m.

The purpose of the meeting will be to:

1. Elect three Directors for a term expiring in 2001.

2. Ratify the appointment of KPMG Peat Marwick LLP as auditors of
the Company for the fiscal year ending January 30, 1999.

3. Approve an amendment to the 1996 Stock Option Plan to reserve
for issuance under such plan an additional 600,000 Common
Shares of the Company.

4. 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 May 1, 1998 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, DATE AND SIGN 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
May 7, 1998

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 1998 Annual Report to Shareholders will be
mailed to the Company's shareholders commencing on May 7, 1998.

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, telephone or telegraph 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
2001; (2) ratifying the appointment of KPMG Peat Marwick LLP as auditors of the
Company for fiscal 1998; (3) approving an amendment to the 1996 Stock Option
Plan increasing the number of shares reserved for issuance under the Plan from
900,000 to 1,500,000 Common Shares; and (4) transacting such other business as
may properly come before the meeting.

The two persons named in the enclosed proxy have been selected by the
Board of Directors and will vote Common Shares represented by valid Board of
Directors' proxies. They have indicated that, unless otherwise indicated in the
enclosed Proxy, they intend to vote for the election of the Director nominees
named herein and in favor of the proposals listed in Items 2 and 3 above.

VOTING SECURITIES

The close of business on May 1, 1998 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,
9,149,689 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.
The affirmative vote of the holders of a majority of the outstanding

Common Shares is required to approve the amendment to the 1996 Stock Option
Plan. 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; however, they will be counted for purposes of
determining the presence of a quorum and will in effect be votes against the
proposal to amend the 1996 Stock Option Plan.

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
nine. The Company's Amended and Restated Code of Regulations ("Code of
Regulations") divides the Board of Directors into three classes of three
Directors each. The Directors serve staggered terms of three years, with the
members of one class being elected each year, as follows: (i) Brady Churches,
Robert Horne and Charles Bilezikian serve until the 1998 Annual Meeting; (ii)
Reuven D. Dessler and Ned L. Sherwood serve until the 1999 Annual Meeting; and
(iii) Jacob Koval, Jerry Sommers and Phillip Cohen serve until the 2000 Annual
Meeting, and in each case until their respective successors are elected and
qualified. A vacancy exists in the class of Directors whose term expires in
1999.

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

The Audit Committee has general responsibility for supervision of
financial controls as well as accounting and audit activities of the Company.
The Audit Committee annually reviews the qualifications of the Company's
independent certified public accountants, makes recommendations to the Board of
Directors concerning the selection of the accountants, reviews and approves the
services performed by the accountants and reviews their fees. The Audit
Committee consists of Messrs. Bilezikian, Horne and Sherwood.

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. Sherwood, Bilezikian and Cohen.

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 election received a
stock option to purchase 15,000 Common Shares at $16.00 per share. Such options
vest ratably over a period of five years and expire ten years from date of
grant.

2
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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 reelection as Directors. The three-year term will end upon the election of
Directors at the 2001 Annual Meeting of Shareholders.

At the Annual Meeting, the Common Shares represented by valid proxies,
unless otherwise specified, will be voted to reelect 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.

3
7

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

NOMINEES FOR TERM TO EXPIRE IN 2001

CHARLES BILEZIKIAN 61 PRESIDENT OF CHRISTMAS TREE SHOPS, INC., A NEW 1997
ENGLAND-BASED SPECIALTY RETAILER OF HOUSEWARES AND
GOURMET FOODS SINCE 1971.

BRADY CHURCHES 39 PRESIDENT OF THE COMPANY SINCE NOVEMBER 1996 HAVING 1996
SERVED AS PRESIDENT - RETAIL FROM AUGUST 1995 UNTIL SUCH
DATE. FROM 1978 UNTIL APRIL 1995, MR. CHURCHES HELD
VARIOUS SENIOR MANAGEMENT POSITIONS WITH CONSOLIDATED
STORES CORPORATION, INCLUDING PRESIDENT FROM AUGUST
1993 UNTIL APRIL 1995. MR. CHURCHES IS CURRENTLY A
MEMBER OF THE BOARD OF DIRECTORS OF SUN TELEVISION &
APPLIANCE, INC.
ROBERT HORNE 39 PRINCIPAL OF ZS FUND L.P., A PRIVATE INVESTMENT FIRM, FOR 1996
OVER FIVE YEARS.

DIRECTORS WHOSE TERM EXPIRES IN 1999
REUVEN D. DESSLER 50 CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER OF 1996
THE COMPANY SINCE NOVEMBER 1996. MR. DESSLER CO-
FOUNDED THE COMPANY IN 1975 AND SERVED AS ITS
PRESIDENT UNTIL NOVEMBER 1996.

NED L. SHERWOOD 48 PRINCIPAL OF ZS FUND L.P., A PRIVATE INVESTMENT FIRM, FOR 1996
OVER FIVE YEARS. MR. SHERWOOD IS CURRENTLY A MEMBER OF
THE BOARDS OF DIRECTORS OF SUN TELEVISION & APPLIANCE,
INC., KAYE GROUP, INC. AND MARKET FACTS, INC.

DIRECTORS WHOSE TERM EXPIRES IN 2000

PHILLIP COHEN 79 Vice President of P-C Sales, Inc., a wholesaler of 1997
closeout merchandise for over five years. From 1947 to
his retirement in 1989, Mr. Cohen was Chairman and
CEO of Wisconsin Toy and Novelty, Inc., a Midwest
distributor of closeout toy and novelty items.

JACOB KOVAL 50 EXECUTIVE VICE PRESIDENT - WHOLESALE OF THE COMPANY 1996
FOR OVER FIVE YEARS. MR. KOVAL CO-FOUNDED THE COMPANY
IN 1975.

JERRY SOMMERS 47 EXECUTIVE VICE PRESIDENT - RETAIL OF THE COMPANY SINCE 1996
NOVEMBER 1995. FROM 1984 THROUGH APRIL 1995, MR.
SOMMERS HELD VARIOUS POSITIONS WITH CONSOLIDATED
STORES CORPORATION, INCLUDING EXECUTIVE VICE PRESIDENT
- MERCHANDISE FROM AUGUST 1993 UNTIL APRIL 1995.

4
8

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

The following table sets forth certain information as of May 1, 1998
with respect to the beneficial ownership of the Common Shares. 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. (1)................................... 2,750,383 30.1%
54 Morris Lane
Scarsdale, NY 10583
Ned Sherwood ...................................... 2,753,383 (2) 30.1
54 Morris Lane
Scarsdale, NY 10583
Robert Horne ...................................... 2,753,383 (2) 30.1
54 Morris Lane
Scarsdale, NY 10583
Mazel/D&K, Inc. (3)................................ 2,058,105 22.5
31000 Aurora Road
Solon, Ohio 44139
Reuven D. Dessler.................................. 1,575,755 (4) 17.2
31000 Aurora Road
Solon, Ohio 44139
Jacob Koval........................................ 808,917 (5) 8.8
31000 Aurora Road
Solon, Ohio 44139
William Shenk...................................... 676,769 7.4
1728 Ocean Front
Del Mar, CA 92014
Wellington Management Company LLP.................. 497,000 5.4
Massachusetts Financial Services Company 461,900 5.0
Brady Churches .................................... 314,004 (6) 3.4
Jerry Sommers...................................... 312,276 (6) 3.4
Susan Atkinson..................................... 45,510 (6) *
Charles Bilezikian................................. 18,000 (7) *
Phillip Cohen ..................................... 16,800 (8) *

All Current Directors and 5,847,645 (9) 63.3
Executive Officers of the Company (9 Persons)

<FN>
- ------------------
* Less than one percent.

(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
</FN>

5
9

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 3,000 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 15,000 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 6,000 shares subject to options currently
exercisable or exercisable within 60 days hereof.

(6) Messrs. Churches and Sommers and Ms. Atkinson own 35,076, 35,076 and
2,164 Common Shares, respectively, that are unvested and held under the
Company's Restricted Stock Plan and 20,000, 20,000 and 6,000 shares,
respectively, subject to options currently exercisable or exercisable
within 60 days hereof. These shares are included in the individuals
respective totals.

(7) Includes 3,000 shares subject to options currently exercisable or
exercisable within 60 days hereof.

(8) Includes 13,000 shares subject to options currently exercisable or
exercisable within 60 days hereof.

(9) Includes 89,000 shares subject to options currently exercisable or
exercisable within 60 days hereof.

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.

EXECUTIVE OFFICERS' COMPENSATION

The following table sets forth certain information with respect to the
compensation earned during the fiscal years ended January 31, 1998, January 25,
1997 and January 31, 1996, respectively, by the Chief Executive Officer and
certain other named executive officers of the Company:

Summary Compensation Table

Annual Compensation Long Term Compensation
------------------- ----------------------
Fiscal Option Restricted Stock All Other
Name and Principal Position Year Salary Bonus Awards(#) Awards ($) (1) Compensation
- --------------------------- ---- ------ ----- --------- -------------- ------------

Reuven D. Dessler 1997 $ 457,363 $62,500 - - -
Chief Executive Officer 1996 1,273,883 125,000 75,000 - $1,274,285 (2)
1995 1,406,836 - - $33,750 -
Brady Churches 1997 390,055 62,500 - - 112,500 (2)
President 1996 420,913 125,000 100,000 - 881,479 (2)
1995 196,995 80,000 - 110,250 122,500 (3)
Jacob Koval 1997 243,477 79,376 - - -
Executive Vice President - 1996 414,719 75,000 30,000 - 461,528 (3)
Wholesale 1995 432,356 - - 11,250 -
Jerry Sommers 1997 288,709 62,500 - - 53,750 (2)
Executive Vice President - Retail 1996 367,044 125,000 100,000 - 488,733 (2)
1995 25,957 80,000 - 110,250 -
Susan Atkinson 1997 129,069 30,377 - -
Senior Vice President - 1996 138,629 56,918 30,000 - 123,134 (2)
Chief Financial Officer and 1995 121,564 25,000 - 6,750 -
Treasurer

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10

(1) The executive officers each purchased in fiscal 1995 partnership units in
Mazel Company L.P., as part of the Company's Employee Equity Plan. The
issuances have been included here as the difference between their fair
market value on the date of purchase and the purchase price.

(2) Payments were made under the executive officers' employment agreements
discussed below.

(3) Mr. Churches received a consulting fee in the amount of $122,500.

STOCK OPTION GRANTS IN FISCAL 1997

There were no stock option grants to executive officers during the
fiscal year ended January 31, 1998.

AGGREGATED OPTION EXERCISES IN FISCAL 1997 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 on page 6. No options were exercised by any executive officer
in fiscal 1997.

NUMBER OF SECURITIES UNDERLYING
UNEXERCISED OPTIONS AT JANUARY 31, VALUE OF UNEXERCISED IN-THE-MONEY
1998(#) OPTIONS AT JANUARY 31, 1998 ($) (1)
---------------------------------- ----------------------------------

NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------

Reuven Dessler 15,000 60,000 $0 $0
Brady Churches 20,000 80,000 0 0
Jacob Koval 6,000 24,000 0 0
Jerry Sommers 20,000 80,000 0 0
Susan Atkinson 6,000 24,000 0 0

<FN>
(1) The closing price of Mazel Stores, Inc. Common Shares on January 30, 1998, the last trading day
prior to the fiscal year end, was $13.875.
</FN>

EMPLOYMENT ARRANGEMENTS

Mr. Dessler has an employment agreement terminating October 31, 2000.
Under the terms of the agreement, Mr. Dessler's annual salary is $425,000
(subject to annual cost-of-living adjustments). Mr. Dessler is entitled to
received an annual bonus of up to 88.2% of his base salary subject to the
Company achieving pre-determined annual performance targets, provided that the
maximum bonus for fiscal 1997 is $125,000. Under the agreement, Mr. Dessler
received on November 21, 1996, Common Shares having a value of approximately
$668,000 and $606,108 in cash. Under the agreement, Mr. Dessler is entitled to
a severance payment equal to one-year's salary and

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bonus in the event of termination of his employment by the Company without
cause, except that, if the termination occurs after or in contemplation of a
"change in control" (as defined in the agreement) that Mr. Dessler voted
against, the severance payment is two-years' salary and bonus.

Mr. Koval has an employment agreement terminating on October 31, 2000.
Under the terms of the agreement, Mr. Koval's annual salary is $225,000 (subject
to annual cost-of-living adjustments). Mr. Koval is entitled to receive an
annual bonus of up to 66.7% of his base salary subject to the Company achieving
pre-determined annual performance targets, provided that the maximum bonus for
fiscal 1997 is $115,000. Under the agreement, Mr. Koval was issued, on November
21, 1996, Common Shares having a value of $369,349 and $92,179 in cash. Under
the agreement, Mr. Koval is entitled to a severance payment equal to one-year's
salary and bonus in the event of termination of his employment by the Company
without cause, except that, if the termination occurs after or in contemplation
of a change in control that Mr. Koval voted against, the severance payment is
two-years' salary and bonus.

Mr. Churches has an employment agreement terminating on October 31, 2000
providing him an annual base salary of $360,000 (subject to annual
cost-of-living adjustments). Mr. Churches is entitled to receive an annual bonus
up to 58.3% of his annual base salary, subject to the Company achieving
pre-determined annual performance targets, provided that the maximum annual
bonus in fiscal 1997 is $125,000. Under the agreement, Mr. Churches was issued
on November 21, 1996, Common Shares having a value of $543,979. 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.

Mr. Sommers has an employment agreement terminating on October 31, 2000
providing him an annual base salary of $265,000 (subject to annual
cost-of-living adjustments). Mr. Sommers is entitled to receive an annual bonus
of up to 59.4% of his annual base salary, subject to the Company achieving
pre-determined annual performance targets, provided that the maximum annual
bonus in fiscal 1997 is $125,000. On November 21, 1996, pursuant to his
employment agreement, Mr. Sommers also was issued Common Shares having a value
of $327,483. 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.

Ms. Atkinson has an employment agreement terminating January 31, 2000
providing her an annual base salary of $186,769 for the 1998 fiscal year. Ms.
Atkinson is entitled to an annual bonus of up to 48.4% of her annual base
salary, subject to the Company achieving pre-determined annual performance
targets. On November 21, 1996, pursuant to her employment agreement, Ms.
Atkinson also was issued Common Shares having a value of $123,134. Under her
agreement, Ms. Atkinson is entitled to receive one-year's salary in the event of
termination of her employment other than for cause.

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12

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
1997.

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. At the time of the Company's initial public offering
("IPO") in November 1996, the Company entered into or amended existing
employment agreements with each of the Company's executive officers. The
agreements generally expire on October 31, 2000. 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. In fiscal 1997, the Compensation Committee
reviewed the agreements to determine if the annual salaries were still
appropriate or needed modifications in order to continue to meet the Company's
compensation objectives. The Committee determined that no modification in the
salaries of the executives was necessary.

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 annual
bonus percentages for the named officers range from 48% to 88% of base salary,
with the annual bonus of the Chief Executive Officer being at the 88% threshold.
The plan provided for graduated bonus payments dependent on the percentage of
the targeted goal achieved. The employment contracts capped the maximum bonus
payable to senior executive officers.

During the fiscal year, the Compensation Committee determined that the
targeted goals set under the Plan were too aggressive and that scheduled
payments under the plan would not achieve the Compensation Committee objective
of adequately rewarding executives for the Company's performance in fiscal 1997.
As a consequence, the Committee elected to permit each officer to achieve a
bonus equal to 50% of the scheduled maximum bonus payable to the individual.

STOCK-RELATED COMPENSATION. In November 1996, at the time of the
Company's IPO, the Company made stock option awards and restricted stock awards
to its officers and key personnel, including the named executive officers. 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. Both stock option and restricted stock awards contain vesting
provisions that ensures the executives have a financial incentive to remain with
the Company during the vesting period and beyond. Option awards to the
executives were made at the IPO's offering price of the Company's Common Shares
and, accordingly, will have value only if the Company's stock price

9
13

increases. 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. No stock option awards were made to executive officers in fiscal 1997 as
awards were made in November 1996 at the time of the Company's IPO.

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. Mr. Dessler's employment agreement is described on page 7 hereto.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. Philip
Cohen is an officer of a company that is involved in a joint venture with the
Company with respect to the identification, purchase and sale of close-out
merchandise. See "Certain Transactions" below.

COMPENSATION COMMITTEE:

Charles Bilezikian, Chairman
Phillip Cohen
Ned Sherwood

CERTAIN TRANSACTIONS

Messrs. Dessler and Koval are partners in Aurora Road Realty
Development Company, a partnership which 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 $1,988,000 pursuant to the lease for fiscal 1997. 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 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 in connection with the Company's IPO. The
balances as of January 31, 1998 were $861,600, $607,400 and $56,600 to Messrs.
Dessler, 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 the date of the
individual's first sale of Common Shares, but only to the extent of net sale
proceeds. The loans bear interest at the applicable federal rate. Loans of
$252,100 and $151,800 to Messrs. Churches and Sommers were repaid during fiscal
1997 by the receipt by the Company of 13,615 and 8,196 Common Shares
respectively, from such officers.

P-C Sales, a corporation owned by the son of Mr. Cohen and of which Mr.
Cohen is an officer, has a joint venture agreement with the Company wherein the
two companies split the profits derived from the sale of closeout merchandise
located by P-C Sales and sold by the Company. In fiscal 1997, P-C Sales income
from the joint venture totaled $503,600. Additionally, for services rendered for
and on behalf of P-C Sales and the Company, on March 16, 1998, Mr. Cohen
received 10,000 ten-year, fully-vested stock options to purchase Common Shares
at $17.25 per share.

Christmas Tree Shops, 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.

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14

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 1998.

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

From November 29, 1996 through January 31, 1998

[GRAPHIC OMITTED]

================================================================================================
11/29/96 1/31/97 1/31/98
- ------------------------------------------------------------------------------------------------

Mazel Stores, Inc. $100.00 $164.06 $ 86.72
- ------------------------------------------------------------------------------------------------
Nasdaq Retail Trade Stock Index $100.00 $ 97.67 $114.21
- ------------------------------------------------------------------------------------------------
Nasdaq U.S. Composite Index $100.00 $107.01 $126.56
================================================================================================

11
15

PROPOSAL TWO
INDEPENDENT AUDITORS

The Board of Directors, upon the recommendation of the Audit Committee,
has selected KPMG Peat Marwick LLP as auditors for the fiscal year ending
January 30, 1999. The Board of Directors requests the ratification of the
appointment of KPMG Peat Marwick LLP by the shareholders at the Annual Meeting.
The Board of Directors recommends that each shareholder vote "FOR" ratification
of KPMG Peat Marwick LLP as auditors for fiscal 1998.

KPMG Peat Marwick LLP has audited the Company's financial statements
for each fiscal year since the fiscal year ended December 31, 1987.
Representatives of KPMG Peat Marwick 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.

PROPOSAL THREE
APPROVAL OF THE AMENDMENT TO
THE 1996 STOCK OPTION PLAN

INTRODUCTION

On March 17, 1998, the Board of Directors approved, subject to
shareholder approval, an amendment to the Mazel Stores, Inc. 1996 Stock Option
Plan (the "Plan"). The amendment to the Plan increases the number of Common
Shares reserved for issuance thereunder from 900,000 shares to 1,500,000 shares.
The amendment is summarized below.

PURPOSE OF THE AMENDMENT AND SUMMARY OF PLAN

The shareholders of the Company approved the Plan in 1996 to advance
the interests of the Company and its shareholders by encouraging and enabling
directors and key employees to acquire or increase financial interests in the
Company through the stock options granted under the Plan. As of January 31,
1998, the Company had options with respect to 748,450 shares outstanding, and
only 151,550 shares remained available to be granted under the Plan.

The Board of Directors believes that it is in the best interests of the
Company to increase the number of Common Shares reserved for issuance under the
Plan to 1,500,000 shares, an increase of 600,000 shares. The Board of
Directors believes that the success of the Company is greatly dependent upon its
ability to attract and retain key personnel of outstanding ability who are
motivated to exert their best efforts on behalf of the Company and that the Plan
has been effective in achieving this goal. In the opinion of the Board of
Directors, the authorization of the additional shares will give the Company
sufficient stock reserved for issuance under the Plan to allow the Company to
attract and retain employees, including employees of potential acquisition
candidates, which will contribute to the successful conduct of the Company's
operations.

At January 31, 1998, the Company estimates that approximately 250
persons, of which 5 are executive officers, are currently eligible to
participate in the Plan.

The Plan is administered by the Company's Compensation Committee
("Committee").

12
16

Options granted under the Plan represent rights to purchase Common
Shares of the Company within a fixed period of time and at a specified price per
share which will be determined by the Committee but shall be no less than the
market price of the Common Shares of the Company on the date of grant of the
option.

Options granted under the Plan become vested and exercisable as
determined by the Committee, generally at 20% per year increments. Options
terminate, as determined by the Committee, generally at the end of ten years
following the date of grant, subject to earlier termination in certain
circumstances. Pursuant to the Plan, in the event of a "change of control" of
the Company, the Committee in its discretion may declare that all outstanding
options become exercisable immediately and shall terminate if not exercised
prior to the control change. Options may be exercised with cash or, at the sole
discretion of the Committee, by delivery of Common Shares of the Company owned
by the option holder.

The options granted under the Plan are, during the lifetime of the
optionee, exercisable only by the optionee (or by an appointed guardian or legal
representative) and are not transferable or assignable in whole or in part
except by will or by the laws of descent and distribution. In general, the
unexercised portion of any option granted under the Plan will terminate upon the
earlier to occur of (i) the expiration of the option in accordance with its
terms or (ii) the expiration of three months from the date of termination of the
option holder's employment; provided, however, that unless otherwise determined
by the Committee, all options held by an optionee shall terminate immediately
upon cessation of employment if the optionee provides services to a competitor
of the Company.

The Board of Directors has the right at any time to terminate or amend
the Plan, but no such action may terminate options already granted or otherwise
affect the rights of any optionee under an outstanding option without the
optionee's consent. Without shareholder approval, the Board may not amend the
Plan to (i) increase the total number of shares of stock subject to option
(except for an adjustment of shares for stock splits, stock dividends or the
like), (ii) change or modify the class of eligible participants or (iii)
materially increase the benefits accruing to Plan participants. Unless the Plan
is terminated earlier by the Board, no options may be granted under the Plan
after September 9, 2006.

Common Shares to be issued upon exercise of options granted under the
Plan are registered under the Securities Act of 1933, as amended (the "Act").
Therefore, shares received by optionees upon exercise of the options will be
freely transferable; provided that officers, directors and other "affiliates" of
the Company must also comply with the resale restrictions of Rule 144
promulgated under the Act.

FEDERAL INCOME TAX CONSEQUENCES

There are no federal income tax consequences to an optionee or to the
Company on the granting of options. Generally, when an optionee exercises a
non-qualified stock option, the optionee recognizes income in the amount of the
aggregate fair market value of the shares received upon exercise, less the
aggregate amount paid for those shares, and the Company may deduct as an expense
the amount of income so recognized by the optionee, provided that the Company
satisfies certain tax withholding requirements. The holding period of the
acquired shares begins upon the exercise of the option, and the optionee's basis
in the shares is equal to the fair market value of the acquired shares on the
date of exercise.

13
17

VOTE REQUIRED AND RECOMMENDATION OF THE BOARD

Approval of the Plan, as amended requires the affirmative vote of the
holders of a majority of the Company's outstanding Common Shares present in
person or by proxy and voting at the meeting. The Board of Directors recommends
that each shareholder vote "FOR" this proposal.

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 is
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 1999 Annual Meeting of Shareholders is
expected to be January 6, 1999.

OTHER INFORMATION

The Company's fiscal 1997 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
May 7, 1998

14
18

PROXY

MAZEL STORES, INC.

ANNUAL MEETING OF SHAREHOLDERS, JUNE 4, 1998

The undersigned shareholder of MAZEL STORES, INC. (the "Company") hereby
appoints Reuven D. Dessler and Brady Churches, or either one of them, each with
full power of substitution and revocation as Proxies 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 PROXIES WILL USE THEIR
DISCRETION WITH RESPECT TO ANY MATTER REFERRED TO IN ITEM (4). 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 May 6, 1998 for the Annual Meeting of Shareholders.

(CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE)
19
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!

ANNUAL MEETING OF SHAREHOLDERS
MAZEL STORES, INC.

JUNE 4, 1998

Please Detach and Mail in the Envelope Provided
_ |
A [ X ] PLEASE MARK YOUR | |__
VOTE AS IN THIS
EXAMPLE

FOR WITHHOLD NOMINEES : Charles Bilezikian
Item 1. Brady Churches
Election of [ ] [ ] Robert Horne
directors

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

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

FOR AGAINST ABSTAIN
Item 2. Approval of the appointment of KPMG Peat
Marwick LLP as auditors for the fiscal year [ ] [ ] [ ]
ending January 30, 1999.

Item 3. Approve an Amendment in the 1996 Stock
Option Plan to increase the authorized [ ] [ ] [ ]
Common Shares.

Item 4. Upon such other business as may properly
come before said meeting or any adjournment
thereof.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES AND FOR PROPOSAL 2 AND
PROPOSAL 3.

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______________, 1998

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.