SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                  For the quarterly period ended March 31, 2002
                                                 --------------

                                       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 0-21940

                                 Donnkenny, Inc.
                                 ---------------
             (Exact name of registrant as specified in its charter)

                   Delaware                           51-0228891
                   --------                           ----------
           (State or jurisdiction of               (I.R.S. Employer
         incorporation or organization)           Identification No.)

                        1411 Broadway, New York, NY 10018
                        ---------------------------------
            (Address of principal executive offices) (Zip Code)

        Registrant's telephone number, including area code (212) 790-3900
                                                           --------------

                                 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), Yes X No ___ and (2) has been the
subject to such filing requirements for the past 90 days. Yes X No ___.

         Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.

         Common Stock $0.01 par value                 4,367,417
         ----------------------------       ---------------------------------
                     (Class)                  (Outstanding at May 8, 2002)
<PAGE>

                         DONNKENNY, INC AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (FORM 10-Q)

PART I - FINANCIAL INFORMATION                                           Page
                                                                         ----

Consolidated financial statements:

  Independent Accountants' Report

  Balance sheets as of March 31, 2002 (unaudited) and December 31, 2001...I-1

  Statements of operations for the three months ended
  March 31, 2002 and 2001 (unaudited)....................................II-1

  Statements of cash flows for the three months ended
  March 31, 2002 and 2001 (unaudited)...................................III-1

  Notes to Consolidated Financial Statements (unaudited)  .............IV-1-4

  Management's Discussion and Analysis of Financial Condition and
  Results of Operations.................................................V-1-4

PART II - OTHER INFORMATION

  Legal Proceedings and Other Information................................VI-1

  Exhibits and Reports on Form 8-K.......................................VI-2

  Signatures.............................................................VI-3
<PAGE>

                         INDEPENDENT ACCOUNTANTS' REPORT

To the Board of Directors and Stockholders of Donnkenny, Inc.

We have reviewed the accompanying consolidated balance sheet of Donnkenny, Inc.
and subsidiaries as of March 31, 2002, and the related consolidated statements
of operations and cash flows for the three-month periods ended March 31, 2002
and 2001. These financial statements are the responsibility of the Company's
management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to such consolidated financial statements for them to be in conformity
with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
Donnkenny, Inc. and subsidiaries as of December 31, 2001, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the year then ended (not presented herein); and in our report dated March 25,
2002, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
consolidated balance sheet as of December 31, 2001 is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.

As discussed in Note 4 to the consolidated financial statements, effective
January 1, 2002, the Company changed its method of accounting for goodwill and
other intangible assets.


DELOITTE & TOUCHE LLP
New York, New York
May 8, 2002
<PAGE>

<TABLE>
<CAPTION>

                DONNKENNY, INC. AND SUBSIDIARIES
                   Consolidated Balance Sheets
              (in thousands, except per share data)

                                                                        March 31,                    December 31,
                                                                           2002                          2001
                                                                     -----------------             -----------------
                                                                       (Unaudited)
CURRENT ASSETS
<S>                                                                  <C>                           <C>
     Cash..................................................          $             102             $              39
     Accounts receivable - net of allowances of
      $149 and $116, in 2002 and 2001 respectively.........                     18,045                        25,225
     Recoverable income taxes..............................                        381                           381
     Inventories...........................................                     13,440                        17,773
     Deferred tax assets...................................                      1,662                         1,662
     Prepaid expenses and other current assets.............                        565                         1,220
     Assets held for sale..................................                        623                           788
                                                                     -----------------             -----------------
     Total current assets..................................                     34,818                        47,088
PROPERTY, PLANT AND EQUIPMENT, NET.........................                      5,246                         5,379
OTHER ASSETS...............................................                        377                           368
INTANGIBLE ASSETS..........................................                        821                         4,198
GOODWILL...................................................                          -                        25,367
                                                                     -----------------             -----------------
TOTAL......................................................          $          41,262             $          82,400
                                                                     =================             =================

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
       Current portion of long-term debt...................          $             683             $             933
       Accounts payable....................................                      5,439                         7,760
       Accrued expenses and other current liabilities......                      2,054                         3,504
                                                                     -----------------             -----------------
          Total current liabilities........................                      8,176                        12,197
                                                                     -----------------             -----------------

LONG-TERM DEBT.............................................                     26,112                        34,844
DEFERRED TAX LIABILITIES...................................                      1,662                         1,662

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
    Preferred stock $.01 par value; authorized 500
      shares, issued none.................................
    Common stock, $.01 par value.  Authorized 10,000
      shares, issued and outstanding 4,367 shares
     in 2002 and 2001......................................                         44                            44
    Additional paid-in capital.............................                     50,449                        50,449
    Deficit................................................                    (45,181)                      (16,796)
                                                                     -----------------             -----------------
   Total Stockholders' Equity..............................                      5,312                        33,697
                                                                     -----------------             -----------------
TOTAL......................................................          $          41,262             $          82,400
                                                                     =================             =================


                                          See accompanying notes to consolidated financial statements.


</TABLE>


                                      I-1
<PAGE>


<TABLE>
<CAPTION>

                              DONNKENNY, INC. AND SUBSIDIARIES
                            Consolidated Statements of Operations
                            (in thousands, except per share data)
                                         (unaudited)

                                                                                                 Three Months Ended
                                                                                -------------------------------------------------
                                                                                   March 31, 2002             March 31, 2001
                                                                                ---------------------      ----------------------

<S>                                                                             <C>                        <C>
NET SALES.......................................................................$              24,438      $               37,308
COST OF SALES...................................................................               18,021                      28,454
                                                                                ---------------------      ----------------------
     Gross profit...............................................................                6,417                       8,854

OPERATING EXPENSES:
    Selling, general and administrative expenses................................                5,345                       6,773
    Amortization of goodwill and other related
     acquisition costs.........................................................                     -                         373
                                                                                ---------------------      ----------------------
        Operating income........................................................                1,072                       1,708

INTEREST EXPENSE...............................................................                   668                       1,306
                                                                                ---------------------      ----------------------
    Income before income taxes and cumulative effect of change in accounting
      principle................................................................                   404                         402

INCOME TAXES....................................................................                   45                          45
                                                                                ---------------------      ----------------------
     Income before cumulative effect of change in accounting principle..........                  359                         357
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE (NO TAX BENEFIT
  RECOGNIZED)..............................................................                    28,744                           -
                                                                                ---------------------      ----------------------
      NET INCOME (LOSS)........................................................ $             (28,385)     $                  357
                                                                                =====================      ======================

Basic earnings per common share:
     Income before accounting change........................................... $                0.08      $                 0.08
     Cumulative effect of accounting change....................................                 (6.58)                          -
                                                                                ---------------------      ----------------------
       Net income (loss)....................................................... $               (6.50)     $                 0.08
                                                                                =====================      ======================

Diluted earnings per common share:
     Income before accounting change........................................... $                0.08      $                 0.08
     Cumulative effect of accounting change....................................                 (6.58)                          -
                                                                                ---------------------      ----------------------
       Net income (loss).....................................................   $               (6.50)     $                 0.08
                                                                                =====================      ======================
Shares used in the calculation of earnings per share:
     Basic.....................................................................             4,367,417                   4,367,417
                                                                                =====================      ======================
     Diluted....................................................................            4,367,417                   4,367,417
                                                                                =====================      ======================

                                         See accompanying notes to consolidated financial statements.
</TABLE>

                                      II-1
<PAGE>
<TABLE>
<CAPTION>


                               DONNKENNY, INC. AND SUBSIDIARIES
                            Consolidated Statements of Cash Flows
                            (in thousands, except per share data)
                                         (unaudited)
                                                                                                 Three Months Ended
                                                                                ------------------------------------------------
                                                                                      March 31,                 March 31,
                                                                                        2002                       2001
                                                                                ---------------------     ----------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                             <C>                        <C>
Net income (loss).............................................................. $            (28,385)      $                 357
Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities:

  Depreciation and amortization of fixed assets................................                  372                        260
  Disposal of fixed assets.....................................................                    -                          1
  Amortization of intangibles and other assets.................................                    -                        373
  Cumulative effect of change in accounting principle .........................               28,744                          -
  Provision for losses on accounts receivable..................................                    5                          5
Changes in assets and liabilities:
  Decrease in accounts receivable..............................................                7,175                      2,049
  Decrease in recoverable income taxes.........................................                    -                         13
  Decrease in inventories......................................................                4,333                      1,225
  Decrease (increase) in prepaid expenses and
    other current assets.......................................................                  655                       (147)
  (Increase) decrease in other non-current assets..............................                   (9)                        79
  Decrease in accounts payable.................................................               (2,321)                      (802)
  (Decrease) increase in accrued expenses and
    other current liabilities..................................................               (1,449)                       831
                                                                                --------------------     ----------------------
    Net cash provided by operating activities..................................                9,120                      4,244
                                                                                --------------------     ----------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment....................................                 (217)                      (590)
  Proceeds from sale of property, plant and equipment..........................                  143                          -
                                                                                --------------------     ----------------------
Net cash used in investing activities..........................................                  (74)                      (590)
                                                                                --------------------     ----------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of long-term debt..................................................                 (358)                      (402)
  Borrowings under revolving credit line.......................................               23,625                     36,609
  Repayments under revolving credit line.......................................              (32,250)                   (39,844)
                                                                                --------------------     ----------------------
    Net cash used in financing activities......................................               (8,983)                    (3,637)
                                                                                --------------------     ----------------------

NET INCREASE IN CASH...........................................................                   63                         17
CASH, AT BEGINNING OF PERIOD...................................................                   39                         65
                                                                                --------------------     ----------------------

CASH, AT END OF PERIOD......................................................... $                102     $                   82
                                                                                ====================     ======================

SUPPLEMENTAL DISCLOSURES

Income taxes paid.............................................................. $                 32     $                  25
                                                                                ====================     ======================
Interest paid.................................................................. $                671     $               1,173
                                                                                ====================     ======================

                                            See accompanying notes to consolidated financial statements.

</TABLE>

                                     III-1

<PAGE>

                        DONNKENNY, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

         The accompanying unaudited consolidated financial statements have been
prepared by the Company pursuant to the Rules of the Securities and Exchange
Commission ("SEC") and, in the opinion of management, include all adjustments
(consisting of normal recurring accruals) necessary for the fair presentation of
financial position, results of operations and cash flows. 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 such SEC rules. The Company believes the disclosures made
are adequate to make such financial statements not misleading. The results for
the interim periods presented are not necessarily indicative of the results to
be expected for the full year. These financial statements should be read in
conjunction with the Company's Report on Form 10-K for the year ended December
31, 2001. Balance sheet data as of December 31, 2001 have been derived from
audited financial statements of the Company.

<TABLE>
<CAPTION>

NOTE 2 - INVENTORIES

Inventories consist of the following:
                                                        March 31,   December 31,
                                                          2002          2001
                                                          ----          ----
                                                             (In Thousands)

<S>                                                  <C>             <C>
Raw materials     . . . . . . . . . . . . . . . . .  $     590       $       840
Work-in-process  . . . . . . . . . . . . . . . . .         337               331
Finished goods    . . . . . . . . . . . . . . . . .     12,513            16,602
                                                        ------            ------
                                                     $  13,440       $    17,773
                                                        =======           ======
</TABLE>


NOTE 3 - DEBT

         On June 29, 1999, the Company and its operating subsidiaries signed a
three-year credit agreement (the "Credit Agreement") with CIT Group/Commercial
Services. The Credit Agreement provides the Company with a $75 million facility
comprised of a $72 million revolver with sublimits up to $52 million for direct
borrowings, $35 million for letters of credit, certain overadvances and a $3
million term loan.

         The Credit Agreement provides for advances of (i) up to 90% of eligible
accounts receivable plus (ii) up to 60% of eligible inventory plus (iii) up to
60% of the undrawn amount of all outstanding letters of credit plus (iv)
allowable overadvances. The term loan requires quarterly payments of $0.25
million plus all accrued and unpaid interest beginning September 30, 1999
through June 30, 2002. The Credit Agreement as amended expires on June 30, 2004.

         Collateral for the Credit Agreement includes a first priority lien on
all accounts receivable, machinery, equipment, trademarks, intangibles and
inventory, a first mortgage on all real property and a pledge of the Company's
stock interest in its operating subsidiaries, Donnkenny Apparel, Inc. and
Beldoch Industries Corporation.

                                      IV-1
<PAGE>

         The Credit Agreement contains numerous financial and operational
covenants, including limitations on additional indebtedness, liens, dividends,
stock repurchases and capital expenditures. In addition, the Company is required
to maintain specified levels of tangible net worth and comply with minimum
earnings before depreciation, amortization, interest and taxes (EBITDA) and a
minimum interest coverage ratio, based upon the annual business plan approved by
the lender.

         During Fiscal 1999 and Fiscal 2000, the Company entered into various
amendments and agreements to waive the Company's noncompliance with financial
covenants on certain dates and to reset overadvanced amounts and covenants.
These amendments and agreements also increased the interest rate on borrowings.

         On July 6, 2000, the Company entered into an Amendment to finance the
acquisition of the Ann Travis business by the issuance of an additional $1.3
million term loan. The new term loan bears interest at the prime rate plus 2.0%
(6.75% at March 31, 2002) and is repayable over thirty-six months commencing
January 1, 2001. A fee of $100,000 was paid for the Amendment.

         On March 28, 2001, the Company entered into an Amendment and Waiver
Agreement to extend the Final Maturity Date of the original agreement to June
30, 2004, to waive existing events of default under the Credit Agreement as of
December 31, 2000 with respect to the Company's non-compliance with covenants
related to minimum interest coverage, EBITDA and Tangible Net Worth, and to
amend certain other provisions of the Credit Agreement including covenants and
the level of allowable overadvances to support the Company's 2001 business plan.
Pursuant to this amendment, the interest rate on borrowings was increased to
2.0% above the prime rate effective January 1, 2001. A fee of $200,000 was paid
in connection with this Amendment and Waiver.

         Effective January 1, 2002, the Company established covenants and the
level of allowable overadvances with the lender to support its 2002 business
plan. This Amendment and Waiver Agreement also amended the interest rate on the
revolving credit borrowings to the prime rate plus one and three quarters
percent (6.50% at March 31, 2002). No fee was paid in connection with this
Amendment and Waiver.

         As of March 31, 2002, direct borrowings under the revolving credit
facility were $25.8 million and term loans amounted to $1.0 million.
Additionally, the Company had letters of credit outstanding of $10.6 million,
with an unused facility of $24.4 million. As of March 31, 2001, direct
borrowings, term loans and letters of credit outstanding under the credit
facility were $36.0 million, $2.4 million and $18.2 million, respectively.

         The Company also has a factoring agreement with CIT. The factoring
agreement provides for a factoring commission equal to .35% of gross sales, plus
certain customary charges. The agreement is in effect through December 31, 2002.

NOTE 4 - GOODWILL AND INTANGIBLE ASSETS

         In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets". SFAS No. 142 addresses financial accounting and reporting
for acquired goodwill and other intangible assets and supersedes APB No. 17,
"Intangible Assets". It changes the accounting for goodwill from an amortization
method to an impairment only approach. SFAS 142 is effective for fiscal years
beginning after December 15, 2001 for all goodwill and other intangible assets
recognized in an entity's statement of financial position at that date,
regardless of when those assets were initially recognized.

                                      IV-2
<PAGE>


         Prior to January 1, 2002, the Company had net intangible assets of
$29.6 million on its Consolidated Balance Sheet. The intangible assets included
goodwill of $25.4 million, which represented the excess purchase price over fair
value of net assets acquired. The assets acquired related to the acquisitions of
(1) the Company in 1989 following a change in control, (2) the sportswear
division of Oak Hill Sportswear Corporation ("Oak Hill"), (3) Beldoch Industries
Corporation ("Beldoch") in 1995, and (4) Ann Travis in 2000. Goodwill was
amortized on a straight-line basis over expected periods to be benefited,
ranging from 10 to 40 years. Also included in the net intangible assets were
$4.2 million of costs related to the Pierre Cardin license acquired by the
Company in connection with the Beldoch acquisition, which were amortized on a
straight-line basis over 20 years.

         As a result of adopting SFAS No. 142 on January 1, 2002, the Company
ceased the amortization of goodwill and determined that the value of its
intangible assets had been impaired. The impairment charge of $28.7 million was
calculated based upon a valuation of the Company's market capitalization on
January 1, 2002, adjusted for an estimated premium that a willing buyer would
assign to the market capitalization in the event of a sale of the Company. The
premium was based on an average of such premiums paid in similar transactions in
the industry. The impairment charge consists of $25.4 million related to
goodwill and $3.3 million related to intangible assets.

         The impairment charge is reflected in the Company's Consolidated
Statement of Operations as a line item disclosing the cumulative effect of a
change in accounting principle before the net income for the period. The Company
did not record an income tax benefit related to this charge.

         The remaining value of intangible assets of $0.8 million is
attributable to those intangible assets acquired related to the Pierre Cardin
license from the Beldoch acquisition, and is classified as an intangible asset
with an indefinite life on the Company's March 31, 2002 Consolidated Balance
Sheet.

         Actual results of operations for the three-month period ended March 31,
2002 and pro forma results of operations for the three-month period ended March
31, 2001 had the Company applied the non-amortization provisions of SFAS 142 in
that period follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>

                                                               Three Month Periods Ended March 31,
                                                               -----------------------------------
                                                                    2002                 2001
                                                                    ----                 ----

<S>                                                         <C>                 <C>
Income before cumulative effect of change in accounting
principle.............................                      $        359         $        357
Cumulative effect of change in accounting principle (no
tax benefit recognized)................                           28,744                    -
                                                                  ------              -------

Reported net income (loss)                                       (28,385)                 357
Add: Amortization of goodwill and intangibles                          -                  373
                                                                 -------                  ---

Adjusted net income (loss)                                  $    (28,385)        $        730
                                                                 ========                 ===

Basic and diluted net income (loss) per share:
   Reported net income (loss)                               $      (6.50)        $       0.08
   Amortization of goodwill and intangibles                             -                0.09
                                                                 --------                ----
   Adjusted net income (loss) per share                     $      (6.50)        $       0.17
                                                                   ======                ====

</TABLE>

                                      IV-3
<PAGE>


NOTE 5 - RECENT ACCOUNTING PRONOUNCEMENTS

         In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations". SFAS 143 addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. This Statement requires that the fair
value of a liability for an asset retirement obligation be recognized in the
period in which it is incurred if a reasonable estimate of fair value can be
made. The associated asset retirement costs are capitalized as part of the
carrying amount of the long-lived asset. This Statement is effective for
financial statements issued for fiscal years beginning after June 15, 2002.
Early adoption is encouraged. Adoption of SFAS No. 143 on January 1, 2002 did
not have an impact on the Company's consolidated financial statements.

         In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". SFAS 144 addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
SFAS No. 144 replaces SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of" and provides updated
guidance concerning the recognition and measurement of an impairment loss for
certain types of long-lived assets. This Statement is effective for financial
statements issued for fiscal years beginning after December 15, 2001, and
interim periods within those fiscal years. Adoption of SFAS No. 144 on January
1, 2002 did not have an impact on the Company's consolidated financial
statements.

NOTE 6 - COMMITMENTS AND CONTINGENCIES

         a. On April 27, 1998, Wanda King, a former employee of the Company,
commenced an action against the Company in the United States District Court for
the Western District of Virginia. In her complaint, the Plaintiff sought damages
in excess of $8.0 million claiming that she was constructively discharged by the
Company. The Company interposed an Answer to the amended Complaint denying the
material allegations asserted in the Complaint and brought a motion for summary
judgment to dismiss the case. On October 22, 2001, the Magistrate Judge, after
considering the Motion for Summary Judgment, recommended to the United States
District Court that the case against the Company be dismissed in its entirety.
The Plaintiff objected to the recommendation of the Magistrate Judge. By Order
dated February 25, 2002, the United States District Judge granted the Company's
motion for summary judgment and the case was dismissed. The Plaintiff has
appealed this dismissal to the United States Court of Appeals for the Fourth
Circuit.

         b. The Company is also a party to legal proceedings arising in the
ordinary course of its business. Management believes that the ultimate
resolution of these proceedings will not, in the aggregate, have a material
adverse effect on financial condition, results of operations, liquidity or
business of the Company.

                                      IV-4
<PAGE>


                        DONNKENNY, INC. AND SUBSIDIARIES
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

Comparison of Quarters Ended March 31, 2002 and 2001
----------------------------------------------------

         Net sales decreased by $12.9 million, or 34.6% from $37.3 million in
the first quarter of 2001 to $24.4 million in the first quarter of 2002. The
decline was primarily due to the Company's discontinuation of the Decade dress
business, the consolidation of Pierre Cardin Options into Pierre Cardin Knits,
the Company's decision to exit the career private label business and the
continuing slow retail environment, which caused a drop in the Company's core
businesses.

         Gross profit for the first quarter of 2002 was $6.4 million, or 26.2%
of net sales, compared to $8.9 million, or 23.7% of net sales, during the first
quarter of 2001. The increase in gross profit as a percentage of net sales was
primarily attributable to decreases in the sales of non-current inventory and
the continued effort to improve sourcing.

         Selling, general and administrative expenses decreased $1.5 million
from $6.8 million in the first quarter of 2001 to $5.3 million in the first
quarter of 2002. The decrease in selling, general and administrative expenses
was primarily due to reductions in headcount and reductions in sales and product
related expenses.

         As a result of the Company's adoption of SFAS No. 142 there was no
amortization of goodwill and other related acquisition costs for the first
quarter of 2002 as compared to $0.4 million in 2001 (see Recent Accounting
Pronouncements).

         In the first quarter of 2002, the Company recorded an impairment charge
related to goodwill and intangible assets of $28.7 million as a change in
accounting principle upon the adoption of SFAS No. 142 (See Notes 4 and 5 to the
consolidated financial statements).

         Net interest expense decreased from $1.3 million during the first
quarter of 2001 to $0.7 million during the first quarter of 2002. The decrease
was attributable to lower revolving credit borrowings and lower direct
borrowings under the loan agreement in addition to lower interest rates.

Liquidity and Capital Resources
-------------------------------

         The Company's liquidity requirements arise from the funding of working
capital needs, primarily inventory and accounts receivable, and interest and
principal payments related to certain indebtedness and capital expenditures. The
Company's borrowing requirements for working capital fluctuate throughout the
year.

          On June 29, 1999, the Company and its operating subsidiaries signed a
three-year credit agreement (the "Credit Agreement") with CIT Group/Commercial
Services. The Credit Agreement provides the Company with a $75 million facility
comprised of a $72 million revolver with sublimits up to $52 million for direct
borrowings, $35 million for letters of credit, certain overadvances and a $3
million term loan.

         The Credit Agreement provides for advances of (i) up to 90% of eligible
accounts receivable plus (ii) up to 60% of eligible inventory plus (iii) up to
60% of the undrawn amount of all outstanding letters of credit plus (iv)
allowable overadvances. The term loan requires quarterly

                                      V-1
<PAGE>

payments of $0.25 million plus all accrued and unpaid interest beginning
September 30, 1999 through June 30, 2002. The Credit Agreement as amended
expires on June 30, 2004.

         Collateral for the Credit Agreement includes a first priority lien on
all accounts receivable, machinery, equipment, trademarks, intangibles and
inventory, a first mortgage on all real property and a pledge of the Company's
stock interest in its operating subsidiaries, Donnkenny Apparel, Inc. and
Beldoch Industries Corporation.

         The Credit Agreement contains numerous financial and operational
covenants, including limitations on additional indebtedness, liens, dividends,
stock repurchases and capital expenditures. In addition, the Company is required
to maintain specified levels of tangible net worth and comply with minimum
earnings before depreciation, amortization, interest and taxes (EBITDA) and a
minimum interest coverage ratio, based upon the annual business plan approved by
the lender.

         During Fiscal 1999 and Fiscal 2000, the Company entered into various
amendments and agreements to waive the Company's noncompliance with financial
covenants on certain dates and to reset overadvanced amounts and covenants.
These amendments and agreements also increased the interest rate on borrowings.

         On July 6, 2000, the Company entered into an Amendment to finance the
acquisition of the Ann Travis business by the issuance of an additional $1.3
million term loan. The new term loan bears interest at the prime rate plus 2.0%
(6.75% at March 31, 2002) and is repayable over thirty-six months commencing
January 1, 2001. A fee of $100,000 was paid for the Amendment.

         On March 28, 2001, the Company entered into an Amendment and Waiver
Agreement to extend the Final Maturity Date of the original agreement to June
30, 2004, to waive existing events of default under the Credit Agreement as of
December 31, 2000 with respect to the Company's non-compliance with covenants
related to minimum interest coverage, EBITDA and Tangible Net Worth, and to
amend certain other provisions of the Credit Agreement including covenants and
the level of allowable overadvances to support the Company's 2001 business plan.
Pursuant to this amendment, the interest rate on borrowings was increased to
2.0% above the prime rate effective January 1, 2001. A fee of $200,000 was paid
in connection with this Amendment and Waiver.

         Effective January 1, 2002, the Company established covenants and the
level of allowable overadvances with the lender to support its 2002 business
plan. This Amendment and Waiver Agreement also amended the interest rate on the
revolving credit borrowings to the prime rate plus one and three quarters
percent (6.50% at March 31, 2002). No fee was paid in connection with this
Amendment and Waiver.

         As of March 31, 2002, direct borrowings under the revolving credit
facility were $25.8 million and term loans amounted to $1.0 million.
Additionally, the Company had letters of credit outstanding of $10.6 million,
with an unused facility of $24.4 million. As of March 31, 2001, direct
borrowings, term loans and letters of credit outstanding under the credit
facility were $36.0 million, $2.4 million and $18.2 million, respectively.

         The Company also has a factoring agreement with CIT. The factoring
agreement provides for a factoring commission equal to .35% of gross sales, plus
certain customary charges. The agreement is in effect through December 31, 2002.

         During the first quarter of 2002, cash provided by operating activities
was $9.1 million, principally as the result of decreases in inventory and
accounts receivable partially offset by

                                      V-2
<PAGE>

decreases in accounts payable and accrued expenses and other current
liabilities. During the first quarter of 2001, cash provided by operating
activities was $4.2 million, principally as the result of decreases in inventory
and accounts receivable.

         Cash used in investing activities during the first quarter of 2002
included $0.2 million for the purchase of fixed assets, principally computer
equipment and related software, partially offset by $0.1 million from the sale
of fixed assets. Cash used in investing activities during the first quarter of
2001 included $0.6 million for the purchase of fixed assets.

         Cash used in financing activities during the first quarter of 2002 was
$9.0 million which represents net repayments under the revolver of $8.6 million
and repayments of $0.4 million of the term loan. Cash used in financing
activities during the first quarter of 2001 was $3.6 million which represents
net repayments under the revolver of $3.2 million and repayments of $0.4 million
of the term loan and a secured term loan.

         The Company believes that cash flows from operations and amounts
available under the revolving credit agreement will be sufficient for its needs
for the foreseeable future.

Seasonality of Business and Fashion Risk
----------------------------------------

         The Company's principal products are organized into seasonal lines for
resale at the retail level during the Spring, Summer, Transition, Fall and
Holiday Seasons. Typically, the Company's products are designed as much as one
year in advance and manufactured approximately one season in advance of the
related retail selling season. Accordingly, the success of the Company's
products is often dependent on the ability to successfully anticipate the needs
of retail customers and the tastes of the ultimate consumer up to a year prior
to the relevant selling season.

Recent Accounting Pronouncements
--------------------------------

         In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets". SFAS No. 142 addresses financial accounting and reporting
for acquired goodwill and other intangible assets and supersedes APB No. 17,
"Intangible Assets". It changes the accounting for goodwill from an amortization
method to an impairment only approach. SFAS 142 is effective for fiscal years
beginning after December 15, 2001 to all goodwill and other intangible assets
recognized in an entity's statement of financial position at that date,
regardless of when those assets were initially recognized. The Company ceased
the amortization of goodwill, which was recorded in past business combinations
on December 31, 2001 as required by SFAS No. 142 and recorded an impairment
charge of $28.7 million related to goodwill and intangible assets as a change in
accounting principle upon the adoption of this statement (See Note 4 to the
consolidated financial statements).

         In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations". SFAS 143 addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. This Statement requires that the fair
value of a liability for an asset retirement obligation be recognized in the
period in which it is incurred if a reasonable estimate of fair value can be
made. The associated asset retirement costs are capitalized as part of the
carrying amount of the long-lived asset. This Statement is effective for
financial statements issued for fiscal years beginning after June 15, 2002.
Early adoption is encouraged. Adoption of SFAS No. 143 on January 1, 2002 did
not have an impact on the Company's consolidated financial statements.

                                      V-3
<PAGE>


         In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". SFAS 144 addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
SFAS No. 144 replaces SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of" and provides updated
guidance concerning the recognition and measurement of an impairment loss for
certain types of long-lived assets. This Statement is effective for financial
statements issued for fiscal years beginning after December 15, 2001, and
interim periods within those fiscal years. Adoption of SFAS No. 144 on January
1, 2002 did not have an impact on the Company's consolidated financial
statements.

Critical Accounting Policies and Estimates
------------------------------------------

         The Company's significant accounting policies are more fully described
in Note 1 to the annual consolidated financial statements. Certain of the
Company's accounting policies require the application of significant judgment
by management in selecting the appropriate assumptions for calculating financial
estimates. By their nature, these judgments are subject to an inherent degree
of uncertainty. These judgments are based on historical experience, observation
of trends in the industry, information provided by customers and information
available from other outside sources, as appropriate. Significant accounting
policies include:

         Revenue Recognition - The Company recognizes sales upon shipment of
         -------------------
products to customers. Provisions for estimated uncollectible accounts,
discounts and returns and allowances are provided when sales are recorded based
upon historical experience and current trends. While such amounts have been
within expectations and the provisions established, the Company cannot guarantee
that it will continue to experience the same rates as in the past.

         Inventories - Inventory is stated at the lower of cost or market, cost
         -----------
being determined on the first-in, first-out method. Reserves for slow moving and
aged merchandise are provided based on historical experience and current product
demand. The Company evaluates the adequacy of the reserves quarterly. While
markdowns have been within expectations and the provisions established, the
Company cannot guarantee that it will continue to experience the same level of
markdowns as in the past.

         Valuation of Long-Lived Assets - The Company periodically reviews the
         ------------------------------
carrying value of its long-lived assets for continued appropriateness. This
review is based upon projections of anticipated future undiscounted cash flows.
While the Company believes that its estimates of future cash flows are
reasonable, different assumptions regarding such cash flows could materially
affect evaluations.

         Income Taxes - Currently, the Company provides for income taxes only to
         ------------
the extent that it expects to pay cash taxes (primarily state and local taxes).
This is due to the Company's cumulative net operating loss (NOL) carry-forward
of $19.7 million for federal income taxes and $30.8 million for state income
taxes, which have generated estimated tax benefits of $8.1 million as of
December 31, 2001. In accordance with generally accepted accounting principles,
the Company has not recognized in income any of this tax benefit due to the size
of the NOL carry-forward and the Company's history of unprofitable operations.
However, should the Company conclude that future profitability is assured; the
estimated net realizable value of the deferred tax asset would be partially or
fully credited to net income. Subsequent revisions to the estimated net
realizable value of the deferred tax asset could cause the Company's provision
for income taxes to vary from period to period; cash payments would remain
unaffected until the benefit of the NOL is utilized.

                                      V-4

<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1.       Legal Proceedings
              -----------------

              a. On April 27, 1998, Wanda King, a former employee of the
                 Company, commenced an action against the Company in the United
                 States District Court for the Western District of Virginia. In
                 her complaint, the Plaintiff sought damages in excess of $8.0
                 million claiming that she was constructively discharged by the
                 Company. The Company interposed an Answer to the amended
                 Complaint denying the material allegations asserted in the
                 Complaint and brought a motion for summary judgment to dismiss
                 the case. On October 22, 2001, the Magistrate Judge, after
                 considering the Motion for Summary Judgment, recommended to the
                 United States District Court that the case against the Company
                 be dismissed in its entirety. The Plaintiff objected to the
                 recommendation of the Magistrate Judge. By Order dated February
                 25, 2002, the United States District Judge granted the
                 Company's motion for summary judgment and the case was
                 dismissed. The Plaintiff has appealed this dismissal to the
                 United States Court of Appeals for the Fourth Circuit.

              b. The Company is also a party to legal proceedings arising in the
                 ordinary course of its business. Management believes that the
                 ultimate resolution of these proceedings will not, in the
                 aggregate, have a material adverse effect on financial
                 condition, results of operations, liquidity or business of the
                 Company.

ITEM 2.       Not Applicable
              --------------

ITEM 3.       Not Applicable
              --------------

ITEM 4.       Not Applicable
              --------------

ITEM 5.       Not Applicable
              --------------

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

(a)           Exhibits
              --------

              The following documents are filed as part of this report:

              Exhibit No.       Description of Exhibit
              -----------       ----------------------
              10.65             Amended and restated employment agreement
                                between Daniel H. Levy and the Company dated
                                January 1, 2002.

              10.66             Employment agreement between Harry A. Katz and
                                the Company dated January 1, 2002.

              10.67             Amended and restated employment agreement
                                between Lynn Siemers and the Company dated
                                January 1, 2002.


(a)           Reports on Form 8-K
              -------------------

              The Company filed no reports on Form 8-K during the first quarter
              ended March 31, 2002.

                                      VI-1
<PAGE>


                                   SIGNATURES
                                   ----------


         Pursuant to the requirements of 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.

                                                 Donnkenny, Inc.
                                                 Registrant




Date:    May 15, 2002                             /s/    Daniel H. Levy
                                                  ------------------------------
                                                  Daniel H. Levy
                                                  Chairman of the Board,
                                                  Chief Executive Officer


Date:    May 15, 2002                             /s/    Maureen d. Schimmenti
                                                  -----------------------------
                                                  Maureen d. Schimmenti
                                                  Vice President
                                                  and Chief Financial Officer,
                                                  (Principal Financial Officer)

                                      VI-2