PART I
 ITEM 1.  BUSINESS

 (a)  General Development of Business

      Hampton Industries, Inc. and its subsidiaries and divisions
 (herein referred to as "Hampton" or "Company") are engaged in the
 business of manufacturing and selling wearing apparel.

      Hampton, a North Carolina Corporation, is the successor of
 several predecessor corporations, the first of which was incorporated
 in 1925 in the State of New York under the name of Hampton Shirt Co.

 (b)  Financial Information About Industry Segments

      Hampton has been engaged in one line of business in excess of
 five years; reference is made to the financial statements included
 herein under ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 (c) Narrative Description of Business

      Hampton's principal products consist of men's and boys' shirts
 and men's and women's sleepwear, which are produced domestically and
 in Central America.  In addition, sport and dress shirts, sweaters,
 activewear, outerwear and swimtrunks, for both men and boys are
 imported from unaffiliated sources located primarily in the Far East.


      Hampton's products are principally sold at retail under private
 labels.  However, the company also manufactures and sells apparel
 under the following licenses:
             LICENSE                      PRODUCT CATEGORY
 Nautica for Boys'                Boys' shirts, pants, outerwear
                                  and swimwear
 Rawlings                         Men's and  boys' activewear
 Spalding (2)                     Men's  and boys' activewear
 Dickies (1)                      Men's casual and rugged
                                  sportshirts
 Justin (2)                       Men's and boys' western wear
 Ron Chereskin (1)                Men's sleepwear and robes
 Bugle Boy (1)                    Men's and boys' sleepwear and
                                  robes
 Charles Goodnight (2)            Ladies sleepwear and robes
 Warner Brothers                  Men's sleepwear and robes and
                                  children's robes and novelty
                                  apparel
      (1)             Initial sales occurred in 1997.
      (2)             Initial sales will occur in 1998.

            TRADEMARK                     PRODUCT CATEGORY
 Kaynee                           Boys' and girl's shirts and
                                  school uniforms
 Le Tigre                         Men's and boys' sportshirts and
                                  sportswear
 Campus                           Men's and boys' sportshirts and
                                  sportswear

 Branded apparel is becoming a more important part of the success of
 the Company's business.
-1-

      Hampton designs its own line of apparel as well as produces apparel 
 under private label to customers specifications. The Company's products
 are manufactured from various combinations of man-made and natural fibers
 which are readily available from a number of sources both
 domestically and imported.  Hampton has no long-term contracts with
 any supplier. The average domestic production cycle is approximately
 five weeks from the time the fabric is scheduled for cutting until
 the finished product is received at the Company's distribution
 centers.  The production cycle for goods imported or manufactured in
 Central America is approximately ten weeks, while the lead time for
 goods imported from the Far East can be as long as six months.  The
 design and production specifications for imported products are
 provided to the manufacturers by Hampton.

      Hampton's products are sold throughout the United States, to
 approximately 2,750 customers including most of the country's leading
 national and regional retail chains and department stores.  Sales are
 made by a nationwide sales staff of 72 salesmen, including 33 field
 representatives at the end of 1997.  Sales offices are located in New
 York, and at the Company's executive and administrative headquarters
 in Kinston, North Carolina.  As of December 27, 1997 the Company had
 approximately 903 full-time associates domestically and approximately
 434 associates in the Caribbean.  Hampton is not a party to any
 collective bargaining agreements, has never experienced a strike or
 work stoppage, and believes that it maintains satisfactory
 relationships with its associates.
<TABLE>
      Hampton's largest customers accounted for approximately 31% of
 consolidated sales volume in 1997 and 1996, respectively.  Wal-Mart
 Stores, Inc. and J.C. Penney Co. are large multi-outlet retail chains
 who purchase a broad range of Hampton's products through a variety of
 their merchandising departments.  There have been no contracts with
 either customer for continued business.  The following is a breakdown
 of their respective sales volume:
<CAPTION>
                                         1997   1996   1995
  <S>                                      <C>    <C>    <C>
  J.C. Penney Co.                          16%    15%    16%
  Wal-Mart Stores, Inc.                    15%    16%    18%
</TABLE>
<TABLE>
      The following is a breakdown of sales by product categories:
<CAPTION>
                                         1997      1996   1995
 <S>                                      <C>       <C>    <C>
 Men's shirts and sportswear              34%       40%    50%
 Boys' shirts and sportswear              30%       26%    19%
 Ladies' sleepwear                        13%       13%     9%
 Men's sleepwear                          13%       12%    13%
 Activewear                                9%        7%     7%
 Other                                     1%        2%     2%
</TABLE>
      Sales of licensed products accounted for 31%, 23% and 14% of the
 consolidated sales for 1997 and the prior two years, respectively.
-2-
<TABLE>
      The following reflects the Company's sourcing of its products:
<CAPTION>
                                          1997     1996   1995
 <S>                                       <C>      <C>    <C>
 Imports                                   51%      56%    47%
 Caribbean                                 29%      24%    24%
 Domestic                                  20%      20%    29%
</TABLE>
      All foreign purchases are contracted for in U.S. Dollars;
 therefore, there is no currency risk.

      As of February 28, 1998, Hampton's backlog of orders was
 approximately $109,105,000 as compared to $87,146,000 on the same date
 in 1997.  The orders are believed to be firm and are expected to be
 shipped during the current fiscal year.

     The Company relies on various computer applications for the operation
of its business.  Several current computer applications could have a 
significant impact on the Company if not modified prior to the year 2000.
As part of an reengineering effort and a conversion to a new computer 
system, the Company is converting all business applications to new
hardware and software.  This conversion will address all issues related 
to Year 2000 and is expected to be completed in the early part of 1999.
It is anticipated that the expenditure for this effort will approximate
$500,000 of which a portion has already been spent in 1997.  Management
does not believe that this will have a significant impact on the 
Company.

      The apparel industry is highly competitive as to style, quality
 and price.  Hampton competes with many other manufactures and
 suppliers as to each of its products.
<TABLE>
 EXECUTIVE OFFICERS OF REGISTRANT
<CAPTION>
                                                                   First year
 Name and age                   Office                               elected
<S>                           <C>                                    <C>  
 David Fuchs (73)             Chairman and Chief Executive Officer   1975
 Steven Fuchs (38)            President                              1996
 Roger M. Eichel (49)         Senior Vice President and Secretary    1997
 Robert J. Stiehl, Jr. (62)   Executive Vice President - Operations,
                              Treasurer, and Assistant Secretary     1995
 Frank Simms (49)             Chief Financial Officer and
                              Vice President of Finance              1997
</TABLE>

      Each of the above named was elected for one year or until the
 election of a successor.  The next election shall take place
 immediately following the Annual Meeting of Shareholders to be held
 on May 18, 1998.  There is no arrangement or understanding between
 any of the above pursuant to which they were elected as Officers.

      All of the Executive Officers above named, except Robert J.
 Stiehl, Jr. and Frank Simms are related family members.
 Steven Fuchs is the son of David Fuchs, and Roger Eichel is David Fuchs'
 son-in-law.
-3-

      Mr. David Fuchs has held his current executive position for in
 excess of five years.  Mr. Steven Fuchs was elected to his present
 position in January, 1996.  From 1993 to January 1996, Mr. Steven
 Fuchs was the President of Hampton Shirt Co. (a subsidiary).  Prior
 to 1993, he held various positions with the Company.  Mr. Roger
 Eichel was elected to his present position in May, 1997 and prior
 thereto, he was Secretary of the Company.  Mr. Robert J. Stiehl, Jr.
 was elected to his present position in January 1995.  For in excess
 of five years prior thereto, he was Vice President - Finance.  Mr.
 Frank Simms was elected Chief Financial Officer in November 1997 and
 had previously been Vice President of Finance since May 1995.  Prior
 to joining Hampton he was the Chief Financial Officer of Riverside
 Manufacturing Co. for in excess of five years. 
      David Fuchs, Steven Fuchs, and Roger Eichel are also
 Directors of the Company.

 ITEM 2.  PROPERTIES
      Hampton operates three domestic manufacturing plants, one
 manufacturing plant in the Caribbean and three domestic distribution
 centers.  The Company's sales and merchandising personnel as well as
 certain executive officers occupy a building located in New York City.
 Hampton's principal executive and administrative offices are located
 in North Carolina.  All of these properties are owned by the Company.
 The New York office is collateralized by a related mortgage loan. 
 The executive and administrative offices located in North Carolina 
 are financed through an Industrial Revenue Bond issued by a state
 governmental agency. All bonds and mortgages are guaranteed by the
 Company and are secured by the underlying assets.

      The Company believes that its plants and facilities are in good
 repair and adequate in respect to its foreseeable needs.  The
 machinery and equipment utilized in its facilities are considered by
 management to be modern and efficient.

 ITEM 3.  LEGAL PROCEEDINGS

      There are no significant legal proceedings.

 ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None
-4-

                                PART II

 ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
 STOCKHOLDER MATTERS

 (a)  Principal Market

      The principal market on which Hampton's Common Stock is traded
 is the American Stock Exchange under the symbol HAI.

 (b)  Stock Price and Dividend Information
<TABLE>
      The table below presents the high and low market prices for
 Hampton's Common Stock.
<CAPTION>   
                            QUARTER ENDED                      

                     1997                         1996             
         3/29     6/28    9/27    12/27    3/30    6/29   9/28   12/28
 <S>    <C>       <C>    <C>      <C>      <C>     <C>     <C>    <C>        
 High   7  1/4    8 1/2  10 1/4   10 1/2   5 1/8   4 7/8   5 3/8  5 7/8
 Low    5 13/16   6 5/8   7 3/4    8 3/8   4 5/16  4 1/4   4 1/4  4 3/4
</TABLE>
      The Company has not paid a cash dividend on its common stock
 since 1973.  The present credit agreement includes restrictive
 covenants which, among other things, prevent the payment of cash
 dividends.

  (c)  Approximate Number of Holders of Common Stock

      The number of holders of record of Hampton's Common Stock as of
 December 27, 1997 was approximately 332, including, as a single
 holder of record, brokerage firms having more than one stockholder
 account.
<TABLE>
 ITEM 6.  SELECTED FINANCIAL DATA

           (In thousands except per common share amounts)
<CAPTION>
                            1997       1996     1995       1994*      1993
<S>                       <C>       <C>       <C>         <C>       <C>
 YEAR ENDED:
   Net Sales              $163,040  $160,684  $184,593    $172,024  $196,438
   Net earnings (loss)       1,083     2,709    (2,164)      1,002    (2,433)
   Basic earnings
    (loss) per
    common share              $.24      $.59     $(.47)       $.22     $(.53)
   Diluted earnings
    (loss) per common
    share -                   $.23      $.58     $(.47)       $.22     $(.53)

 AT YEAR END:
   Total assets            $78,042   $74,421   $94,271     $90,616   $90,168
   Long-term debt            4,110     5,103     5,305      17,002    20,722
   Working capital          40,648    40,158    37,501      49,206    48,642
   Stockholders'
    equity                 $53,907   $52,820   $50,111     $52,275   $51,273
       *  (53 Weeks)
</TABLE>
-5-

      The Company has not paid cash dividends on its common stock 
 since 1973.

      The Company uses the LIFO method of costing principally all of
 its inventories to more fairly present the results of operations by
 matching current costs with current revenues.  The LIFO method had
 the effect of decreasing net earnings by $404,900 ($.09 per share) in
 1997, increasing net earnings by $504,800 ($.11 per share) in 1996
 and $153,800 ($.03 per share) in 1995.  Income realized as a result
 of inventory liquidation was not significant in 1997, $668,200 ($.15
 per share) in 1996 and was not significant in 1995.


 ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
 AND RESULTS OF OPERATIONS

      The following discussion and analyses of the consolidated
 results of operations and financial conditions should be read in
 conjunction with the accompanying financial statements and related
 notes to provide additional information concerning the Company's
 financial activities and conditions.

 Results of Operations

<TABLE>
      The following table summarizes the operating data for the
 periods indicated:
<CAPTION>       
                                            YEAR ENDED
                                   December   December  December
                                      27,        28,       30,
                                     1997       1996      1995
 <S>                              <C>        <C>        <C>
 Net sales                          100.0%     100.0%     100.0%
 Cost of products sold               77.3       78.2       83.1
                                  ---------  ---------  ---------
 Gross margin                        22.7       21.8       16.9
 Selling, general and
 administrative                      20.8       18.2       16.4
 Net rental income                 (  0.6)    (  0.4)    (  0.4)
 Gain on asset sales                  -       (  0.4)    (  0.4)
 Provision for restructuring
 costs                                -           -         0.7
 Net other income                   (  .1)    (    .1)
 Equity in income of
   unconsolidated subsidiaries      (  .1)       -          -
                                  ---------  ---------  ---------
   Operating income                   2.7        4.5        0.6
 Interest                             1.7        2.0        2.2
                                  ---------  ---------  ---------
   Earnings (loss) before income
     taxes                            1.0        2.5       (1.6)
 Net earnings (loss)                   .7%       1.7%      (1.2)%
                                     ====        ====       =====
</TABLE>
 Fiscal 1997 Versus Fiscal 1996

      Net sales for 1997 increased by 1.4%. An increase of 2.4% in the
 average selling price was partially offset by a decline of 1.0% in
 units shipped.  The increase in average selling price is primarily
 due to the greater influence of the "branded" product sales.
-6-

      Gross profit margins increased by $2,093,000 for 1997.  As a
 percent of sales this represented an increase of .9%, from 21.8% in
 1996 to 22.7% in 1997, which is primarily attributable to increase
 sales of branded product. Gross profit was negatively impacted in 1997
 due to an increase in allowances provided to customers of
 approximately $761,000.  Also, as a result of late delivery of
 product, approximately $963,000 was incurred for air shipments which
 occurred primarily in the fourth quarter.

      Selling, general and administrative expenses increased by
 $4,698,000 in 1997.  As a percent of sales there was an increase from
 18.2% in 1996 to 20.8% in 1997.  Royalty and advertising expenses
 were 2.4% as compared to 2.1% of sales in 1996, increasing by
 $541,000 in 1997. Sales of "Branded" product, for which royalty
 expense is recorded, increased from 23.3%  of sales in 1996 to 27.5%
 in 1997. During 1997, the Company expanded its management team.
 Three new divisional presidents were hired as well as a new Vice
 President of Corporate Marketing.  Certain other individuals were
 hired in design, sales and sales administration.  These new positions
 along with certain related terminations resulted in an increase
 in recruiting and severance expenses of $744,000.  Compensation and
 related fringe benefits increased by approximately $1,815,000 in 
 1997 as compared to 1996. 

      During 1997 several new license agreements were entered into
 which will not contribute to sales until 1998.  The development of
 these new brands negatively impacted 1997 by $1,129,000.

      A portion of the Company's corporate office building in New York
 is leased to third parties. Operations related to this are classified
 as Rental Income - net.

      During 1996 gains on sale of property were $656,191.  In 1997
 losses on sale of property were $64,279.
      Interest expense decreased by $495,000 from 1996.  This decline
 is the result of a lower level of borrowing during the year which
 resulted from lower average levels of receivables and inventory.

      The effective tax rate increased to 34.0% in 1997 from 31.6% in
 1996.  The rate differential is impacted by the utilization of jobs
 credit carryovers and reversal of prior year over accruals and the
 equity in earnings of the unconsolidated subsidiary which is not
 subject to U. S. federal taxation until such earnings are
 repatriated.

 Fiscal 1996 Versus Fiscal 1995


      Net sales for 1996 declined by 13.0%.  A decline of 17.4% in
 units shipped was partially offset by an increase of 5.5% in the
 average selling price.  The increase in average selling price is
 primarily due to the greater influence of the "branded" product
 sales.

      Gross profit margins increased by $3,806,000 for 1996.  As a
 percent of sales this represented an increase of 4.9% from 16.9% in
 1995 to 21.8% in 1996. Two programs that generated approximately
 $16,000,000 in sales during 1995 were discontinued by the Company.
 These programs were not profitable and their elimination contributed
 to the improvement in the margin.
-7-

      Selling, general and administrative expenses declined by
 $957,000 in 1996.  However, as a percent of sales, there was an
 increase from 16.4% in 1995 to 18.2% in 1996. Certain costs in this
 category are of a fixed nature.  Royalty and advertising expenses
 were 2.1% of sales in 1996 and 1.4% in 1995 increasing by $823,000 in
 1996. "Branded" product, for which royalty expense is recorded,
 increased from 14.2% of sales in 1995 to 23.3% in 1996.

      In 1995 the Company closed two manufacturing facilities which
 completed the Company's program of reducing excess domestic
 production capacity begun in 1991.  The closing costs related thereto
 are included in the statement of operations as Provision for
 restructuring costs.  The restructuring reduced the work force by
 approximately 400 associates or 25% of total employees.  Plant
 closing costs totaled approximately $1,211,000 representing severance
 pay, payroll taxes and a noncash charge of $610,000 relating to the
 write-down of manufacturing equipment to estimated realizable value.

      A portion of the Company's corporate office building in New York
 is leased to third parties. Rental income (net of related expenses)
 is classified separately.

      Interest expense decreased by $908,000 from 1995.  This decline
 is the result of a lower level of borrowing during the year which
 occurred from better management of receivables and inventory levels.

      The effective tax rate increased to 31.6% in 1996 from a benefit
 rate of 24.9% in 1995.  The effective rate in 1995 was impacted by
 the loss of certain future state tax benefits.  The 1996 effective
 rate is less than the statutory rate due primarily to the utilization
 of certain carryover job tax credits and alternative minimum tax
 carryovers.

 Liquidity and Capital Resources
      On May 3, 1996, the Company entered into a new credit facility
 with BNY Financial Corporation, as Agent ("New Facility").  The New
 Facility provides for a maximum line of credit of $100,000,000, which
 includes both direct loans and letters of credit.  The initial
 proceeds of the New Facility were used to repay the outstanding
 indebtedness under the Company's previously existing bank line of
 credit.

      Availability under the New Facility is based on a formula of
 eligible accounts receivable and eligible inventory and provides for
 a seasonal overadvance of up to $13,500,000 within the $100,000,000
 maximum line of credit.  Direct borrowings bear interest at the
 London Interbank Offered Rate plus the applicable margin (as defined
 in the New Facility) or the Prime Rate, at the option of the Company.
 Borrowings are collateralized by accounts receivable, inventory and
 general intangibles of the Company and its subsidiaries.  The New
 Facility expires in May 1999.

      The New Facility contains financial covenants, including but not
 limited to, tangible net worth and interest coverage, limits fixed
 asset purchases and does not allow for the payment of cash dividends.
 The Company is not required to maintain compensating balances,
-8-

 however, it is required to pay a fee of 1/4 of 1% per annum on the
 unused portion of the total facility plus certain other
 administrative costs.  As of December 27, 1997, the Company failed to
 meet financial covenants relating to minimum tangible net worth,
 fixed charge coverage ratio and minimum EBITDA.  On February 25,1998,
 the bank waived non compliance with respect to these provisions.

      Outstanding borrowings under the New Facility amounted to
 $5,108,000 at December 27, 1997 as compared to $400,000 in 1996.  Net
 working capital as of the end of 1997 was $40,648,000 as compared to
 $40,158,000 in 1996.  The working capital ratio as of the end of 1997
 was 3.7:1 as compared to 4.5:1 in 1996.

      During 1997, cash used in operations approximated $2,000,000
 which primarily related to higher levels of accounts receivables.  In
 1996, cash provided by operations was approximately $22,000,000.  In
 1996, a significant reduction in inventory levels is the primary
 reason for the generation of cash from operations.

      Additions to plant, property and equipment, which represented
 normal replacement and upgrading of equipment, were approximately
 $1,000,000 in 1997 as compared to $600,000 in 1996.  Capital
 expenditures for 1998 are expected to be higher than 1997 and are
 expected to be financed from operations.

      The increase in other assets in 1997 is primarily due to
 unamortized in-store fixture cost which are being amortized over 36
 months.

      In 1993, the Company entered into two joint ventures in Central
 America for the purpose of producing apparel under the Caribbean
 Basin Incentive program or as imports.  Effective December 1, 1996,
 the Company purchased the 50% ownership interest of its joint venture
 partner in one of  the ventures for $1,267,000.  This entity has been
 consolidated since the date of acquisition.  This transaction
 resulted in recording goodwill of $240,000 which is being amortized
 over 10 years.  The Company continues to maintain a 50% interest in
 the other joint venture.

      At December 27, 1997, the Company had unused lines of credit of
 $11,215,000 for direct borrowings or the issuance of letters of
 credit.  This availability is in addition to the outstanding direct
 borrowings of $5,108,000 and letters of credit of $33,402,000
 outstanding at the end of 1997.

      Management believes that the line of credit that is available
 under the New Facility, together with the cash expected to be
 provided from operations, is adequate to meet the Company's financing
 needs for the foreseeable future.

      The Company relies on various computer applications for the
 operation of its business.  Several current computer applications
 could have a significant impact on the Company if not modified prior
 to the year 2000.  As part of an reengineering effort and a
 conversion to a new computer system, the Company is converting all
 business applications to new hardware and software.  This conversion
 will address all issues related to Year 2000 and is expected to be
 completed in the early part of 1999.  It is anticipated that the
 expenditure for this effort will approximate $500,000 of which a
 portion has already been spent in 1997.  Management does not believe
 that this will have a significant impact on the Company.
-9-
 New Financial Accounting Standards

      During Fiscal 1997, the Financial Accounting Standards Board
 issued the following accounting standards:  Statement of Financial
 Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS
 No. 130), Statement of Financial Accounting Standards No. 131,
 "Disclosures about Segments of an Enterprise and Related Information"
 (SFAS No. 131) and Statement of Financial Accounting Standards No. 132
 "Employers Disclosures about Pension and other Post retirement Benefit
 Plans" (SFAS No. 132).  The Company will adopt SFAS No. 130 and 
 SFAS No. 131 in the fiscal year beginning December 28, 1997.  The 
 Company does not expect any material effect from adoption of these
 statements.
-10-

 Forward-Looking Statements

      This report contains forward-looking statements within the
 meaning of Section 21E of the Securities Exchange Act of 1934 as
 amended.  As such, final results could differ from estimates or
 expectations due to factors such as, information currently available
 is preliminary and incomplete, government regulation and policies may
 change from that anticipated in present business decisions, business
 conditions in the retail environment and market prices for raw
 materials may change to a degree that existing plans may have to be
 substantially revised.  For any of these factors, the Company claims
 the protection of the safe harbor for forward-looking statements
 contained in the Private Securities Litigation Reform Act of 1995, as
 amended.
-11-

 ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 INDEPENDENT AUDITOR'S REPORT

 To the Board of Directors and Stockholders of Hampton Industries,
 Inc.

 We have audited the accompanying consolidated balance sheets of
 Hampton Industries, Inc. and subsidiaries as of December 27, 1997 and
 December 28, 1996, and the related consolidated statements of
 operations, shareholders' equity and cash flows for the years ended
 December 27, 1997, December 28, 1996 and December 30, 1995.  Our
 audits also included the financial statement schedule listed in the
 index at Item 14 (a)(2).  These financial statements and financial
 statement schedule are the responsibility of the Company's
 management.  Our responsibility is to express an opinion on these
 financial statements and financial statement schedule based on our
 audits.

 We conducted our audits in accordance with generally accepted
 auditing standards.  Those standards require that we plan and perform
 the audit to obtain reasonable assurance about whether the financial
 statements are free of material misstatement.  An audit includes
 examining, on a test basis, evidence supporting the amounts and
 disclosures in the financial statements.  An audit also includes
 assessing the accounting principles used and significant estimates
 made by management, as well as evaluating the overall financial
 statement presentation.  We believe that our audits provide a
 reasonable basis for our opinion.

 In our opinion, such financial statements present fairly, in all
 material respects, the financial position of Hampton Industries, Inc.
 and subsidiaries as of December 27, 1997 and December 28, 1996, and
 the results of their operations and their cash flows for the years
 ended December 27, 1997, December 28, 1996 and December 30, 1995 in
 conformity with generally accepted accounting principles.  Also, in
 our opinion, the financial statement schedule, when considered in
 relation to the basic consolidated financial statements taken as a
 whole, presents fairly in all material respects the information set
 forth therein.

 S\Deloitte Touche LLP
 -----------------------
 February 17, 1998  (February 25, 1998 as to Note E)
 New York, New York
-12-
<TABLE>
               HAMPTON INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
<CAPTION>       
                                            December     December
                                               27,          28,
                                              1997         1996
                                           -----------  -----------
 <S>                                       <C>          <C>
 ASSETS
 Current assets:
      Cash                                 $  171,944   $  310,520
      Accounts receivable, less reserves                             
       for doubtful accounts and customer                            
       allowances of $2,304,000 in 1997                                 
       and $819,000 in 1996.                24,313,827   18,967,447
      Inventories (Note B)<F1>              30,356,997   30,748,132
      Deferred income tax 
       assets (Note D)<F2>                     405,145      532,078
      Refundable income taxes                    -          905,833
      Other current assets                     514,303      132,933
                                           -----------  -----------
           Total current assets             55,762,216   51,596,943
                                                                  
 Property, plant and equipment - net                                   
  (Notes C<F3> and E<F4>)                   17,702,668   19,185,350
 Assets held for disposal
  - net (Note J)<F5>                         1,200,387    1,200,684
 Investments in and advances to                                      
  unconsolidated affiliates                    703,155      823,771
 Other assets                                2,673,453    1,613,792
                                           -----------  -----------
                                           $78,041,879  $74,420,540
                                           ===========  ===========
 LIABILITIES AND STOCKHOLDERS'EQUITY                                 
 Current liabilities:                                                  
      Notes payable - banks and current                                
       maturities of long-term debt                                    
       (Note E)<F4>                        $ 5,701,573  $   593,332
      Accounts payable                       5,642,107    8,412,730
      Accrued liabilities (Note K)<F6>       3,702,083    2,432,776
      Income taxes (Note D)<F2>                 68,346        -
                                           -----------  -----------
           Total current liabilities        15,114,109   11,438,838
                                                                   
 Deferred income tax 
  liabilities (Note D)<F2>                     996,793    1,034,519
 Long-term debt (Note E)<F4>                 4,110,015    5,102,991
 Retirement plan 
  obligations (Note G)<F7>                   3,913,480    4,024,561
                                           -----------  -----------
                                            24,134,397   21,600,909
 Commitments and 
  contingencies (Note E)<F4>                                    
                                                                     
 Stockholders' equity 
  (Notes E<F4> and F<F8>)                                 
  Common stock, $1 par value - authorized                               
  10,000,000 shares; issued 5,192,254                                 
  shares                                     5,192,254    5,191,454
      Additional paid-in capital            34,022,873   34,018,908
      Retained earnings                     19,569,699   18,486,613
                                           -----------  -----------
                                            58,784,826   57,696,975
      Less cost of common stock held in                            
      treasury - 605,825 shares              4,877,344    4,877,344
                                           -----------  -----------
           Total stockholders' equity       53,907,482   52,819,631
                                           -----------  -----------
                                           $78,041,879  $74,420,540
                                           ===========  ===========
</TABLE>
            See notes to consolidated financial statements.
-13-
<TABLE>
               HAMPTON INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
                                                  YEAR ENDED     

                                  December 27,  December 28, December 30,
                                      1997          1996         1995
                                  ------------- ------------  ------------
 <S>                              <C>           <C>           <C>
 Net sales                        $163,040,212  $160,683,890  $184,592,840
 Cost of products 
  sold (Note B)<F1>                125,966,826   125,703,090   153,418,347
                                  -------------  ------------  ------------
  Gross margin                      37,073,386    34,980,800    31,174,493
                                  -------------  ------------  ------------
 Operating expenses (income):                                             
      Selling, general and                                                 
       administrative               33,962,059    29,264,129    30,221,234
      Provision for                                                          
       restructuring cost                                                  
       (Note J)<F5>                    -             -           1,211,077
      Equity in (earnings) loss                                            
       of unconsolidated                                                   
       affiliate                      (164,633)       12,574      (116,618)
      Rental income - net             (935,216)     (666,181)     (632,869)
      Loss (gain) on disposal of                                            
       fixed assets                     64,279      (656,191)     (683,102)
      Other income - net              (182,853)     (108,638)      (27,925)
                                   ------------  ------------  ------------
                                    32,743,636    27,845,693    29,971,797
                                   ------------  ------------  ------------
 Operating income                    4,329,750     7,135,107     1,202,696
 Interest expense                    2,681,664     3,176,589     4,084,949
                                   ------------  ------------  ------------
 Earnings (loss) before                                                     
    provision (benefit) for                                                
    income tax                       1,648,086     3,958,518   (2,882,253)
 Provision  (benefit) for income                                           
  tax (Note D)<F2>:                    565,000     1,250,000     (718,400)
                                   ------------  ------------  ------------
 Net earnings (loss)              $  1,083,086  $  2,708,518  $(2,163,853)
                                   ============  ============  ============

 Basic earnings (loss) per
  common share                        $.24          $.59        $(.47)
                                       ===           ===          ====
 Weighted average common shares
  outstanding                       4,586,029     4,585,629     4,585,629
                                     =======       =======       =======
 Diluted earnings (loss) per
  share                               $.23          $.58        $(.47)
                                       ===           ===          ====
 Weighted average common shares
  outstanding and common share
  equivalents                       4,661,846     4,595,215     4,585,629
                                     =======       =======       =======
</TABLE>
            See notes to consolidated financial statements.
-14-
<TABLE>
               HAMPTON INDUSTRIES, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<CAPTION>
                                                    Additional
                                  Common stock        paid in     Retained
                                Shares      Amount    capital     earnings
                              --------- ----------- ------------------------
 <S>                          <C>        <C>        <C>         <C>
 Balance, December 31, 1994   5,191,454  $5,191,454 $34,018,908 $17,941,948
      Net loss                                                   (2,163,853)
                              --------- ----------- ------------------------
 Balance, December 30, 1995   5,191,454   5,191,454  34,018,908  15,778,095
      Net earnings                                                2,708,518
                              --------- ----------- ------------------------
 Balance, December 28, 1996   5,191,454   5,191,454  34,018,908  18,486,613
      Stock options exercised       800         800       3,965              
      Net earnings                                                1,083,086
                              --------- ----------- ------------------------
 Balance, December 27, 1997   5,192,254 $ 5,192,254 $34,022,873 $19,569,699
                              ========= =========== =========== ============
<CAPTION>
                                Treasury stock          Total
                                   at cost           Stockholders'
                               Shares     Amount        Equity
                             --------- ------------- ------------
 <S>                         <C>        <C>          <C>
 Balance, December 31, 1994  (605,825)  $(4,877,344) $52,274,966
      Net loss                                        (2,163,853)
                             ----------------------- ------------
 Balance, December 30, 1995  (605,825)   (4,877,344)  50,111,113
      Net earnings                                     2,708,518
                             ----------------------- ------------
 Balance, December 28, 1996  (605,825)   (4,877,344)  52,819,631
    Stock options exercised                                4,765
      Net earnings                                     1,083,086
                             --------- ------------- ------------
 Balance, December 27, 1997  (605,825)  $(4,877,344) $53,907,482
                             =========  ============ ============
</TABLE>
            See notes to consolidated financial statements.

-15-
<TABLE>
               HAMPTON INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
                                                    Year Ended
                                      December 27,  December 28,  December 30,
                                          1997          1996          1995
                                      ------------  ------------  ------------
 <S>                                   <C>          <C>           <C>
 OPERATING ACTIVITIES:                                                        
 Net earnings (loss)                   $ 1,083,086  $  2,708,518  $(2,163,853)
 Adjustments to reconcile net                                                 
  earnings (loss) to net                                                     
  cash (used in) provided by                                                   
  operating activities:                                                      
      Amortization                         549,555       264,751      108,293
      Depreciation                       2,210,009     2,326,723    2,855,091
      Deferred income taxes                 89,207       660,742      (16,343)
      LIFO debit (credit)                  616,129      (737,743)    (204,800)
      Reserve for doubtful accounts                                            
       and allowances                    1,030,000      (381,002)   1,210,678
      Retirement plan obligations         (111,081)      (34,726)    (132,503)
      Loss (gain) on sale of fixed                                            
       assets                               64,279      (656,191)    (683,102)
      Equity in (earnings) loss of                                           
       unconsolidated affiliates          (164,633)       12,574     (116,618)
      Provision for restructuring                                            
       costs                                   -        (587,000)      45,083
 Changes in current assets and                                               
  current liabilities:                                                        
      Accounts receivable               (6,376,380)    3,756,816   (1,233,862)
      Inventories on a FIFO basis         (224,994)   16,348,512   (7,137,886)
      Other current assets                 524,463       259,986     (439,667)
      Accounts payable                  (2,770,623)   (2,550,235)     716,803
      Accrued liabilities                1,269,308       729,867   (1,334,993)
      Income taxes                          68,346       (48,183)  (1,066,987)
                                       ------------ ------------- ------------
 NET CASH (USED IN) PROVIDED BY                                              
  OPERATIONS                            (2,143,329)   22,073,409   (9,594,666)
                                       ------------ ------------- ------------
 INVESTING ACTIVITIES:                                                       
      Additions to fixed assets         (1,033,327)     (582,009)    (619,524)
      Proceeds received from sale                                            
       of fixed assets                     211,043     1,183,222    1,645,124
      Decrease (increase) in                                                 
       investments in and advances                                           
       to unconsolidated                                                       
       subsidiaries                        202,963      (185,835)     (26,708)
      Increase in other assets          (1,495,957)   (1,042,359)     (34,791)
      Joint venture purchase                 -        (1,267,000)        -     
                                       ------------ ------------- ------------
 NET CASH (USED IN) PROVIDED BY                                               
 INVESTING ACTIVITIES:                 (2,115,278)    (1,893,981)     964,101
                                      ------------  ------------- ------------
 FINANCING ACTIVITIES:                                                       
      Additions to debt - Banks          4,708,597         -       48,295,000
      Payments on debt  - Banks                      (19,200,356) (39,380,000)
                        - Other          (593,332)    (1,020,534)  (1,064,658)
      Exercise of stock options              4,766         -            -    
                                      ------------  ------------- ------------
 NET CASH PROVIDED BY (USED IN)                                              
 FINANCING ACTIVITIES                    4,120,031   (20,220,890)   7,850,342
                                      ------------  ------------- ------------
 DECREASE IN CASH                        (138,576)       (41,462)    (780,223)
 CASH - BEGINNING OF PERIOD                310,520       351,982    1,132,205
                                      ------------  ------------- ------------
 CASH - END OF PERIOD                 $    171,944  $    310,520  $   351,982
                                         =========     ==========   =========
 Cash paid during the period                                                   
                 -Interest            $  2,480,000  $  2,700,000  $ 3,901,000
                                         =========     =========    =========
                 -Income taxes        $    412,390  $  1,485,000  $ 1,544,000
                                         =========     =========    =========
</TABLE>
            See notes to consolidated financial statements.
-16-

               HAMPTON INDUSTRIES, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              YEARS ENDED
      DECEMBER 27, 1997, DECEMBER 28, 1996 AND DECEMBER 30, 1995

 A.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Description of Business
      The Company is engaged in the business of manufacturing and
 selling wearing apparel.  The products consist principally of men's
 and boys' shirts and men's and women's sleepwear, which are produced
 domestically and in Central America.  In addition, sport and dress
 shirts, sweaters, activewear, outerwear and swimtrunks, for both men
 and boys are imported from unaffiliated sources located primarily in
 the Far East.

 Principles of Consolidation
      The consolidated financial statements include the accounts of
 the Company and its subsidiaries, all of which are wholly-owned.  All
 significant intercompany profits, transactions and balances have been
 eliminated.
      The Company has an investment in a 50% owned but not controlled
 entity which is accounted for by the equity method.

 Use of Estimates
      The preparation of financial statements in conformity with
 generally accepted accounting principles requires management to make
 estimates and assumptions that effect the reported amounts of assets
 and liabilities and disclosure of contingent assets and liabilities
 at the date of the financial statements and the reported amounts of
 revenues and expenses during the reporting period.  Actual results
 could differ from those estimates.

 Inventories
      Inventories are carried at the lower of cost or market value.
 As described in Note B<F1>, the cost of substantially all inventory
 is determined by the last-in, first-out (LIFO) method.

 Property, Plant and Equipment
      Expenditures for buildings, equipment and improvements are
 capitalized and depreciated or amortized on a straight-line basis
 over their estimated useful lives.  Estimated useful lives of assets
 are based upon the following ranges:  land improvements, 30 years,
 buildings and leasehold improvements, 30 to 35 years, machinery and
 equipment, 3 to 15 years and furniture and fixtures, 5 to 10 years.

 In-Store Displays
      The costs for in-store point of sale displays are borne by the
 Company in whole or in part.  Such costs are capitalized as other
 assets and amortized over a thirty-six month period.

 Deferred Financing Costs
      The costs associated with obtaining the Company's New Credit
 facility have been deferred and are being amortized over the term of
 the agreement.
-17-

 Long-Lived Assets
      Financial Accounting Standards Board Statement Number 121,
 "Accounting for the Impairment of Long-Lived Assets and for Long-
 Lived Assets to Be Disposed Of" requires that they be segregated 
 and stated at the lower of the expected net realizable value or
 cost.  The carrying value of long-lived assets is periodically
 reviewed to determine whether impairment exists.  The review is
 based on comparing the carrying amount of the asset to the 
 undiscounted estimated cash flows over the remaining useful lives.
 No impairment is indicated as of December 31, 1997. The Company
 has adopted this statement and the impact has not been significant.

 Revenue Recognition
      Sales are recognized upon shipment of product, which is when
 title passes to the customer.

 Income Taxes
      Deferred income taxes are provided to reflect the tax effect of
 temporary differences between financial statement income and taxable
 income in accordance with the provisions of Statement of Financial
 Accounting Standards No. 109, "Accounting for Income Taxes".

 Basic and Diluted Earnings (Loss) per Common Share
      The Company has adopted the provisions of Statement of Financial
 Accounting Standard No. 128 "Earnings per share" (the "Statement").
 The Statement establishes standards for computing and presenting
 earnings per share and applies to entities with publicly held common
 stock or potential common stock such as employee stock options.  The
 Statement replaces the presentation of primary earnings per share
 with a presentation of basic earnings per share and also requires,
 among other things, dual presentation of basic and diluted earnings
 per share for all entities with complex capital structures.  Basic
 earnings per share excludes dilution and is computed by dividing net
 earnings (loss) by the weighted-average number of shares outstanding
 for each period presented.  Diluted earnings (loss) per share is
 computed by dividing net earnings (loss) by the weighted average
 number of shares outstanding plus dilutive potential common shares
 which will result from the exercise of stock options.  Prior periods
 have been restated to reflect the requirements of the new statement.
<TABLE>
      The following is a reconciliation of the weighted average shares
 used in the computations of basic and dilutive earnings (loss) per
 common shares:
<CAPTION>
                                     1997       1996       1995
 <S>                              <C>        <C>        <C>
 Weighted average common shares
    outstanding used for basic
    earnings (loss) per share     4,586,029  4,585,629  4,585,629
 Dilutive stock options              75,817      9,586      -
                                  ---------  ---------  ---------
 Weighted average common shares
    outstanding used for
    dilutive earnings (loss) per
    share                         4,661,846  4,595,215  4,585,629
                                   ========   ========   ========
</TABLE>
-18-

 Stock Options and Warrants
      Financial Accounting Standards Board Statement Number 123,
 "Accounting for Stock-Based Compensation" which encourages, but
 does not require, companies to recognize compensation expense of
 grants for stock, stock options and other equity instruments to
 employees based on fair value.  The Company has elected to continue
 to follow the provisions of APB Opinion 25 and related
 Interpretations in accounting for employee stock options.

 Fair Value of Financial Instruments
      For financial instruments including cash, accounts receivable
 and payable, accruals, notes payable - banks and current maturities
 of long-term debt, it was assumed that the carrying amount
 approximated fair value because of their short maturity.
      The carrying amount of the non-current portion of mortgage notes
 due through the year 2000, all of which bear interest at floating
 rates, are also assumed to approximate their fair values.

 Investments In and Advances to Unconsolidated Affiliate
      The investment in the remaining joint venture is carried on the
 equity basis, which approximates the Company's equity in the
 unconsolidated entity's underlying net book value.  Advances due from
 the unconsolidated entity were $284,130  and $478,764 at December 27,
 1997 and December 28, 1996 respectively.

-19-
<TABLE>
 <F1>
 B. INVENTORIES
<CAPTION>
                                               1997         1996
 <S>                                        <C>          <C>
 Finished goods                             $21,731,568  $22,295,109
 Work-in-process                              4,215,569    3,840,966
 Piece goods                                  3,926,422    3,734,936
 Supplies and other                             483,438      877,121
                                           ------------  -----------
                                            $30,356,997  $30,748,132
                                             ==========   ==========
</TABLE>
      Principally all inventories are valued at the lower of last-in,
 first-out (LIFO) cost or market.  Information related to the first-
 in, first-out (FIFO) method may be useful in comparing operating
 results to those of companies not on the LIFO method.  On a
 supplemental basis, if inventories had been valued at the lower of
 FIFO cost or market, inventories at December 27, 1997 and December
 28, 1996 would have been approximately $35,300,000 and $35,100,000,
 respectively.  The LIFO valuation method had the effect of decreasing
 net earnings by $404,900 ($.09 per share) in 1997, increasing net
 earnings by $504,800 ($.11 per share) in 1996, and $153,800 ($.03 per
 share) in 1995. Income realized as a result of inventory liquidation
 was not significant in 1997, $668,200 ($.15 per share) in 1996 and
 was not significant in 1995.
      Inventory in transit of $4,675,046 in 1997 and $4,453,000 in
 1996 are included in finished goods.
<TABLE>
 <F3>
 C.  PROPERTY, PLANT AND EQUIPMENT
<CAPTION>
                                           1997          1996
 <S>                                   <C>           <C>
 Land and land improvements            $   2,608,387 $  2,851,282
 Buildings and leasehold improvements     21,960,680   23,249,576
 Machinery and equipment                  17,120,832   15,247,345
 Furniture and fixtures                    1,388,575    1,411,016
                                       ------------- ------------
                                          43,078,474   42,759,219
 Less accumulated depreciation and
 amortization                             25,375,806   23,573,869
                                       ------------- ------------
                                       $  17,702,668 $ 19,185,350
                                          ==========   ==========
</TABLE>
-20-
<TABLE>
 <F2>
 D. INCOME TAXES


      Components of income tax provision (benefit) reflected in the
 consolidated statements of operations are as follows:
<CAPTION>
                                1997         1996          1995
 <S>                        <C>          <C>           <C>
 Current:
      Federal               $   412,893  $   491,700   $ (874,400)
      State and local            62,900       97,600      172,300
                            -----------  -----------   -----------
                                475,793      589,300     (702,100)

 Deferred:
      Federal                    84,207     665,200      (132,800)
      State and local             5,000      (4,500)      116,500
                            -----------  -----------   -----------
                                 89,207      660,700     ( 16,300)
                            -----------  -----------   -----------
                            $   565,000  $ 1,250,000   $ (718,400)
                             ==========   ==========      ========
</TABLE>
      The following is a reconciliation of the statutory federal
 income tax rate applied to pre-tax accounting earnings (loss)
 compared to the provision (benefit) for income tax in the
 consolidated statements of operations:
<TABLE>
<CAPTION>
                                         1997         1996         1995
 <S>                                  <C>          <C>          <C>
 Income tax expense (benefit) at the
  statutory rate                      $ 560,400    $ 1,345,900  $(980,000)
 Increase (decrease) resulting from:
      State and local income taxes,
       net of federal income tax         29,800         61,400    190,600
      Nontaxable foreign (income)
       loss                             (56,000)        -            -
      Utilization of jobs credit
       carryovers                          -          (216,100)      -
      Utilization of AMT credit
       carryovers                          -            31,000       -
      Prior year over accruals                         (82,400)
      Other, net                         30,800        110,200      71,000
                                       ---------   ------------  ----------
                                      $ 565,000    $ 1,250,000   $(718,400)
                                      =========    ============  ==========
</TABLE>
-21-
<TABLE>
      The components of deferred taxes included in the balance sheet
 as of December 27, 1997 and December 28, 1996 are as follows:
<CAPTION>
                                              1997         1996
 <S>                                       <C>           <C>
 Deferred income tax assets:
      Net operating loss carryforwards     $  548,912    $  753,438
      Restructuring costs                      -            104,607
      Allowance for doubtful accounts         120,579        27,229
      Inventory                               250,975       251,843
      Charitable contribution                                      
       carryforwards                           -             17,852
      Other                                   (12,807)       (2,686)
                                            ----------    ----------
                                              907,659     1,152,283
      Valuation allowance                    (502,514)     (620,206)
                                            ----------    ----------
                                           $  405,145    $  532,077
                                            ==========    ==========

 Deferred income tax liabilities - net
      Depreciation                         $ 2,668,151   $ 2,818,053
      Deferred compensation                 (1,452,400)   (1,573,704)
      Trademarks                              (166,748)     (156,922)
      Equity in profit (loss) of joint                              
       venture                                   -           (54,174)
      Other                                    (52,210)        1,252
                                            -----------   -----------
                                           $   996,793   $ 1,034,505
                                            ===========   ===========
</TABLE>
<TABLE>
      Net operating loss carryforwards for state income tax purposes
 expire as follows:
<CAPTION>
                          Year          Amount
                       <S>            <C>
                          1998        $2,647,122
                          1999         1,088,704
                          2000         3,544,119
                          2001         1,569,629
                       Thereafter      2,330,336
</TABLE>
-22-
<TABLE>
 <F4>
 E.  LONG TERM DEBT
<CAPTION>
                                                    1997        1996
 <S>                                             <C>        <C>
 Revolving credit facility (i)<F9>               $5,108,241 $  399,644
 Capitalized lease obligations (ii)<F10>          1,583,347  1,916,679
 Mortgage note, due quarterly to 2000 (ii)<F10>   3,120,000  3,380,000
                                                 ---------- ----------
                                                  9,811,588  5,696,323
   Less amount due in one year                    5,701,573    593,332
                                                 ---------- ----------
                                                 $4,110,015 $5,102,991
                                                 ========== ==========
</TABLE>
<TABLE>
      Annual maturities of debt are as follows:
                     <S>             <C>
                     1998  _______   $ 5,701,573
                     1999  _______     1,510,015
                     2000  _______     2,600,000

                                     $ 9,811,588
                                       =========
</TABLE>
 <F9>
 (i)  On May 3, 1996, the Company entered into a new credit
 facility with BNY Financial Corporation, as Agent ("New Facility").
 The New facility provides for a maximum line of credit of
 $100,000,000, which includes both direct loans and letters of credit.
 The initial proceeds of the New Facility were used to repay the
 outstanding indebtedness under the Company's previously existing bank
 line of credit.
      Availability under the New Facility is based on a formula of
 eligible accounts receivable and eligible inventory and provides for
 a seasonal overadvance of up to $13,500,000 within the $100,000,000
 maximum line of credit.  Direct borrowings bear interest at the
 London Interbank Offered Rate, plus the applicable margin (as defined
 in the New Facility) or the Prime Rate, at the option of the Company.
 Borrowings are collateralized by accounts receivable, inventory and
 general intangibles of the Company and its subsidiaries and the New
 Facility expires in May 1999.  The borrowings of $5,108,241
 outstanding at December 27, 1997 have been classified as short term.
      The New Facility contains financial covenants, including but not
 limited to, tangible net worth and interest coverage, restricts fixed
 asset purchases and does not allow for the payment of cash dividends.
 The Company is not required to maintain compensating balances,
 however, it is required to pay a fee of 1/4% of 1% per annum on the
 unused portion of the total facility and certain other administrative
 costs. As of December 27, 1997, the Company failed to meet financial
 covenants relating to minimum tangible net worth, fixed charge
 coverage ratio and minimum EBITDA.  On February 25,1998, the bank
 waived non compliance with respect to these provisions.

-23-
 <F10>
 (ii) The mortgage notes and capitalized lease obligations are
 collateralized by building and property having a carrying value at
 December 27, 1997 of approximately $5,976,000. The effective interest
 rate on the aggregate amount of capitalized leases at December 27,  1997
 was 6.34%. The effective interest rate on the mortgage note due
 in 2000 at December 27, 1997 was 7.87%.

      At December 27, 1997, letters of credit amounting to
 approximately $33,402,076 were outstanding which relate to purchase
 commitments issued to foreign suppliers of approximately $40,289,775.

 <F8>
 F.  STOCKHOLDERS' EQUITY

 Preferred Stock
      The Company has authorized 14,140.5 shares of $7 cumulative
 First Preferred Stock, par value of $100, none of which is issued.
      In addition, the Company has authorized 1,000,000 shares of
 Second Preferred Stock, par value of $1, none of which has been
 issued.  The Board of Directors is authorized to fix designations,
 relative rights, preferences and limitations on the stock at the time
 of issuance.

 Common Stock
      In 1992, the stockholders approved a non-qualified stock option
 plan (the "Plan") under which it has reserved 363,000 shares of
 common stock and expires in 2002.  The Plan was amended in 1997 to
 increase the reserved shares of common stock to 963,000 shares and
 the expiration date of 2002 was eliminated.  The Plan is administered
 by a committee designated by the Board of Directors.  Options granted
 to eligible employees are exercisable in increments of 20% annually.
 Stock to be offered under the Plan consists of shares, whether
 authorized but unissued or reacquired by the Company, of the common
 stock of the Company.
<TABLE>
      The exercise price of options is equal to the fair market value
 on the date of each grant.  The exercise price may be paid in cash,
 common stock of the Company, or a combination thereof. A summary of
 the changes in common stock options during 1996 and 1997 is as
 follows:
<CAPTION>
                                                   Price range   Weighted
                                       Number of       per        average
                                        Shares        Share    price per share

    <S>                                <C>        <C>             <C>
    Outstanding at December 30,1995        0            -           -
      Granted                           279,500       $4.50       $4.50
      Exercised                            -            -           -
      Canceled                            4,500       $4.50       $4.50
                                       ---------     
    Outstanding at December 28, 1996    275,000       $4.50       $4.50
      Granted                           121,500   $6.75 - $9.50   $7.64
      Exercised                            (800)      $4.50       $4.50
      Canceled                           (6,000)  $4.50 - $6.75   $5.06
                                       ---------     
    Outstanding at December 27, 1997    389,700   $4.50 - $9.50   $5.47
                                        ======     
</TABLE>
-24-

      As of December 27, 1997, 53,300 shares were exercisable.
<TABLE>
      The Company applies the provisions of APB Opinion 25 and related
 Interpretations in accounting for its stock options.  Accordingly, no
 compensation cost has been recognized for the foregoing options.  The
 excess, if any, of the fair market value of shares on the measurement
 date over the exercise price is charged to operations each year as
 the options become exercisable.  Had compensation cost for these
 options been determined using the Black-Scholes option-pricing model
 described in FASB Statement 123, the Company would have recorded
 aggregate compensation expense of approximately $234,300 in 1997 and
 $490,100 in 1996 which would be expensed at the rate of 20% per annum
 over the option's vesting period.  The assumptions used in the
 option-pricing model for 1997 and 1996, respectively, include a risk-
 free interest rate of 5.8% and 6.7%, expected volatility of 33.1% and
 39.3% and a life of 5 years.  The pro forma impact of following the 
 provisions of FASB Statement 123 on the Company's operations and income
 per share would be as follows:
<CAPTION>
                                           Fifty-two     Fifty-two
                                         Weeks Ended   Weeks Ended
                                         December 27,  December 28,
                                             1997          1996
    <S>                                <C>           <C>
    Net income
                    -  as reported     $  1,083,086  $  2,708,518
                                          =========     =========
                    -  pro forma       $  1,014,086  $  2,670,038
                                          =========     =========
    Basic net income per common share
                    -  as reported          $.24          $.59
                                             ===           ===

                    -  pro forma            $.22          $.58
                                             ===           ===
    Diluted net income per common share
                    -  as reported          $.23          $.58
                                             ===           ===

                    -  pro forma            $.22          $.58
                                             ===           ===
</TABLE>
 <F7>  
 G.  PROFIT SHARING PLANS

      On December 31, 1995, the Company merged two qualified profit
 sharing plans into a single plan (the Plan) that is in compliance
 with the regulations of the Internal Revenue Service Code for
 qualification as a 401-K plan.  The Plan covers all associates of the
 Company.  During 1996 and 1997, the Company made a matching
 contribution of 40% of the deferral amount that the associates elect
 to make (as limited by the Internal Revenue Service Code) and has set
 the matching contribution rate for 1998 at 40%.  The Company has the
 option of changing the matching contribution each year, the right to
 amend, modify or terminate the Plan.  Company contributions to the
 Plan were $362,000 for 1997 and $160,475 for 1996.  Under the
 predecessor plans, the Company contribution aggregated $248,000 for
 1995.

-25-

      The Company also maintains a Supplemental Retirement Plan for
 Key Employees (the Supplemental Plan) to permit certain key
 associates to defer receipt of current compensation in order to
 provide retirement and death benefits on behalf of such associates.
 Company profit sharing credits are determined at the discretion of
 the Board of Directors.  Amounts of profit sharing credits are vested
 in the same manner as vesting occurs under the Company's Qualified
 Profit Sharing and Retirement Savings Plan.  An annual return equal
 to the Moody's AAA Corporate bond rate is added to each participant
 deferred compensation account balance and employer profit sharing
 credit account balance.  The Company may provide supplemental profit
 sharing credits to one or more active participants in the
 Supplemental Plan, the amount of which shall be determined by the
 Board of Directors in its sole and absolute discretion.
<TABLE>
      As of January 1, 1996, the participants in this Supplemental
 Plan were no longer able to make salaried deferrals.  The Company
 credited interest and profit sharing credits to the participants as
 follows:
<CAPTION>
                                     1997       1996       1995
 <S>                              <C>        <C>        <C>
 Interest                         $ 273,000  $ 287,000  $ 285,000
 Profit sharing credits               -           -     $ 137,000
</TABLE>
      The Supplemental Plan is not intended to be a qualified plan
 under the provisions of the Internal Revenue Code.  It is intended to
 be unfunded and, therefore, all compensation deferred under the
 Supplemental Plan is held by the Company and commingled with its
 general assets.  However, in 1998, the Company purchased life
 insurance policies on the lives of the participants of which it is
 the beneficiary.  It is the intention of the Company that
 distributions under the Supplemental Plan will continue to be made
 from general assets of the Company until such time that the cash
 surrender value of these policies will provide the funding necessary
 for the payment of future benefits to the participants.

      Effective January 1, 1998, the Company instituted a Nonqualified
 Deferred Compensation Plan for Key Employees (the Deferred Plan) to
 permit certain key employees to defer receipt of current compensation
 in order to provide retirement and death benefits on behalf of such
 employees.  The Company may provide a matching contribution to the
 Deferred Plan.  The Company may provide supplemental profit sharing
 credits which are determined at the discretion of the Board of
 Directors.  Amounts of matching contributions and profit sharing
 credits are vested in the same manner as vesting occurs under the
 Company's Qualified Profit Sharing and Retirement Savings Plan.  For
 1998 the Company has established a matching rate of 20% of the
 employees deferrals. The Deferred Plan is not intended to be a
 qualified plan under the provisions of the Internal Revenue Code.  It
 is intended to be unfunded and, therefore, all compensation deferred
 under the Deferred Plan is held by the Company and commingled with
 its general assets.  However, employee deferrals and the Company's
 match are deposited each month in Company owned insurance contracts.
 Within these contracts the employees have the option of selecting a
 variety of investments.  The return on these underlying investments
 will determine the amount of earnings credit. The Company has the
 option of changing the matching contribution each year, the right to
 amend, modify or terminate the Deferred Plan.

-26-

 H.  SELECTED QUARTERLY DATA (UNAUDITED)
<TABLE>
      The following table sets forth selected quarterly financial
 information for the fiscal years 1997 and 1996 (in thousands of
 dollars, except per share amounts):
<CAPTION>
                                       NET EARNINGS (LOSS)

                                                BASIC   DILUTED
                   NET       GROSS               PER      PER
 QUARTER ENDED    SALES     MARGIN    AMOUNT    SHARE    SHARE
    <S>         <C>       <C>       <C>       <C>      <C>  
    3-29-97     $ 36,356  $  8,940  $   620   $ .14    $  .13
    6-28-97       26,111     5,947   (1,184)   (.26)     (.26)
    9-27-97       46,151    12,932    1,891     .41       .40
    12-28-97      54,422     9,254     (244)   (.05)     (.05)
                --------  --------  -------- 
    Y E A R     $163,040  $ 37,073  $ 1,083  
                 =======   =======    ======  
</TABLE>
<TABLE>
<CAPTION>
                                        NET EARNINGS (LOSS)

                                               BASIC   DILUTED
                   NET      GROSS               PER      PER
QUARTER ENDED     SALES    MARGIN   AMOUNT     SHARE    SHARE
    <S>         <C>       <C>       <C>       <C>       <C>
    3-30-96     $ 35,936  $  7,699  ($  264)  ($.06)    ($.06)
    6-29-96       25,295     4,567   (1,184)   (.26)     (.26)
    9-28-96       54,226    13,030    2,718     .59       .59
    12-28-96      45,227     9,685    1,439     .32       .32
                --------  --------  --------  
    Y E A R     $160,684  $ 34,981  $  2,709  
                 =======   =======    ======  
</TABLE>

 I.  CONCENTRATION OF CREDIT RISK

      Trade receivables potentially subject the Company to credit
 risk.  The Company extends credit to its customers based upon an
 evaluation of the customer's financial condition and credit history
 and generally does not require collateral.  The Company has
 historically incurred minimal credit losses.
<TABLE>
      The Company's broad range of customers includes many large
 multi-outlet retail chains, two of which account for a significant
 percentage of sales volume, as follows:
<CAPTION>
                                     1997       1996       1995
 <S>                                 <C>        <C>        <C>
 J.C. Penney Co., Inc.               16%        15%        16%
 Wal-Mart Stores, Inc.               15%        16%        18%
</TABLE>
-27-

 <F5>
 J.  RESTRUCTURING COSTS

      In 1995 the Company closed two manufacturing facilities which
 completed the Company's program of reducing excess domestic
 production capacity begun in 1991.  The closing costs related thereto
 are in the statement of operations as Provision for restructuring
 costs.  The restructuring reduced the work force by approximately 400
 associates or 25% of total employees.  Plant closing costs totaled
 approximately $1,211,000 representing severance pay, payroll taxes
 and a noncash charge of $610,000 relating to the write-down of
 manufacturing equipment to estimated realizable value.
 <F6>
 K.  ACCRUED LIABILITIES
<TABLE>
      Accrued liabilities consist of the following:
<CAPTION>
                                              1997        1996
 <S>                                       <C>         <C>
 Accrued payroll                           $1,230,259  $1,369,818
 Accrued expenses                           2,264,405     626,700
 Other                                        207,419     436,258
                                           ----------  ----------
                                           $3,702,083  $2,432,776
                                           ==========  ==========
</TABLE>
 ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

      None

-28-

                               PART III

 ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      See "Election of Directors" on page 2 of the Proxy Statement for
 Registrant's 1998 Annual Meeting of Shareholders, which information
 is incorporated herein by reference.  Also see information contained
 under the caption "Executive Officers of Registrant" on page 2
 hereof.

 ITEM 11.  EXECUTIVE COMPENSATION

      See "Compensation of Officers and Directors" on page 4 of the
 Registrant's 1998 Proxy Statement, which information is incorporated
 herein by reference.

 ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
 MANAGEMENT

      See "Voting Securities" on page 1 of the Registrant's 1998 Proxy
 Statement, which information is incorporated herein by reference.

 ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      See "Certain Transactions with Management" on page 9 of the
 Registrant's 1998 Proxy Statement, which information is incorporated
 herein by reference.

-29-


                                PART IV

 ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
 8-K

 (A)1.  Financial Statements

      The following consolidated financial statements of Hampton
 Industries, Inc. and its subsidiaries are included in Part II,
 Item 8:

      Independent Auditors' Report  ____________________________________ 12

      Consolidated balance sheets - 
        December 27, 1997 and December 28, 1996 ________________________ 13

      Consolidated statements of operations - 
        years ended December 27, 1997, December 28, 1996 and 
        December 30, 1995  _____________________________________________ 14

      Consolidated statements of  stockholders' equity - years ended
        December 27, 1997, December 28, 1996 and December 30, 1995  ____ 15

      Consolidated statements of cash flows - years ended December 27,
        1997, December 28, 1996 and December 30, 1995  _________________ 16

      Notes to consolidated financial statements  ___________________ 17-28

 (a)2.  Financial Statement Schedule

      Schedule II -  Valuation and qualifying accounts _________________ 31

      All other schedules have been omitted because they are
 inapplicable or not required, or the information is included
 elsewhere in the financial statements or notes thereto.

 (a)3.  Exhibits

      Exhibit No. 21 - Subsidiaries of the Company  ____________________ 32

 (b)      Reports on Form 8-K

      None

-30-
<TABLE>
                       HAMPTON INDUSTRIES, INC.
           SCHEDULE II  -  VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>
                               Balance at Charged to Charged
                               beginning  costs and    to
                               of period   expenses   other
          Description                                accounts
 ----------------------------- ---------- ---------- -------
 <S>                           <C>        <C>        <C>     <C>
 RESERVE FOR DOUBTFUL ACCOUNTS                                  
  AND CUSTOMER ALLOWANCES:                                      
 Year ended December 27, 1997  $  819,000 $1,470,531 $57,305 (A)<F11>
                                 ========  ========= =======
 Year ended December 28, 1996  $1,200,000 $  393,465 $ 7,183 (A)<F11>
                                 ========  ========= =======
 Year ended December 30, 1995  $1,238,000 $1,210,678    -    (A)<F11>
                                 ========  ========= =======
</TABLE>
 NOTES:
 <F11>
 (A)          Recoveries of accounts previously written off.
 <F12>
 (B)          Uncollectible accounts written off.

<TABLE>
<CAPTION>
                                                             Balance at
                                                                 end
         Description                    Deductions            of period
 ----------------------------           ----------          -------------
 <S>                          <C>      <C>         <C>        <C>
 RESERVE FOR DOUBTFUL                                            
  ACCOUNTS AND CUSTOMER                                        
  ALLOWANCES:                                                   
 Year ended December 27, 1997 (A)<F11> $   42,836  (B)<F12>   $ 2,304,000
                                         =========             =========
 Year ended December 28, 1996 (A)<F11> $  781,648  (B)<F12>   $   819,000
                                         =========             =========
 Year ended December 30, 1995 (A)<F11> $1,248,678  (B)<F12>   $ 1,200,000
                                         =========             =========
 </TABLE>
 NOTES:
 <F11>
 (A)          Recoveries of accounts previously written off.
 <F12>
 (B)          Uncollectible accounts written off.

-31-

 Exhibit 21

                       HAMPTON INDUSTRIES, INC.

                             Subsidiaries

      Name                               State of Incorporation
 Hamptex, Inc.                                North Carolina
 IGM CORP., S.A. DE C.V.                      El Salvador


      Hampton owns 100% of the outstanding stock of each subsidiary
 and they are included in the consolidated financial statements.

-32-

                              SIGNATURES

           Pursuant to requirements of Section 13 or 15(d) of the
 Securities Exchange Act of 1934, Hampton Industries, Inc. has duly
 caused this report to be signed on its behalf by the undersigned,
 thereunto duly authorized.

                               HAMPTON INDUSTRIES, INC.

                               S/DAVID FUCHS
                               _____________________________________
                               David Fuchs, Chairman and Director

                               S/STEVEN FUCHS
                               _____________________________________
                               Steven Fuchs, President and Director

                               S/ROBERT J. STIEHL, JR.
                               _____________________________________
                               Robert J. Stiehl, Jr., Executive Vice
                               President - Operations and Treasurer

                               S/FRANK E. SIMMS
                               _____________________________________
                               Frank E. Simms, Chief Financial Officer



      Pursuant to the requirements of the Securities Exchange Act of
 1934, this report had been signed below by the following persons on
 behalf of the Company and in the capacities and on the dates
 indicated:

 S/HERBERT L. ASH                             S/SOL SCHECHTER
 ______________________________               ____________________________
 Herrbert L. Ash, March 10, 1998              Sol Schechter,March 10, 1998
        (Director)                                  (Director)

 S/PAUL CHUSED
 _______________________________
 Paul Chused, March 10, 1998
      (Director)

      The Company's annual report to stockholders and proxy material
 is to be furnished to its security holders subsequent to the filing
 of the annual report on this form.  Copies of such material will be
 furnished to the Commission when it is sent to security holders.

-33-