SecProbe.io

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May 24, 2005

Mr. George F. Ohsiek, Jr., Branch Chief
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re:      Harvey Electronics, Inc.
         File No. 1-04626
         Comment letter on Form 10K for the fiscal year ended October 30, 2004
         and Form 10-Q for the first quarter ended January 29, 2005

Dear Mr. Ohsiek, Jr.:

This letter is in response to your letter dated May 2, 2005 (the "Letter"). We
thank you for your prompt review of our initial response letter and we are
grateful for the extension of time granted for this follow up. We understand the
purpose of your letter and look forward to improving and enhancing our future
filings with the Commission. We respectfully submit this response to your follow
up questions.

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

1.  Description of Business and Summary of Significant Accounting Policies
--------------------------------------------------------------------------

General
-------

1. We have reviewed your response to prior comment 10, noting that you exclude
warehousing and distribution network costs from cost of goods sold. Please
confirm that you will disclose in MD&A the amount of these costs excluded from
cost of goods sold to the extent that they are material to your operating
results. 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.

In connection with this disclosure, we will disclose in MD&A the amount of
warehousing and distribution network costs excluded from the Company's cost of
goods sold. As previously noted, we will also expand MD&A to note that the
Company's gross profit margin may not be comparable to other reporting
electronics retailers as other entities may include these costs in their cost of
goods.

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Income Per Share
----------------

2. We have reviewed your response to our prior comment 12. Please show us
supplementally the disclosures related to the restated diluted earnings per
share amounts for 2003 and 2004 that you would propose to include in your 2005
Form 10-K. Such disclosure should include a discussion of the nature of the
error in the historical financial statements as well as a table showing the
previously reported and restated amounts. Also tell us whether you intend to
label the 2003 and 2004 statements of operations as restated, and if not,
provide us your justification.

As previously noted, after our recalculation of the diluted earnings per share
calculation, we noticed that the per share amounts as originally recorded were
conservatively presented at $.30 and $.06 for fiscal years 2004 and 2003,
respectively. The corrected diluted net income per share was $.32 and $.07 for
fiscal years 2004 and 2003, respectively. The per share amounts as originally
reported are not materially different than the recalculated amounts and only
affect the fully diluted earnings per share calculation. Due to the immaterial
nature of the restated diluted per share amounts, we would not label the 2004
and 2003 statements of operations as restated. We do agree that the following
supplemental disclosure will include the nature of the error and will disclose
the diluted per share amounts as previously reported. We respectfully present
the supplemental disclosure as follows:

         Proposed 2005 Earnings Per Share Supplemental Disclosure

         Basic and diluted earnings per share are calculated in accordance with
         SFAS No. 128, "Earnings Per Share" ("SFAS No. 128"). Basic earnings per
         share excludes the dilutive effects of options and convertible
         preferred stock. Diluted earnings per share includes only the dilutive
         effects of common stock equivalents such as stock options and
         convertible preferred stock.

         The following table sets forth the computation of basic and diluted
         earnings per share pursuant to SFAS No. 128. Per share amounts for the
         diluted net income per share calculation were restated for fiscal years
         2004 and 2003 to properly reflect the assumed conversion of the
         Company's convertible preferred stock and the related impact on income
         available to common stockholders.

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<TABLE>
<CAPTION>

                                                        2005             2004             2003
                                                        ----             ----             ----
Numerator:
<S>                                                     <C>               <C>                <C>
Net income                                           $x,xxx,xxx       $1,273,900         $287,041
Dividends on convertible preferred stock                 xx,xxx          (70,295)         (70,295)
                                                         ------          --------         --------
Numerator for basic earnings per share -
   income attributable to common
   stockholders                                                        1,203,605          216,746
                                                      x,xxx,xxx
Effect of dilutive securities:
    Dividends on convertible preferred stock
                                                         xx,xxx           70,295           70,295
                                                         ------           ------           ------
Numerator for diluted earnings per share -
   income available to common stockholders
   after assumed conversion                          $x,xxx,xxx       $1,273,900         $287,041
Denominator:
Denominator for basic earnings per share -
   weighted average shares outstanding
   during the period                                  x,xxx,xxx        3,324,525        3,324,525
Effect of dilutive securities:
   Stock options                                         xx,xxx           38,408           38,971
   Convertible preferred stock                          xxx,xxx          670,559          502,919
                                                        -------          -------          -------

Denominator for diluted earnings per share
   - adjusted weighted average shares and
   assumed conversions                                 x,xxx,xxx       4,033,492        3,866,415
                                                       =========       =========        =========

Basic net income per share                                    $.xx             $.36             $.07
                                                              ====             ====             ====
Diluted net income per share                                  $.xx             $.32             $.07
                                                              ====             ====             ====

As originally reported:
Basic net income per share                                    $.xx             $.36             $.07
Diluted net income per share                                  $.xx             $.30             $.06

</TABLE>

Such per share amounts, as originally reported, were not materially different
from the restated amounts presented above and only affected the fully diluted
income per share calculation. As a result, the diluted income per share amounts
on the Company's Statements of Operations for fiscal years 2004 and 2003 were
restated.

Options and warrants totaling xxx,xxx in 2005, 674,828 in 2004 and 931,637 in
2003 were excluded from our earnings per share computations as their effects
would have been anti-dilutive.

Advertising Expense
-------------------

3. We have reviewed your response to prior comment 13. As previously requested,
please confirm that you will disclose in the footnotes the gross amounts of
advertising expenses and cooperative advertising reimbursements for each period
presented. Also, with respect to the manufacturer rebates you receive 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.

In future filings, we will disclose in the footnotes to the financial statements
the gross amounts of advertising expense and cooperative advertising
reimbursements for each period presented.

Manufacturer rebates received by the Company are recorded based on the quarterly
estimated progress in earning such rebates. The Company's estimates to record
these rebates are based on historical information and current programs with such
vendors. There have been no significant adjustments to the Company's estimates
relating to these manufacturer rebates, in the aggregate, over the past several
years. In future filings, the Company will disclose this method of recording
rebates in the notes to its financial statements.

8.5% Cumulative Convertible Preferred Stock
-------------------------------------------

4. We have reviewed your response to prior comment 14. Please supplementally
provide us with the disclosures you intend to provide in your next Form 10-Q and
10-K regarding the beneficial conversion feature error adjustment. Please also
revise your future filings to disclose in detail the nature of these types of
terms in your debt and equity instruments and how the terms of these instruments
affect your accounting.

The following supplemental disclosure will be made in the notes to the financial
statements for the Company's second quarter Form 10-Q for the fiscal quarter
ended April 30, 2005, as well as in Form 10-K for fiscal 2005:

Beneficial Conversion of Preferred Stock
----------------------------------------

875 shares of 8.5% convertible preferred stock were originally issued in
conjunction with the Company's reorganization, effective October 26, 1996. As
specified in the Company's By-laws, the preferred stock has a conversion
feature.

Prior to January 1, 2001, 50% of the preferred stock was convertible at a price
of $6.00 per share and 50% of the preferred stock was convertible at $7.50 per
share. Commencing January 1, 2001, each share of preferred stock became
convertible into shares of common stock at a conversion price equal to the
average of the closing bid price of one share of common stock over the 45
trading days preceding January 1, 2001, if traded on the NASDAQ SmallCap Market.
This new conversion price was set at $1.2333 on January 1, 2001.

When the preferred stock was issued in October 1996, the conversion reset
provision at January 1, 2001 represented a contingent event. In accordance with
EITF Issue No. 00-27, Application of Issue No. 98-5 to Certain Convertible
Instruments, Issue 7, paragraph 23, the Company has determined that a beneficial
conversion feature existed at the issuance date. In accordance with EIFT No.
00-27, the Company recalculated the intrinsic value of the conversion feature,
which was reset on January 1, 2001, and has determined that retained earnings
should have been reduced by $711,000, while additional paid-in capital should
have been increased by the same amount in fiscal 2001. This adjustment
ultimately had no effect on shareholders' equity or earnings. In fiscal 2001,
the $711,000 would have been recorded as a dividend to the preferred
shareholders and would have impacted the loss per share applicable to common
shareholders. In fiscal 2001, the Company reported a loss and, as a result, the
loss per share applicable to common shareholders would have been increased to
$.62 per share from $.40 per share. As this adjustment only impacted certain
components of shareholders' equity, having no effect on total equity and no
effect on earnings, the Company corrected the equity accounts in the second
quarter of fiscal 2005, and additionally in the balance sheet as of October 30,
2004, for comparative purposes. Financial statements prior to fiscal year 2004
were not restated.

In future filings, we will disclose in detail the nature of any convertible debt
or equity instruments and how the nature of these instruments could affect the
Company's financial statements.

We thank you again for your patience and cooperation as well as your
consideration of the above responses. We look forward to working with you and
your staff in concluding your review.

Sincerely,

/s/ Franklin C. Karp
--------------------
Franklin C. Karp
Chief Executive Officer/President

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