United
      States


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, 2007**





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** **0-10593**







**ICONIX
      BRAND GROUP, INC.**


(Exact
      name of registrant as specified in its charter)








Delaware
            11-2481903(State
                or other jurisdiction of  incorporation or
                organization)
            (I.R.S.
                Employer Identification No.)1450
                Broadway, New York, NY
            10018(Address
                of principal executive offices)
            (Zip
                Code)





(212)
      730-0030


(Registrant's
      telephone number, including area code)







(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 periods 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 .





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange
      Act):




Large
      accelerated filer ___  Accelerated filer
      _X_  Non-accelerated filer ___





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act) Yes ___ No. _X_





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





Common
      Stock, $.001 Par Value - 56,652,955 shares as of May 4, 2007.








**INDEX**





**FORM
      10-Q**





**Iconix
      Brand Group, Inc. and Subsidiaries**




Part
                I.
            Financial
                Information
            Page
                No.Item
                1.
            Financial
                Statements (Unaudited)Condensed
                Consolidated Balance Sheets - March 31, 2007 and December 31,
                2006
            3Condensed
                Consolidated Income Statements - Three Months Ended March 31, 2007
                and
                2006
            4Condensed
                Consolidated Statement of Stockholders' Equity - Three Months Ended
                March
                31, 2007
            5Condensed
                Consolidated Statements of Cash Flows - Three Months Ended March
                31, 2007
                and2006
            6Notes
                to Condensed Consolidated Financial Statements
            8Item
                2.
            Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations
            16Item
                3.
            Quantitative
                 and Qualitative Disclosures about Market Risk
            19Item
                4.
            Controls
                and Procedures
            19Part
                II.
            Other
                Information
            20Item
                1.
            Legal
                Proceedings
            20Item
                1A.
            Risk
                Factors
            20Item
                6.
            Exhibits
            21Signatures





2





Part
      I.
 Financial Information


Item
      1.
      FINANCIAL STATEMENTS





**Iconix
      Brand Group, Inc. and Subsidiaries**


Condensed
      Consolidated Balance Sheets


(in
      thousands, except par value)




**March
                31,**
            
            **December
                31,****2007**
            
            **2006****Assets**
            
            (unaudited)Current
                Assets:Cash
                (including restricted cash of $1,930 in 2007 and $4,268 in
                2006)
            
            $
            21,691
            
            $
            77,840Accounts
                receivable, net of reserve for doubtful accounts of $2,102 in 2007
                and
                $1,633 in 2006
            
            
            24,287
            
            
            14,548Due
                from affiliate
            
            
            32
            
            
            297Promissory
                note receivable
            
            
            1,000
            
            
            1,000Deferred
                income tax assets
            
            
            15,949
            
            
            3,440Prepaid
                advertising and other
            
            
            3,030
            
            
            2,704Total
                Current Assets
            
            
            65,989
            
            
            99,829Property
                and equipment:Furniture,
                fixtures and equipment
            
            
            2,809
            
            
            2,769Less:
                Accumulated depreciation and amortization
            
            
            (1,424
            )
            
            (1,385
            )1,385
            
            
            1,384Other
                Assets:Restricted
                cash
            
            
            12,744
            
            
            11,659Goodwill
            
            
            96,511
            
            
            93,593Trademarks
                and other intangibles, net
            
            
            748,285
            
            
            467,688Deferred
                financing costs, net
            
            
            7,099
            
            
            3,355Non-current
                deferred income tax assets
            
            
            567
            
            
            17,970Other
            
            
            5,269
            
            
            5,574870,475
            
            
            599,839Total
                Assets
            
            $
            937,849
            
            $
            701,052**Liabilities
                and Stockholders' Equity**Current
                liabilities:Accounts
                payable and accrued expenses
            
            $
            10,537
            
            $
            7,043Accounts
                payable, subject to litigation
            
            
            4,886
            
            
            4,886Deferred
                revenue
            
            
            5,332
            
            
            1,644Current portion of long-term debt
            
            
            25,045
            
            
            22,132Total
                current liabilities
            
            
            45,800
            
            
            35,705Deferred
                income taxes
            
            
            61,150
            
            
            59,054Long-term
                debt, less current maturities
            
            
            346,170
            
            
            140,676Long
                term deferred revenue
            
            
            280
            
            
            160Total
                Liabilities
            
            
            453,400
            
            
            235,595Contingencies
                and commitmentsStockholders'
                EquityCommon
                stock, $.001 par value-shares authorized 75,000; shares issued 56,416 and 56,227
                respectively
            
            
            57
            
            
            57Additional
                paid-in capital
            
            
            475,126
            
            
            468,881Retained
                earnings (deficit)
            
            
            9,933
            
            
            (2,814
            )Less:
                Treasury stock - 198 shares at cost
            
            
            (667
            )
            
            (667
            )Total
                stockholders' equity
            
            
            484,449
            
            
            465,457Total
                Liabilities and Stockholders' Equity
            
            $
            937,849
            
            $
            701,052





See
      Notes
      to Unaudited Condensed Consolidated Financial Statements.





3




**Iconix
      Brand Group, Inc. and Subsidiaries**





Condensed
      Consolidated Income Statements - (Unaudited)


(in
      thousands, except earnings per share data)





Three
                Months Ended March 31,2007
            
            2006Licensing
                and commission revenue
            
            $
            30,841
            
            $
            13,269Selling,
                general and administrative expenses
            
            
            7,719
            
            
            4,667Special
                charges
            
            
            763
            
            
            556Operating
                income
            
            
            22,359
            
            
            8,046Other
                expenses:Interest
                expense
            
            
            3,535
            
            
            2,122Interest
                income
            
            
            (913
            )
            
            (161
            )Interest
                expense - net
            
            
            2,622
            
            
            1,961Income
                before income taxes
            
            
            19,737
            
            
            6,085Provision
                (benefit) for income taxes
            
            
            6,990
            
            
            (1,272
            )Net
                income
            
            $
            12,747
            
            $
            7,357Earnings
                per share:Basic
            
            $
            0.23
            
            $
            0.21Diluted
            
            $
            0.21
            
            $
            0.18Weighted
                average number of common shares outstanding:Basic
            
            
            56,402
            
            
            35,719Diluted
            
            
            61,243
            
            
            41,169





See
      Notes
      to Unaudited Condensed Consolidated Financial Statements.





4





**Iconix
      Brand Group, Inc. and Subsidiaries**





Condensed
      Consolidated Statement of Stockholders' Equity


(Unaudited)





Three
      Months Ended March 31, 2007


***(in
      thousands)***




Additional
            
            RetainedCommon
                Stock
            
            Paid
                - in
            
            Earnings/
            
            TreasuryShares
            
            Amount
            
            Capital
            
            (Deficit)
            
            Stock
            
            TotalBalance
                at January 1, 2007
            
            
            56,227
            
            $
            57
            
            $
            468,881
            
            $
            (2,814
            )
            $
            (667
            )
            $
            465,457Warrants
                issued to non-employee related to the acquisition of
                Danksin®
            
            
            -
            
            
            -
            
            
            2,260
            
            
            -
            
            
            -
            
            
            2,260WarWarrants
                issued to non-employee related to the acquisition of
                Rocawear®
            
            
            -
            
            
            -
            
            
            2,671
            
            
            -
            
            
            -
            
            
            2,671Common
                stock issued to non-employee related to the acquisition of
                Danskin®
            
            
            13
            
            
            -
            
            
            241
            
            
            -
            
            
            -
            
            
            241Common
                stock issued to non-employee related to the acquisition of
                Rocawear®
            
            
            12
            
            
            -
            
            
            255
            
            
            -
            
            
            -
            
            
            255Exercise
                of stock options and warrants
            
            
            164
            
            
            -
            
            
            643
            
            
            -
            
            
            -
            
            
            643Stock
                option compensation
            
            
            -
            
            
            -
            
            
            82
            
            
            -
            
            
            -
            
            
            82Amortization
                in connection with restricted stock
            
            
            -
            
            
            -
            
            
            277
            
            
            -
            
            
            -
            
            
            277Expenses
                related to the issuance of new stock
            
            
            -
            
            
            -
            
            
            (184
            )
            
            -
            
            
            -
            
            
            (184
            )Net
                income
            
            
            -
            
            
            -
            
            
            -
            
            
            12,747
            
            
            -
            
            
            12,747Balance
                at March 31, 2007
            
            
            56,416
            
            $
            57
            
            $
            475,126
            
            $
            9,933
            
            $
            (667
            )
            $
            484,449

















See
      Notes
      to Unaudited Condensed Consolidated Financial Statements.







5





**Iconix
      Brand Group, Inc. and Subsidiaries**





Condensed
      Consolidated Statements of Cash Flows


(Unaudited)





(in
                thousands)
            
            Three
                Months Ended March 31,2007
            
            
            2006


Cash
                flows from operating activities:Net
                income
            
            $
            12,747
            
            $
            7,357Depreciation
                of property and equipment
            
            
            39
            
            
            47Amortization
                of intangibles
            
            
            903
            
            
            315Amortization
                of deferred financing costs
            
            
            165
            
            
            148Loss
                on sale of marketable securities
            
            
            -
            
            
            93Provision
                for doubtful accounts
            
            
            469
            
            
            (25
            )Stock
                option compensation
            
            
            359
            
            
            40Accrued
                interest on long-term debt
            
            
            60
            
            
            59Deferred
                income tax benefit (liability)
            
            
            6,990
            
            
            (1,356
            )Changes
                in operating assets and liabilities, net of business
                acquisitions:Accounts
                receivable
            
            
            (10,208
            )
            
            (3,419
            )Due
                from affiliate
            
            
            265
            
            
            165Prepaid
                advertising and other
            
            
            (776
            )
            
            244Other
                assets
            
            
            305
            
            
            (164
            )Deferred
                revenue
            
            
            3,808
            
            
            (3,668
            )Accounts
                payable and accrued expenses
            
            
            (11
            )
            
            (551
            )Net
                cash provided by (used in) operating activities
            
            
            15,115
            
            
            (715
            )Cash
                flows from investing activities:Purchases
                of fixed assets
            
            
            (40
            )
            
            (476
            )Purchase
                of marketable securities
            
            
            -
            
            
            (167
            )Acquisition
                of Danskin
            
            
            (70,799
            )
            
            -Acquisition
                of Rocawear
            
            
            (204,233
            )
            
            -Purchase
                of trademarks
            
            
            -
            
            
            (223
            )Net
                cash used in investing activities
            
            
            (275,072
            )
            
            (866
            )Cash
                flows from financing activities:Proceeds
                from long-term debt
            
            
            212,500
            
            
            -Proceeds
                from exercise of stock options and warrants
            
            
            643
            
            
            297Payment
                of expenses related to equity offering
            
            
            (184)
            
            
            -Payment
                of long-term debt
            
            
            (4,151
            )
            
            (2,242
            )Deferred
                financing costs
            
            
            (3,915
            )
            
            -Restricted
                cash - Current
            
            
            2,338
            
            
            3,556Restricted
                cash - Non Current
            
            
            (1,085
            )
            
            (404
            )Net
                cash provided by financing activities
            
            
            206,146
            
            
            1,207Net
                decrease in cash and cash equivalents
            
            
            (53,811
            )
            
            (374
            )Cash
                and cash equivalents, beginning of period
            
            
            73,572
            
            
            7,593Cash
                and cash equivalents, end of period
            
            $
            19,761
            
            $
            7,219Balance
                of restricted cash - Current
            
            
            1,930
            
            
            538Total
                cash and cash equivalents including current restricted cash, end
                of
                period
            
            $
            21,691
            
            $
            7,757





6








**Supplemental
      disclosure of cash flow information:**




Three
                Months Ended March 31,2007
            
            2006Cash
                paid during the period:Interest
            
            $
            3,375
            
            $
            1,853Taxes
            
            $
            291
            
            $
            -





**Supplemental
      disclosures of non-cash investing activities:**





Three
                Months Ended March 31,2007
            
            2006Acquisitions
                of Danskin and Rocawear:Common
                stock issued
            
            $
            496
            
            $
            -Warrants
                issued - acquisition cost
            
            $
            4,931
            
            $
            -





See
      Notes
      to Unaudited Condensed Consolidated Financial Statements.







7





**Iconix
      Brand Group, Inc. and Subsidiaries**





Notes
      to
      Condensed Consolidated Financial Statements (Unaudited)


March
      31,
      2007





NOTE
      A  BASIS OF
      PRESENTATION




The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with generally accepted accounting principles for interim
      financial information and with the instructions to Form 10-Q and Article 10
      of
      Regulation S-X. Accordingly, they do not include all the information and
      footnotes required by generally accepted accounting principles for complete
      financial statements. In the opinion of management of Iconix Brand Group, Inc.
      ("Company", "we", "us", or "our"), all adjustments (consisting primarily of
      normal recurring accruals) considered necessary for a fair presentation have
      been included. Operating results for the three months ended March 31, 2007
      (“Current Quarter”) are not necessarily indicative of the results that may be
      expected for a full fiscal year.




Impairment
      losses are recognized for long-lived assets, including certain intangibles,
      used
      in operations when indicators of impairment are present and the undiscounted
      cash flows estimated to be generated by those assets are not sufficient to
      recover the assets' carrying amount. Impairment losses are measured by comparing
      the fair value of the assets to their carrying amount.





Certain
      prior year amounts have been reclassified to conform with the current year’s
      presentation.





For
      further information, refer to the consolidated financial statements and
      footnotes thereto included in the Company's annual report on Form 10-K for
      the
      year ended December 31, 2006.





NOTE
      B  ACQUISITION OF DANSKIN





On
      March
      9, 2007, the Company completed its acquisition of the Danskin® brand and certain
      of the assets and rights related to the business of designing, marketing,
      licensing and/or managing the Danskin® brand. Danskin is a 125 year-old iconic
      brand of women's activewear, legwear, dancewear, yoga apparel and fitness
      equipment. The brand is sold through better department, specialty and sporting
      goods stores, and through freestanding Danskin boutiques and Danskin.com.
      Danskin also has a license with Wal-Mart Stores for its Danskin Now® brand
      of apparel and fitness equipment.




The
      purchase price for the acquisition was $70 million in cash and contingent
      additional consideration of up to $15 million based on certain criteria relating
      to the achievement of revenue and performance targets involving the licensing
      of
      the Danskin brand; all or a portion of which may be paid, at the Company’s
      discretion, in shares of the Company's common stock. The cash portion of
      the purchase price was self-funded from the Company's cash reserves. Upon the
      closing, a subsidiary of the Company entered into a license agreement with
      Danskin, Inc. relating to Danskin's continued operation of its wholesale
      business and freestanding retail stores using the assets acquired by the Company
      in the acquisition





***(000's
                omitted except share information)***Total
                cash paid at closing to sellers
            
            
            
            
            $
            70,000Fair
                value of 12,500 shares of $.001 par value common stock, at $19.33
                fair
                market value per share issued as a cost of the acquisition
            
            $
            241Fair
                value of 30,000 warrants ($20.18 exercise price) issued as a cost
                of the
                acquisition
            
            
            284Fair
                value of 133,334 warrants ($8.81 exercise price) issued as a cost
                of the
                acquisition
            
            
            1,976Total
                equity consideration
            
            
            
            
            
            2,501Other
                estimated costs of the merger
            
            
            
            
            
            1,782Total
            
            
            
            
            $
            74,283








The
      purchase price was allocated to the estimated fair value of the assets acquired
      as follows:





Trademarks
            
            $
            71,700License
                agreements
            
            
            1,700Goodwill
            
            
            883Total
                allocated purchase price
            
            $
            74,283





The
      Danskin trademark has been determined by management to have an indefinite useful
      life and accordingly, consistent with FAS 142, no amortization will be recorded
      in the Company's consolidated income statements. The licensing contracts are
      being amortized on a straight-line basis over the remaining contractual period
      of approximately 3-5 years. The goodwill of approximately $0.9 million is
      subject to a test for impairment on an annual basis. Any adjustments resulting
      from the finalization of the purchase price allocations will affect the amounts
      assigned to goodwill.





8




NOTE
      C  ACQUISITION OF ROCAWEAR AND UNAUDITED PROFORMA INFORMATION





On
      March
      30, 2007, the Company completed its acquisition of the Rocawear® brand and
      certain of the assets and rights related to the business of designing,
      marketing, licensing and/or managing the Rocawear® brand of Rocawear Licensing
      LLC (“RLC”).




The
      purchase price for the acquisition was $204 million in cash and contingent
      additional consideration of up to $35 million based on certain criteria relating
      to the achievement of revenue and performance targets involving the licensing
      of
      the Rocawear assets all of which would be paid in shares of the Company's common
      stock. The cash portion of the purchase price was funded from the Company's
      credit agreement with Lehman Brothers Inc. and Lehman Commercial Paper Inc.,
      which consists of a term loan facility in an aggregate principal amount of
      $212.5 million. For further details on this credit agreement, see Note D. Upon
      the closing, a subsidiary of the Company entered into a license agreement,
      expiring in March 2012, with Roc Apparel, LLC (“Roc Apparel”), an affiliate
      of RLC, in
      which
      it granted Roc Apparel the exclusive right to use the Rocawear Assets in
      connection with the design, manufacture, market and sale of men's wearing
      apparel products in the United States, its territories and possessions and
      military installations throughout the world. Further, the Company has committed
      an amount of $5.0 million to fund its investment in a limited liability company
      which will operate as a brand management and licensing company to identify
      brands to be acquired across a broad spectrum of consumer product categories.
      To
      date, the investment has not been funded.





***(000's
                omitted except share information)***Cash
                paid at closing to sellers
            
            
            
            
            $
            204,000Fair
                value of 12,500 shares of $.001 par value common stock, at $20.40
                fair
                market value per share issued as a cost of acquisition
            
            
            255Fair
                value of 55,000 warrants ($20.40 exercise price) issued as a cost
                of the
                acquisition
            
            
            562Fair
                value of 133,334 warrants ($8.81 exercise price) issued as a cost
                of the
                acquisition
            
            
            2,109Total
                equity consideration
            
            
            
            
            
            2,926Other
                estimated costs of the merger
            
            
            
            
            
            3,208Total
            
            
            
            
            $
            210,134





The
      purchase price was allocated to the estimated fair value of the assets acquired
      as follows:





***(000's
                omitted)***Trademarks
            
            $
            200,000License
                agreements
            
            
            5,100Non-compete
                agreement
            
            
            3,000Goodwill
            
            
            2,034Total
            
            $
            210,134





The
      Rocawear trademark has been determined by management to have an indefinite
      useful life and accordingly, consistent with FAS 142, no amortization will
      be
      recorded in the Company's consolidated income statements. The licensing
      contracts are being amortized on a straight-line basis over the remaining
      contractual period of approximately 4 years. The goodwill of approximately
      $2.0
      million is subject to a test for impairment on an annual basis. Any adjustments
      resulting from the finalization of the purchase price allocations will affect
      the amounts assigned to goodwill.




The
      following unaudited pro-forma information presents a summary of the Company's
      consolidated results of operations as if the 2006 acquisitions of Mossimo,
      Inc.
      ("Mossimo") and the Mudd, and Ocean Pacific brands and certain related
      assets, and the 2007 acquisitions of the Danskin and Rocawear brands and
      certain related assets (See Notes B and C) and their related financing had
      occurred on January 1, 2006. These pro forma results have been prepared for
      comparative purposes only and do not purport to be indicative of the results
      of
      operations which actually would have resulted had the acquisitions occurred
      on
      January 1, 2006, or which may result in the future.







(000’s
      omitted except per share data)


Three
                months
              ended
              3/31/2007
            
            Three
                months
              ended
              3/31/2006Licensing
                and commission revenue
            
            $
            43,627
            
            $
            35,716Operating
                income
            
            $
            31,448
            
            $
            15,889Net
                Income
            
            $
            16,061
            
            $
            6,493Basic
                earnings per common share
            
            $
            0.28
            
            $
            0.15Diluted
                earnings per common share
            
            $
            0.26
            
            $
            0.14








9





NOTE
      D  DEBT
      ARRANGEMENTS





*Asset-Backed
      Notes*





The
      financing for certain of the Company's acquisitions has been accomplished
      through private placements by its subsidiary, IP Holdings LLC ("IP
      Holdings") of Asset-Backed Notes secured by intellectual property assets
      (trade names, trademarks, license agreements and payments and proceeds with
      respect thereto relating to the Candies, Bongo, Joe Boxer, Rampage, Mudd and
      London Fog brands) of IP Holdings. At March 31, 2007, the balance of the
      Asset-Backed Notes was $151.7 million.




Cash
      on
      hand in the bank account of IP Holdings is restricted at any point in time
      up to
      the amount of the next debt principal and interest payment required under the
      Asset-Backed Notes. Accordingly, $1.9 million and $4.3 million as of March
      31,
      2007 and December 31, 2006, respectively, have been disclosed as restricted
      cash
      within the Company's current assets. Further, in connection with IP Holdings'
      issuance of Asset Backed Notes, a reserve account has been established and
      the
      funds on deposit in such account will be applied to the last principal payment
      with respect to the Asset Backed Notes. Accordingly, $12.7 million and $11.7
      million as of March 31, 2007 and December 31, 2006, respectively, have been
      disclosed as restricted cash within the Company's other assets.





Interest
      rates and terms on the outstanding principal amount of the Asset-Backed Notes
      as
      of March 31, 2007 are as follows: $53.4 million principal amount bears interest
      at a fixed interest rate of 8.45% with a 6-year term, $23.7 million principal
      amount bears interest at a fixed rate of 8.12% with a 6- year term, and $74.6
      million principal amount bears interest at a fixed rate of 8.99% with a 6 1⁄2 year
      term.




Neither
      the Company nor any of its subsidiaries (other than IP Holdings) is obligated
      to
      make any payment with respect to the Asset-Backed Notes, and the assets of
      the
      Company and its subsidiaries (other than IP Holdings) are not available to
      IP
      Holdings' creditors. The assets of IP Holdings are not available to the
      creditors of the Company or its subsidiaries (other than IP
      Holdings).





*The
      Kmart Note*





In
      connection with the acquisition of the Joe Boxer brand in July, 2005, the
      Company assumed a promissory note, dated August 13, 2001 in the amount of $10.8
      million that originated with the execution of the Kmart License by the former
      owners of the Joe Boxer brand.   The note provides for interest at
      5.12% and is payable in three (3) equal annual installments, on a
      self-liquidating basis, on the last day of each year commencing on December
      31,
      2005 and continuing through December 31, 2007.  Payments due under the note
      may be off-set against any royalties owed under the Kmart License.  As of
      March 31, 2007, the outstanding balance of the note was $3.8 million. The note
      may be pre-paid without penalty.





*Term
      Loan Facility*





In
      connection with the acquisition of the Rocawear brand, the Company entered
      into
      a $212.5 million credit agreement (the “Credit Agreement” or “Term Loan
      Facility”) with Lehman Brothers Inc. and Lehman Commercial Paper Inc.
      (“LCPI”). The Company pledged to LCPI 100% of the capital stock owned by the
      Company in OP Holdings and Management Corporation, a Delaware corporation
      (“OPHM”), and Studio Holdings and Management Corporation, a Delaware corporation
      (“SHM”). The Company's obligations under the Credit Agreement are guaranteed by
      OPHM, SHM, OP Holdings LLC, a Delaware limited liability company (“OP Holdings”)
      and Studio IP Holdings LLC ("Studio IP Holdings"). The guarantees are secured
      by
      a pledge to LCPI of, among other things, the Ocean Pacific, Danskin and Rocawear
      trademarks and related intellectual property assets, license agreements and
      proceeds therefrom. The loan under the Credit Agreement currently bears interest
      at a variable rate equal to the three-month LIBOR plus 2.25% per annum, with
      principal payable in equal quarterly installments in annual aggregate amounts
      equal to 1.00% of the initial aggregate principal amount of the loan, with
      any
      remaining unpaid principal balance to be due on March 30, 2013. The interest
      rate as of March 31, 2007 was 7.35%. The $212.5 million in proceeds from the
      Credit Agreement was used by us as follows: $204.0 million was used to pay
      the
      cash portion of the initial consideration for the acquisition of the Rocawear
      brand; approximately $0.2 million was used to pay the costs associated with
      the
      acquisition; $2.7 million will be used to pay additional costs associated with
      the acquisition; and $3.9 million was used to pay costs associated with the
      loan
      financing. The costs of $3.9 million in financing charges relating to the Term
      Loan Facility have been deferred and are being amortized over the life of the
      loan, using the effective interest method. The remaining cash will
      be invested by the Company to fund its investment in the limited
      liability company which will develop the “Shawn Carter Collection”. See
      Note C.





*Debt
      Maturities*





(In
      000’s)





The
      Company's debt maturities are the following:




Total
            
            2007
            
            2008
            
            2009
            
            2010
            
            2011
            
            thereafterDue
                to Sweet
            
            $
            3,230
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            3,230
            
            $
            -Kmart
                Note
            
            
            3,781
            
            
            3,781
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Asset
                backed notes
            
            
            151,704
            
            
            19,139
            
            
            20,849
            
            
            22,711
            
            
            24,740
            
            
            26,950
            
            
            37,315Credit
                Agreement
            
            
            212,500
            
            
            2,125
            
            
            2,125
            
            
            2,125
            
            
            2,125
            
            
            2,125
            
            
            201,875Total
                Debt
            
            $
            371,215
            
            $
            25,045
            
            $
            22,974
            
            $
            24,836
            
            $
            26,865
            
            $
            32,305
            
            $
            239,190




10


NOTE
      E -
      UNZIPPED APPAREL, LLC (“UNZIPPED”)





*Equity
      Investment:*





On
      October 7, 1998, the Company formed Unzipped with joint venture partner Sweet
      Sportswear, LLC (“Sweet”), the purpose of which was to market and distribute
      apparel under the Bongo label. The Company and Sweet each had a 50% interest
      in
      Unzipped. Pursuant to the terms of the joint venture, the Company licensed
      the
      Bongo trademark to Unzipped for use in the design, manufacture and sale of
      certain designated apparel products.





*Acquisition:*





On
      April
      23, 2002, the Company acquired the remaining 50% interest in Unzipped from
      Sweet
      for a purchase price of three million shares of the Company's common stock
      and
      $11 million in debt evidenced by the 8% Senior Subordinated Note due in 2012
      (“Sweet Note”). See Note I. In connection with the acquisition of Unzipped, the
      Company filed a registration statement with the Securities and Exchange
      Commission ("SEC") for the three million shares of the Company's common stock
      issued to Sweet, which was declared effective by the SEC on July 29,
      2003.





*Related
      Party Transactions:*





Prior
      to
      August 5, 2004, Unzipped was managed by Sweet pursuant to a management agreement
      (the “Management Agreement”). Unzipped also had a supply agreement with Azteca
      Productions International, Inc. ("Azteca") and a distribution agreement with
      Apparel Distribution Services, LLC ("ADS"). All of these entities are owned
      or
      controlled by Hubert Guez.





On
      August
      5, 2004, Unzipped terminated the Management Agreement with Sweet, the supply
      agreement with Azteca and the distribution agreement with ADS and commenced
      a
      lawsuit against Sweet, Azteca, ADS and Hubert Guez. See Note I.





There
      were no transactions with these related parties during the three months ending
      March 31, 2007.





At
      March
      31, 2007, the Company included in accounts payable subject to litigation
      amounts due to Azteca and ADS $847,000 and $2,261,000 respectively. These
      amounts, however, were in dispute in the litigation at March 31, 2007. See
      Note
      I.





NOTE
      F -
      SPECIAL CHARGES





Special
      charges consist of professional fees related to the Unzipped litigation (See
      Note I)





NOTE
      G -
      STOCKHOLDERS’ EQUITY





*Public
      Offering*





On
      December 13, 2006 the Company completed a public offering of common stock
      pursuant to registration statements that were declared effective by the SEC.
      All
      10,784,750 shares of common stock offered in the final prospectus were sold
      at
      $18.75 per share. Net proceeds from the offering amounted to approximately
      $189.5 million.





*Stock
      Options*





The
      Black-Scholes option valuation model was developed for use in estimating the
      fair value of traded options which have no vesting restrictions and are fully
      transferable. In addition, option valuation models require the input of highly
      subjective assumptions including the expected stock price volatility. Because
      the Company's employee stock options have characteristics significantly
      different from those of traded options, and because changes in the subjective
      input assumptions can materially affect the fair value estimate, in management's
      opinion, the existing models do not necessarily provide a reliable single
      measure of the fair value of its employee stock options.





The
      fair
      value for these options was estimated at the date of grant using a Black-Scholes
      option-pricing model with the following weighted-average
      assumptions:




11




Three
                months endedMarch
                31,2007Expected
                Volatility
            
            .30-.50Expected
                Dividend Yield
            
            0%Expected
                Life (Term)
            
            3-5
                yearsRisk-Free
                Interest Rate
            
            3.00-4.75%





The
      options that were granted under the Company's existing stock option and equity
      incentive plans expire between five and ten years from the date of
      grant.




Summaries
      of the Company's stock option and warrant activity and related information
      for
      the Current Quarter follows:




Weighted-AverageOptions
            
            Exercise
                PriceOutstanding
                December 31, 2006
            
            
            5,769,632
            
            $
            4.35GrantedCanceled
            
            
            -
            
            
            -Exercised
            
            
            (80,500
            )
            
            7.36Expired
            
            
            -
            
            
            -Outstanding
                March 31, 2007
            
            
            5,689,132
            
            $
            4.30Exercisable
                at March 31, 2007
            
            
            5,566,464
            
            $
            4.22






Weighted-AverageWarrants
            
            Exercise
                PriceOutstanding
                December 31, 2006
            
            
            799,175
            
            $
            11.02Granted
            
            
            80,000
            
            
            20.32Canceled
            
            
            -
            
            
            -Exercised
            
            
            (255,750
            )
            
            15.77Expired
            
            
            -
            
            
            -Outstanding
                March 31, 2007
            
            
            623,425
            
            $
            10.27Exercisable
                at March 31, 2007
            
            
            558,425
            
            $
            10.45





All
      warrants issued in connection with acquisitions are recorded at fair market
      value using the Black Scholes model and are recorded as part of purchase
      accounting. See Notes B and C.





Other
      warrants issued to non-employees are valued at fair market value using the
      Black
      Scholes model and are expensed over the vesting period.





At
      March
      31, 2007, 1,904,345, 1,597,334, 922,250, and 564,721 shares of common stock
      were
      reserved for issuance on exercise of stock options under the Company's 2006
      Equity Incentive Plan and its 2002, 2001, and 2000 Stock Option Plans,
      respectively.




**Restricted
      stock**




Compensation
      cost for restricted stock is measured as the excess, if any, of the quoted
      market price of our stock at the date the common stock is issued over the amount
      the employee must pay to acquire the stock (which is generally zero). The
      compensation cost, net of projected forfeitures, is recognized over the period
      between the issue date and the date any restrictions lapse, with compensation
      cost for grants with a graded vesting schedule recognized on a straight-line
      basis over the requisite service period for each separately vesting portion
      of
      the award as if the award was, in substance, multiple awards. The restrictions
      do not affect voting and dividend rights.




The
      Company has from time to time awarded restricted shares of common stock to
      certain employees. The awards have restriction periods tied to employment and
      vest over a period of 2-5 years. The cost of the restricted stock awards, which
      is the fair market value on the date of grant net of estimated forfeitures,
      is
      expensed ratably over the vesting period. During the three months ended March
      31, 2007, the Company did not award any restricted shares. As of March 31,
      2007,
      no restricted stock grants had vested.




12


Unearned
      compensation expense related to restricted stock grants for the three months
      ended March 31, 2007 was approximately $276,000. An additional amount of $1.1
      million is expected to be expensed evenly over a period of approximately 2-3
      years.




NOTE
      H
      - EARNINGS PER SHARE





Basic
      earnings per share includes no dilution and is computed by dividing net income
      available to common shareholders by the weighted average number of common shares
      outstanding for the period. Diluted earnings per share reflect, in periods
      in
      which they have a dilutive effect, the effect of common shares issuable upon
      exercise of stock options. The difference between reported basic and diluted
      weighted-average common shares results from the assumption that all dilutive
      stock options and warrants outstanding were exercised. Diluted loss per share
      reflects, in periods in which they have a dilutive effect, the effect of common
      shares issuable upon exercise of stock options.





As
      of
      March 31, 2007 of the total potentially dilutive shares related to stock
      options, none were anti-dilutive.




NOTE
      I
      - COMMITMENTS AND CONTINGENCIES




**Sweet
      Sportswear/Unzipped litigation**




On
      August
      5, 2004, the Company, along with its subsidiaries, Unzipped, Michael Caruso
      & Co., referred to as Caruso, and IP Holdings, collectively referred to as
      the plaintiffs, commenced a lawsuit in the Superior Court of California, Los
      Angeles County, against Unzipped's former manager, former supplier and former
      distributor, Sweet, Azteca and ADS, and a principal of these entities and former
      member of our board of directors, Hubert Guez, collectively referred to as
      defendants. The Company is pursuing numerous causes of action against
      defendants, including breach of contact, breach of fiduciary duty, trademark
      infringement and others and is seeking damages in excess of $20 million. On
      March 10, 2005, Sweet, Azteca and ADS, collectively referred to as
      cross-complainants, filed a cross-complaint against the Company claiming damages
      resulting from a variety of alleged contractual breaches, among other
      things.





On
      April
      10, 2007, the jury returned a verdict of approximately $45 million in favor
      of
      the Company and its subsidiaries, finding in favor of the Company and its
      subsidiaries on every claim that they pursued, and against the defendants on
      every counterclaim asserted. Additionally, the jury found that all of the
      defendants acted with malice, fraud or oppression with regard to each of the
      tort claims asserted by the Company and its subsidiaries, and on April 16,
      2007,
      awarded plaintiffs $5 million in punitive damages against Mr. Guez personally.
      On May 9, 2007, the Court is expected to determine whether the Company and
      its
      subsidiaries should be awarded treble damages arising from defendants’
infringement of plaintiffs’ federally registered Bongo® trademarks, and in the
      upcoming months the Company and its subsidiaries will request that the Court
      award them, pursuant to various contractual and statutory fee-shifting
      provisions, certain fees, expenses and costs incurred in connection with this
      litigation.





The
      Company and its subsidiaries intend to vigorously pursue collection of the
      judgments against the defendants, upon the entry of such judgments by the Court.
      The defendants have the right to appeal the judgments, but should be required
      to
      post an appropriate bond to secure the judgments and to stay execution
      proceedings.




***Bader/Unzipped
      litigation***




On
      November 5, 2004, Unzipped commenced a lawsuit in the Supreme Court of New
      York,
      New York County, against Unzipped's former president of sales, Gary Bader,
      alleging that Mr. Bader breached certain fiduciary duties owed to Unzipped
      as
      its president of sales, unfairly competed with Unzipped and tortiously
      interfered with Unzipped's contractual relationships with its employees. On
      October 5, 2005, Unzipped amended its complaint to assert identical claims
      against Bader's company, Sportswear Mercenaries, Ltd. On October 14, 2005,
      Bader
      and Sportswear Mercenaries filed an answer containing counterclaims to
      Unzipped's amended complaint, and a third-party complaint, which was dismissed
      in its entirety on June 9, 2006, except with respect to one remaining claim
      asserted against it, a claim that it failed to pay Bader and Sportswear
      Mercenaries $72,000 in commissions and bonuses. The Company intends to
      vigorously defend against such claim.




13


***Redwood
      Shoe litigation***




This
      litigation, which was commenced in January 2002, by Redwood Shoe Corporation
      (“Redwood”), one of the Company's former buying agents of footwear, was
      dismissed with prejudice by the court on February 15, 2007, pursuant to an
      agreement in principle by the Company, Redwood, its affiliate, Mark Tucker,
      Inc.
      (“MTI”) and MTI's principal, Mark Tucker, to settle the matter. The proposed
      settlement agreement provides for the Company to pay a total of $1.9 million
      to
      Redwood and MTI. The stipulation and order dismissing the action may be reopened
      should the settlement agreement not be finalized and consummated by all of
      the
      parties. The Company is awaiting receipt of the signed Settlement Agreement
      from
      the other parties.




***Bongo
      Apparel, Inc. litigation***




On
      or
      about June 12, 2006, Bongo Apparel, Inc. (“BAI”), filed suit in the Supreme
      Court of the State of New York, County of New York, against the Company alleging
      certain breaches of contract and other claims and seeks, among other things,
      damages of at least $25 million. The Company believes that, in addition to
      other
      defenses and counterclaims that it intends to assert, the claims in the lawsuit
      are the subject of a release and settlement agreement that was entered into
      by
      the parties in August 2005, and has moved to dismiss almost all claims. In
      response to the motion to dismiss, BAI made a cross-motion for partial summary
      judgment on some of its claims. The motion and cross-motion are pending before
      the Court.




Additionally,
      on or about October 6, 2006, the Company and IP Holdings filed suit in the
      U.S.
      District Court for the Southern District of New York against BAI and its
      guarantor, TKO Apparel, Inc. In that complaint, the Company asserts various
      contract, tort and trademark claims that arose as a result of the failures
      of
      BAI with regard to the Bongo men's jeans wear business and its wrongful conduct
      with regard to the Bongo women's jeans wear business. The Company and IP
      Holdings are seeking monetary damages in an amount in excess of $10 million
      and
      a permanent injunction with respect to the use of the Bongo mark. The District
      Court denied TKO Apparel, Inc.’s motion to dismiss the federal court action.
      Currently, a stay of the District Court proceedings is in place.




**Mossimo
      litigation**




In
      April
      2005, Mr. Mossimo Giannulli offered to acquire all of the outstanding publicly
      held common stock of Mossimo at a price of $4.00 per share. Following the
      announcement of such offer, six purported class action lawsuits were filed
      in
      the Court of Chancery of the State of Delaware seeking an injunction preventing
      the proposed acquisition of Mossimo by the Company and asserting that the
      Mossimo directors breached their fiduciary duties to the Mossimo stockholders.
      These six cases were consolidated. Although Mr. Giannulli subsequently
      withdrew his acquisition proposal, plaintiffs filed a first consolidated amended
      complaint in March 2006, in which they allege, among other things, that Mossimo
      and its board of directors breached their fiduciary duties and engaged in
      self-dealing in approving the merger agreement with the Company.




In
      addition, on April 12, 2006, a purported shareholder class action lawsuit
      was filed in the Superior Court of the State of California for the County of
      Los
      Angeles asserting similar claims against Mossimo and its directors with respect
      to the merger and seeking, among other relief, to enjoin the merger and rescind
      any agreements entered into in connection with the merger, and to recover costs,
      including attorney's fees.




On
      September 27, 2006, Mr. Giannulli and other defendants entered into a
      memorandum of understanding with the Delaware plaintiffs to settle the Delaware
      action which was approved by the Delaware Chancery Court on February 26, 2007.
      The settlement agreement provides that if the Company sells Mossimo or the
      Mossimo business prior to October 31, 2007 to an unaffiliated third party
      and if the consideration for such sale is greater than 120% of the amount paid
      to the Mossimo stockholders in the merger, 30% of that excess amount will be
      paid into a settlement fund to be administered and distributed by the
      plaintiffs' lawyers under the supervision of the Delaware court. This additional
      amount, if it becomes due and distributable, will be paid to all persons who
      owned Mossimo stock, directly or indirectly, between April 12, 2005 and
      October 31, 2006, and will not constitute additional merger consideration.
      Mossimo also negotiated in good faith with the plaintiffs' lead counsel
      concerning the amount of attorney fees and expenses to be paid by Mossimo or
      the
      Company, as its successor, and not to oppose such counsel's application to
      the
      court of up to $800,000 in payment of such fees and expenses. In consideration
      of these terms, the parties agreed that they would fully and finally release
      and
      discharge all claims against each other.




On
      October 27, 2006, Mr. Giannulli and other defendants also entered into
      a settlement letter with the California plaintiffs in the California action.
      Under the terms of this settlement, Mr. Giannulli and the other defendants
      have agreed to pay Plaintiffs' counsel between $620,000 and $650,000. The
      California plaintiffs will be bound by the terms of the Delaware settlement
      once
      the settlement is approved by the Delaware Chancery Court and have agreed to
      file a request for dismissal with prejudice. As a result, if and when the
      settlement of the Delaware action is approved by the Delaware court and becomes
      effective, it will also bind the members of the purported class in the
      California litigation, rendering the California action moot. On March 1, 2007,
      the parties filed a stipulation with the California court dismissing the action
      with prejudice and requesting an order awarding Plaintiffs' counsel between
      $620,000 and $650,000. On March 13, 2007, the California court entered an order
      approving the settlement, dismissing the action with prejudice, and awarding
      Plaintiff's counsel $650,000.




The
      Company received an insurance payment of $700,000 in connection with the above
      mentioned litigations.





**Normal
      course litigation**




From
      time
      to time, the Company is also made a party to litigation incurred in the normal
      course of business. While any litigation has an element of uncertainty, the
      Company believes that the final outcome of any of these routine matters will
      not
      have a material effect on the Company's financial position or future
      liquidity.




14


NOTE
      J -
      RELATED PARTY TRANSACTIONS





On
      May 1,
      2003, the Company granted Kenneth Cole Productions, Inc. the exclusive worldwide
      license to design, manufacture, sell, distribute and market footwear under
      its
      Bongo brand. The chief executive officer and chairman of Kenneth Cole
      Productions is Kenneth Cole, who is the brother of Neil Cole, the Company's
      Chief Executive Officer and President. During the three months ended March
      31,
      2007 and 2006, the Company received $271,000 and $350,000, respectively, in
      royalties from Kenneth Cole Productions.




The
      Candie's Foundation, a charitable foundation founded by Neil Cole for the
      purpose of raising national awareness about the consequences of teenage
      pregnancy, owed the Company $32,000 and $297,000 at March 31, 2007 and December
      31, 2006, respectively.




NOTE
      K -
      INCOME TAXES





The
      Company accounts for income taxes in accordance with Statement of Financial
      Accounting Standards No. 109, (“SFAS 109”) “Accounting for Income Taxes.” Under
      SFAS No. 109, deferred tax assets and liabilities are determined based on
      differences between the financial reporting and tax basis of assets and
      liabilities and are measured using the enacted tax rates and laws that will
      be
      in effect when the differences are expected to reverse. A valuation allowance
      is
      established when necessary to reduce deferred tax assets to the amount expected
      to be realized. In determining the need for a valuation allowance, management
      reviews both positive and negative evidence pursuant to the requirements of
      SFAS
      No. 109, including current and historical results of operations, the annual
      limitation on utilization of net operating loss carry forwards pursuant to
      Internal Revenue Code section 382, future income projections and the overall
      prospects of the Company's business. Based upon management's assessment of
      all
      available evidence, including the Company's completed transition into a
      licensing business, estimates of future profitability based on projected royalty
      revenues from its licensees, and the overall prospects of the Company's
      business, management is of the opinion that the Company will be able to utilize
      the deferred tax assets in the foreseeable future, and as such do not anticipate
      requiring a further valuation allowance. Based on current estimates of pre-tax
      income for the year ending December 31, 2007, the management anticipates a
      net
      income tax expense for this year.





In
      July 2006, the FASB issued FASB Interpretation No. 48 (“FIN 48”)
“Accounting for Uncertainty in Income Taxes.” FIN 48 clarifies the accounting
      for income taxes by prescribing the minimum recognition threshold a tax position
      is required to meet before being recognized in the financial statements. FIN
      48
      also provides guidance on derecognition, measurement, classification, interest
      and penalties, and disclosure requirements. FIN 48 is effective for fiscal
      years
      beginning after December 15, 2006. Accordingly, we adopted FIN 48 beginning
      January 1, 2007. The implementation of FIN 48 did not have a significant impact
      on our financial position or results of operations. The total unrecognized
      tax
      benefit was $780,000 at the date of adoption. However, the liability is not
      recognized for accounting purposes because the related deferred tax asset has
      been fully reserved in prior year.





We
      recognize interest and penalties related to uncertain tax positions in income
      tax expense which were zero for the three months ended March 31,
      2007.




The
      Company is subject to taxation in the US and various state and local
      jurisdictions. The Company remains subject to examination by US Federal and
      state tax authorities for tax years 2003 through 2006.




NOTE
      L  RECENT
      ACCOUNTING STANDARDS





In
      September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements," which
      establishes a framework for measuring fair value in generally accepted
      accounting principles and expands disclosures about fair value measurements.
      SFAS No. 157 defines fair value as the price that would be received to sell
      an
      asset or paid to transfer a liability in an orderly transaction between market
      participants at the measurement date. SFAS No. 157 is effective for financial
      statements issued for fiscal years beginning after November 15, 2007, and
      interim periods within those fiscal years. The adoption of SFAS No. 157 is
      not
      expected to have a material impact on our results of operations or our financial
      position.





In
      September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined
      Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements
      No. 87, 88, 106, and 132(R)," which requires a business entity to recognize
      the
      overfunded or underfunded status of a single-employer defined benefit
      postretirement plan as an asset or liability in its statement of financial
      position and to recognize changes in that funded status in comprehensive income
      in the year in which the changes occur. SFAS No. 158 also requires a business
      entity to measure the funded status of a plan as of the date of its year-end
      statement of financial position, with limited exceptions. An employer with
      publicly traded equity securities is required to initially recognize the funded
      status of a defined benefit postretirement plan and to provide the required
      disclosures as of the end of the fiscal year ending after December 15, 2006.
      As
      our defined benefit pension plans are currently underfunded and benefits are
      either frozen or increase only though interest credits, the adoption of SFAS
      No.
      158 will not have a material impact on our results of operations or our
      financial position.





In
      February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial
      Asset and Financial Liability: Including an amendment to FASB Statement No.
      115”
(“SFAS 159”). The standard permits all entities to elect to measure certain
      financial instruments and other items at fair value with changes in fair value
      reported in earnings. SFAS 159 is effective as of the beginning of the first
      fiscal year that begins after November 15, 2007.The
      adoption of SFAS No. 159 is not expected to have a material impact on our
      results of operations or our financial position.





15





NOTE
      M  SUBSEQUENT EVENTS -





On
      April
      11, 2007, the Company announced that the jury had returned a favorable verdict
      in the litigation entitled Unzipped Apparel, LLC. et al. v. Sweet Sportswear,
      LLC., et al. commenced by the Company and certain of its subsidiaries in August
      2004 in the Superior Court of California, Los Angeles County. A description
      of
      the litigation is contained in the Company's 2006 Form 10-K and certain of
      its
      other SEC reports. See Note I.





**Item
      2.**  **MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS**





*Safe
      Harbor Statement under the Private Securities Litigation Reform Act of
      1995* .
      The
      statements that are not historical facts contained in this report are forward
      looking statements that involve a number of known and unknown risks,
      uncertainties and other factors, all of which are difficult or impossible to
      predict and many of which are beyond the control of the Company, which may
      cause
      the actual results, performance or achievements of the Company to be materially
      different from any future results, performance or achievements expressed or
      implied by such forward looking statements. These risks are detailed in the
      Company's Form 10-K for the fiscal year ended December 31, 2006 and other SEC
      filings. The words "believe", "anticipate," "expect", "confident", "project",
      provide "guidance" and similar expressions identify forward-looking statements.
      Readers are cautioned not to place undue reliance on these forward looking
      statements, which speak only as of the date the statement was made.





*Executive
      Summary.* The
      Company is a brand management company engaged in licensing, marketing and
      providing trend direction for a diversified and growing consumer brand
      portfolio. The Company's brands are sold across every major segment of retail
      distribution, from luxury to mass. As of March 31, 2007, the Company owned
      11
      iconic consumer brands: Candie's, Bongo, Badgley Mischka, Joe Boxer, Rampage,
      Mudd, London Fog, Mossimo, Ocean Pacific, Danskin, and Rocawear. The Company
      licenses its brands worldwide through over 150 retail and wholesale licenses
      for
      use in connection with a broad variety of product categories, including women's,
      men's and children's apparel, footwear and accessories, home furnishings and
      beauty and fragrance. The Company's business model allows it to focus on its
      core competencies of marketing and managing brands without some of the risks
      and
      investment requirements associated with a more traditional operating company.
      Its licensing agreements with leading retail and wholesale partners throughout
      the world provide the Company with a predictable stream of guaranteed minimum
      royalties.




The
      Company's growth strategy is focused on increasing licensing revenue from its
      existing portfolio of brands through adding new product categories, expanding
      its brands' retail penetration and optimizing the sales of its licensees. The
      Company will also seek to continue the international expansion of its brands
      by
      partnering with leading licensees throughout the world. Finally, the Company
      believes it will continue to acquire iconic consumer brands with an
      applicability to a wide range of merchandise categories and an ability to
      further diversify its brand portfolio.





***Results
      of Operations***




*For
      the three months ended March 31, 2007*




*Revenue.* Revenue
      for the Current Quarter increased to $30.8 million, from $13.3 million in the
      three months ended March 31, 2006, (“Prior Year Quarter”). The largest driver of
      the growth of $17.5 million was revenue from the acquisitions of Mossimo and
      the
      Mudd, London Fog, Ocean Pacific and Danskin brands and certain related assets
      during the last 12 months and therefore were not included in the Prior Year
      Quarter’s revenue. Rocawear was acquired on March 30, 2007, and therefore had no
      impact on the Current Quarter.




*Operating
      Expenses.* Selling,
      general and administrative ( **“** SG&A”)
      expenses totaled $7.7 million in the Current Quarter compared to $4.7 million
      in
      the Prior Year Quarter, an increase of $3.0 million. The increase in SG&A
      expense was primarily related to increased advertising obligations relating
      to the growth in licensing revenue and additional operating and advertising
      expenses relating to new acquisitions not included in the Prior Year Quarter,
      together accounting for approximately $2.4 million. Further, in the Current
      Quarter the Company recorded an additional $469,000 reserve against its accounts
      receivables primarily relating to one licensee's non-payment that is currently
      in dispute with the Company, compared to no reserve recorded in the Prior Year
      Quarter. For the Current Quarter and Prior Year Quarter, the Company's special
      charges included $763,000 and $556,000 respectively, incurred by the Company
      relating to litigation involving Unzipped. See Note F of Notes to Unaudited
      Condensed Consolidated Financial Statements.





16


Operating
      Income for the Current Quarter increased to $22.4 million, or approximately
      73%
      of total revenue compared to $8.0 million or approximately 61% of total revenue
      in the Prior Year Quarter.





*Net
      Interest Expense* .
      Net
      Interest expense increased by $0.6 million in the Current Quarter to $2.6
      million, compared to $2.0 million in the Prior Year Quarter. This increase
      was
      due primarily to an increase in the Company's debt through financing
      arrangements in connection with the acquisitions of Mudd and London Fog. See
      Notes B and C of Notes to Unaudited Condensed Consolidated Financial
      Statements. A total of $913,000 in interest income for the Current Quarter
      partially offset the increase in interest expense, compared to $161,000 offset
      in the Prior Year Quarter.





*Provision
      (Benefit) for Income Taxes.* The
      Company accounts for income taxes in accordance with Statement of Financial
      Accounting Standards No. 109, (“SFAS 109”) “Accounting for Income Taxes.” Under
      SFAS No. 109, deferred tax assets and liabilities are determined based on
      differences between the financial reporting and tax basis of assets and
      liabilities and are measured using the enacted tax rates and laws that will
      be
      in effect when the differences are expected to reverse. A valuation allowance
      is
      established when necessary to reduce deferred tax assets to the amount expected
      to be realized. In determining the need for a valuation allowance, management
      reviews both positive and negative evidence pursuant to the requirements of
      SFAS
      No. 109, including current and historical results of operations, the annual
      limitation on utilization of net operating loss carry forwards pursuant to
      Internal Revenue Code section 382, future income projections and the overall
      prospects of the Company's business. The effective income tax rate for the
      Current Quarter is approximately 35% resulting in the $7.0 million income tax
      expense as compared to the $1.3 million income tax benefit for the Prior Quarter
      due primarily from a reduction in the Company's valuation allowance. There was no comparable reduction of the
      Company's valuation allowance in the Current Quarter.





*Net
      income* .
      The
      Company's net income was $12.7 million in the Current Quarter, compared to
      net
      income of $7.4 million in the Prior Year Quarter, as a result of the factors
      discussed above.





***Liquidity
      and Capital Resources***





*Liquidity*





Our
      principal capital requirements have been to fund acquisitions, working capital
      needs, and to a lesser extent capital expenditures. We have historically relied
      on internally generated funds to finance our operations and our primary source
      of capital needs for acquisition have been the issuance of debt and equity
      securities. At March 31, 2007 and December 31, 2006, our cash totaled $21.7
      million and $77.8 million, respectively, including restricted cash of $1.9
      million and $4.3 million, respectively.





We
      believe that cash from future operations as well as currently available cash
      will be sufficient to satisfy our anticipated working capital requirements
      for
      the foreseeable future. We intend to continue financing our brand acquisitions
      through some combination of cash from operations, bank financing and the
      issuance of additional equity and/or debt securities. The Company
      funded the acquisition of Danskin from its cash reserves. The Rocawear
      acquisition has been funded from the proceeds of a loan under the Company's
      $212.5 million Term Loan Facility, entered into with Lehman Brothers Inc. and
      Lehman Commercial Paper Inc. on March 30, 2007 which was amended and restated
      on
      May 2, 2007. We have limited ability, however, to secure additional indebtedness
      with our existing assets due to certain provisions of IP Holdings' existing
      Asset-Backed Notes, in addition to certain provisions of the Term Loan Facility.
      The note issued by the Company under the Term Loan Facility currently bears
      interest at a variable rate equal to the three-month LIBOR plus 2.25% per annum,
      with principal payable in equal quarterly installments in annual aggregate
      amounts equal to 1.00% of the initial aggregate principal amount of the Term
      Loan Facility, with any remaining unpaid principal balance to be due on March
      30, 2013 . See Note D of Notes to Condensed Consolidated Financial
      Statements.





*Changes
      in Working Capital*





At
      March
      31, 2007 and December 31, 2006 the working capital ratio (current assets to
      current liabilities) was 1.4 to 1 and 2.8 to 1 respectively. The reasons for
      this decrease in the ratio were the decrease in cash and cash equivalents on
      hand which decreased from $77.8 million at December 31, 2006 to $21.7 million
      at
      March 31, 2007 as a result of cash paid for the acquisition of the Danskin
      brand, partially offset by the increase in accounts receivable from $14.5
      million at December 31, 2006, to $24.3 million at March 31, 2007, which also
      was
      a direct result of the new acquisitions, and the increase in the current portion
      of deferred income tax assets from $3.4 million at December 31, 2006, to $15.9
      million at March 31, 2007.





*Operating
      Activities*





Net
      cash
      provided by operating activities totaled $15.1 million in the Current Quarter,
      as compared to $0.7 million of net cash used in operations in the Prior Year
      Quarter. Cash provided by operating activities in the Current Quarter was
      increased primarily due to net income of $12.7 million, an increase of $3.8
      million in deferred revenues, and a decrease of $7.0 million in deferred income
      tax benefits, offset primarily by an increase of $10.2 million in accounts
      receivable. The Company continues to rely upon cash generated from licensing
      and
      commission operations to finance its operations. Further, the Company believes
      that such cash from operations will be sufficient to satisfy its anticipated
      working capital requirements for the foreseeable future.





17


*Investing
      Activities*





Net
      cash
      used in investing activities in the Current Quarter totaled $275.1 million,
      as
      compared to $0.9 million in the Prior Year Quarter. In the Current Quarter,
      the
      Company paid $70.8 million in cash for certain assets relating to the Danskin
      brand and $204.2 million in cash for certain assets relating to the Rocawear
      brand. See Notes B & C of Notes to Unaudited Condensed Consolidated
      Financial Statements. Capital expenditures in the Current Quarter were $40,000,
      compared to $476,000 in capital expenditures in the Prior Year Quarter. Capital
      expenditures in the Current Quarter were primarily attributable to the purchase
      of computers and software in the ordinary course of business.





*Financing
      Activities*





Net
      cash
      provided by financing activities was $206.1 million in the Current Quarter,
      compared with $1.2 million in the Prior Year Quarter. Of the $206.1 million
      in
      net cash provided by financing activities, $212.5 million was provided from
      the
      net proceeds of the issuance of the term loan facility, and $0.6 million from
      proceeds in connection with the exercise of stock options. This was offset
      by
      $4.2 million used for principal payments related to the Asset-Backed Notes,
      $1.1
      million in cash placed in a non-current reserve account, and $3.9 in financing
      costs which have been deferred to be amortized over the remaining life of the
      Term Loan Facility. In the Prior Year Quarter, approximately $2.2 million was
      used for principal payments related to Asset-Backed Notes.





***Other
      Matters***





*Summary
      of Critical Accounting Policies.*





The
      Unaudited condensed consolidated financial statements include the accounts
      of
      the Company and its wholly-owned subsidiaries. All significant intercompany
      transactions and items have been eliminated in consolidation. The Company
      acquired the Danskin brand on March 9, 2007 and the Rocawear brand on March
      30,
      2007. All acquisitions have been accounted for using purchase price accounting.
      The purchase method of accounting requires that the total purchase price of
      an
      acquisition be allocated to the assets acquired and liabilities assumed based
      on
      their fair values on the date of the business acquisition. Any excess of the
      purchase price over the estimated fair values of the net assets acquired is
      recorded as goodwill. See Notes B and C. of Notes to Unaudited Condensed
      Consolidated Financial Statements.





The
      preparation of the condensed consolidated financial statements in conformity
      with accounting principles generally accepted in the United States requires
      management to make estimates and assumptions that affect the reported amounts
      of
      assets and liabilities and disclosure of contingent assets and liabilities
      at
      the date of the financial statements and the reported amounts of revenues and
      expenses during the reporting period. The Company reviews all significant
      estimates affecting the financial statements on a recurring basis and records
      the effect of any adjustments when necessary.





In
      June
      2001, the FASB issued Statement of Financial Accounting Standards No. 142 (SFAS
      No. 142), “Goodwill and Other Intangible Assets,” which changes the accounting
      for goodwill and other intangible assets without determinable lives from an
      amortization method to an impairment-only approach. The Candie's and Bongo
      trademarks had previously been amortized on a straight-line basis over their
      estimated useful lives of approximately 20 years. Effective July 1, 2005 the
      Company had a change in estimate of the useful lives of both the Candie's and
      Bongo trademarks to indefinite life. As of March 31, 2007, the net book value
      of
      the Candie's and Bongo trademarks totaled $14.3 million. Impairment losses
      are
      recognized for long-lived assets, including certain intangibles, used in
      operations when indicators of impairment are present and the undiscounted cash
      flows estimated to be generated by those assets are not sufficient to recover
      the assets' carrying amount. Impairment losses are measured by comparing the
      fair value of the assets to their carrying amount.





The
      Company has entered into various trade name license agreements that provide
      revenues based on minimum royalties and additional revenues based on a
      percentage of defined sales. Minimum royalty revenue is recognized on a
      straight-line basis over each period, as defined, in each license agreement.
      Royalties exceeding the defined minimum amounts are recognized as income during
      the period corresponding to the licensee's sales. Beginning January 2005, the
      Company changed its business practices with respect to Bright Star Footwear,
      Inc
      (“Bright Star”), a subsidiary of the Company, which resulted in a change in
      revenue recognition from prior year. Bright Star now acts as an agent, therefore
      only net commission revenue is recognized commencing January 1,
      2005.





Effective
      January 1, 2006, the Company adopted Statement No. 123(R), “Accounting for
      Share-Based Payment” (“SFAS 123(R)”), which requires companies to measure and
      recognize compensation expense for all stock-based payments at fair value.
      Under
      SFAS 123(R), using the modified prospective method, compensation expense is
      recognized for all share-based payments granted prior to, but not yet vested
      as
      of, January 1, 2006. In December 2005, the Company's Board of Directors approved
      the accelerated vesting of all employee service-based stock options previously
      granted under the Company's various non-qualified stock option plans, which
      would have been unvested as of December 31, 2005. As a result, all options
      granted as of December 31, 2005, except certain options based on performance
      became exercisable immediately. The number of shares, exercise prices and other
      terms of the options subject to the acceleration remain unchanged. The
      acceleration of such option vesting resulted in an additional $446,000 of
      compensation expense reflected in pro forma net income for the year ended
      December 31, 2005, an amount that would have otherwise been recorded as
      compensation expense in the years ending December 31, 2006 and 2007, but had
      no
      impact on compensation recognition in 2005 as the options would have otherwise
      vested. Prior to the adoption of SFAS 123(R), the Company accounted for its
      stock-based compensation plans under the recognition and measurement principles
      of Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock
      Issued to Employees”, and related interpretations. Accordingly, the compensation
      cost for stock options had been measured as the excess, if any, of the quoted
      market price of the Company's stock at the date of the grant over the amount
      the
      employee must pay to acquire the stock. In accordance with the modified
      prospective transition method, the consolidated financial statements have not
      been restated to reflect the impact of SFAS 123(R). The impact on the Company's
      financial condition and results of operations of adopting FAS No. 123(R) will
      depend on the number and terms of stock options granted in future years under
      the modified prospective method, the amount of which can not currently be
      estimated by management.





18


The
      Company accounts for income taxes in accordance with Statement of Financial
      Accounting Standards No. 109, (“SFAS 109”) “Accounting for Income Taxes.” Under
      SFAS No. 109, deferred tax assets and liabilities are determined based on
      differences between the financial reporting and tax basis of assets and
      liabilities and are measured using the enacted tax rates and laws that will
      be
      in effect when the differences are expected to reverse. A valuation allowance
      is
      established when necessary to reduce deferred tax assets to the amount expected
      to be realized. In determining the need for a valuation allowance, management
      reviews both positive and negative evidence pursuant to the requirements of
      SFAS
      No. 109, including current and historical results of operations, the annual
      limitation on utilization of net operating loss carry forwards pursuant to
      Internal Revenue Code section 382, future income projections and the overall
      prospects of the Company's business. Based upon management's assessment of
      all
      available evidence, including the Company's completed transition into a
      licensing business, estimates of future profitability based on projected royalty
      revenues from its licensees, and the overall prospects of the Company's
      business, management concluded in the three months ended March 31, 2007 that
      it
      is more likely than not that the net deferred income tax asset recorded as
      of
      March 31, 2007 will be realized.




*Seasonal
      and Quarterly Fluctuations* .





The
      majority of the products manufactured and sold under the Company's brands and
      licenses are for apparel, accessories and footwear, which sales vary as a result
      of holidays, weather, and the timing of product shipments. Accordingly, a
      portion of the Company's revenue from its licensees, particularly from those
      mature licensees that are performing and actual sales royalties exceed minimum
      royalties, is subject to seasonal fluctuations. The results of operations in
      any
      quarter therefore will not necessarily be indicative of the results that may
      be
      achieved for a full fiscal year or any future quarter.





*Other
      Factors*





We
      continue to seek to expand and diversify the types of licensed products being
      produced under our various brands, as well as diversify the distribution
      channels within which licensed products are sold, in an effort to reduce
      dependence on any particular retailer, consumer or market sector. The success
      of
      our company, however, will still remain largely dependent on our ability to
      build and maintain brand awareness and contract with and retain key licensees
      and on our licensees' ability to accurately predict upcoming fashion trends
      within their respective customer bases and fulfill the product requirements
      of
      their particular retail channels within the global marketplace. Unanticipated
      changes in consumer fashion preferences, slowdowns in the U.S. economy, changes
      in the prices of supplies, consolidation of retail establishments, and other
      factors noted in the Risk Factors section of this report and in our annual
      report on Form 10-K for the Year ended December 31, 2006, could adversely affect
      our licensees' ability to meet and/or exceed their contractual commitments
      to us
      and thereby adversely affect our future operating results.





*Effects
      of Inflation.* The
      Company does not believe that the relatively moderate rates of inflation
      experienced over the past few years in the United States, where it primarily
      competes, have had a significant effect on its revenues or
      profitability.




**Item
      3.**  **Quantitative
      and Qualitative Disclosures about Market Risk**




The
      market risk inherent in the Company’s financial
      instruments represents the potential loss in earnings or cash flows arising
      from
      adverse changes in interest rates. We manage this exposure through regular
      operating and financing activities when deemed appropriate.




The
      primary interest rate exposures on floating rate
      financing arrangements are with respect to short-term interest rates. The
      Company had approximately $212.5 million in variable rate credit facilities
      at
      March 31, 2007.





**Item
      4.**  **Controls
      and Procedures**





The
      Company maintains “disclosure controls and procedures”, as such term is defined
      under Rule 13a-15(e) of the Securities Exchange Act of 1934 (“Exchange Act”),
      that are designed to ensure that information required to be disclosed in the
      Company's Exchange Act reports is recorded, processed, summarized and reported
      within the time periods specified in the SEC's rules and forms, and that such
      information is accumulated and communicated to its management, including its
      Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
      timely decisions regarding required disclosures. In designing and evaluating
      the
      disclosure controls and procedures, the Company's management recognized that
      any
      controls and procedures, no matter how well designed and operated, can provide
      only reasonable assurance of achieving the desired control objectives and the
      Company's management necessarily was required to apply its judgment in
      evaluating the cost-benefit relationship of possible controls and procedures.
      The Company has carried out an evaluation, as of the end of period covered
      by
      this report, under the supervision and with the participation of the Company's
      management, including its Chief Executive Officer and Chief Financial Officer,
      of the effectiveness of the design and operation of the Company's disclosure
      controls and procedures. Based upon the management's evaluation and subject
      to
      the foregoing, the Chief Executive Officer and Chief Financial Officer concluded
      that the Company's disclosure controls and procedures were effective in ensuring
      that material information relating to the Company that is required to be
      disclosed in the Company's Exchange Act reports is made known to the Chief
      Executive Officer and Chief Financial Officer by others within the Company
      in a
      timely manner.




There
      have been no significant changes in the Company's internal control over
      financial reporting (as defined in Exchange Act Rule 13a-15(f)) that occurred
      during the quarter ended March 31, 2007 that have materially affected, or are
      reasonably likely to materially affect, the Company's internal control over
      financial reporting.





19




PART
      II.
      Other Information




**Item
      1.**  **Legal
      Proceedings**





See
      Note I and M of Notes to Condensed Consolidated Financial
      Statements.





**Item 1A.**  **Risk
      Factors.**





In
      addition to the risk factors disclosed in Part 1, Item 1A, “Risk
      Factors” of our Annual Report on Form 10-K for the year ended December 31,
      2006 (other than the risk relating to the California state court litigation
      which has recently been decided in our favor), and the additional risks related
      to an increase in our total consolidated debt and increases in our goodwill
      and
      other intangible assets during the quarter ended March 31, 2007 due to our
      acquisitions of the Danskin ® and Rocawear ® brands, set forth below are certain
      factors that have affected, and in the future could affect, our operations
      or
      financial condition. We operate in a changing environment that involves numerous
      known and unknown risks and uncertainties that could impact our operations.
      The
      risks described below and in our Annual Report on Form 10-K for the
      year ended December 31, 2006 are not the only risks we face. Additional risks
      and uncertainties not currently known to us or that we currently deem to be
      immaterial also may materially adversely affect our financial condition
      and/or operating results.




*Our
      existing and future debt obligations could impair our liquidity and financial
      condition, and in the event we are unable to meet our debt obligations we could
      lose title to our trademarks.*




As
      of
      March 31, 2007, we had consolidated net debt of approximately $371 million,
      primarily all of which was incurred in connection with our acquisition
      activities. We may also assume or incur additional debt, including secured
      debt,
      in the future in connection with, or to fund, future acquisitions. Our debt
      obligations:




·
            could
                impair our liquidity;




·
            could
                make it more difficult for us to satisfy our other
                obligations;




·
            require
                us to dedicate a substantial portion of our cash flow to payments
                on our
                debt obligations, which reduces the availability of our cash flow
                to fund
                working capital, capital expenditures and other corporate
                requirements;




·
            could
                impede us from obtaining additional financing in the future for working
                capital, capital expenditures, acquisitions and general corporate
                purposes;




·
            make
                us more vulnerable in the event of a downturn in our business prospects
                and could limit our flexibility to plan for, or react to, changes
                in our
                licensing markets; and




·
            place
                us at a competitive disadvantage when compared to our competitors
                who have
                less debt.




While
      we
      believe that by virtue of the guaranteed minimum royalty payments due to us
      under our licenses we will generate sufficient revenues from our licensing
      operations to satisfy our obligations for the foreseeable future, in the event
      that we were to fail in the future to make any required payment under agreements
      governing our indebtedness or fail to comply with the financial and operating
      covenants contained in those agreements, we would be in default regarding that
      indebtedness. A debt default could significantly diminish the market value
      and
      marketability of our common stock and could result in the acceleration of the
      payment obligations under all or a portion of our consolidated indebtedness.
      In
      the case of IP Holdings' asset-backed notes, it would also enable the holders
      of
      such notes to foreclose on the assets securing such notes, including the
      Candie's, Bongo, Joe Boxer, Rampage, Mudd, and London Fog
      trademarks.





*We
      have a material amount of goodwill and other intangible assets, including our
      trademarks, recorded on our balance sheet. As a result of changes in market
      conditions and declines in the estimated fair value of these assets, we may,
      in
      the future, be required to write down a portion of this goodwill and other
      intangible assets and such write-down would, as applicable, either decrease our
      profitability or increase our net loss.*




As
      of
      March 31, 2007, goodwill represented approximately $97 million, or 10% of our
      total assets, and other intangible assets represented approximately $748
      million, or 80% of our total assets. Under Statement of Financial Accounting
      Standard No. 142, or SFAS No. 142, “Goodwill and Other Intangible Assets,”
goodwill and indefinite life intangible assets, including some of our
      trademarks, are no longer amortized, but instead are subject to impairment
      evaluation based on related estimated fair values, with such testing to be
      done
      at least annually. While, to date, no impairment write-downs have been
      necessary, any write-down of goodwill or intangible assets resulting from future
      periodic evaluations would, as applicable, either decrease our net income or
      increase our net loss and those decreases or increases could be
      material.




20
 
  *A
          substantial portion of our licensing revenue is concentrated with a limited
          number of retailers such that the loss of any of such licensees could decrease
          our revenue and impair our cash flows.*




Our
      licenses with Target, Kohl's and Kmart Corporation, were our three largest
      licenses during the 3 months ended March 31, 2007, representing approximately
      45% of our total revenue for such period. Our license agreement with Kohl's
      grants it the exclusive U.S. license with respect to the Candie's trademark
      for
      a wide variety of product categories for an initial term expiring in January
      2011; our license agreement with Kmart grants it the exclusive U.S. license
      with
      respect to the Joe Boxer trademark for a wide variety of product categories
      for
      a term expiring in December 2010; and our license agreement with Target grants
      it the exclusive U.S. license with respect to the Mossimo trademark for
      substantially all Mossimo-branded products for an initial term expiring in
      January 2010. Because we are dependent on these licensees for a significant
      portion of our licensing revenue, if any of them were to have financial
      difficulties affecting its ability to make guaranteed payments, or if any of
      these licensees decides not to renew or extend its existing agreement with
      us,
      our revenue and cash flows could be reduced substantially. In addition, as
      of
      September 2006, Kmart had not approached the sales levels of Joe Boxer products
      needed to trigger royalty payments in excess of its guaranteed minimums since
      2004, and, as a result, when we entered into the current license agreement
      with
      Kmart in September 2006 expanding its scope to include Sears stores and
      extending its term from December 2007 to December 2010, we agreed to reduce
      its
      guaranteed annual royalty minimums by approximately half, as a result of which
      our revenues from this license, at least for the short term, will likely be
      substantially reduced.




**Item
      6.**  **Exhibits**


2.1*+
              Assets
                  Purchase Agreement dated as of February 21, 2007 by and among the
                  Registrant, Danskin, Inc. and Danskin Now, Inc. (1)2.2*
              Asset
                  Purchase Agreement dated March 6, 2007 by and among the Registrant,
                  Rocawear Licensing LLC and Arnold Bize, Shawn Carter and Naum Chernyavsky.
                  (2)10.1
              Registration
                  Rights Agreement dated as of March 9, 2007 by and between the Registrant
                  and Danskin, Inc. (1)10.2
              Registration
                  Rights Agreement dated March 30, 2007 by and between the Registrant
                  and
                  Rocawear Licensing LLC. (2)10.3*
              Credit
                  Agreement dated March 30, 2007 by and among the Registrant, Lehman
                  Brothers Inc., as Arranger, and Lehman Commercial Paper Inc., as
                  Lender,
                  as Syndication Agent and as Administrative Agent.(2)10.4
              Amended
                  and Restated Credit Agreement dated as of May 2, 2007 by and among
                  the
                  Registrant, Lehman Brothers Inc., as Arranger, and Lehman Commercial
                  Paper
                  Inc., as Lender, as Syndication Agent and as Administrative
                  Agent.(3)31.1
              Certification
                of Chief
                Executive Officer Pursuant To Rule 13a-14 or 15d-14 of The Securities
                Exchange Act of 1934, As Adopted Pursuant To Section 302 Of The
                Sarbanes-Oxley Act of 2002.31.2
              Certification
                  of Chief Financial Officer Pursuant To Rule 13a-14 or 15d-14 of
                  The
                  Securities Exchange Act of 1934, As Adopted Pursuant To Section
                  302 Of The
                  Sarbanes-Oxley Act of 2002.32.1
              Certification
                  of Chief Executive Officer Pursuant To 18 U.S.C. Section 1350,
                  As Adopted
                  Pursuant To Section 906 of The Sarbanes-Oxley Act of
                  2002.32.2
              Certification
                  of Chief Financial Officer Pursuant To 18 U.S.C. Section 1350,
                  As Adopted
                  Pursuant To Section 906 of The Sarbanes-Oxley Act of
                  2002._______(1)
              Filed
                  as an exhibit to the Company’s Current Report on Form 8-K for the event
                  dated March 9, 2007 and incorporated by reference
                  herein.(2)
              Filed
                  as an exhibit to the Company’s Current Report on Form 8-K for the event
                  dated March 30, 2007 and incorporated by reference
                  herein.(3)
              Filed
                  as an exhibit to the Company's Current Report on Form 8-K for the
                  event
                  dated May 1, 2007 and incorporated by reference herein.*
              The
                  Registrant has omitted certain schedules and exhibits pursuant
                  to Item
                  601(b)(2) of Regulation S-K and shall furnish supplementally to
                  the
                  Securities and Exchange Commission (the “SEC”), copies of any of the
                  omitted schedules and exhibits upon request by the SEC.+
              Portions
                  of this document have been omitted and have been filed separately
                  with the
                  SEC pursuant to a request for confidential treatment, which was
                  made under
                  Rule 24b-2 of the Securities Exchange Act of
                  1934.
  21


**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.
  ****
              ****
              **Iconix
                  Brand Group, Inc.****(Registrant)**Date:
                  May 7, 2007
              ****
              /s/
                  Neil
                  Cole****
              ****
              Neil
                  Cole****
              ****
              Chairman
                  of the Board, President****
              ****
              and
                  Chief Executive Officer****
              ****
              (on
                  Behalf of the Registrant)Date:
                  May 7, 2007
              ****
              /s/
                  Warren
                  Clamen****
              ****
              Warren
                  Clamen****
              ****
              Chief
                  Financial Officer
 
 22