SECURITIES AND EXCHANGE
                                   COMMISSION

                             Washington, D.C. 20549
                               ___________________

                                    FORM 10-Q

              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the Quarterly Period Ended June 30, 1997

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                                      THE
                         SECURITIES EXCHANGE ACT OF 1934

                        For the transition period from to

                         Commission file number 0-1282-3

                             Swiss Army Brands, Inc.
             (Exact name of registrant as specified in its charter)
 
 
                               Delaware 13-2797726
          (State of incorporation) (I.R.S. Employer Identification No.)

                 One Research Drive, Shelton, Connecticut 06484
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (203) 929-6391

                                 NOT APPLICABLE
 (Former name, former address and former fiscal year, if changed since
                                  last report.)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.
                                                                        Yes X No

The number of shares of Issuer's  Common Stock,  $.10 par value,  outstanding on
August 7, 1997, was 8,209,610 shares.
 
<PAGE>


                             SWISS ARMY BRANDS, INC.
                                AND SUBSIDIARIES
                                      INDEX
<TABLE>
<CAPTION>


 PART I:       FINANCIAL INFORMATION                                   Page No.
<S>           <C>                                                     <C>

 Item 1.       FINANCIAL STATEMENTS

               Consolidated Balance Sheets as of
               June 30, 1997 and December 31, 1996.                     3 - 4

               Consolidated Statements of Operations for the
               Three and Six Months Ended June 30, 1997 and 1996.           5

               Consolidated Statements of Stockholders' Equity
               for the Six Months Ended June 30, 1997 and 1996.             6

               Consolidated Statements of Cash Flows for the
               Six Months Ended June 30, 1997 and 1996.                     7

               Notes to Consolidated Financial Statements               8 - 9

 Item 2.       MANAGEMENTS DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF
               OPERATIONS                                             10 - 13

 Part II:      OTHER INFORMATION

 Item 4.       SUBMISSION OF MATTERS TO A VOTE OF
               SECURITY HOLDERS                                            14

 Item 6.       EXHIBITS AND REPORTS ON FORM 8-K                            15

 Signatures                                                                16

 The Exhibit Index appears on page 15.
</TABLE>

                                       2
<PAGE>


         
                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
                                     Assets

<TABLE>
<CAPTION>

 
                                                      June 30,      December 31,
                                                        1997            1996
                                                    (unaudited)

<S>                                                   <C>             <C>

 Current assets:
    Cash and cash equivalents ......................   $ 3,673         $ 2,067
    Accounts receivable, less
     allowance for doubtful accounts 
     of $1,032, respectively  ......................    22,718          32,992
    Inventories  ...................................    33,966          29,657
    Deferred income taxes  .........................     3,295           3,295
    Prepaid and other  .............................     5,392           2,922  
                                                      ---------        --------

    Total current assets ...........................    69,044          70,933
                                                      ---------        --------
Deferred income taxes  .............................     1,597           1,597
Property, plant and equipment, net  ................     3,767           3,969

Investments in preferred units, at cost ............     9,003           9,003
Investments in unconsolidated affiliate  ...........       150             150

Foreign distribution rights, net of
accumulated amortization of $2,853 and $2,518, 
respectively  ......................................     3,891           4,226

Other assets, net of accumulated
amortization of $862 and $496, respectively.........     9,411           8,765 
                                                      ---------        --------

Total Assets                                           $96,863         $98,643
                                                      =========        ========

</TABLE>
                                       3
<PAGE>



                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (in thousands, except for share data)

                      Liabilities and Stockholders' Equity
<TABLE>
<CAPTION>



                                                    June 30,        December 31,
                                                      1997              1996 
                                                  (unaudited)
<S>                                                <C>               <C>

Current liabilities: 
Accounts payable .................................. $ 11,685          $ 10,952
Accrued liabilities ...............................    7,363             7,835
                                                    ---------         ---------
Total current liabilities .........................   19,048            18,787

Commitments and contingencies
                                                                              
Stockholders' equity
Preferred stock, par value $.10 per share: shares 
authorized -2,000,000; no shares issued                    -                 -

Common stock, par value $.10 per
share: shares authorized -
18,000,000; shares issued - 8,823,718 and
8,822,968, respectively                                  882               882
Additional paid-in capital                            46,186            46,182
Foreign currency translation adjustment                 (143)             (113)
Retained earnings                                     36,003            38,018
                                                   ----------         ---------
                                                      82,928            84,969
Less-cost of common stock in
treasury; 614,108 shares                              (5,113)           (5,113)
                                                   ----------         ---------
Total stockholders' equity                            77,815            79,856
                                                   ----------         ---------
Total Liabilities and Stockholders' Equity           $96,863           $98,643
                                                   ==========         =========

</TABLE>
                                       4
<PAGE>


                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except for share per data)
                                   (unaudited)

<TABLE>
<CAPTION>



                                      Three Months Ended       Six Months Ended
                                           June 30,                June 30,
                                        1997    1996              1997    1996 
<S>                                  <C>      <C>             <C>      <C>

Net sales ..........................  $28,862  $28,677         $53,076  $54,756

Cost of sales ......................   18,554   23,288          33,748   40,775
                                     --------  -------         -------  -------
Gross profit .......................   10,308    5,389          19,328   13,981

Selling, general and administrative
expenses ...........................   12,099    9,537          22,935   18,709

Special charges ....................      -      2,073             -      2,073
                                     --------  -------         --------  ------
Operating loss .....................   (1,791)  (6,221)         (3,607)  (6,801)

Interest income (expense), net .....       54       11             111       59

Gain (loss) on sale (write-down) of 
investments  .......................      110     (789)            110     (789)

Other income (expense), net ........        3        1              (1)     118
                                     --------  -------         --------  ------
Total interest and other income, net      167     (777)            220     (612)
                                     --------  -------         --------  ------
Loss before income taxes  ..........   (1,624)  (6,998)         (3,387)  (7,413)

Income tax benefit  ................     (658)  (2,941)         (1,372)  (3,111)
                                     --------  -------         -------- -------
Net loss  ..........................    ($966) ($4,057)        ($2,015) ($4,302)
                                     ========  =======         ======== =======
Net loss per share  ................   ($0.12)  ($0.49)         ($0.25)  ($0.52)
                                     ========  =======         ======== =======
Weighted average number of
shares outstanding  ................    8,210    8,196           8,210    8,204
                                     ========  =======         ======== =======
</TABLE>
                                       5
<PAGE>



                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                      (in thousands, except for share data)
<TABLE>
<CAPTION>


                                                     Foreign    Unrealized
                        Common Stock   Additional   Currency     Gain on
                       Par Value $.10    Paid-In  Translation   Marketable   Retained  Treasury
                     Shares     Amount   Capital   Adjustment   Securities   Earnings    Stock 
<S>                <C>          <C>      <C>         <C>         <C>        <C>        <C>

BALANCE
December 31, 1995   8,800,718    $880    $45,898      ($9)        $   -      $43,284    ($5,113)

Net loss for
six months ended
June 30, 1996
(unaudited)                 -       -          -        -             -       (4,302)        -
 
Stock options 
exercised              19,750       2        239        -             -            -         -
 
Unrealized gain on
marketable securities       -       -          -        -           701            -         -
 
Foreign currency
translation adjustment      -       -          -       (2)            -            -         -
                    ---------    ------  --------   -------      ---------   ---------   --------   
BALANCE, June 30,
1996 (unaudited)    8,820,468    $882    $46,137      (11)         $701      $38,982    ($5,113)
                    =========    ======  ========   =======      =========   =========   ========

BALANCE
December 31, 1996   8,822,968    $882     46,182    ($113)         $  -      $38,018    ($5,113)

Net loss for
six months ended
June 30, 1997
(unaudited)                 -       -          -        -             -       (2,015)         -

Stock options exercised   750       -          4        -             -            -          -
 
Foreign currency
translation adjustment      -       -          -      (30)            -            -          -
                  -----------   ------   --------  --------      --------   ---------   ---------
BALANCE, June 30,
1997 (unaudited)    8,823,718    $882    $46,186    ($143)          $ -      $36,003    ($5,113)
                  ===========   ======   ========  ========      ========   =========   =========
                      
</TABLE>
                                       6
<PAGE>



                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
<TABLE>
<CAPTION>


                                                           Six months ended
                                                               June 30,
                                                           1997        1996 
<S>                                                     <C>         <C>

Cash flows from operating activities:                  
Net loss                                                ($ 2,015)   ($ 4,302) 
Adjustments to reconcile net loss to net cash
provided from operating activities:           
Depreciation and amortization                              1,481       2,537 
(Gain) loss on (sale) write-down of investments             (110)        789
                                                        ---------   --------
                                                            (644)       (976)
Changes in other current assets and liabilities:
Accounts receivable                                       10,169      10,562
Inventories                                               (4,207)     (4,859)
Prepaid and other                                         (2,472)     (2,720)
Accounts payable                                             763       2,403
Accrued liabilities                                         (492)     (3,553)
                                                        ---------   ---------
Net cash provided from operating activities                3,117         857

Cash flows from investing activities:
Capital expenditures                                        (538)       (741)
Additions to other assets                                 (1,062)       (903)
Investment in preferred units                                 -       (2,000)
Proceeds from sale of investments in stock                   110          59
                                                        ---------   ---------
Net cash (used for) investing activities                  (1,490)     (3,585)
                                                        ---------   ---------

Cash flows from financing activities:
Proceeds from short-term debt                                 -        2,747
Proceeds from exercise of stock options                       -          241
                                                        ---------   ---------
Net cash provided from financing activities                   -        2,988
                                                        ---------   ---------
Effect of exchange rate changes on cash                      (21)         (9)
                                                        ---------   ---------
Net increase (decrease) in cash                            1,606         251
Cash and cash equivalents, beginning of period             2,067         609
                                                        ---------   ---------
Cash and cash equivalents, end of period                 $ 3,673       $ 860
                                                        =========   =========

Cash paid during the period:
Interest                                                     $ 7        $ 42
                                                        =========   =========
Income taxes                                               $ 453     $ 1,683
                                                        =========   =========
</TABLE>
                                       7
<PAGE>

    
                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 1997 and 1996
                                   (unaudited)

                       CONSOLIDATED FINANCIAL STATEMENTS
     The consolidated  financial statements included in this Form 10-Q have been
prepared by Swiss Army Brands, Inc. (Swiss Army, the Company) without audit.
Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been  condensed  or omitted  pursuant to the rules and  regulations  of the
Securities  and Exchange  Commission.  It is suggested  that these  consolidated
financial  statements be read in conjunction  with the financial  statements and
notes thereto  included in the Company's  report on Form 10-K for the year ended
December  31, 1996.  In the opinion of  management  of the Company,  the interim
financial statements included herein reflect all adjustments, consisting only of
normal recurring adjustments ( except for the special charges discussed below) ,
necessary  for a  fair  presentation  of  the  financial  position,  results  of
operations and cash flows for the interim periods presented.  The preparation of
financial statements in conformity with generally accepted accounting principles
requires  management to make estimates and assumptions  that affect the reported
amounts of 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.  Due to the seasonal nature of
the  Company's  business,  the results of  operations  for the  interim  periods
presented are not necessarily  indicative of the operating  results for the full
year.

INVENTORIES
-----------

     Domestic  inventories  are stated at the lower of cost  (determined  by the
last-in,  first-out (LIFO) method) or market.  Foreign inventories are valued at
the  lower  of  cost  or  market  determined  by the  FIFO  method.  Inventories
principally consist of finished goods.

SIGNIFICANT CUSTOMER
--------------------
     Sales  related  to  special  promotional  programs  to  a  single  customer
accounted  for  approximately  16% and 11% of net  sales  for the  three and six
months ended June 30, 1997,  respectively.  There were no sales  related to this
customer in the comparable periods in 1996. The Company has continued to receive
orders from this customer in the third quarter of 1997.

SPECIAL CHARGES
---------------
     In the second  quarter of 1996,  the Company  recorded  special  charges of
approximately  $7,394,000  related to an  extensive  analysis  of the  Company's
operations and non-strategic assets. The special charges consisted of :


Write-off of inventory  .......................    $4,521,000 (a)
Selling, general and administrative charges  ..    $2,073,000 (b)
Write-down of investments  ....................     $ 800,000 (c)
                                                  ------------
                                                   $7,394,000
                                                  ============

     (a)Represents  the write-off of discontinued  inventory,  including certain
cutlery products sold by Cuisine de France Limited ("CDF"). Substantially all of
the assets of CDF were sold by the Company in January 1997. 

                                       8
<PAGE>


     (b)  Consists  of an  $870,000  write-off  of  goodwill  related  to CDF, a
$850,000  write-off  for  obsolete  displays  and a $353,000  write-off of other
assets.

     (c)Consists  of a  $800,000  write-off  of the  Company's  investment  in a
privately held affiliated  start-up  entity.  In the second quarter of 1997, the
Company  recovered  $110,000 related to this investment which is included in the
gain (loss) on sale (write-down) of investments.

INCOME TAXES
------------
     Income taxes are provided at the projected  annual  effective tax rate. The
income tax  provisions  (benefits)  for the interim 1997 and 1996 periods exceed
the federal  statutory  rate of 34% due  primarily to state income taxes (net of
federal benefit).

EARNINGS PER SHARE
------------------
     For the periods ended June 30, 1997 and 1996,  the weighted  average number
of shares of common  stock  outstanding  do not include the  dilutive  effect of
stock options as they would have an anti-dilutive effect.

     In February 1997, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standards No. 128 ("SFAS No. 128" or the "Statement"),
Earnings Per Share ("AEPS"). SFAS No.128 establishes standards for computing and
presenting EPS and is effective for both interim and annual periods ending after
December 15,  1997.  The  Statement  does not permit  early  application  of its
provisions.  The  Statement  replaces  the  presentation  of primary  EPS with a
presentation  of basic EPS, as defined.  It also requires dual  presentation  of
basic and diluted EPS on the face of the  Statement of  Operations  for entities
with a complex capital structure.  The Company does not anticipate the effect on
EPS to be material.

                                       9
<PAGE>

   

                    SWISS ARMY BRANDS, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (unaudited)

                           FORWARD LOOKING STATEMENTS
                           --------------------------

     The following discussion contains, in addition, to historical  information,
forward looking statements.  The forward looking statements were prepared on the
basis of certain assumptions which relate, among other things, to the demand for
and cost of purchasing and marketing the Company's products; the prices at which
such products may be sold; new product development; seasonal selling trends; the
Swiss franc- U.S. dollar exchange rates; the extent to which the Company is able
to successfully hedge against foreign currency  fluctuations;  and the Company's
anticipated  credit  needs  and  ability  to  obtain  such  credit.  Even if the
assumptions  upon which the objections are based prove accurate and appropriate,
the actual  results of the  Company's  operations  in the future may vary widely
from financial  projections  due to increased  competition,  changes in consumer
tastes and other factors not yet known or anticipated.  Accordingly,  the actual
results of the  Company's  operations  in the future  may vary  widely  from the
forward looking statements included herein.

                              RESULTS OF OPERATIONS
                              ---------------------

Comparison for the Three Months Ended June 30, 1997 and 1996
------------------------------------------------------------

     Sales for the three months ended June 30, 1997 were $28.9 million  compared
with $28.7 million for the same period in 1996,  representing a decrease of $0.2
million  or  0.6%.  Sales  for  the  three  months  ended  June  30,  1997  were
significantly impacted by sales related to special promotional programs with one
customer which  accounted for  approximately  15.7% of sales in the three months
ended June 30,  1997.  There were no sales to this  customer in the three months
ended June 30,  1996.  The Company  has  continued  to receive  orders from this
customer in the third quarter of 1997.  Excluding sales to this customer,  sales
decreased  by $4.3 million in the three months ended June 30, 1997 , as compared
to the  comparable  period in 1996.  Approximately  $740,000 of the $4.3 million
sales decrease was due to the sale of substantially all of the assets of Cuisine
de France Limited ("CDF") in January 1997, with the remaining sales decrease due
primarily  to a  decrease  in sales of  watches,Victorinox  Original  Swiss Army
Knives, and cutlery, offset in part by sales of Swiss Army Brand Sunglasses.

     Gross  profit of $10.3  million  for the three  months  ended June 30, 1997
increased $4.9 million or 91.3% from 1996. This increase is primarily due to the
$4.5 million inventory write-off in 1996. The gross profit margin percentage for
the  second  quarter of 1997 of 35.7% was higher  than the gross  profit  margin
percentage of 34.6%,  excluding the $4.5 million inventory  write-off,  reported
for the same period in 1996.  This  increase is primarily due to the increase in
the value of the U.S.  dollar  versus  the  Swiss  franc  offset by  unfavorable
product mix. The Company's gross profit margin is a function of both product mix
and Swiss franc exchange rates.  Since the Company imports  virtually all of its
products  from  Switzerland,  its  costs are  affected  by both the spot rate of
exchange and by its foreign currency  hedging  program.  The Company enters into
foreign  currency  contracts and options to hedge the exposure  associated  with
foreign currency  fluctuations.  Based upon current Swiss franc requirements the
Company  believes it is hedged  through the  remainder  of 1997.  However,  such
hedging activity cannot eliminate the long-term  adverse impact on the Company's
competitive  position  and  results  of  operations  that  would  result  from a
sustained  decrease in the value of the dollar  versus the Swiss franc.  These
hedging  transactions,  which are meant to reduce foreign  currency  risk,  also
reduce the beneficial effects to the Company if the dollar increases relative to
the  Swiss  franc.   The  Company   plans  to  continue  to  engage  in  hedging
transactions;  however,  it is uncertain as to what extent to which such hedging
transactions will reduce the effect of adverse currency fluctuations. 

                                       10
<PAGE>


     Selling,  general and  administrative  expenses  for the three months ended
June 30, 1997 of $12.1 million were $2.6 million or 26.9% higher than the amount
for the  comparable  period  in 1996.  Approximately  $2.1  million  of the $2.6
million  increase is due to expenses  related to the introduction of a new brand
and a brand  extension;  Swiss Watches marketed under the name Allenby and
Swiss Army Brand  Sunglasses,  with the  remaining  increase  due  primarily  to
increased  expenditures for advertising and marketing related  activities,  $0.3
million in costs related to continuing restructuring, offset in part by expenses
related to CDF.

     The Company recorded special selling, general and administrative charges of
$2.1 in 1996 related to the write-off of obsolete  displays,  goodwill and other
assets.  The goodwill  write-off  related to CDF, and was written-off due to the
lack of  recoverability  of the asset.  Substantially  of the assets of CDF were
sold by the  Company  in 1997 with no  significant  gain or loss.  There were no
special charges recorded in 1997.

     As a percentage  of net sales,  total  selling  general and  administrative
expenses increased from 40.5% in 1996 to 41.9% in 1997.

     Interest income  (expense),  net of $54,000 for the three months ended June
30,  1997  was  $43,000  higher  than  interest  income  (expense),  net for the
comparable  period in 1996  primarily  due to increased  invested  cash balances
during 1997 as compared to 1996.

     Gain (loss) on sale ( write-down) of investments  was a gain of $110,000 in
1997,  verse a loss of $789,000 in 1996.  In 1996,  the  Company  wrote-off  its
$800,000  investment in privately  held start-up  entity.  In 1997,  the Company
recovered $110,000 related to this investment.

     As a result of these changes, loss before income taxes for the three months
ended June 30,  1997 was  $1,624,000  versus  $6,998,000  for the same period in
1996, a decrease of $5,374,000.

     Income tax expense (benefit) was provided at an effective rate of 40.5% and
42.0% in 1997 and 1996, respectively.

     As a result, net loss for the three months ended June 30, 1997 was $966,000
($0.12 per share)  versus  $4,057,000  ($0.49 per share) for the same  period in
1996, a decrease of $3,091,000.

Comparison for the Six Months Ended June 30, 1997  and 1996
-----------------------------------------------------------

     Sales for the six months  ended June 30, 1997 were $53.1  million  compared
with $54.8 million for the same period in 1996,  representing a decrease of $1.7
million  or  3.0%.   Sales  for  the  six  months  ended  June  30,  1997,  were
significantly impacted by sales related to special promotional programs with one
customer  which  accounted  for  approximately  11.1% of sales in the six months
ended  June 30,  1997.  There were no sales to this  customer  in the six months
ended June 30,  1996.  The Company  has  continued  to receive  orders from this
customer in the third quarter of 1997.  Excluding sales to this customer,  sales
decreased  by $7.6  million in the six months ended June 30, 1997 as compared to
the comparable  period in 1996.  Approximately  $1.5 million of the $7.6 million
sales decrease was due to the sale of substantially  all of the assets of CDF in
January 1997,  with the remaining  sales decrease due primarily to a decrease in
sales of watches ,Victorinox Original Swiss Army Knives, and cutlery,  offset in
part by sales of Swiss Army Brand Sunglasses.

                                       11
<PAGE>


     Gross  profit of $19.3  million  for the six  months  ended  June 30,  1997
increased $5.3 million or 38.2% from 1996. This increase is primarily due to the
$4.5 million inventory write-off in 1996. The gross profit margin percentage for
the  second  quarter of 1997 of 36.4% was higher  than the gross  profit  margin
percentage of 33.8% , excluding the $4.5 million inventory  write-off,  reported
for the same period in 1996.  This  increase is primarily due to the increase in
the  value  of the  U.S.  dollar  versus  the  Swiss  franc  offset  in  part by
unfavorable product mix. The Company's gross profit margin is a function of both
product mix and Swiss franc exchange rates.  Since the Company imports virtually
all of its products  from  Switzerland,  its costs are affected by both the spot
rate of exchange and by its foreign currency hedging program. The Company enters
into foreign  currency  contracts  and options to hedge the exposure  associated
with foreign currency fluctuations.  Based upon current Swiss franc requirements
the Company believes it is hedged through the remainder of 1997.  However,  such
hedging activity cannot eliminate the long-term  adverse impact on the Company's
competitive  position  and  results  of  operations  that  would  result  from a
sustained  decrease  in the value of the dollar  versus the Swiss  franc.  These
hedging  transactions,  which are meant to reduce foreign  currency  risk,  also
reduce the beneficial effects to the Company if the dollar increases relative to
the  Swiss  franc.   The  Company   plans  to  continue  to  engage  in  hedging
transactions;  however,  it is uncertain as to what extent to which such hedging
transactions will reduce the effect of adverse currency fluctuations.

     Selling,  general and administrative expenses for the six months ended June
30, 1997 of $22.9  million were $4.2 million or 22.6% higher than the amount for
the comparable  period in 1996.  Approximately  $3.1 million of the $4.2 million
increase is due to  expenses  related to the  introduction  of a new brand and a
brand  extension;  Swiss Watches marketed under the name Allenby and Swiss
Army Brand  Sunglasses,  with the remaining  increase due primarily to increased
expenditures for advertising and marketing related  activities,  $0.3 million in
costs related to continuing restructuring, offset in part by expenses related to
CDF.
     The Company recorded special selling, general and administrative charges of
$2.1 in 1996 related to the write-off of obsolete  displays,  goodwill and other
assets.  The goodwill  write-off  related to CDF, and was written-off due to the
lack of  recoverability  of the asset.  Substantially  of the assets of CDF were
sold by the  Company  in 1997 with no  significant  gain or loss.  There were no
special charges recorded in 1997.

     As a percentage  of net sales,  total  selling  general and  administrative
expenses increased from 38.0% in 1996 to 43.2% in 1997.

     Interest  income  (expense),  net of $111,000 for the six months ended June
30,  1997  was  $52,000  higher  than  interest  income  (expense),  net for the
comparable  period in 1996  primarily  due to increased  invested  cash balances
during 1997 as compared to 1996.

     Gain (loss) on sale ( write-down) of investments  was a gain of $110,000 in
1997,  verse a loss of $789,000 in 1996.  In 1996,  the  Company  wrote-off  its
$800,000  investment in privately  held start-up  entity.  In 1997,  the Company
recovered $110,000 related to this investment.

     Other income  (expense),  net of ($1,000) for the six months ended June 30,
1997  versus  $118,000  in the same  period  for the prior  year,  is due to the
favorable settlement of a legal matter in 1996.


     As a result of these  changes,  loss before income taxes for the six months
ended June 30,  1997 was  $3,387,000  versus  $7,413,000  for the same period in
1996, a decrease of $4,026,000.

                                       12
<PAGE>

     Income tax expense (benefit) was provided at an effective rate of 40.5% and
42.0% in 1997 and 1996, respectively.

     As a result, net loss for the six months ended June 30, 1997 was $2,015,000
($0.25 per share)  versus  $4,302,000  ($0.52 per share) for the same  period in
1996, a decrease of $2,287,000.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

     As of June 30,  1997,  the  Company had  working  capital of $50.0  million
compared with $52.1 million as of December 31, 1996, a decrease of $2.1 million.
Significant  uses of working capital  included a $1.1 million  increase in other
assets and capital  expenditures of $0.5 million.  The Company  currently has no
material commitments for capital expenditures.

     Cash provided from operating  activities was approximately $ 3.1 million in
the six months ended June 30, 1997 compared with $ 0.9 million in the comparable
period in 1996.  The  improvement  resulted  in a smaller  decrease  in  accrued
liabilities  in 1997 as  compared  to 1996,  a smaller  net loss in 1997 than in
1996,  offset in part by a smaller  increase in accounts payable in 1997 than in
1996.

     The Company meets its short-term  liquidity  needs with cash generated from
operations,  and, when  necessary,  bank borrowings  under its revolving  credit
agreement.  As of June 30,  1997,  the Company has a $5.0 million line of credit
which it can use for any borrowings.  The Company had a $15.0 million  revolving
credit  agreement  which  expired  in January  1997.  The  Company is  currently
reviewing  its  options to  establish  a new  revolving  credit  agreement.  The
Company's  short-term  liquidity  is affected by seasonal  changes in  inventory
levels, payment terms and seasonality of sales. The Company believes its current
liquidity  levels  and  financial  resources  will be  sufficient  to  meet  its
operating needs in the near-term.


                                       13
<PAGE>


PART II. - OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders
        ---------------------------------------------------

     The annual meeting of the  stockholders  of the Company was held on May 15,
1997,  pursuant to notice, at the folloing persons were elected directors of the
Company to serve until the next annual  meeting of  stockholders  or until their
successors are elected and qualified:
<TABLE>
<CAPTION>
 
                                        NUMBER OF VOTES        NUMBER OF VOTES
                                               FOR                 WITHHELD
                                        ----------------       ----------------
NAME
----
<S>                                        <C>                      <C>

A. Clinton Allen                            6,548,802                22,155
Clarke H. Bailey                            6,547,048                23,909
Thomas A. Barron                            6,548,906                22,051
Vincent D. Farrell, Jr.                     6,548,902                22,055
Herbert M. Friedman                         6,548,854                22,103
Peter W. Gilson                             6,548,906                22,051
M. Leo Hart                                 6,549,092                21,955
James W. Kennedy                            6,548,882                22,075
Keith R. Lively                             6,546,948                24,009
Lindsay Marx                                6,541,888                29,069
Louis Marx, Jr.                             6,549,002                21,955
Stanley G. Mortimer III                     6,549,002                21,955
Stanley R. Rawn, Jr.                        6,549,002                21,955
Eric M. Reynolds                            6,548,906                22,051   
John Spencer                                6,548,906                22,051
J. Merrick Taggart                          6,548,902                22,055
John V. Tunney                              6,546,852                24,105
</TABLE>
     


     In  addition,  the  shareholders  approved by a majority  vote of 6,523,203
shares a proposal to increase  the number of  authorized  shares of common stock
from twelve  million to eighteen  million.  37,941 shares were voted against the
proposal and 9,813 abstained.

                                       14
<PAGE>

 
Item 6.  Exhibits and Reports on Form 8-K
         --------------------------------

A) Exhibits

   2) Not Applicable

   3) Not Applicable

   4) Not Applicable
    
     10.1) Certificate of amendment of Certification of Incorporation of Swiss
           Army Brands, Inc.   

     10.2) Agreement dated July 1, 1997 by and between Swiss Army Brands,Inc.
           and  Stanley G. Mortimer III.

     10.3) License Agreement dated May 15, 1997 by and between Swiss Army
           Brands, Inc. and St. John Knits, Inc.

   11) Statement  regarding  computation  of per share  earnings  is not
       required because the relevant computation can be clearly  determined from
       the material contained in the Financial Statements included herein.

   15) Not Applicable
   18) Not Applicable
   19) Not Applicable
   22) Not Applicable
   23) Not Applicable
   24) Not Applicable

   27)Financial Data Schedule

   99)Not Applicable

 B.)There were no reports or exhibits on Form 8-K filed for the three months
    ended June 30, 1997.

                                       15
<PAGE>


          Pursuant to the  requirements to the Securities  Exchange Act of 1934,
     the  Registrant  has duly  caused this report to be signed on its behalf by
     the undersigned thereunto duly authorized.
 
                                                  SWISS ARMY BRANDS, INC.
                                                        Registrant)

 
Date:  August 13, 1997
                                              By /s/ Thomas M. Lupinski
                                              Name:  Thomas M. Lupinski
                                              Title:  Senior Vice President &
                                              Chief Financial Officer, Secretary
                                              and Treasurer
                                       16
<PAGE>