Exhibit 10.1

                      SEPARATION AGREEMENT

     This  Separation  Agreement (the "Agreement")  is  made  and
entered  into  by  and between Innovo Group Inc.  ("Innovo")  and
Samuel   J.   Furrow,   Jr.  ("Executive")   (collectively,   the
"Parties"),  to be effective as of January 20, 2006 ("Termination
Date").

                            RECITALS

A.   WHEREAS, as of the effective date of this Agreement, Innovo
employs Executive pursuant to an at-will employment relationship.

B.   WHEREAS, Innovo and Executive acknowledged  the termination
of the services of Executive's  employment with  Innovo, and its
subsidiaries,pursuant to the at-will employment arrangement (the
"Employment Relationship") and in  connection  therewith, Innovo
has agreed to extend to Executive certain payments of  severance
benefits and continuation of benefits.

C.   WHEREAS, in  connection with the payment of these benefits,
each agrees to release the other,  in  accordance with the terms
and provisions herein, from any and all obligations, liabilities
and claims arising from or in any way related to  the employment
arrangement, the termination thereof or otherwise.

     NOW  THEREFORE,  for  good and valuable  consideration, the
receipt  and  sufficiency of which are hereby  acknowledged, the
Parties hereto acknowledge, agree and covenant as follows:


                            AGREEMENT

     1.    Termination.  The Parties hereto agree that Innovo has
terminated the services of Executive from his position  as  Chief
Executive Officer and that the Employment Relationship  shall  be
deemed  terminated  as of the effective date of  this  Agreement.
This Agreement is made with the mutual and express intent of  the
Parties to extinguish all obligations and liabilities imposed  on
either  of  them  by  the Employment Relationship  or  otherwise,
except  as specifically set forth herein.  Innovo agrees that  it
will   not  oppose  any  claim  for  unemployment  benefits  that
Executive  may file with any governmental agency as a  result  of
the  termination of the Employment Relationship pursuant to  this
Agreement.

     2.   Severance Benefits. In return for Executive's execution
of  and adherence to this Agreement, including the releases  that
form  a  material  part of this Agreement, Innovo  shall  provide
Employee  with certain benefits, including benefits to  which  he
would not otherwise be entitled:

          (a)    Salary   Continuation.      Innovo   shall   pay
Executive  his  aggregate regular salary  in  effect  as  of  his
Termination  Date, in the amount of One Hundred Thousand  Dollars
($100,000.00)  in four equal installments for a total  amount  of
Four  Hundred  Thousand  Dollars  ($400,000.00)  to  be  paid  on
February  3,  2006, March 3, 2006, March 31, 2006 and  April  28,
2006,  all  of which are Innovo's regular paydays, and  shall  be
subject  to  usual and customary deductions required by  law  and
Innovo  policy.   In the event of Executive's  death  before  the

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completion of all payments, any remaining payments due under this
paragraph shall be paid to Executive's estate.

          (b)  Group Health Plan.  Executive shall be entitled to
elect  for  himself  "continuation coverage"  as  provided  under
Section  4980B of the Internal Revenue Code of 1986,  as  amended
("COBRA").   In  the  event  Executive  becomes  re-employed  and
eligible for such new employer's group health insurance coverage,
then  this  benefit  shall cease.  To the extent  that  Executive
elects  and  is eligible for continuation coverage  under  COBRA,
Innovo will reimburse him, or alternatively, pay, for the cost of
such  continuation coverage for himself during  the  twelve  (12)
months  following the Termination Date (the "Benefit Continuation
Period").  Such  reimbursements shall be  treated  as  additional
salary  continuation and shall be subject to usual and  customary
deductions required by law and Company policy.  After the Benefit
Continuation Period, Executive shall bear the full cost  of  such
continuation coverage, if available.

          (c)  Life and Disability Insurance.          Subject to
any limitations imposed by applicable laws or by the underwriters
of  any group or individual life or disability insurance policies
maintained  by  Innovo,  Innovo shall continue  its  coverage  of
Executive  under  such group or individual  life  and  disability
insurance  policies through the Benefit Continuation Period.   In
the event Executive becomes re-employed and eligible for such new
employer's  group  or  individual life  or  disability  insurance
coverage, then this benefit shall cease.  If Innovo is unable  to
continue  such  coverage  and if such benefit  is  not  otherwise
terminated  by  re-employment, Innovo shall pay to  Executive  an
amount  sufficient on an after-tax basis to obtain such  coverage
through  the  end  of  the  Benefit  Continuation  Period.   Such
benefits  or  payments  shall  be treated  as  additional  salary
continuation  and  shall  be  subject  to  usual  and   customary
deductions required by law and Innovo policy.

          (d)  Stock Options.      Effective on September 3, 2004
and  June  13,  2005, Innovo granted to Executive  certain  stock
options  as  evidenced by those certain Innovo Group  Inc.  Stock
Option  Agreements executed by Innovo and Executive (the  "Option
Agreements").  As of the Termination Date, Executive had a vested
right  to exercise options to purchase certain shares of Innovo's
common  stock.   Executive and Innovo agree that  each  paragraph
3.1(d) of the Option Agreements is hereby amended to delete  such
section in its entirety.  Accordingly, Executive and Innovo agree
and  acknowledge that Executive shall have the vested right under
the  Options  Agreements, as so amended, to exercise  options  to
purchase  up  to  500,000  shares of  Innovo's  common  stock  in
accordance  with and subject to the terms and provisions  of  the
Option Agreements.

     3. Release of Claims. Each Party hereto,on behalf of himself
or  itself  and  his or its successors, assigns  and  affiliates,
hereby fully and forever releases, remises, waives and discharges
the  other  Party hereto and its successors, assigns, affiliates,
heirs   and   beneficiaries  from  any  and   all,   obligations,
liabilities  and  claims whatsoever (whether  known  or  unknown,
foreseen or unforeseen) relating to or arising in any way out  of
the   Employment   Relationship,  the  termination   thereof   or
otherwise,   including,  without  limitation   any   obligations,
liabilities or claims against Executive arising out of or related
to  any actual or alleged acts or omissions of Executive or based
upon  the  fact that Executive is or was a trustee,  director  or
officer of Innovo or any affiliate of Innovo or is or was serving
at the request of Innovo or any affiliate as a trustee, director,

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officer,  member, employee or agent of another corporation  or  a
partnership, joint venture, trust or other enterprise, including,
without  limitation,  service with respect  to  employee  benefit
plans, whether or not the basis of such obligation, liability  or
claim  is  alleged action in an official capacity as  a  trustee,
director, officer, member, employee or agent while serving  as  a
trustee, director, officer, member, employee or agent.  Executive
specifically  acknowledges that he is releasing all  such  claims
including, without limitation, all statutory claims arising under
Title  VII  of  the Civil Rights Act of 1964 ("Title  VII"),  the
Americans with Disabilities Act ("ADA"), the Fair Labor Standards
Act ("FLSA") and any similar federal, state or local statutes  or
regulations.

     4.Indemnification. Innovo agrees that if Executive is made a
party or is threatened to be made a party to any action, suit  or
proceeding,   whether   civil,   criminal,   administrative    or
investigative  (a  "Proceeding"), by  reason  of  the  fact  that
Executive  is or was a trustee, director or officer of Innovo  or
any  affiliate of Innovo or is or was serving at the  request  of
Innovo  or any affiliate as a trustee, director, officer, member,
employee or agent of another corporation or a partnership,  joint
venture,   trust   or   other  enterprise,   including,   without
limitation,  service  with  respect to  employee  benefit  plans,
whether or not the basis of such Proceeding is alleged action  in
an  official  capacity as a trustee, director,  officer,  member,
employee  or agent while serving as a trustee, director, officer,
member, employee or agent, Executive shall be indemnified to  the
fullest extent allowed by applicable law against all liabilities,
losses  and  expenses  incurred  or  suffered  by  Executive   in
connection therewith.  Innovo will cooperate with Executive  with
respect  to  the  defense  of  any Proceeding,  including  making
documents, witnesses and other reasonable information related  to
the  defense  available  to  Executive  and  Executive's  counsel
pursuant   to   joint-defense   agreements   or   confidentiality
agreements, as appropriate.  Innovo agrees to file any  potential
counterclaims or cross claims that Innovo may possess  which  are
related  to such Proceeding, and will take all reasonable  action
to  pursue such counterclaims and cross claims, as Executive  may
reasonably direct.  If Innovo refuses to file or fully pursue any
such  counterclaim or cross claim, in the reasonable  opinion  of
Executive,  Executive  will be deemed  to  be  appointed  as  the
attorney-in-fact  for  Innovo  for  the  purpose  of  filing  and
pursuing such claims on behalf of Innovo.

     5.  Directors' and Officers' Insurance. Innovo will maintain
directors' and officers' insurance with a policy limit of no less
than  $3  million that will cover Executive against  claims  made
against Executive in any Proceeding or threatened Proceeding  for
a  minimum  of  two years after the execution of this  Separation
Agreement.

     6. Non-Disparagement.Each Party acknowledges and agrees that
such  Party  will not defame or publicly criticize the  services,
business,   integrity,  veracity  or  personal  or   professional
reputation  of  the  other  Party in  either  a  professional  or
personal  manner  at  any time following the  execution  of  this
Separation Agreement.


     7.   Cooperation.  Executive hereby agrees to cooperate with
Innovo  regarding  Executive's execution  of  any  necessary  and
appropriate required documentation evidencing said separation  as
set forth pursuant to this Agreement.

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     8.   No Amendment.    This   Agreement  may not be rescinded,
amended or modified,except by a written agreement executed by both
Parties.

    9.   Severability.  If any provision of this Agreement is held
by any court of  competent  jurisdiction to be invalid, illegal or
unenforceable,  such  provision  shall  be deemed modified in such
manner as  to render such  provision  valid, legal and enforceable
to the fullest  extent  permitted by law in such jurisdiction. The
remaining  provisions  of  this  Agreement  shall  not be affected
thereby, and shall continue in full force and effect.

   10.   Successors.   This  Agreement  shall  be binding upon the
Parties  and  their  respective  successors and assigns, and shall
inure to the benefit of  their  respective successors and assigns.

   11.   Governing Law.  This  Agreement  shall  be  governed  by,
construed  and  enforced  in accordance with the laws of the State
of  California,  without  reference  to  the  conflict-of-laws  or
choice-of-law  principles  thereof.   The  parties  agree that any
dispute  between  the  parties,  including  but not limited to any
action  or proceeding that may arise under this Agreement shall be
brought  in and maintained in a court of competent jurisdiction in
Los Angeles County, California.

  12.   Confidentiality.   In  consideration  for the promises set
forth   herein,  each  Party  agrees  that  such  Party  will  not
disclose,  disseminate and/or publicize any of the terms  of  this
Agreement,  directly or indirectly, specifically or generally,  to
any   person,  corporation, association  or  governmental  agency,
except   (i)  to  such  Party's  tax return  preparer  and  taxing
agencies,   (ii) as required by law, and (iii) in response  to  an
order  of a court or governmental agency of competent jurisdiction
or subpoena issued under proper authority.

  13.   No Other Benefits.  Executive acknowledges that, except as
set  forth herein,  he is not entitled to any compensation, monies
or benefits from Innovo, including but not limited to compensation
for accrued vacation, bonuses,commissions, expenses or other forms
of compensation or benefits. Executive hereby waives all rights to
any payments other than for outstanding bonafide business expenses
incurred  by  Executive  on  behalf of Innovo prior to January 20,
2006.

  14.   Entire Agreement.   This Agreement represents and contains
the entire agreement and understanding between Executiveand Innovo
with respect to its subject matter,  and it supersedes any and all
prior  oral  and  written  agreements  and  understandings, and no
representation, warranty, condition,understanding, or agreement of
any kind with respect to the subject matter of this Agreement will
be relied upon by  Executive  unless  specifically incorporated in
this Agreement; provided, however,that the Option Agreements, will
each remain in fullforce and effect,except to the extent expressly
modified or amended hereunder. Further, this Agreement is intended
to  be  a  binding  contract  between the parties and shall not be
modified, except by writing signed by both parties.

  15.  Tax Withholdings.Certain payments made under this Agreement
may  be  subject  to  required  income and other tax withholdings.
Executive will be responsible for any taxes which  may be due as a

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result  of  any  payments  made  by  Innovo  or benefits otherwise
provided as described above, and Executive agrees to indemnify and
hold  Innovo  harmless  from any claim and expense that Innovo may
incur as a resultof any failure by Executive to pay any such taxes.

                        *    *    *    *

     IN  WITNESS  WHEREOF, the Parties hereto have each  reviewed,
understood, approved and executed this Agreement as of  the  date
opposite their respective signatures.


EXECUTIVE:



Signed:    /s/ Samuel J. Furrow, Jr.     Dated: January 27, 2006
           Samuel J. Furrow, Jr.


INNOVO GROUP INC.:



Signed:    /s/ Marc Crossman             Dated: January 27, 2006
           Marc Crossman
           Authorized Representative of
           Innovo Group, Inc.

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