UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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 28, 2002.


           ( )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   333-38951
                      ------------


                               GFSI HOLDINGS, INC.
              -----------------------------------------------------
               (Exact name of registrant specified in its charter)


               DELAWARE                                          74-2810744
---------------------------------------------               --------------------
(State or other jurisdiction of incorporation               (I.R.S. Employer
             or organization)                                Identification No.)

                              9700 Commerce Parkway
                              Lenexa, Kansas 66219
                   -------------------------------------------
                    (Address of principal executive offices)


        Registrant's telephone number, including area code (913) 888-0445
                                                           --------------


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.

              (1)  Yes   (X)                       No  ( )
              (2)  Yes   (X)                       No  ( )

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (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, $0.01 par value per share - 1,820 shares issued and outstanding as
of February 1, 2003.


                                        1

<PAGE>

                       GFSI HOLDINGS, INC. AND SUBSIDIARY
                          QUARTERLY REPORT ON FORM 10-Q
                     FOR THE QUARTER ENDED DECEMBER 28, 2002
                                      INDEX


                                                                            PAGE
PART I - FINANCIAL INFORMATION

         ITEM 1 -   CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                    Consolidated Balance Sheets                                3
                    Consolidated Statements of Income                          4
                    Consolidated Statements of Cash Flows                      5
                    Notes to Consolidated Financial Statements                 6


         ITEM 2 -   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF
                    OPERATIONS                                                 7

         ITEM 3 -   QUANTITATIVE AND QUALITATIVE DISCLOSURES
                    ABOUT MARKET RISK                                         10

PART II - OTHER INFORMATION                                                   11


SIGNATURE PAGE                                                                12

OFFICERS CERTIFICATION                                                        13



                                        2

<PAGE>
<TABLE>

GFSI HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands, except share data)
<CAPTION>

                                                                                   December 28,         June 29,
                                                                                      2002                2002
                                                                                ----------------     --------------
     <S>                                                                           <C>                <C>

ASSETS
Current assets:
     Cash and cash equivalents                                                     $     3,753        $       328
     Accounts receivable, net                                                           32,776             32,626
     Inventories, net                                                                   43,470             45,729
     Income tax receivable                                                                  --                284
     Prepaid expenses and other current assets                                           1,383              1,268
     Deferred income taxes                                                               1,195                845
                                                                                   ------------       ------------
Total current assets                                                                    82,577             81,080
Property, plant and equipment, net                                                      20,263             19,671
Other assets:
     Deferred financing costs, net                                                       3,599              4,063
     Other                                                                                 509              1,010
                                                                                   ------------       ------------
Total assets                                                                       $   106,948        $   105,824
                                                                                   ============       ============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
     Accounts payable                                                              $    10,099        $    12,010
     Accrued interest expense                                                            4,174              4,365
     Accrued expenses                                                                    6,292              5,983
     Income taxes payable                                                                  759                 --
     Current portion of long-term debt                                                     197                177
                                                                                   ------------       ------------
Total current liabilities                                                               21,521             22,535
Deferred income taxes                                                                      762                699
Other long-term obligations                                                                527                527
Long-term debt, less current portion                                                   241,874            241,120
Redeemable preferred stock                                                               5,522              5,405
Stockholders' equity (deficiency):
     Common stock, $.01 par value 2,105 shares authorized,
     2,000 shares issued at December 28, 2002 and June 29, 2002                             --                 --
     Additional paid-in capital                                                            200                200
     Accumulated deficiency                                                           (163,445)          (164,651)
     Treasury stock, at cost (180 and 152.5 series A shares at
     December 28, 2002 and June 29, 2002, respectively)                                    (13)               (11)
                                                                                   ------------       ------------
Total stockholders' equity (deficiency)                                            $  (163,258)          (164,462)
                                                                                   ------------       ------------
Total liabilities and stockholders' equity (deficiency)                            $   106,948        $   105,824
                                                                                   ============       ============



See notes to consolidated financial statements.
</TABLE>



                                        3

<PAGE>
<TABLE>

GFSI HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED) (In thousands)

<CAPTION>



                                                        QUARTER ENDED                            SIX MONTHS ENDED
                                                DECEMBER 28,        DECEMBER 28,         DECEMBER 28,       DECEMBER 28,
                                                    2002                2001                 2002               2001
                                               -------------        ------------        -------------       ------------
<S>                                              <C>                  <C>                <C>                 <C>

Net sales                                        $ 54,633             $ 52,265           $  115,844          $ 106,377
Cost of sales                                      34,404               32,820               73,553             66,090
                                                 ---------            ---------          -----------         ----------
Gross profit                                       20,229               19,445               42,291             40,287

Operating expenses:
     Selling                                        6,879                6,022               14,375             11,950
     General and administrative                     6,844                6,504               13,479             12,909
                                                 ---------            ---------          -----------         ----------
                                                   13,723               12,526               27,854             24,859
                                                 ---------            ---------          -----------         ----------
Operating income                                    6,506                6,919               14,437             15,428

Other income (expense):
     Interest expense                              (6,164)              (6,164)             (12,156)           (12,420)
     Other, net                                        11                   (6)                  11                 11
                                                 ---------            ---------          -----------         ----------
                                                   (6,153)              (6,170)             (12,145)           (12,409)
                                                 ---------            ---------          -----------         ----------
Income before income taxes                            353                  749                2,292              3,019
Income tax expense                                    139                  293                  895              1,178
                                                 ---------            ---------          -----------         ----------
Net income                                            214                  456                1,397              1,841
Preferred stock dividends                             (99)                (100)                (198)              (201)
                                                 ---------            ---------          -----------         ----------
Net income attributable to
   common shareholders                           $    115             $    356           $    1,199          $   1,640
                                                 =========            =========          ===========         ==========


See notes to consolidated financial statements.
</TABLE>

                                        4

<PAGE>

<TABLE>
GFSI HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) (In thousands)
<CAPTION>

                                                                                            SIX MONTHS ENDED
                                                                                      DECEMBER 28,       DECEMBER 28,
                                                                                          2002             2001
                                                                                      ------------       ------------
<S>                                                                                    <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                             $    1,397         $    1,841
Adjustments to reconcile net income to net cash provided by
   (used in) operating activities:
     Depreciation                                                                           1,576              1,576
     Amortization of deferred financing costs                                                 500                562
     Amortization of other intangibles                                                        500                500
     (Gain) loss on sale or disposal of property, plant and equipment                         (11)                 8
     Accretion of discount on long-term debt                                                4,834              4,327
     Deferred income taxes                                                                   (287)               (81)
     Gain (loss) on foreign currency translation                                                7                 --
Changes in operating assets and liabilities:
     Accounts receivable, net                                                                (150)            (8,883)
     Inventories, net                                                                       2,259             (1,334)
     Prepaid expenses, other current assets and other assets                                 (114)               283
     Income taxes receivable and payable                                                    1,043              1,851
     Accounts payable, accrued expenses and other
        long-term obligations                                                              (1,792)            (1,342)
                                                                                       -----------        -----------
Net cash provided by (used in) operating activities                                         9,762               (692)
                                                                                       -----------        -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from sales of property, plant and equipment                                      14                  1
     Purchases of property, plant and equipment                                            (2,172)            (1,988)
                                                                                       -----------        -----------
Net cash used in investing activities                                                      (2,158)            (1,987)
                                                                                       -----------        -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net changes to short-term borrowings and revolving credit agreement                   (4,422)             1,200
     Redemption of preferred stock                                                            (81)              (700)
     Treasury stock purchase                                                                   (2)               (26)
     Proceeds from sale of stock                                                               --                676
     Cash paid for financing costs                                                            (37)                --
     Issuance of long-term debt                                                               450                 --
     Payments on long-term debt                                                               (87)            (1,722)
                                                                                       -----------        -----------
Net cash used in financing activities                                                      (4,179)              (572)
                                                                                       -----------        -----------

Net increase (decrease)  in cash and cash equivalents                                       3,425             (3,251)
Cash and cash equivalents at beginning of period                                              328              5,324
                                                                                       -----------        -----------
Cash and cash equivalents at end of period                                             $    3,753         $    2,073
                                                                                       ===========        ===========
Supplemental cash flow information:
     Interest paid                                                                     $    7,013         $    6,868
                                                                                       ===========        ===========
     Income taxes paid (refunded)                                                      $      139         $     (962)
                                                                                       ===========        ===========

</TABLE>

See notes to consolidated financial statements.

                                        5

<PAGE>

                       GFSI HOLDINGS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                DECEMBER 28, 2002

1.   BASIS OF PRESENTATION

     The  accompanying  unaudited  consolidated  financial  statements  of  GFSI
Holdings,  Inc.  (the  "Company")  include  the  accounts of the Company and the
accounts of its wholly owned  subsidiaries,  GFSI,  Inc.,  Event 1, Inc. ("Event
1"),  Champion  Custom  Products,  Inc.  ("CCP")  and GFSI Canada  Company.  All
intercompany  balances and  transactions  have been  eliminated.  The  unaudited
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 promulgated
by the Securities and Exchange Commission.  Accordingly, they do not include all
of the  information  and  footnotes  required by generally  accepted  accounting
principles for annual financial statement reporting purposes.  In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation of the financial position, operations and cash
flows of the  Company  have been  included.  Operating  results  for the interim
periods are not  necessarily  indicative of the results that may be expected for
the entire fiscal year. The  consolidated  balance sheet  information as of June
29, 2002 has been derived from the audited consolidated  financial statements at
that date, but does not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.  For
further  information,   refer  to  the  consolidated  financial  statements  and
footnotes  thereto  for the year ended June 29, 2002  included in the  Company's
Annual Report on Form 10-K.

     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  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.


2.   COMMITMENTS AND CONTINGENCIES

     The Company,  in the normal course of business,  may be threatened  with or
named as a defendant in various  lawsuits.  It is not possible to determine  the
ultimate  disposition  of these matters,  however,  management is of the opinion
that there are no known  claims or known  contingent  claims  that are likely to
have  a  material  adverse  effect  on  the  results  of  operations,  financial
condition, or cash flows of the Company.


3.   RECLASSIFICATIONS

     Certain  reclassifications  have been made to the fiscal 2002  consolidated
financial statements to conform to the fiscal 2003 presentation.


4.   SUBSEQUENT EVENT

     On December 31, 2002 the Company's  wholly-owned  subsidiary,  GFSI,  Inc.,
completed the private  placement of $9.9 million of  unregistered  9.625% senior
subordinated  notes  ("Exchange  Notes") in exchange  for $24 million  aggregate
principal amount at maturity of the Company's 11.375% Senior Discount Notes (the
"Holdings  Discount  Notes") with an accreted book value of $19.9  million.  The
acquisition of the Holdings  Discount Notes by GFSI, Inc. is considered an early
extinguishment of debt, and accordingly,  the Company will record a pre-tax gain
on the transaction of approximately  $9.6 million,  net of related costs, in the
third quarter of fiscal 2003.

     The Exchange Notes are unsecured obligations of GFSI, Inc., mature on March
1, 2007, pay interest semi-annually on March 1  and September 1, and were issued
under an indenture with substantially identical terms as the indenture governing
the $125 million  aggregate  principal  amount at maturity of GFSI,  Inc. Senior
Subordinated  Notes  issued on  February  27,  1997.  The  Exchange  Notes  were
guaranteed by each of GFSI, Inc.'s wholly-owned subsidiaries (Event One, CCP and
GFSI Canada Company). The Exchange Notes were issued to an "accredited investor"
and were exempt from registration  under Rule 144 of the Securities Act of 1933.
GFSI,  Inc.  intends to file an exchange offer  registration  statement with the
Securities and Exchange Commission in the third quarter of fiscal 2003 to enable
the holder of the Exchange Notes to exchange them for publicly  registered notes
having terms substantially identical to the Exchange Notes.


                                        6

<PAGE>

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

      The  discussions set forth in this Form 10-Q should be read in conjunction
with the financial  information  included herein and the Company's Annual Report
on Form 10-K for the year  ended  June 29,  2002.  Management's  discussion  and
analysis of financial  condition and results of operations and other sections of
this report contain forward-looking statements relating to future results of the
Company.   Such   forward-looking   statements   are   identified   by   use  of
forward-looking words such as "anticipates",  "believes",  "plans", "estimates",
"expects",  and  "intends"  or words or  phrases of  similar  expression.  These
forward-looking  statements  are  subject  to  various  assumptions,  risks  and
uncertainties,  including but not limited to,  changes in political and economic
conditions,  demand for the  Company's  products,  acceptance  of new  products,
developments  affecting  the  Company's  products and to those  discussed in the
Company's  filings with the  Securities  and Exchange  Commission.  Accordingly,
actual  results  could  differ   materially  from  those   contemplated  by  the
forward-looking statements.

     EBITDA  represents  operating income plus  depreciation  and  amortization.
While EBITDA should not be construed as a substitute  for operating  income or a
better  indicator of liquidity than cash flow from operating  activities,  which
are determined in accordance with generally accepted accounting  principles,  it
is  included  herein to  provide  additional  information  with  respect  to the
Company's  ability to meet its future  debt  service,  capital  expenditure  and
working capital  requirements.  In addition,  the Company  believes that certain
investors find EBITDA to be a useful tool for measuring the Company's ability to
service its debt.  EBITDA is not necessarily a measure of the Company's  ability
to fund its cash needs.  See the  Consolidated  Statements  of Cash Flows of the
Company herein for further information.

CRITICAL ACCOUNTING POLICIES

     The following  discussion and analysis of financial  condition,  results of
operations,  liquidity  and  capital  resources  is  based  upon  the  Company's
consolidated  financial statements,  which have been prepared in accordance with
accounting  principles  generally  accepted  in  the  United  States.  Generally
accepted  accounting  principles require estimates and judgments that affect the
reported  amounts of assets,  liabilities,  revenues and  expenses,  and related
disclosure  of  contingent  assets and  liabilities.  On an ongoing  basis,  the
Company  evaluates  its  estimates,   including  those  related  to  bad  debts,
inventories,  intangible  assets,  long-lived  assets,  deferred  income  taxes,
accrued expenses,  contingencies and litigation. The Company bases its estimates
on historical  experience and on various other  assumptions that it believes are
reasonable  under the  circumstances,  the  results  of which form the basis for
making  judgments about the carrying  values of assets and liabilities  that are
not readily  apparent from other sources.  Actual results may differ  materially
from these estimates under different assumptions or conditions.

     The Company's  management believes that some of its significant  accounting
policies involve a higher degree of judgment or complexity than other accounting
policies.  Identified below are the policies deemed critical to its business and
the understanding of its results of operations.

     REVENUE  RECOGNITION.  The  Company  recognizes  revenues  when  goods  are
shipped,  title has  passed,  the sales  price is fixed  and  collectibility  is
reasonably assured.  Returns,  discounts and sales allowance estimates are based
on projected sales trends,  historical  data and other known factors.  If actual
returns,  discounts and sales  allowances are not consistent with the historical
data used to calculate these estimates, net sales could either be understated or
overstated.

     ACCOUNTS  RECEIVABLE.  Accounts  receivable  consist  of  amounts  due from
customers and business partners. The Company maintains an allowance for doubtful
accounts to reflect  expected  credit losses and provides for bad debts based on
collection  history and  specific  risks  identified  on a  customer-by-customer
basis.  A  considerable  amount of judgment  is required to assess the  ultimate
realization of accounts receivable and the  credit-worthiness  of each customer.
Furthermore,  these judgments must be continually  evaluated and updated. If the
historic data used to evaluate credit risk does not reflect future  collections,
or, if the financial  condition of the Company's  customers  were to deteriorate
causing an impairment of their ability to make payments,  additional  provisions
for bad debts may be required in future periods. Accounts receivable at December
28, 2002  and  June 28, 2002  were  net  of  allowance for  doubtful accounts of
$1.1 million and $838,000, respectively.

     INVENTORIES.  Inventories  are  carried  at the  lower  of cost  or  market
determined under the First-In,  First-Out (FIFO) method. The Company writes down
obsolete and  unmarketable  inventories  to their  estimated  market value based
upon, among other things, assumptions about future demand and market conditions.
If actual  market  conditions  are less  favorable  than  projected,  additional
inventory write-downs may be required.

                                        7

<PAGE>

COMPARISON OF OPERATING RESULTS FOR THE QUARTERS ENDED DECEMBER 28, 2002
AND DECEMBER 28, 2001.

         NET SALES.  Net sales for the quarter ended December 28, 2002 increased
5% to $54.6  million  compared to $52.3  million last year.  The increase in net
sales was primarily due to sales growth from the Licensed  Apparel group,  which
was partially  offset by sales  decreases from the Corporate  division.  The net
sales growth in the Licensed Apparel group was from college bookstore  customers
and was most pronounced in our Champion licensed products group (CCP). Net sales
from college bookstore customers for the second quarter of fiscal 2003 were $3.0
million greater than last year while sales for the Corporate  division were $1.3
million less than last year. A soft  economy and reduced  corporate  spending on
marketing and employee  incentive  programs have had a detrimental effect on the
net sales of the Corporate division.

         GROSS  PROFIT.  Gross  profit for the quarter  ended  December 28, 2002
increased 4% to $20.2 million  compared to $19.4 million last year. Gross profit
as a  percentage  of net sales was  comparable  for both  periods  at about 37%.
College bookstore sales represented 46% of net sales for the quarter compared to
43% last year.

         OPERATING  EXPENSES.  Operating expenses for the quarter ended December
28, 2002 increased 10% to $13.7 million from $12.5 million last year.  Operating
expenses as a percentage of net sales were 25.1% in the second quarter of fiscal
2003  compared  to 24.0% last year.  Operating  expenses  increased  due to more
revenue generated from college bookstore sales, which carry royalty fees and are
marketed through more expensive  distribution channels. In addition, the Company
incurred  higher bad debt  expense in fiscal  2003 and changed the timing of its
annual sales meetings, which were held in the second quarter of fiscal 2003. The
annual sales meetings were held in the third quarter last year.

         OPERATING INCOME.  Operating income decreased 6% to $6.5 million in the
second  quarter of fiscal 2003  compared to $6.9  million  last year.  Operating
income as a percentage of net sales  decreased to 11.9% in the second quarter of
fiscal 2003 from 13.2% in the second  quarter of fiscal  2002.  The  decrease in
operating  income as a  percentage  of sales was the result of the  increase  in
operating expenses.

         EBITDA.  EBITDA  decreased 5% to $7.6 million in the second  quarter of
fiscal 2003  compared to $7.9 million last year.  EBITDA as a percentage  of net
sales  decreased to 13.8% in the quarter  ended  December 28, 2002 from 15.2% in
the quarter  ended  December 28, 2001.  The decrease in EBITDA was the result of
lower operating income.

         INTEREST EXPENSE. Interest expense in the second quarter of fiscal 2003
was $6.2 million,  the same as the  comparable  period last year.  The effect of
higher average borrowings was offset by lower interest rates.

         NET  INCOME.  Net  income for the  second  quarter  of fiscal  2003 was
$214,000  compared  to  $456,000  for the  second  quarter of fiscal  2002.  The
decrease was primarily the result of the decline in operating income.


COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED DECEMBER 28, 2002
AND DECEMBER 28, 2001.

         NET  SALES.  Net sales  for the six  months  ended  December  28,  2002
increased  9% to $115.8  million  from  $106.4  million in the six months  ended
December  28,  2001.  The increase in net sales from last year was due to strong
growth from the Licensed  Apparel  group,  which was fueled by a 42% increase in
revenue from CCP. The net sales increase from CCP was partially  offset by a 28%
decline in Corporate  division sales. Net sales for CCP for the first six months
of fiscal  2003 were  $10.8  million  greater  than  last year  while  Corporate
division sales were $5.1 million less than last year.  Management  believes that
the Company's  customers  have shifted their  purchases to lower priced  apparel
with less  expensive  decoration,  which has  enhanced  the sales of CCP's  more
moderately  priced goods. A soft economy and consequent  reductions in corporate
spending on marketing  and employee  incentive  programs  have had a detrimental
effect on the net sales of the Corporate division.

         GROSS PROFIT.  Gross profit for the six months ended  December 28, 2002
increased  5% to $42.3  million  from  $40.3  million  in the six  months  ended
December 28, 2001.  Gross profit as a percentage of net sales decreased to 36.5%
from 37.9% last year.  The decrease in gross profit as a percentage of net sales
was the result of a change in  customer  purchasing.  College  bookstore  sales,
fueled by CCP,  represented  52% of net sales  for the six  month  period  ended
December 28, 2002 compared to 45% last year.  College  bookstore sales generally
provide a lower gross profit than the Company's other divisions.

         OPERATING  EXPENSES.  Operating  expenses  for  the  six  months  ended
December 28, 2002  increased  12% to $27.9 million from $24.9 million last year.
Operating  expenses  as a  percentage  of net sales  were 24.0% in the first six
months of fiscal 2003  compared to 23.4% in the first six months of fiscal 2002.
The increase in operating  expenses was  principally due to a greater portion of
fiscal 2003 sales generated from college  bookstore  sales,  which carry royalty
fees and are marketed through more expensive distribution channels. In addition,
the Company incurred higher bad debt expense in fiscal 2003 due to soft economic
conditions.

                                        8

<PAGE>



         Operating  Income.  Operating  income  decreased 6% to $14.4 million in
fiscal 2003 from $15.4 million in fiscal 2002.  Operating income as a percentage
of net sales  decreased to 12.5% in fiscal 2003 from 14.5% in fiscal  2002.  The
decrease in operating  income as a percentage of sales was the result of a lower
gross  profit  percentage  on higher net sales  combined  with the  increase  in
operating expenses.

         EBITDA. EBITDA decreased 6% to $16.5 million in the first six months of
fiscal 2003 from $17.5 million in the first six months of fiscal 2002. EBITDA as
a percentage  of net sales  decreased to 14.3% in the six months ended  December
28, 2002 from 16.5% in the  comparable  period last year. The decrease in EBITDA
was a result of lower operating income.

         INTEREST EXPENSE.  Interest  expense in  the first six months of fiscal
2003 was $12.2  million,  $264,000  less than the  comparable  period last year.
Lower interest rates created the decrease in interest expense.

         NET INCOME.  Net income  for  the  first six months of  fiscal 2003 was
$1.4 million,  compared to $1.8 million for the first six months of fiscal 2002.
The decrease was primarily the result of the decrease in operating income.


LIQUIDITY AND CAPITAL RESOURCES

         Cash provided by operating activities in the first six months of fiscal
2003 was $9.8 million compared to cash used by operating  activities of $692,000
last year.  Fiscal 2002  operating  cash flows were used to fund the increase in
accounts  receivable  and  inventory  related to the addition of the CCP college
bookstore business.

         Cash used in  investing  activities  in the first six  months of fiscal
2003 was $2.2 million  compared to $2.0 million last year. The cash used in both
periods was related to the acquisition of property, plant and equipment.

         Cash used in  financing  activities  in the first six  months of fiscal
2003 was $4.2 million  compared to $572,000 in the  comparable  period of fiscal
2002. Payments of bank debt was the primary use of cash in fiscal 2003.

         Under the Company's  Revolving Bank Credit Agreement ("RBCA") up to $65
million of revolving credit availability is provided, of which $26.1 million was
borrowed  and  outstanding  and  approximately  $5.9  million was  utilized  for
outstanding  commercial and stand-by  letters of credit as of December 28, 2002.
At December 28, 2002,  $28.4 million was available for future  borrowings  under
the RBCA.  The Company  believes that cash flows from  operating  activities and
borrowings under the RBCA will be adequate to meet the Company's  short-term and
future liquidity  requirements prior to the maturity of the RBCA in fiscal 2005,
although no assurance can be given in this regard.

         The Company's wholly-owned  subsidiary,  GFSI, Inc., anticipates paying
dividends to the Company to enable the Company to pay  corporate  income  taxes,
interest  on  subordinated  discount  notes  issued by Holdings  (the  "Holdings
Discount  Notes"),  fees payable under a consulting  agreement,  preferred stock
dividends and certain other ordinary course expenses incurred on behalf of GFSI,
Inc. The Company is dependent upon the cash flows of GFSI, Inc. to provide funds
to service the Holdings  Discount Notes. The Holdings Discount Notes do not have
an annual cash flow  requirement  until  fiscal 2005 as they accrue  interest at
11.375% per annum, compounded  semi-annually to an aggregate principal amount of
$108.5 million at September 15, 2004.  Thereafter,  the Holdings  Discount Notes
will accrue interest at the rate of 11.375% per annum, payable semi-annually, in
cash on March 15 and  September 15 of each year,  commencing  on March 15, 2005.
Additionally,  the Company's  cumulative  non-cash  preferred  stock  ("Holdings
Preferred  Stock") dividends total  approximately  $396,000  annually.  Holdings
Preferred  Stock may be redeemed at stated value  (approximately  $3.4  million)
plus accrued dividends with mandatory redemption in fiscal 2009.


                                        9

<PAGE>


SUBSEQUENT EVENT

         On December 31, 2002 GFSI,  Inc.,  completed  the private  placement of
$9.9 million of unregistered 9.625% senior subordinated notes ("Exchange Notes")
in  exchange  for $24  million  aggregate  principal  amount at  maturity of the
Company's 11.375% Senior Discount Notes (the "Holdings  Discount Notes") with an
accreted book value of $19.9 million.  The acquisition of the Holdings  Discount
Notes  by  the  Company's   wholly-owned   subsidiary  is  considered  an  early
extinguishment of debt, and accordingly,  the Company will record a pre-tax gain
on the transaction of approximately  $9.6 million,  net of related costs, in the
third quarter of fiscal 2003.

         The Exchange Notes are unsecured  obligations of GFSI, Inc.,  mature on
March 1, 2007,  pay interest semi- annually on March 1 and September 1, and were
issued under an indenture with  substantially  identical  terms as the indenture
governing the $125 million aggregate  principal amount at maturity of GFSI, Inc.
Senior  Subordinated  Notes issued on February 27, 1997. The Exchange Notes were
guaranteed by each of GFSI, Inc.'s wholly-owned subsidiaries (Event One, CCP and
GFSI Canada Company). The Exchange Notes were issued to an "accredited investor"
and were exempt from  registration  under Rule 144 of the Securities  Act. GFSI,
Inc.  intends  to  file  an  exchange  offer  registration  statement  with  the
Securities and Exchange Commission in the third quarter of fiscal 2003 to enable
the holder of the Exchange Notes to exchange them for publicly  registered notes
having terms substantially identical to the Exchange Notes.

SEASONALITY AND INFLATION

         The  Company  experiences  seasonal   fluctuations  in  its  sales  and
profitability,  with  generally  higher  sales and gross profit in the first and
second quarters of its fiscal year. The  seasonality of sales and  profitability
is primarily due to higher college  bookstore  sales during the first two fiscal
quarters.  Sales at the Company's Resort and Corporate  divisions typically show
little seasonal variations.

         The  impact  of  inflation  on the  Company's  operations  has not been
significant  to date.  However,  there can be no  assurance  that a high rate of
inflation  in the  future  would not have an  adverse  effect  on the  Company's
operating results.



       ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

DERIVATIVE AND MARKET RISK DISCLOSURE

         The  Company's  market  risk  exposure  is  primarily  due to  possible
fluctuations  in  interest  rates.  The  fixed  rate  portion  of the  Company's
long-term  debt does not bear  significant  interest rate risk. An immediate 10%
change in  interest  rates  would not have a  material  effect on the  Company's
results  of  operations  over the next  fiscal  year,  although  there can be no
assurances that interest rates will not significantly change.


                                       10

<PAGE>


PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

The Company is not a party to any pending  legal  proceeding  the  resolution of
which,  the management of the Company  believes,  would have a material  adverse
effect on the Company's results of operations or financial condition, nor to any
other  pending  legal  proceedings  other  than  ordinary,   routine  litigation
incidental to its business.

ITEM 2.  CHANGES IN SECURITIES

None


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None


ITEM 5.  OTHER INFORMATION

None


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K


(a)      Exhibits

         4.11     Indenture, dated as of December 31, 2002 between GFSI, Inc.
                  and State Street Bank and Trust Company.*

         4.12     9 5/8% Series A Senior Subordinated Note due 2007.*

         10.25    Exchange Agreement, dated as of December 31, 2002, between
                  GFSI, Inc. and Jefferies Company, Inc.*

         10.26    Consent and  Amendment,  dated as of December 31, 2002, to the
                  Credit Agreement, dated March 28, 2002.*

         * Incorporated by reference to Form 10-Q of GFSI,  Inc., filed with the
         Securities and Exchange Commission on February 6, 2003 (Commission File
         No. 333-24189).

(b)      Reports on Form 8-K

         None


                                       11

<PAGE>

SIGNATURES


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


GFSI HOLDINGS, INC.
February 5, 2003
                                         /s/ J. CRAIG PETERSON
                                    --------------------------------------------
                                    J. Craig Peterson, Sr. Vice President
                                    of Finance and  Principal Accounting Officer



                                       12

<PAGE>



CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER REGARDING GFSI HOLDINGS, INC.'S
QUARTERLY REPORT ON FORM 10-Q FOR THE FISCAL PERIOD ENDED DECEMBER 28, 2002

I, Robert M. Wolff,  Chairman and Chief Executive Officer  (Principal  Executive
Officer) of GFSI Holdings, Inc., certify that:

1.       I have reviewed this  Quarterly  Report on Form 10-Q of GFSI  Holdings,
         Inc.;

2.       Based on my  knowledge,  this  Quarterly  Report  does not  contain any
         untrue  statement of a material  fact or omit to state a material  fact
         necessary to make the  statements  made, in light of the  circumstances
         under which such  statements  were made, not misleading with respect to
         the period covered by this Quarterly Report;


3.       Based on my knowledge,  the financial  statements,  and other financial
         information  included in this Quarterly  Report,  fairly present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the registrant as of, and for, the periods represented in
         this Quarterly Report;

4.       The registrant's  other  certifying  officers and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

         a)       Designed  such  disclosure  controls and  procedures to ensure
                  that  material   information   relating  to  the   registrant,
                  including its consolidated  subsidiaries,  is made known to us
                  by others  within  those  entities,  particularly  during  the
                  period in which this quarterly report is being prepared;
         b)       Evaluated the  effectiveness  of the  registrant's  disclosure
                  controls and  procedures  as of a date within 90 days prior to
                  the filing  date of this  quarterly  report  (the  "Evaluation
                  Date"); and
         c)       Presented in this quarterly  report our conclusions  about the
                  effectiveness of the disclosure  controls and procedures based
                  on our evaluation as of the Evaluation Date.

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

         a)        All  significant  deficiencies  in the design or operation of
                   internal   controls   which   could   adversely   affect  the
                   registrant's ability to record, process, summarize and report
                   financial  data  and  have  identified  for the  registrant's
                   auditors any material weaknesses in internal controls;
         b)        Any fraud, whether or not material,  that involves management
                   or  other  employees  who  have  a  significant  role  in the
                   registrant's internal controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not these were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: February 5, 2003


/S/  ROBERT M. WOLFF
---------------------------------------
Robert M. Wolff
Chairman and Chief Executive Officer



                                       13

<PAGE>


CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER REGARDING GFSI HOLDINGS, INC.'S
QUARTERLY REPORT ON FORM 10-Q FOR THE FISCAL PERIOD ENDED DECEMBER 28, 2002

I, J.  Craig  Peterson,  Senior  Vice  President  and  Chief  Financial  Officer
(Principal Financial Officer) of GFSI Holdings, Inc., certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q of GFSI Holdings, Inc.;

2.   Based on my knowledge,  this  Quarterly  Report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this Quarterly Report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  Quarterly  Report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for, the periods  represented  in this
     Quarterly Report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a)        Designed such  disclosure  controls and  procedures to ensure
                   that  material   information   relating  to  the  registrant,
                   including its consolidated subsidiaries,  is made known to us
                   by others  within  those  entities,  particularly  during the
                   period in which this quarterly report is being prepared;
         b)        Evaluated the  effectiveness of the  registrant's  disclosure
                   controls and  procedures as of a date within 90 days prior to
                   the filing date of this  quarterly  report  (the  "Evaluation
                   Date"); and
         c)        Presented in this quarterly report our conclusions  about the
                   effectiveness of the disclosure controls and procedures based
                   on our evaluation as of the Evaluation Date.

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

         a)        All  significant  deficiencies  in the design or operation of
                   internal   controls   which   could   adversely   affect  the
                   registrant's ability to record, process, summarize and report
                   financial  data  and  have  identified  for the  registrant's
                   auditors any material weaknesses in internal controls; and
         b)        Any fraud, whether or not material,  that involves management
                   or  other  employees  who  have  a  significant  role  in the
                   registrant's internal controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not these were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date:  February 5, 2003


/S/  J. CRAIG PETERSON
---------------------------------------
J. Craig Peterson
Senior Vice President and Chief Financial Officer



                                       14