SecProbe.io

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Mail Stop 3-8

								April 5, 2005

By Facsimile and U.S. Mail

Mr. Franklin C. Karp
Chief Executive Officer and President
Harvey Electronics, Inc.
205 Chubb Avenue
Lyndhurst, NJ 07071

	RE:	Form 10-K for the fiscal year ended October 30, 2004
		File No. 1-04626
Filed January 28, 2005

Form 10-Q for the quarterly period ended January 29, 2005

Dear Mr. Karp:

	We have reviewed your filings and have the following
comments.
Where indicated, we think you should revise your disclosures in
future filings in response to these comments.  If you disagree, we
will consider your explanation as to why our comment is
inapplicable
or a revision is unnecessary.  Please be as detailed as necessary
in
your explanation.  In some of our comments, we may ask you to
provide
us with supplemental information so we may better understand your
disclosure.  After reviewing this information, we may or may not
raise additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

FORM 10-K FOR THE FISCAL YEAR ENDED OCTOBER 30, 2004

General

1. Where a comment below requests additional disclosures or other
revisions to be made, these revisions should be included in your
future filings, as applicable.

Item 7. Management`s Discussion and Analysis of Financial
Condition
and Results of Operations

Results of Operations

2. It appears that you are presenting EBITDA as a non-GAAP measure
of
performance.   Because EBITDA eliminates items of a recurring
nature,
please refer to Item 10(e)(1)(ii)(B) of Regulation S-K and
Questions
8 and 15 of the Staff`s Frequently Asked Questions Regarding the
Use
of Non-GAAP Financial Measures (the non-GAAP FAQ) and justify for
us
supplementally your presentation of this measure.  Your current
disclosure that the company uses this measure to evaluate
performance
is not sufficient in this regard.  Also, to the extent you are
able
to justify including this non-GAAP performance measure in your
future
filings, please ensure you revise your disclosures to include each
of
the disclosures listed in the bullet points of Question 8 of the
non-
GAAP FAQ.  Show us supplementally how the revised disclosures will
read.

3. Please disclose how you calculate the change in comparable
store
sales from period to period.  Given your plans to relocate a store
in
the spring of 2005, please make it clear how you treat relocated
stores in these computations, as well as any stores that were
closed
or renovated during the period.

4. Where you identify intermediate causes of changes in your
operating results, also describe the reasons underlying the
intermediate causes.  For example, you indicate that the increase
in
net sales from fiscal year 2003 to 2004 is due to strong sales
growth
at specific Harvey and Bang & Olufsen stores, partially offset by
sales decreases at certain other stores.  While this information
is
beneficial to the reader, you do not explain why sales increased
or
decreased at these specific stores.  A discussion of the relevant
factors and trends that led to the movement in sales at these
stores,
such as new product lines or changes in merchandise mix, would be
beneficial to the reader.  See SEC Release No. 33-8350.

5. Where you describe two or more business reasons that
contributed
to a material change in a financial statement line item between
periods, please quantify the extent to which each change
contributed
to the overall change in that line item.  For example, with
respect
to the changes in your selling, general and administrative
expenses
from fiscal year 2003 to 2004, please quantify the extent to which
the changes are attributable to the various contributing factors
you
mention.  See Item 303(a) of Regulation S-K and SEC Release No.
33-
8350.

6. We note that your presentation of the change in "comparable"
SG&A
expenses represents a non-GAAP measure subject to the disclosure
and
reconciliation requirements as well as prohibitions in Item 10(e)
of
Regulation S-K.  It is unclear from your disclosure how you
arrived
at comparable SG&A expenses or the change in comparable SG&A
expenses.   It is also unclear why you are discussing this
measure,
as opposed to discussing the change in SG&A expense as presented
on
your statements of operations.  Please tell us why you believe
this
measure is permitted to be included in your filings pursuant to
Item
10(e)(1)(ii)(B) of Regulation S-K.  Also refer to Questions 8 and
9
of the non-GAAP FAQ, as applicable.  Moreover, to the extent you
plan
to include this measure in future filings, please provide a
reconciliation, preferably in tabular form, which reconciles the
non-
GAAP measure to the change in SG&A expense as calculated from the
face of your financial statements.   Please also ensure you
disclose
the other information required by Item 10(e) of Regulation S-K and
Question 8 of the non-GAAP FAQ (as applicable) with respect to
this
measure.  Show us supplementally how the revised disclosures will
read.  Finally, please ensure you provide a discussion with equal
or
greater prominence of the reasons for the changes in your SG&A
expense on a GAAP basis.

Liquidity and Capital Resources

7. Please ensure your discussion and analysis of cash flows is not
merely a recitation of changes evident from the financial
statements.
For example, you mention that the cash flow provided from
operations
is primarily due to increases in customer deposits and inventory,
offset by decreases in accounts payable.  Please provide analysis
explaining the underlying reasons for the fluctuations in these
accounts.

Item 9A. Disclosure Controls and Procedures

8. Please revise your future filings to identify any changes, not
just significant changes, in your internal controls over financial
reporting that have materially affected, or are reasonably likely
to
materially affect, your internal controls over financial
reporting.
See Item 308(c) of Regulation S-K.

Financial Statements

Statements of Cash Flows

9. Reference is made to your net presentation of borrowings and
repayments on your revolving credit facility.  Because the
borrowings
under your revolving credit facility are classified as a long-term
liability on your balance sheet, it does not appear that netting
of
borrowings and repayments under this facility is appropriate under
GAAP.  Refer to paragraph 13 of SFAS 95.  Please either revise
your
future filings accordingly, or otherwise tell us why you believe
net
presentation is appropriate.

1. Description of Business and Summary of Significant Accounting
Policies

General

10. Please disclose the types of expenses that you include in the
cost of sales line item and the types of expenses that you include
in
the selling, general and administrative expenses line item.  In
doing
so, please disclose specifically whether you include inbound
freight
charges, purchasing and receiving costs, inspection costs,
warehousing costs, internal transfer costs, and the other costs of
your distribution network in cost of sales.  If you currently
exclude
a significant portion of these costs from cost of sales, please
provide cautionary disclosure in MD&A that your gross margins may
not
be comparable to others, since some entities include the costs
related to their distribution network in cost of sales and others
like you exclude all or a portion of them from gross margin,
including them instead in a line item such as selling, general and
administrative expenses.  To the extent the excluded costs are
material to your operating results, quantify these amounts in
MD&A.
If you determine that these amounts are immaterial for disclosure,
please supplementally provide us with your qualitative and
quantitative assessment of materiality for all periods presented.

Long-Lived Assets

11. Please consider disclosing the range of depreciable lives of
your
furniture, fixtures and equipment.

Income Per Share

12. Please disclose a reconciliation, in tabular format, of the
numerator and denominator of the basic and diluted per-share
computations for each period presented.  This reconciliation
should
detail the individual income and share amount effects of all
securities that affect earnings per share.  See paragraph 40(a) of
SFAS 128.  Show us supplementally what the revised disclosure
would
look like for the historical periods presented.

Advertising Expense

13. We note your disclosure that you record cooperative
advertising
funds as a reduction of advertising expense.  Please ensure that
you
also disclose the statement of operations line item in which net
advertising expense is included and the gross amounts of
advertising
expenses and cooperative advertising reimbursements for each
period
presented.  Refer to EITF 02-16 and SOP 93-7.  We further note
that
you receive manufacturer rebates based on volume buying levels.
Please disclose whether you record the rebates as progress is made
toward earning them or whether they are only recognized upon
achievement of milestones.  Where applicable, please also revise
your
MD&A to discuss changes in cooperative advertising reimbursements
and
manufacturer rebates between periods and how they impacted the
related statement of operations line items.

4. 8.5% Cumulative Convertible Preferred Stock

14. Please help us understand what you mean when you say,
"commencing
on January 1, 2001, the Preferred Stock is convertible at
$1.2333."
Were the terms of the preferred stock modified on January 1, 2001?
If so, how were the terms of the stock modified and how did this
impact your accounting for the Preferred Stock, if at all?  Also
address in your response whether you recorded a beneficial
conversion
feature associated with this preferred stock at issuance and/or
upon
modification of the terms of the issuance, and why or why not.  If
there was a beneficial conversion feature upon issuance or upon
modification, help us understand why there is no reduction to net
income available to common shareholders in any period presented to
reflect your amortization of the discount on the Preferred Stock
issuance.  Please cite the applicable authoritative literature in
your response.

5.  Income Taxes

15. We note that during the fourth quarter ended October 30, 2004,
you recorded a $1,350,000 reduction to your deferred tax asset
valuation allowance, resulting in an income tax benefit of
$977,000.
Citing the factors in SFAS 109, please explain in detail how you
determined that the material reduction of the valuation allowance
was
appropriate, including the negative and positive evidence you
considered in your evaluation.  Also indicate what caused the
change
in your outlook with respect to the probability of generating
future
taxable income between November 1, 2003 and October 30, 2004.
Please
revise your MD&A in future filings to discuss in more detail the
basis for your reversal of the valuation allowance and to
highlight
the judgments and assumptions involved in evaluating the
sufficiency
of the remaining valuation allowance.

16. Please explain to us supplementally how you determined the
allocation of the $1,350,000 reversal between the deferred tax
benefit ($977,000) and the reorganization value in excess of
amounts
allocable to identifiable assets ($373,000).

7.  Commitments and Contingencies

17. In disclosing rental expense under operating leases, please
provide separate amounts, if material, for contingent and minimum
rentals for each period presented.  See paragraph 16(c) of SFAS
13.

18. Based on your disclosure, it appears that a loss related to
the
contamination matter involving the Pennsylvania Department of
Environmental Protection may be reasonably possible.  As noted in
paragraph .165 of SOP 96-1, an entity is often able to determine
early in the remediation process that it is probable it has an
obligation, even though the determination of a reasonable estimate
of
the total cost of that obligation may take additional time.  When
a
loss is reasonably possible, but not probable, or probable, but
not
reasonably estimable, paragraph 10 of SFAS 5 requires that you
disclose the estimated amount (or range) of the possible loss or a
statement that an estimate cannot be made.  Please note that
reasonably possible, as described in paragraph .160 of SOP 96-1,
spans a significant range starting from remote and ending with
probable.  Accordingly, please disclose a range of possible losses
in
your future filings or supplementally tell us why an estimate
cannot
be made.  See also the guidance provided in SAB Topic 5-Y.

Schedule II - Valuation and Qualifying Accounts

19. Please revise this schedule in future filings to include your
sales returns allowance.  Alternatively, you may provide such
disclosure in the notes to the financial statements or in MD&A.
See
Rules 5-04 and 12-09 of Regulation S-X.  Supplementally provide us
with a roll forward of the sales returns allowance for the
historical
periods presented.

   As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please
understand that we may have additional comments after reviewing
your
responses to our comments.

   We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

   In connection with responding to our comments, please provide,
in
writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

   In addition, please be advised that the Division of Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.

   If you have any questions regarding these comments, please
direct
them to Staff Accountant Andrew Blume at (202) 824-5455.  In his
absence, direct your questions to Robyn Manuel at (202) 942-7786.
Any other questions regarding disclosure issues may be directed to
me
at (202) 942-2905.

							Sincerely,

							George F. Ohsiek, Jr.
							Branch Chief

Mr. Franklin C. Karp
Chief Executive Officer and President
Harvey Electronics, Inc.
April 5, 2005
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