`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 December 31, 2005.

                                       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 1-9169

                               BERNARD CHAUS, INC.
             (Exact Name of Registrant as Specified in its Charter)

            New York                                        13-2807386
(State or other jurisdiction of                  (I.R.S. employer identification
 incorporation or organization)                              number)

 530 Seventh Avenue, New York, New York                                  10018
(Address of Principal Executive Offices)                              (Zip Code)

        Registrant's telephone number, including area code (212) 354-1280

________________________________________________________________________________
      (Former name, former address and former fiscal year, if changed since
                                  last report)

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

          Indicate by check mark whether the registrant is an accelerated filer
(as defined in Exchange Act Rule 12b-2) 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.

      Date                          Class                     Shares Outstanding
      ----                          -----                     ------------------
February 8, 2006        Common Stock, $0.01 par value             37,528,633



                                      INDEX
                                                                            PAGE
                                                                            ----
PART I    FINANCIAL INFORMATION

Item 1.   Condensed Consolidated Financial Statements (Unaudited)

          Condensed Consolidated Balance Sheets as of December 31, 2005,
             June 30, 2005 and December 31, 2004                              3

          Condensed Consolidated Statements of Operations for the Three
             and Six Months ended December 31, 2005 and 2004                  4

          Condensed Consolidated Statements of Cash Flows for the Six
             Months ended December 31, 2005 and 2004                          5

          Notes to Condensed Consolidated Financial Statements                6

Item 2.   Management's Discussion and Analysis of Financial Condition and
             Results of Operations                                           12

Item 3.   Quantitative and Qualitative Disclosures About Market Risk         16

Item 4.   Controls and Procedures                                            16

PART II   OTHER INFORMATION

Item 4.   Submission of Matters to Vote of Security Holders                  18

Item 6.   Exhibits                                                           19

SIGNATURES                                                                   19

CERTIFICATIONS                                                               20


                                        2



PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

                      BERNARD CHAUS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
          (In thousands, except number of shares and per share amounts)



                                                          December 31,    June 30,   December 31,
                                                              2005          2005         2004
                                                          ------------   ---------   ------------
                                                           (Unaudited)      (*)       (Unaudited)

ASSETS
Current Assets
   Cash and cash equivalents                                $   3,626    $   7,732    $     114
   Accounts receivable - net                                   14,086       16,331       25,959
   Accounts receivable - due from factor                          814        1,689        2,727
   Inventories - net                                           10,932       10,667        8,349
   Prepaid expenses and other current assets                      641          898          973
                                                            ---------    ---------    ---------
      Total current assets                                     30,099       37,317       38,122
Fixed assets - net                                              3,289        3,353        3,721
Other assets - net                                                350          371          400
Trademarks                                                      1,000        1,000        1,000
Goodwill                                                        2,257        2,257        2,257
                                                            ---------    ---------    ---------
      Total assets                                          $  36,995    $  44,298    $  45,500
                                                            =========    =========    =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
   Revolving credit borrowings                              $      --    $      --    $   6,857
   Accounts payable                                             8,740        9,479        8,701
   Accrued expenses                                             3,062        4,682        3,049
   Term loan - current                                          1,700        1,700        1,700
                                                            ---------    ---------    ---------
      Total current liabilities                                13,502       15,861       20,307
Term loan                                                       4,775        5,625        6,475
Long term liabilities                                             884          994          734
Deferred income taxes                                             223          179          125
                                                            ---------    ---------    ---------
      Total liabilities                                        19,384       22,659       27,641
STOCKHOLDERS' EQUITY
   Preferred stock, $.01 par value, authorized shares -
      1,000,000; outstanding shares- none                          --           --           --
   Common stock, $.01 par value,                                  376          360          281
      authorized shares - 50,000,000; issued shares -
      37,594,196 at December 31, 2005, 36,004,359
      at June 30, 2005 and 28,139,359 at
      December 31, 2004
   Additional paid-in capital                                 133,352      132,621      126,300
   Deficit                                                   (113,962)    (109,187)    (106,937)
   Accumulated other comprehensive loss                          (675)        (675)        (305)
   Less: Treasury stock at cost -
      62,270 shares at December 31, 2005, June
      30, 2005 and December 31, 2004                           (1,480)      (1,480)      (1,480)
                                                            ---------    ---------    ---------
   Total stockholders' equity                                  17,611       21,639       17,859
                                                            ---------    ---------    ---------
      Total liabilities and stockholders' equity            $  36,995    $  44,298    $  45,500
                                                            =========    =========    =========


*Derived from audited financial statements at June 30, 2005.
See accompanying notes to condensed consolidated financial statements.


                                        3



                      BERNARD CHAUS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
          (In thousands, except number of shares and per share amounts)



                                                           For the Three Months Ended     For the Six Months Ended
                                                          ---------------------------   ---------------------------
                                                          December 31,   December 31,   December 31,   December 31,
                                                             2005            2004           2005           2004
                                                          ------------   ------------   ------------   ------------
                                                                  (Unaudited)                   (Unaudited)

Net revenue                                               $     23,002    $    38,569   $    60,720     $    73,003
Cost of goods sold                                              18,228         27,931        45,362          52,170
                                                          ------------    -----------   -----------     -----------
Gross profit                                                     4,774         10,638        15,358          20,833
Selling, general and administrative expenses                     9,405          9,889        19,634          18,986
                                                          ------------    -----------   -----------     -----------
Income (loss) from operations                                   (4,631)           749        (4,276)          1,847
Interest expense,net                                               194            341           424             646
                                                          ------------    -----------   -----------     -----------
Income (loss) before income tax provision                       (4,825)           408        (4,700)          1,201
Income tax provision                                                46             36            75             108
                                                          ------------    -----------   -----------     -----------
Net income (loss)                                         $     (4,871)   $       372   $    (4,775)    $     1,093
                                                          ============    ===========   ===========     ===========
Basic earnings (loss) per share                           $      (0.13)   $      0.01   $     (0.13)    $      0.04
                                                          ============    ===========   ===========     ===========
Diluted earnings (loss) per share                         $      (0.13)   $      0.01   $     (0.13)    $      0.04
                                                          ============    ===========   ===========     ===========
Weighted average number of shares outstanding- basic        37,025,000     28,065,000    36,513,000      27,999,000
                                                          ============    ===========   ===========     ===========
Weighted average number of  shares outstanding- diluted     37,025,000     30,500,000    36,513,000      30,591,000
                                                          ============    ===========   ===========     ===========


See accompanying notes to condensed consolidated financial statements.


                                        4



                      BERNARD CHAUS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)



                                                           For the Six Months Ended
                                                         ---------------------------
                                                         December 31,   December 31,
                                                             2005           2004
                                                         ------------   ------------
                                                                 (Unaudited)

OPERATING ACTIVITIES
Net income (loss)                                          $(4,775)       $ 1,093
Adjustments to reconcile net income (loss) to net cash
   provided by (used in) operating activities:
   Depreciation and amortization                               599            646
   Stock compensation expense                                   98             --
   Deferred income taxes                                        44             44
Changes in operating assets and liabilities:
   Accounts receivable                                       2,245          2,302
   Accounts receivable due from factor                         875         (2,185)
   Inventories                                                (265)           324
   Prepaid expenses and other current assets                   251           (135)
   Accounts payable                                           (739)           788
   Accrued expenses and long term liabilities               (1,730)          (312)
                                                           -------        -------
Net Cash Provided by (Used In) Operating Activities         (3,397)         2,565
                                                           -------        -------
INVESTING ACTIVITIES
   Purchases of fixed assets                                  (508)           (99)
                                                           -------        -------
Net Cash Used In Investing Activities                         (508)           (99)
                                                           -------        -------
FINANCING ACTIVITIES
   Net repayments of revolving credit borrowings                --         (1,706)
   Principal payments on term loan                            (850)          (850)
   Repurchases and retirement of Common Stock                  (17)            --
   Net proceeds from exercise of stock options                 666             67
                                                           -------        -------
Net Cash Used In Financing Activities                         (201)        (2,489)
                                                           -------        -------
Decrease in cash and cash equivalents                       (4,106)           (23)
Cash and cash equivalents, beginning of period               7,732            137
                                                           -------        -------
Cash and cash equivalents, end of period                   $ 3,626        $   114
                                                           =======        =======
Supplemental Disclosure of Cash Flow Information:
Cash paid for:
   Taxes                                                   $    35        $    70
                                                           =======        =======
   Interest                                                $   388        $   565
                                                           =======        =======


See accompanying notes to condensed consolidated financial statements.


                                        5



                      BERNARD CHAUS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
            Six Months Ended December 31, 2005 and December 31, 2004

     1.   Business and Summary of Significant Accounting Policies

Business:

          Bernard Chaus, Inc. (the "Company" or "Chaus") designs, arranges for
the manufacture of and markets an extensive range of women's career and casual
sportswear principally under the JOSEPHINE CHAUS(R) COLLECTION, JOSEPHINE
CHAUS(R) SPORT, CHAUS(R), CYNTHIA STEFFE(R), CYNTHIA CYNTHIA STEFFE(R) , and
FRANCES & RITA(R) trademarks and under private label brand names. The Company's
products are sold nationwide through department store chains, specialty
retailers and other retail outlets. In November 2002, the Company acquired
certain assets of S.L. Danielle, Inc. ("SL Danielle"). SL Danielle designs,
arranges for the manufacture of and markets women's moderately priced clothing
primarily under private labels. In January 2004, the Company acquired certain
assets of the Cynthia Steffe division of LF Brands Marketing, Inc., including
inventory and intellectual property. In connection with such acquisition, the
Company also acquired the Cynthia Steffe trademarks from Cynthia Steffe. The
Cynthia Steffe business designs, arranges for the manufacture of, markets and
sells an upscale modern women's apparel line, under the Cynthia Steffe
trademarks. In June 2005, the Company signed a licensing agreement with Kenneth
Cole Productions, Inc. to manufacture and sell women's sportswear under the
Kenneth Cole Reaction (R) label. The Company is targeting these products to be
sold nationwide through major retail department stores and select specialty
stores starting in spring 2006. These products will offer high-quality
fabrications and styling at "better" price points. As used herein, fiscal 2006
refers to the fiscal year ended June 30, 2006, fiscal 2005 refers to the fiscal
year ended June 30, 2005 and fiscal 2004 refers to the fiscal year ended June
30, 2004.

          On June 13, 2005, the Company and Kenneth Cole Productions, Inc. (the
"Purchaser") entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement"), pursuant to which the Purchaser purchased from the Company six
million shares of newly issued shares of common stock for an aggregate purchase
price of $6.0 million dollars. The Stock Purchase Agreement provides the
Purchaser with one demand and one piggy-back registration right.

Basis of Presentation:

          The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States of America ("generally accepted accounting principles") for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six months ended December 31,
2005 are not necessarily indicative of the results that may be expected for the
year ending June 30, 2006 ("fiscal 2006") or any other period. The balance sheet
at June 30, 2005 has been derived from the audited financial statements at that
date. For further information, refer to the financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the year ended
June 30, 2005.

Principles of Consolidation:

          The consolidated financial statements include the accounts of the
Company and its subsidiaries. Intercompany accounts and transactions have been
eliminated.

Use of Estimates:

          The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of


                                        6



                      BERNARD CHAUS, INC. AND SUBSIDIARIES

contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Revenue Recognition:

          The Company recognizes sales upon shipment of products to customers
since title and risk of loss passes upon shipment. Provisions for estimated
uncollectible accounts, discounts and returns and allowances are provided when
sales are recorded based upon historical experience and current trends. While
such amounts have been within expectations and the provisions established, the
Company cannot guarantee that it will continue to experience the same rates as
in the past. Design revenue, which is less than 1% of total revenue, is
recognized when designs are manufactured and shipped.

Shipping and Handling:

          Shipping and handling costs are included as a component of selling,
general and administrative expenses in the consolidated statements of
operations. For the three months ended December 31, 2005 and December 31, 2004
shipping and handling costs approximated $0.6 million and $0.2 million,
respectively. For the six months ended December 31, 2005 and December 31, 2004
shipping and handling costs approximated $1.1 million and $0.3 million,
respectively. Shipping and handling cost for three and six months ended December
31, 2005 includes the costs of the Company's new third party distribution
providers which was effective September 1, 2005.

Credit Terms:

          The Company extends credit to its customers, other than customers of
Cynthia Steffe Acquisition, LLC ("CS Acquisition") based upon an evaluation of
the customer's financial condition and credit history. CS Acquisition extends
credit to the majority of its customers through a factoring agreement with The
CIT Group/Commercial Services, Inc. ("CIT"). Under the factoring arrangement,
the Company receives payment from CIT as of the earlier of: a) the date that CIT
has been paid by the Company's customers; b) the date of the customer's longest
maturity if the customer is in a bankruptcy or insolvency proceeding; or c) the
last day of the third month following the customer's longest maturity date if
the receivable remains unpaid. CIT assumes only the risk of the Company's
customers' insolvency or non-payment. All other receivable risks for customer
deductions that reduce the customer receivable balances are retained by the
Company, including, but not limited to, allowable customer markdowns,
operational chargebacks, disputes, discounts, and returns. As of December 31,
2005 approximately 95% of the Company's accounts receivable was not factored.

Accounts Receivable:

          Accounts Receivable are net of allowances and anticipated discounts.
An allowance for doubtful accounts is determined through analysis of the aging
of accounts receivable at the date of the financial statements, assessments of
collectibility based on historical trends and an evaluation of the impact of
economic conditions. This amount is not significant primarily due to the
Company's history of minimal bad debts. An allowance for discounts is based on
those discounts relating to open invoices where trade discounts have been
extended to customers. Costs associated with potential returns of products as
well as allowable customer markdowns and operational charge backs, net of
expected recoveries, are included as a reduction to net revenue and are part of
the provision for allowances included in Accounts Receivable. These provisions
result from seasonal negotiations as well as historic deduction trends, net
expected recoveries and the evaluation of current market conditions. As of
December 31, 2005, June 30, 2005 and December 31, 2004, Accounts Receivable was
net of allowances of $2.6 million, $1.8 million and $1.8 million, respectively.

Inventories:

          Inventories are stated at the lower of cost or market, cost being
determined on the first-in, first-out method. The majority of the Company's
inventory purchases are shipped FOB shipping point from the Company's suppliers.
The Company takes title and assumes the risk of loss when the merchandise is
received at the boat or airplane overseas. The Company records inventory at the
point of such receipt at the boat or airplane overseas. Reserves for slow moving
and aged merchandise are provided to writedown inventory costs to net realizable
value based on historical experience and current product demand. Inventory
reserves were $1.6 million at December 31, 2005, $1.5 million at June 30, 2005,
and $1.0 million at December 31,


                                        7



                      BERNARD CHAUS, INC. AND SUBSIDIARIES

2004. Inventory reserves are based upon the level of excess and aged inventory
and the Company's estimated recoveries on the sale of the inventory. While
markdowns have been within expectations and the provisions established, the
Company cannot guarantee that it will continue to experience the same level of
markdowns as in the past.

Cash and Cash Equivalents:

          All highly liquid investments with an original maturity of three
months or less at the date of purchase are classified as cash equivalents.

Income Taxes:

          The Company accounts for income taxes under the asset and liability
method in accordance with Statement of Financial Accounting Standards ("SFAS")
No. 109, Accounting for Income Taxes. Deferred income taxes reflect the future
tax consequences of differences between the tax bases of assets and liabilities
and their financial reporting amounts at year-end. The Company periodically
reviews its historical and projected taxable income and considers available
information and evidence to determine if it is more likely than not that a
portion of the deferred tax assets will be realized. A valuation allowance is
established to reduce the deferred tax assets to the amount that is more likely
than not to be realized. As of December 31, 2005, June 30, 2005 and December 31,
2004, based upon its evaluation, the Company recorded a full valuation allowance
on its deferred tax assets. If the Company determines that a portion of the
deferred tax assets will be realized in the future, a portion of the valuation
allowance will be reduced and the Company will provide for income tax expense
(benefit) in its Statement of Operations at its estimated effective tax rate.

Stock-based Compensation:

          The Company has a Stock Option Plan and previously accounted for the
plan under the recognition and measurement principles of APB 25, "Accounting for
Stock Issued to Employees", and related interpretations. Under this method,
compensation cost was the excess, if any, of the quoted market price of the
stock at the grant date or other measurement date over the amount an employee
must pay to acquire the stock. No stock-based employee compensation cost was
reflected in net income because options granted under the plan had an exercise
price equal to the market value of the underlying common stock on the date of
grant.

          Effective July 1, 2005 the Company adopted SFAS No. 123 (revised
2004), "Share Based Payment" ("SFAS No. 123R") which eliminates the use of APB
25 and the intrinsic value method of accounting, and requires companies to
recognize the cost of employee services received in exchange for awards of
equity instruments, based on the grant date fair value of those awards, in the
financial statements. The Company has adopted the modified prospective method
whereby compensation cost is recognized in the financial statements beginning
with the effective date based on the requirements of SFAS No. 123R for all
share-based payments granted after that date and for all unvested awards granted
prior to that date.


                                        8



                      BERNARD CHAUS, INC. AND SUBSIDIARIES

          The Company's net income and earnings per share would have been
reduced for the three and six months ended December 31, 2004 had compensation
costs for the Company's stock option grants been determined based on the fair
value at the grant dates for awards under these plans in accordance with SFAS
No. 123R. The pro forma amounts have been as follows (Dollars in thousands,
except share data):



                                                                   For the Three Months Ended     For the Six Months Ended
                                                                  ---------------------------   ---------------------------
                                                                  December 31,   December 31,   December 31,   December 31,
                                                                      2005           2004           2005           2004
                                                                  ------------   ------------   ------------   ------------
                                                                                         (Unaudited)
                                                                           (In thousands except per share amounts)

Net income (loss), as reported                                      $(4,871)        $ 372         $(4,775)        $1,093
Add: Total stock-based employee compensation expense
   determined included in reported net income (loss), net of tax
   effects                                                               49            --              98             --
Deduct: Total stock-based employee compensation expense
   determined under fair value based method, net of tax effects         (49)          (88)            (98)          (165)
                                                                    -------         -----         -------         ------
Proforma net income (loss)                                          $(4,871)        $ 284         $(4,775)        $  928
                                                                    =======         =====         =======         ======
Earnings (loss) per share:
                                                                    -------         -----         -------         ------
   Basic-as reported                                                $ (0.13)        $0.01         $ (0.13)        $ 0.04
                                                                    =======         =====         =======         ======
   Basic-proforma                                                   $ (0.13)        $0.01         $ (0.13)        $ 0.03
                                                                    =======         =====         =======         ======
                                                                    -------         -----         -------         ------
   Diluted-as reported                                              $ (0.13)        $0.01         $ (0.13)        $ 0.04
                                                                    =======         =====         =======         ======
   Diluted-proforma                                                 $ (0.13)        $0.01         $ (0.13)        $ 0.03
                                                                    =======         =====         =======         ======


The following assumptions were used in the Black Scholes option-pricing model
that was utilized to determine stock-based employee compensation expense under
the fair value based method:



                                                         For the Three       For the Three
                                                          Months Ended        Months Ended
                                                       December 31, 2005   December 31, 2004
                                                       -----------------   -----------------

Weighted average fair value of stock options granted          $--             $  0.73
Risk-free interest rate                                        --                4.12%
Expected dividend yield                                       $--             $  0.00
Expected life of option                                        --              10.0 years
Expected volatility                                            --                  86%


Earnings Per Share:

          Basic earnings (loss) per share have been computed by dividing the
applicable net income (loss) by the weighted average number of common shares
outstanding. Potentially dilutive shares of 0.4 million and 0.6 million were not
included in the calculation of diluted net loss per share for the three and six
months ended December 31,2005, respectively, as their inclusion would be
antidilutive. Diluted earnings per share has been computed for the three and six
months ended December 31, 2004 by dividing the applicable net income by the
weighted average number of common shares outstanding and common equivalents.


                                        9



                      BERNARD CHAUS, INC. AND SUBSIDIARIES



                                                    For the Three Months Ended     For the Six Months Ended
                                                   ---------------------------   ---------------------------
                                                   December 31,   December 31,   December 31,   December 31,
Denominator for earnings per share (in millions)       2005           2004           2005           2004
                                                   ------------   ------------   ------------   ------------

Denominator for basic earnings per share
   weighted-average shares outstanding                 37.0           28.1           36.5           28.0
Assumed exercise of potential common shares              --            2.4             --            2.6
                                                       ----           ----           ----           ----
Denominator for diluted earnings per share             37.0           30.5           36.5           30.6
                                                       ====           ====           ====           ====


Reclassifications:

          Certain reclassifications related to accounts receivable have been
made to conform to the current period presentation.

2.   Inventories - net

                  December 31,      June 30,      December 31,
                      2005            2005            2004
                  ------------   --------------   ------------
                                 (in thousands)
                   (unaudited)                    (unaudited)
Raw materials        $ 2,322         $ 1,119         $2,422
Work-in-process          273             299            251
Finished goods         8,337           9,249          5,676
                     -------         -------         ------
Total                $10,932         $10,667         $8,349
                     =======         =======         ======


          Inventories are stated at the lower of cost, using the first-in,
first-out (FIFO) method, or market. Included in finished goods inventories is
merchandise in transit of approximately $4.9 million at December 31, 2005, $5.1
million at June 30, 2005 and $2.3 million at December 31, 2004.

3.   Financing Agreement

          The Company has a financing agreement (the "Financing Agreement") with
The CIT Group/Commercial Services, Inc. ("CIT") which provides the Company with
a $40 million revolving line of credit (the "Revolving Facility") with a $25
million sublimit for letters of credit, and a term loan (the "Term Loan").

          At the option of the Company, the Revolving Facility and the Term Loan
each may bear interest either at the JP Morgan Chase Bank Rate ("Prime Rate") or
the London Interbank Offered Rate ("LIBOR"). If the Company chooses the Prime
Rate, the interest (i) on the Revolving Facility accrues at a rate of 1/2 of 1%
above the Prime Rate (ii) on the Term Loan accrues at a rate of 1% above the
Prime Rate. If the Company chooses LIBOR, the interest (i) on the Revolving
Facility accrues at a rate of 2.75% above LIBOR (ii) on the Term Loan accrues at
a rate of 3 3/4% above LIBOR. The Company has elected the Prime Rate option from
the inception of the financing agreement through December 31, 2005. Each of the
foregoing interest rates is subject to an annual upward or downward adjustment
by 1/4 of 1%, commencing with the month following delivery of the Company's
consolidated financial statements to CIT for fiscal 2006 and fiscal 2007 based
upon the Company's borrowing availability, fixed charge coverage ratio and
leverage ratio as in effect at each such adjustment period. The interest rate as
of December 31, 2005 on the Revolving Facility was 7.75% and on the Term Loan
was 8.25%.

          The Term loan is paid down in quarterly installments of $425,000 with
a balloon payment of $1.8 million due on October 1, 2008. The Company's
obligations under the Financing Agreement are secured by a first priority lien
on


                                       10



                      BERNARD CHAUS, INC. AND SUBSIDIARIES

substantially all of the Company's assets, including the Company's accounts
receivable, inventory, intangibles, equipment, and trademarks, and a pledge of
the Company's interest in its subsidiaries.

          The Financing Agreement contains numerous financial and operational
covenants, including limitations on additional indebtedness, liens, dividends,
stock repurchases and capital expenditures. In addition, the Company is required
to maintain (i) specified levels of tangible net worth, (ii) minimum EBITDA
(earnings before interest, taxes, depreciation and amortization), (iii)certain
fixed charge coverage ratios, (iv) certain leverage ratios, and (v) specified
levels of minimum borrowing availability under the Revolving Facility. At
December 31, 2005, the Company was in compliance with all of its covenants. In
the event of the early termination by the Company of the Financing Agreement,
the Company will be liable for termination fees of $150,000 if termination
occurs prior to November 11, 2007. The Company may prepay at any time, in whole
or in part, the Term Loan without penalty. The expiration of the Financing
Agreement is October 1, 2008.

          On September 15, 2005, the Company and CIT agreed to amend the
Financing Agreement to reset or establish certain financial covenants regarding
tangible net worth, EBITDA and minimum borrowing availability to be consistent
with the Company's then latest business plan for fiscal 2006.

          On December 31, 2005, the Company had $4.1 million of outstanding
letters of credit under the Revolving Facility, total availability of
approximately $15.9 million under the Amended Financing Agreement, a balance of
$6.5 million on the Term Loan and no revolving credit borrowings. On December
31, 2004, the Company had $10.1 million of outstanding letters of credit under
the Revolving Facility, total availability of approximately $11.5 million under
the Amended Financing Agreement, a balance of $8.2 million on the Term Loan and
$6.9 million in revolving credit borrowings. At June 30, 2005, the Company had
$6.2 million of outstanding letters of credit, total availability of
approximately $20.9 million, a balance of $7.3 million on the Term Loan and no
revolving credit borrowings.

Factoring Agreement

          One of the Company's subsidiaries, CS Acquisition has a factoring
agreement with CIT which provides for a factoring commission equal to 6/10 of 1%
of the gross face amount of all accounts factored by CIT up to $10 million
ratably declining to a commission between .55% and .45% of the gross amount of
the receivables in excess of $10 million. The Factoring Agreement expires on
March 31, 2006. The Company is obligated to pay to CIT a collateral management
fee of $5,000 a month.

4.   Pension Plan

     Components of Net Periodic Benefit Cost



                                         Pension Plan                  Pension Plan
                                  For the Three Months Ended     For the Six Months Ended
                                 ---------------------------   ---------------------------
                                 December 31,   December 31,   December 31,   December 31,
                                     2005           2004           2005           2004
                                 ------------   ------------   ------------   ------------
                                         (Unaudited)                   (Unaudited)
                                        (In Thousands)                (In Thousands)

Service cost                         $  8           $ 18           $ 16           $ 36
Interest cost                          24             22             48             44
Expected return on plan assets        (26)           (19)           (52)           (38)
Amortization of net loss                6              5             12             10
                                     ----           ----           ----           ----
Net periodic benefit cost            $ 12           $ 26           $ 24           $ 52
                                     ====           ====           ====           ====


     Employer Contributions

          For the six months ended December 31, 2005 the Company's contribution
to the pension plan was $287,000. The Company anticipates contributing an
additional $44,000 to fund its pension plan in fiscal 2006 for a total of
$331,000.


                                       11



                      BERNARD CHAUS, INC. AND SUBSIDIARIES


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

General

          Bernard Chaus, Inc. (the "Company" or "Chaus") designs, arranges for
the manufacture of and markets an extensive range of women's career and casual
sportswear principally under the JOSEPHINE CHAUS(R) COLLECTION, JOSEPHINE
CHAUS(R) SPORT, CHAUS(R), CYNTHIA STEFFE(R), CYNTHIA CYNTHIA STEFFE(R) , and
FRANCES & RITA(R) trademarks and under private label brand names. The Company's
products are sold nationwide through department store chains, specialty
retailers and other retail outlets. In November 2002, the Company acquired
certain assets of S.L. Danielle, Inc. ("SL Danielle"). SL Danielle designs,
arranges for the manufacture of and markets women's moderately priced clothing
primarily under private labels. In January 2004, the Company acquired certain
assets of the Cynthia Steffe division of LF Brands Marketing, Inc., including
inventory and intellectual property. In connection with such acquisition, the
Company also acquired the Cynthia Steffe trademarks from Cynthia Steffe. The
Cynthia Steffe business designs, arranges for the manufacture of, markets and
sells an upscale modern women's apparel line, under the Cynthia Steffe
trademarks. In June 2005 the Company signed a licensing agreement with Kenneth
Cole Productions, Inc. to manufacture and sell women's sportswear under the
Kenneth Cole Reaction (R) label. The Company is targeting these products to be
sold nationwide through major retail department stores and select specialty
stores starting in spring 2006. These products will offer high-quality
fabrications and styling at "better" price points. As used herein, fiscal 2006
refers to the fiscal year ended June 30, 2006, fiscal 2005 refers to the fiscal
year ended June 30, 2005 and fiscal 2004 refers to the fiscal year ended June
30, 2004.

          On June 13, 2005, the Company and Kenneth Cole Productions, Inc. (the
"Purchaser") entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement"), pursuant to which the Purchaser purchased from the Company six
million shares of newly issued shares of common stock for an aggregate purchase
price of $6.0 million dollars. The Stock Purchase Agreement provides the
Purchaser with one demand and one piggy-back registration right.

Results of Operations

          Net revenues for the quarter ended December 31, 2005 decreased by
40.4%, or $15.6 million, to $23.0 million from $38.6 million for the quarter
ended December 31, 2004. Units sold decreased by approximately 39 % and the
overall price per unit decreased by approximately 1%. The Company's revenues
decreased primarily due to a decrease in revenues in the Company's Chaus product
lines ($13.3 million) and Cynthia Steffe product lines ($2.9 million) partially
offset by an increase in revenues from the Company's private label product lines
($0.3 million). Lower revenues for the three months ended December 31, 2005
reflected, in part, a shift in the timing of shipments to one customer from the
second to the third quarter.

          Net revenues for the six months ended December 31, 2005 decreased by
16.8%, or $12.3 million, to $60.7 million from $73.0 million for the six months
ended December 31, 2004. Units sold decreased by approximately 23% and the
overall price per unit increased by approximately 8%. The Company's revenues
decreased primarily due to a decrease in revenues in the Company's Chaus product
lines ($10.4 million) and Cynthia Steffe product lines ($1.6 million). Lower
revenues for the six months ended December 31, 2005 reflected, in part, a shift
in the timing of shipments to one customer from the second to the third quarter.

          Gross profit for the quarter ended December 31, 2005 decreased by $5.8
million to $4.8 million as compared to $10.6 million for the quarter ended
December 31, 2004. As a percentage of net revenue, gross profit decreased to
20.8% for the quarter ended December 31, 2005 from 27.6% for the quarter ended
December 31, 2004. The decrease in gross profit dollars was primarily due to the
decrease in gross profit in the Company's Chaus product lines ($4.0 million) and
Cynthia Steffe product lines ($2.2 million) partially offset by an increase in
gross profit from the Company's private label product lines ($0.3 million). The
decrease in gross profit was primarily attributable to lower revenues. The
decrease in gross profit percentage was attributable to a change in the mix of
sales and markdowns on higher margin product lines.

          Gross profit for the six months ended December 31, 2005 decreased by
$5.4 million to $15.4 million as compared to $20.8 million for the six months
ended December 31, 2004. As a percentage of net revenue, gross profit decreased
to 25.3% for the six months ended December 31, 2005 from 28.5% for the six
months ended December 31, 2004. The decrease in gross profit dollars was
primarily due to the decrease in gross profit in the Company's Chaus product
lines ($3.3 million) and


                                       12



                      BERNARD CHAUS, INC. AND SUBSIDIARIES

Cynthia Steffe product lines ($2.0 million). The decrease in gross profit was
primarily attributable to lower revenues. The decrease in gross profit
percentage was attributable to a change in the mix of sales and markdowns on
higher margin product lines.

          Selling, general and administrative ("SG&A") expenses decreased by
$0.5 million to $9.4 million (40.9% of net revenue) for the three months ended
December 31, 2005 from $9.9 million (25.6% of net revenue) for the three moths
ended December 31, 2004. The main component of the decrease in SG&A expenses for
the three months ended December 31, 2005 were payroll and payroll related costs
exclusive of warehouse payroll related costs . SGA expenses would have further
decreased had it not been for the expenses associated with the preparation for
the launch of the Kenneth Cole Reaction label in Spring 2006.

          Selling, general and administrative ("SG&A") expenses increased by
$0.6 million to $19.6 million (32.3 % of net revenue) for the six months ended
December 31, 2005 from $19.0 million (26.0% of net revenue) for the six months
ended December 31, 2004. The main component of the increase in SG&A expenses for
the six months ended December 31, 2005 were design related costs ($0.3 million)
and marketing related costs ($0.3 million). A significant portion of the
increase in SG&A expenses was associated with the preparation for the launch of
the Kenneth Cole Reaction label in Spring 2006. In addition effective September
1, 2005 the Company began utilizing third party distribution providers. Total
costs associated with warehouse and distribution were relatively the same for
the six months ended December 31, 2005 as compared to the six months ended
December 31, 2004.

          Interest expense decreased for the quarter and six months ended
December 31, 2005 as compared to the quarter and six months ended December 31,
2004 primarily due to lower bank borrowings partially offset by higher interest
rates.

          The Company's income tax provision for the quarter and six months
ended December 31, 2005 includes provisions for state and local taxes, and a
deferred provision for the temporary differences associated with the Company's
indefinite lived intangibles. The Company's income tax provision for the quarter
and six months ended December 31, 2004 includes the aforementioned and also
includes federal alternative minimum taxes (AMT) resulting from the use of the
Company's net operating loss (NOL) carryforward from prior years.

          The Company periodically reviews its historical and projected taxable
income and considers available information and evidence to determine if it is
more likely than not that a portion of the deferred tax assets will be realized.
A valuation allowance is established to reduce the deferred tax assets to the
amount that is more likely than not to be realized. As of December 31, 2005,
June 30, 2005 and December 31, 2004, based upon its evaluation of taxable income
and the current business environment, the Company recorded a full valuation
allowance on its deferred tax assets including NOL's. If the Company determines
that a portion of the deferred tax assets will be realized in the future, a
portion of the valuation allowance will be reduced and the Company will provide
for income tax expense (benefit) in its Statement of Operations at its estimated
effective tax rate. See discussion below under Critical Accounting Policies and
Estimates regarding income taxes and the Company's federal net operating loss
carryforward.

Financial Position, Liquidity and Capital Resources

General

          Net cash used in operating activities was $3.4 million for the six
months ended December 31, 2005 as compared to cash provided by operating
activities of $2.6 million for the six months ended December 31, 2004. Cash used
in operating activities for the six-month period of fiscal 2006 resulted
primarily from the net loss ($4.8 million) a decrease in accrued expenses and
long term liabilities ($1.7 million) offset by a decrease in accounts receivable
and accounts receivable due from factor ($3.1 million). The decrease in accrued
expenses and long term liabilities was predominately due to a decrease in
compensation related items and professional fees. The decrease in accounts
receivable of $3.1 million was predominately due to the decrease in sales during
the quarter ended December 31, 2005 as compared to the quarter ended December
31, 2004. Cash provided by operating activities for the six months ended
December 31, 2004 resulted primarily from net income ($1.1 million), an increase
in accounts payable ($0.8 million) and depreciation and amortization ($0.6
million).

          Cash used in investing activities for the six months ended December
31, 2005 was $0.5 million compared to $0.1 million in the previous year. The
purchases of fixed assets for the six months ended December 31, 2005 consisted
primarily of capital expenditures connected with the construction of the Kenneth
Cole showroom and Management Information Systems. In


                                       13



                      BERNARD CHAUS, INC. AND SUBSIDIARIES

fiscal 2006, the Company anticipates capital expenditures of approximately $1.0
million, primarily for the Kenneth Cole showroom and store fixtures and
Management Information Systems. The unexpended portion of capital expenditures
for the remainder of fiscal 2006 is approximately $0.5 million.

          Net cash used in financing activities of $0.2 million for the six
months ended December 31, 2005 was primarily the result of principal payments on
the term loan of $0.9 million, partially offset by net proceeds from exercise of
stock options of $0.7 million. Net cash used in financing activities of $2.5
million for the six months ended December 31, 2004 was primarily the result of
principal payments on term loan of $0.9 million and payments on short-term bank
borrowings of $1.7 million.

Financing Agreement

          The Company has a financing agreement (the "Financing Agreement") with
The CIT Group/Commercial Services, Inc. ("CIT") which provides the Company with
a $40 million revolving line of credit (the "Revolving Facility") with a $25
million sublimit for letters of credit, and a term loan (the "Term Loan").

          At the option of the Company, the Revolving Facility and the Term Loan
each may bear interest either at the JP Morgan Chase Bank Rate ("Prime Rate") or
the London Interbank Offered Rate ("LIBOR"). If the Company chooses the Prime
Rate, the interest (i) on the Revolving Facility accrues at a rate of 1/2 of 1%
above the Prime Rate (ii) on the Term Loan accrues at a rate of 1% above the
Prime Rate. If the Company chooses LIBOR, the interest (i) on the Revolving
Facility accrues at a rate of 2.75% above LIBOR (ii) on the Term Loan accrues at
a rate of 3 3/4% above LIBOR. The Company has elected the Prime Rate option from
the inception of the financing agreement through December 31, 2005. Each of the
foregoing interest rates is subject to an annual upward or downward adjustment
by 1/4 of 1%, commencing with the month following delivery of the Company's
consolidated financial statements to CIT for fiscal 2006 and fiscal 2007 based
upon the Company's borrowing availability, fixed charge coverage ratio and
leverage ratio as in effect at each such adjustment period. The interest rate as
of December 31, 2005 on the Revolving Facility was 7.75% and on the Term Loan
was 8.25%.

          The Term loan is paid down in quarterly installments of $425,000 with
a balloon payment of $1.8 million due on October 1, 2008. The Company's
obligations under the Financing Agreement are secured by a first priority lien
on substantially all of the Company's assets, including the Company's accounts
receivable, inventory, intangibles, equipment, and trademarks, and a pledge of
the Company's interest in its subsidiaries.

          The Financing Agreement contains numerous financial and operational
covenants, including limitations on additional indebtedness, liens, dividends,
stock repurchases and capital expenditures. In addition, the Company is required
to maintain (i) specified levels of tangible net worth, (ii) minimum EBITDA
(earnings before interest, taxes, depreciation and amortization), (iii)certain
fixed charge coverage ratios, (iv) certain leverage ratios, and (v) specified
levels of minimum borrowing availability under the Revolving Facility. At
December 31, 2005, the Company was in compliance with all of its covenants. In
the event of the early termination by the Company of the Financing Agreement,
the Company will be liable for termination fees of $150,000 if termination
occurs prior to November 11, 2007. The Company may prepay at any time, in whole
or in part, the Term Loan without penalty. The expiration of the Financing
Agreement is October 1, 2008.

          On September 15, 2005, the Company and CIT agreed to amend the
Financing Agreement to reset or establish certain financial covenants regarding
tangible net worth, EBITDA and minimum borrowing availability to be consistent
with the Company's then latest business plan for fiscal 2006.

          On December 31, 2005, the Company had $4.1 million of outstanding
letters of credit under the Revolving Facility, total availability of
approximately $15.9 million under the Amended Financing Agreement, a balance of
$6.5 million on the Term Loan and no revolving credit borrowings. On December
31, 2004, the Company had $10.1 million of outstanding letters of credit under
the Revolving Facility, total availability of approximately $11.5 million under
the Amended Financing Agreement, a balance of $8.2 million on the Term Loan and
$6.9 million in revolving credit borrowings. At June 30, 2005, the Company had
$6.2 million of outstanding letters of credit, total availability of
approximately $20.9 million, a balance of $7.3 million on the Term Loan and no
revolving credit borrowings.


                                       14



                      BERNARD CHAUS, INC. AND SUBSIDIARIES

Factoring Agreement

          One of the Company's subsidiaries, CS Acquisition has a factoring
agreement with CIT which provides for a factoring commission equal to 6/10 of 1%
of the gross face amount of all accounts factored by CIT up to $10 million
ratably declining to a commission between .55% and .45% of the gross amount of
the receivables in excess of $10 million. The Factoring Agreement expires on
March 31, 2006. The Company is obligated to pay to CIT a collateral management
fee of $5,000 a month.

Outlook

          As the Company launches the new Kenneth Cole Reaction label in spring
2006, it expects to experience an increase in SG&A expenses while only realizing
six months of revenues from such label. The Company is experiencing a
challenging retail environment. Nevertheless, the Company anticipates an
improved performance in the second half of its fiscal year.

Future Financing Requirements

          At December 31, 2005, the Company had working capital of $16.6 million
as compared with working capital of $17.8 million at December 31, 2004. The
Company's business plan requires the availability of sufficient cash flow and
borrowing capacity to finance its product lines and to meet its cash needs for
the launch and support of the Kenneth Cole product lines. The Company is
required to pay specified percentages of net sales to support advertising of the
licensed products and to expend a total of $4.0 million in the period ending
December 31, 2007 to support the initial launch of the licensed products. The
Company expects to satisfy such requirements through cash on hand, cash flow
from operations and borrowings under its financing agreements. The Company
believes that it has adequate resources to meet its needs for the foreseeable
future assuming that it meets its business plan and satisfies the covenants set
forth in the Financing Agreement.

          The foregoing discussion contains forward-looking statements which are
based upon current expectations and involve a number of uncertainties, including
the Company's ability to maintain its borrowing capabilities under the Financing
Agreement, retail market conditions, and consumer acceptance of the Company's
products.

Critical Accounting Policies and Estimates

          The Company's significant accounting policies are more fully described
in Note 2 to the consolidated financial statements included in the Company's
annual report on Form 10-K for the year ended June 30, 2005. Certain of the
Company's accounting policies require the application of significant judgment by
management in selecting the appropriate assumptions for calculating financial
estimates. By their nature, these judgments are subject to an inherent degree of
uncertainty. These judgments are based on historical experience, observation of
trends in the industry, information provided by customers and information
available from other outside sources, as appropriate. Significant accounting
policies include:

          Revenue Recognition -The Company recognizes sales upon shipment of
products to customers since title and risk of loss passes upon shipment.
Provisions for estimated uncollectible accounts, discounts and returns and
allowances are provided when sales are recorded based upon historical experience
and current trends. While such amounts have been within expectations and the
provisions established, the Company cannot guarantee that it will continue to
experience the same rates as in the past. Design revenue, which is less than 1%
of total revenue, is recognized when designs are manufactured and shipped.

          Accounts Receivable- Accounts Receivable are net of allowances and
anticipated discounts. An allowance for doubtful accounts is determined through
analysis of the aging of accounts receivable at the date of the financial
statements, assessments of collectibility based on historical trends and an
evaluation of the impact of economic conditions. This amount is not significant
primarily due to the Company's history of minimal bad debts. An allowance for
discounts is based on those discounts relating to open invoices where trade
discounts have been extended to customers. Costs associated with potential
returns of products as well as allowable customer markdowns and operational
charge backs, net of expected recoveries, are included as a reduction to net
revenue and are part of the provision for allowances included in Accounts
Receivable. These provisions result from seasonal negotiations as well as
historic deduction trends, net expected recoveries and the evaluation of current
market conditions. As of December 31, 2005, June 30, 2005 and December 31, 2004,
Accounts Receivable was net of allowances of $2.6 million, $1.8 million and $1.8
million, respectively.


                                       15



                      BERNARD CHAUS, INC. AND SUBSIDIARIES

          Inventories- Inventories are stated at the lower of cost or market,
cost being determined on the first-in, first-out method. The majority of the
Company's inventory purchases are shipped FOB shipping point from the Company's
suppliers. The Company takes title and assumes the risk of loss when the
merchandise is received at the boat or airplane overseas. The Company records
inventory at the point of such receipt at the boat or airplane overseas.
Reserves for slow moving and aged merchandise are provided to writedown
inventory costs to net realizable value based on historical experience and
current product demand. Inventory reserves were $1.6 million at December 31,
2005, $1.5 million at June 30, 2005, and $1.0 million at December 31, 2004.
Inventory reserves are based upon the level of excess and aged inventory and the
Company's estimated recoveries on the sale of the inventory. While markdowns
have been within expectations and the provisions established, the Company cannot
guarantee that it will continue to experience the same level of markdowns as in
the past.

          Valuation of Long-Lived Assets, Trademarks and Goodwill - The Company
periodically reviews the carrying value of its long-lived assets for continued
appropriateness. This review is based upon projections of anticipated future
undiscounted cash flows. While the Company believes that its estimates of future
cash flows are reasonable, different assumptions regarding such cash flows could
materially affect evaluations. The Company evaluates goodwill and trademarks at
least annually or whenever events and changes in circumstances suggest that the
carrying amount may not be recoverable from its estimated future cash flows. To
the extent these future projections or the Company's strategies change, the
conclusion regarding impairment may differ from the current estimates.

          Income Taxes- The Company's results of operations have generated a
federal tax net operating loss ("NOL") carryforward of approximately $96.0
million as of June 30, 2005. Generally accepted accounting principles require
that the Company record a valuation allowance against the deferred tax asset
associated with this NOL if it is "more likely than not" that the Company will
not be able to utilize it to offset future taxable income. As of December 31,
2005 and June 30, 2005, based upon its evaluation of the Company's historical
and projected results of operations, the current business environment and the
magnitude of the NOL, the Company recorded a full valuation allowance on its
deferred tax assets including NOL's. The provision for income taxes primarily
relates to state and local taxes and a deferred provision for the temporary
differences associated with the company's indefinite lived intangibles. It is
possible, however, that the Company could be profitable in the future at levels
which cause management to conclude that it is more likely than not that the
Company will realize all or a portion of the NOL carryforward. Upon reaching
such a conclusion, the Company would record the estimated net realizable value
of the deferred tax asset at that time and would then provide for income taxes
at a rate equal to its combined federal and state effective rates. Subsequent
revisions to the estimated net realizable value of the deferred tax asset could
cause the Company's provision for income taxes to vary from period to period,
although its cash tax payments would remain unaffected until the benefit of the
NOL is utilized.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          Interest Rate Risk- The Company is subject to market risk from
exposure to changes in interest rates based primarily on its financing
activities. The market risk inherent in the financial instruments represents the
potential loss in earnings or cash flows arising from adverse changes in
interest rates. These debt obligations with interest rates tied to the prime
rate are described in "Liquidity and Capital Resources", as well as Note 3 of
the Notes to the Condensed Consolidated Financial Statements. The Company
manages these exposures through regular operating and financing activities. The
Company has not entered into any derivative financial instruments for hedging or
other purposes. The following quantitative disclosures are based on the
prevailing prime rate. These quantitative disclosures do not represent the
maximum possible loss or any expected loss that may occur, since actual results
may differ from these estimates.

          At December 31, 2005 and 2004, the carrying amounts of the Company's
revolving credit borrowings and term loan approximated fair value. As of
December 31, 2005, the Company's revolving credit borrowings bore interest at
7.75% and the term loan bore interest at 8.25%. As of December 31, 2005, a
hypothetical immediate 10% adverse change in prime interest rates relating to
the Company's revolving credit borrowings and term loan would have a $0.1
million unfavorable impact on its earnings and cash flows over a one-year
period.

ITEM 4. CONTROLS AND PROCEDURES


                                       16



                      BERNARD CHAUS, INC. AND SUBSIDIARIES

          The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed by the Company in
the reports filed or submitted by it under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms, and include controls and procedures designed to ensure that
information required to be disclosed by the Company in such reports is
accumulated and communicated to the Company's management, including the
Company's Chairwoman and Chief Executive Officer and the Company's Chief
Financial Officer, as appropriate to allow timely decisions regarding required
disclosure.

          Each fiscal quarter the Company carries out an evaluation, under the
supervision and with the participation of the Company's management, including
the Company's Chairwoman and Chief Executive Officer along with the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Exchange Act Rule
13a-15. Based upon the foregoing, the Company's Chairwoman and Chief Executive
Officer along with the Company's Chief Financial Officer, concluded that, as of
December 31, 2005, the Company's disclosure controls and procedures were
effective in timely alerting them to material information relating to the
Company (including its consolidated subsidiaries) required to be included in the
Company's Exchange Act reports.

          During the fiscal quarter ended December 31, 2005, there has been no
change in the Company's internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.



                                       17




                      BERNARD CHAUS, INC. AND SUBSIDIARIES

PART II - OTHER INFORMATION

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

     (a)       The Annual Meeting of Stockholders of the Company was held on
               November 17, 2005 at 9:00 a.m.

     (c)       At such meeting, the Stockholders voted on two matters:

     Matter:   The election of four directors of the Company to serve until the
               next Annual Meeting of Stockholders and until their respective
               successors have been elected and qualified.

                                       Number of Shares
                                    ---------------------
                                        For      Withheld
                                    ----------   --------
               Philip G. Barach     35,485,895     92,958
               Josephine Chaus      35,485,442     93,411
               Harvey M. Krueger    35,484,795     94,058
               S. Lee Kling         35,425,440    153,413

     Matter:   The approval of the Company's 2005 Incentive Plan.

                             Number of Shares
                            -----------------
               For          Against   Abstain
               ----------   -------   -------
               29,877,134   174,944   154,743



                                       18




                      BERNARD CHAUS, INC. AND SUBSIDIARIES

Item 6. Exhibits

*31.1   Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
        for Josephine Chaus.

*31.2   Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
        for Barton Heminover.

*32.1   Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
        Section 906 of the Sarbanes-Oxley Act of 2002 for Josephine Chaus.

*32.2   Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
        Section 906 of the Sarbanes-Oxley Act of 2002 for Barton Heminover.

     *    Filed herewith

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.

                          BERNARD CHAUS, INC.
                          (Registrant)


Date: February 13, 2006   By: /s/ Josephine Chaus
                              ----------------------------------------
                          JOSEPHINE CHAUS
                          Chairwoman of the Board, and
                          Chief Executive Officer


Date: February 13, 2006   By: /s/ David Panitz
                              ----------------------------------------
                          DAVID PANITZ
                          Chief Operating Officer


Date: February 13, 2006   By: /s/ Barton Heminover
                              ----------------------------------------
                          BARTON HEMINOVER
                          Chief Financial Officer


                                       19



                      BERNARD CHAUS, INC. AND SUBSIDIARIES
                                INDEX TO EXHIBITS

EXHIBIT NUMBER                           EXHIBIT TITLE
--------------                           -------------
31.1             Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
                 of 2002 for Josephine Chaus.
31.2             Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
                 of 2002 for Barton Heminover.
32.1             Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
                 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
                 Josephine Chaus.
32.2             Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
                 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
                 Barton Heminover.


                                       20`