================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


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

         For the quarterly period ended July 31, 2004

                                       OR

   [_]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934.

         For the transition period from _____________ to _____________.


                         Commission file number 0-23001




                             SIGNATURE EYEWEAR, INC.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


          CALIFORNIA                                            95-3876317
-------------------------------                              ----------------
(State or Other Jurisdiction of                              (I.R.S. Employer
 Incorporation or Organization)                             Identification No.)


                              498 NORTH OAK STREET
                           INGLEWOOD, CALIFORNIA 90302
                    ----------------------------------------
                    (Address of Principal Executive Offices)


                                 (310) 330-2700
              ----------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)



         Indicate by check whether the registrant: (1) filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act 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
    -----           -----

         State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: Common Stock, par value
$0.001 per share, 6,229,889 shares issued and outstanding as of August 31, 2004.

================================================================================
<PAGE>

                             SIGNATURE EYEWEAR, INC.

                               INDEX TO FORM 10-Q




PART I     FINANCIAL INFORMATION                                           PAGE
                                                                           ----
Item 1     Financial Statements

           Balance Sheets ................................................  3-4

           Statements of Operations ......................................   5

           Statements of Cash Flows ......................................   6

           Notes to the Financial Statements .............................  7-12

Item 2     Management's Discussion and Analysis of Financial
             Condition and Results of Operations ......................... 13-15

Item 3     Quantitative and Qualitative Disclosures about Market Risk ....  18

Item 4     Controls and Procedures .......................................  19




PART II    OTHER INFORMATION

Item 6     Exhibits and Reports on Form 8-K ..............................  19






                                        2
<PAGE>








                                                         SIGNATURE EYEWEAR, INC.
                                                            FINANCIAL STATEMENTS
                        AS OF OCTOBER 31, 2003 AND JULY 31, 2004 (UNAUDITED) AND
                                      FOR THE NINE MONTHS AND THREE MONTHS ENDED
                                  JULY 31, 2004 (UNAUDITED) AND 2003 (UNAUDITED)
<PAGE>

                              FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                                                         SIGNATURE EYEWEAR, INC.
                                                                  BALANCE SHEETS
                                  OCTOBER 31, 2003 AND JULY 31, 2004 (UNAUDITED)
================================================================================



                                     ASSETS
<TABLE><CAPTION>
                                                                   July 31,        October 31,
                                                                     2004             2003
                                                                 ------------     ------------
                                                                  (unaudited)
<S>                                                              <C>              <C>
CURRENT ASSETS
   Cash and cash equivalents, including restricted
      cash of $364,765 (unaudited) and $340,567                  $    620,293     $    663,251
   Accounts receivable - trade, net of allowance for
      doubtful accounts of $262,604 (unaudited) and
      $503,490                                                      2,779,909        2,281,255
   Inventories, net of reserves for obsolete inventories
      of $1,332,557 (unaudited) and $1,506,007                      6,090,215        5,955,253
   Promotional products and materials                                      --            9,425
   Prepaid expenses and other current assets                           36,522           19,293
                                                                 ------------     ------------

         Total current assets                                       9,526,939        8,928,477


PROPERTY AND EQUIPMENT, NET                                         1,040,935        1,354,362
DEPOSITS AND OTHER ASSETS                                             155,393          115,055
                                                                 ------------     ------------

         TOTAL ASSETS                                            $ 10,723,267     $ 10,397,894
                                                                 ============     ============
</TABLE>





   The accompanying notes are an integral part of these financial statements.

                                        3
<PAGE>
                                                         SIGNATURE EYEWEAR, INC.
                                                                  BALANCE SHEETS
                                  OCTOBER 31, 2003 AND JULY 31, 2004 (UNAUDITED)
================================================================================



                      LIABILITIES AND SHAREHOLDERS' DEFICIT

<TABLE><CAPTION>
                                                                   July 31,        October 31,
                                                                     2004             2003
                                                                 ------------     ------------
                                                                  (unaudited)
<S>                                                              <C>              <C>
CURRENT LIABILITIES
   Accounts payable - trade                                      $  5,952,746     $  5,367,576
   Accrued expenses and other current liabilities                   2,090,267        1,722,825
   Reserve for customer returns                                       289,587          619,460
   Short-term debt                                                    400,000                0
   Current portion of long-term debt                                  426,641          550,748
                                                                 ------------     ------------

      Total current liabilities                                     9,159,241        8,260,609

LONG-TERM DEBT, NET OF CURRENT PORTION                              6,564,073        6,873,535
                                                                 ------------     ------------

         Total liabilities                                         15,723,314       15,134,144
                                                                 ------------     ------------


SHAREHOLDERS' DEFICIT
   Preferred stock, $0.001 par value
      5,000,000 shares authorized
      Series A 2% convertible preferred stock
      1,360,000 shares authorized
      1,200,000 (unaudited) and 1,200,000 shares
      issued and outstanding                                            1,200            1,200
   Common stock, $0.001 par value
      30,000,000 shares authorized
      6,226,889 (unaudited) and 5,976,889 shares
      issued and outstanding                                            6,227            5,977
   Additional paid-in capital                                      15,275,791       15,236,041
   Accumulated deficit                                            (20,283,265)     (19,979,468)
                                                                 ------------     ------------

         Total shareholders' deficit                               (5,000,047)      (4,736,250)
                                                                 ------------     ------------

            TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT          $ 10,723,267     $ 10,397,894
                                                                 ============     ============
</TABLE>





   The accompanying notes are an integral part of these financial statements.

                                        4
<PAGE>
                                                         SIGNATURE EYEWEAR, INC.
                                                        STATEMENTS OF OPERATIONS
          FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2004 AND 2003 (UNAUDITED)
================================================================================


<TABLE><CAPTION>
                                           For the Three Months Ended          For the Nine Months Ended
                                                    July 31,                           July 31,
                                         ------------------------------      ------------------------------
                                             2004              2003              2004              2003
                                         ------------      ------------      ------------      ------------
                                          (unaudited)       (unaudited)       (unaudited)       (unaudited)
<S>                                      <C>               <C>               <C>               <C>
NET SALES                                $  5,982,896      $  6,302,153      $ 17,634,130      $ 19,320,848

COST OF SALES                               2,191,929         2,300,725         6,577,447         7,047,360
                                         ------------      ------------      ------------      ------------

GROSS PROFIT                                3,790,967         4,001,428        11,056,683        12,273,488
                                         ------------      ------------      ------------      ------------

OPERATING EXPENSES
   Selling                                  1,887,207         2,157,717         5,826,822         5,956,337
   General and administrative               1,521,177         1,989,737         4,796,613         6,602,780
   Depreciation and amortization              104,340            43,161           313,023           362,255
                                         ------------      ------------      ------------      ------------

Total operating expenses                    3,512,724         4,190,615        10,936,458        12,921,372
                                         ------------      ------------      ------------      ------------

INCOME (LOSS) FROM OPERATIONS                 278,243          (189,187)          120,225          (647,884)
                                         ------------      ------------      ------------      ------------

OTHER INCOME (EXPENSE)
   Sundry income                                  225             2,333             3,476           204,659
   Interest expense, net                     (137,751)         (152,090)         (416,765)         (302,946)
   Gain on sale of trademark                       --                --                --           469,103
                                         ------------      ------------      ------------      ------------

Total other income (expense)                 (137,526)         (149,757)         (413,289)          370,816
                                         ------------      ------------      ------------      ------------

INCOME (LOSS) BEFORE PROVISION
   FOR INCOME TAXES AND
   EXTRAORDINARY ITEM                         140,717          (338,944)         (293,064)         (277,068)
PROVISION FOR INCOME TAXES                      7,983             9,975            10,733            10,579
                                         ------------      ------------      ------------      ------------

INCOME (LOSS) BEFORE EXTRAORDINARY
   ITEM                                  $    132,734      $   (348,919)     $   (303,797)     $   (287,647)

EXTRAORDINARY ITEM
   Gain (loss) on extinguishment
   of debt                                         --           (45,164)               --         4,098,687
                                         ------------      ------------      ------------      ------------
NET INCOME (LOSS)                        $    132,734      $   (394,083)     $   (303,797)     $  3,811,040
                                         ============      ============      ============      ============

BASIC AND DILUTED EARNINGS PER SHARE
   Before extraordinary item             $       0.02      $      (0.06)     $      (0.05)     $      (0.05)
   Extraordinary item                              --             (0.01)               --              0.74
                                         ------------      ------------      ------------      ------------
TOTAL BASIC AND DILUTED EARNINGS
   PER SHARE                             $       0.02      $      (0.07)     $      (0.05)     $       0.69
                                         ============      ============      ============      ============
WEIGHTED-AVERAGE COMMON SHARES
   OUTSTANDING                              6,226,889         5,556,889         6,061,743         5,556,889
                                         ============      ============      ============      ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                        5
<PAGE>
                                                         SIGNATURE EYEWEAR, INC.
                                                        STATEMENTS OF CASH FLOWS
                    FOR THE NINE MONTHS ENDED JULY 31, 2004 AND 2003 (UNAUDITED)
================================================================================

<TABLE><CAPTION>
                                                                     2004             2003
                                                                 ------------     ------------
                                                                  (unaudited)      (unaudited)
<S>                                                              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income (loss)                                             $   (303,797)    $  3,811,040
   Adjustments to reconcile net income (loss) to net cash
      (used) in or provided by operating activities
         Depreciation and amortization                                313,023          362,255
         Provisions for bad debt                                     (240,886)
         Provision for inventory write-down                          (173,450)
         Gain on sale of trademark                                                    (469,103)
         Gain on extinguishment of debt                                              4,098,687
         (Increase) decrease in
             Accounts receivable - trade                             (257,767)         599,722
             Inventories                                               38,488          878,123
             Promotional products and materials                         9,425          (80,914)
             Prepaid expenses and other current assets                (17,229)           2,416
             Deposits and other assets                                (38,638)          (2,927)
         Increase (decrease) in
             Accounts payable - trade                                 585,170       (5,418,009)
             Accrued expenses and other current liabilities           367,442         (475,987)
             Reserve for customer returns                            (329,873)      (1,072,456)
                                                                 ------------     ------------

Net cash (used) in or provided by operating activities                (48,092)       2,232,847
                                                                 ------------     ------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property and equipment                                  (1,297)          (2,418)
   Proceeds from sale of trademark                                         --          600,000
                                                                 ------------     ------------

Net cash (used) in or provided by investing activities                 (1,297)         597,582
                                                                 ------------     ------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase (decrease) on line of credit                               --       (2,787,290)
   Proceeds from short-term debt                                      550,000               --
   Payments on short-term debt                                       (150,000)              --
   Payments on long-term debt                                        (433,569)        (828,921)
   Issuance of common stock                                            40,000               --
   Cash received from sale of preferred stock                              --          800,000
                                                                 ------------     ------------

Net cash (used) in or provided by financing activities                  6,431       (2,816,211)
                                                                 ------------     ------------

Net increase (decrease) in cash and cash equivalents             $    (42,958)    $     14,218

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                        663,251        1,077,388
                                                                 ------------     ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                         $    620,293     $  1,091,606
                                                                 ============     ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
   INTEREST PAID                                                 $    416,765     $    229,183
                                                                 ============     ============
   INCOME TAXES PAID                                             $     10,733     $     58,982
                                                                 ============     ============
</TABLE>

During the nine months ended July 31, 2003, cash from operations and financing
activities exclude the effect of a gain on extinguishment of debt, accounts
payable, and accrued expenses for $4,098,687.

   The accompanying notes are an integral part of these financial statements.

                                        6
<PAGE>


                                                         SIGNATURE EYEWEAR, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
                                  OCTOBER 31, 2003 AND JULY 31, 2004 (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 1 - ORGANIZATION AND LINE OF BUSINESS

     Signature Eyewear, Inc. (the "Company") designs, markets and distributes
     eyeglass frames throughout the United States and internationally. Primary
     operations are conducted from leased premises in Inglewood, California,
     with a warehouse and sales office in Belgium.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Basis of Presentation
     ---------------------
     The accompanying financial statements have been prepared in conformity with
     accounting principles generally accepted in the United States of America
     for interim financial information and with the instructions to Form 10-Q
     and Regulation S-K. Accordingly, they do not include all of the information
     and footnotes required by accounting principles generally accepted in the
     United States of America for complete financial statements. In the opinion
     of management, all normal, recurring adjustments considered necessary for a
     fair presentation have been included. These financial statements should be
     read in conjunction with the audited financial statements and notes thereto
     included in the Company's Annual Report on Form 10-K for the year ended
     October 31, 2003. The results of operations for the nine months ended July
     31, 2004 are not necessarily indicative of the results that may be expected
     for the year ended October 31, 2004.

     Inventories
     -----------
     Inventories are stated at the lower of cost (first-in first-out method) or
     market.


     Property and Equipment
     ----------------------
     Property and equipment are recorded at cost. Depreciation and amortization
     are provided using the straight-line method over the estimated useful lives
     of the assets as follows:

            Office furniture and equipment                         7 years
            Computer equipment                                     3 years
            Software                                               3 years
            Machinery and equipment                                5 years
            Machinery and equipment held under
               capital lease agreements                            5 years
            Leasehold improvements                       term of the lease

     Fair Value of Financial Instruments
     -----------------------------------
     For certain of the Company's financial instruments, including cash and cash
     equivalents, accounts receivable and accounts payable - trade, the carrying
     amounts approximate fair value due to their short maturities. The amounts
     shown for long-term debt also approximate fair value because current
     interest rates offered to the Company for debt of similar maturities are
     substantially the same.

                                       7
<PAGE>

                                                         SIGNATURE EYEWEAR, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
                                  OCTOBER 31, 2003 AND JULY 31, 2004 (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Loss per Share
     --------------
     The Company calculates loss per share in accordance with Statement of
     Financial Accounting Standards No. 128, "Earnings per Share." Basic loss
     per share is computed by dividing the net loss by the weighted-average
     number of common shares outstanding. Diluted loss per share is computed
     similar to basic loss per share except that the denominator is increased to
     include the number of additional common shares that would have been
     outstanding if the potential common shares had been issued and if the
     additional common shares were dilutive. The Company did not have any
     dilutive shares for the three or nine months ended July 31, 2004 and 2003.

     The following potential common shares have been excluded from the
     computations of diluted loss per share for the three and nine months ended
     July 31, 2004 and 2003 because the effect would have been anti-dilutive:

                                       For the Nine Months Ended
                                               July 31,
                                        -----------------------
                                          2004           2003
                                        --------       --------
                                       (unaudited)    (unaudited)

            Stock options                359,800        346,700
            Warrants                     150,000        150,000
                                        --------       --------

               TOTAL                     509,800        496,700
                                        ========       ========

     Foreign Currency Translation
     ----------------------------
     The Company's Belgium branch's functional currency is the Euro. Assets and
     liabilities are translated at exchange rates in effect at the balance sheet
     date. Income and expense accounts are translated at average rates. In
     addition, some of the Company's liabilities are denominated in foreign
     currencies. Such liabilities are converted into U.S. Dollars at the
     exchange rate prevailing at the balance sheet date. The resulting gains or
     losses are reflected in the income statement.

     Estimates
     ---------
     The preparation of financial statements 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 revenue and
     expenses during the reporting period. Actual results could differ from
     those estimates.


                                       8
<PAGE>

                                                         SIGNATURE EYEWEAR, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
                                  OCTOBER 31, 2003 AND JULY 31, 2004 (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 3 - PROPERTY AND EQUIPMENT

     Property and equipment at October 31, 2003 and July 31, 2004 consisted of
     the following:

<TABLE><CAPTION>
                                                                       July 31,    October 31,
                                                                         2004         2003
                                                                      ----------   ----------
                                                                      (unaudited)
<S>                                                                   <C>          <C>
            Office furniture and equipment                            $  912,756   $  912,756
            Computer equipment                                         1,498,394    1,497,096
            Software                                                   1,123,340    1,123,340
            Machinery and equipment                                      427,692      429,394
            Machinery and equipment held under capital
                  lease agreements                                       294,609      294,609
            Leasehold improvements                                     1,195,190    1,195,190
                                                                      ----------   ----------

                                                                       5,451,981    5,452,385
            Less  accumulated depreciation and amortization
               (including accumulated depreciation and
               amortization of $264,013 (unaudited) and $272,563
               for equipment under capital
               lease agreement)                                        4,411,046    4,098,023
                                                                      ----------   ----------

                        TOTAL                                         $1,040,935   $1,354,362
                                                                      ==========   ==========
</TABLE>
     Depreciation and amortization expense was $313,023 (unaudited) and $325,083
     (unaudited) for nine months ended July 31, 2004 and 2003, respectively,
     (including depreciation and amortization expense of $13,990 (unaudited) and
     $23,702 (unaudited), respectively, on machinery and equipment held under
     capital leases).

                                       9
<PAGE>

                                                         SIGNATURE EYEWEAR, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
                                  OCTOBER 31, 2003 AND JULY 31, 2004 (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 4 - SHORT-TERM AND LONG-TERM DEBT

     Short-term debt at October 31, 2003 and July 31, 2004 consisted of the
     following:

<TABLE><CAPTION>
                                                                              July  31,    October 31,
                                                                                 2004         2003
                                                                              ----------   ----------
                                                                             (unaudited)
<S>                                                                           <C>          <C>
             Term note payable to Pearltime Investments in the
                  original amount of $350,000 payable in monthly
                  installments of $50,000 commencing on April 30,
                  2004, with interest of 3% per
                  annum due on October 29, 2004                                  200,000         --

             Note payable HLIC in the original amount of $200,000,
                  bearing interest at a rate of 12% per annum and
                  due and payable in June 2005                                   200,000         --
                                                                              ----------   ----------
                        TOTAL SHORT-TERM DEBT                                 $  400,000   $     --
                                                                              ==========   ==========

     Long-term debt at October 31, 2003 and July 31, 2004 consisted of the
     following:

             Term note payable to HLIC in the original amount of
                  $3,000,000, secured by the assets of the Company,
                  a letter of credit in the amount of $1,250,000 and
                  a $250,000 debenture issued by HLIC, bearing
                  Interest at 10% per annum, requiring interest
                  payments only for the first 12 months and monthly
                  installments of principal and interest based on a
                  10-year amortization schedule and maturing in April 2008    $2,970,323   $3,000,000

             Revolving line of credit from HLIC in the original
                  amount of $500,000, secured by the collateral
                  securing the HLIC term note, bearing interest at
                  1% per month on the outstanding balance,
                  and maturing in April 2008                                     500,000      500,000

             Term note payable to Bluebird in the original amount of
                  $2,900,000, secured by the assets of the Company,
                  subordinated to the HLIC credit facility, bearing
                  interest at 5% per annum, and payable in quarterly
                  installments of $72,500, commencing in July 2005             2,900,000    2,900,000

             Term note in the original amount of $400,000, secured
                  by certain inventories, payable without interest
                  in monthly installments of $30,000 through March 2004             --        190,000

             Note payable to lessor of the Company's principal
                  offices and warehouse in the original amount of
                  $240,000, unsecured, payable in monthly
                  installments of $4,134, including interest at
                  10% per annum, maturing on May 1, 2005                          54,411       72,374

             Note payable to lessor of the Company's principal
                  offices and warehouse, unsecured, payable in
                  monthly installments of $3,757, including interest
                  at 8% per annum, maturing on May 1, 2005                         6,425       66,834
</TABLE>

                                       10
<PAGE>

                                                         SIGNATURE EYEWEAR, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
                                  OCTOBER 31, 2003 AND JULY 31, 2004 (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 4 - SHORT-TERM AND LONG-TERM DEBT (CONTINUED)

<TABLE><CAPTION>
                                                                              July  31,    October 31,
                                                                                 2004         2003
                                                                              ----------   ----------
                                                                             (unaudited)
<S>                                                                           <C>          <C>
             Note payable to commercial bank, secured by the
                  property and equipment acquired in the Oliver
                  Allen lease payoff, bearing interest at 4% per
                  annum, payable in 39 monthly installments of
                  $13,812, commencing March 31, 2003, with the
                  remaining principal and accrued interest
                  due and payable in full on February 28, 2008                $  559,554   $  660,700

             Liability for machinery and equipment under various
                  capital lease agreements, secured by certain
                  machinery and equipment, bearing interest ranging
                  from 8.19% to 11.4% per annum,
                  maturing through August 2004                                                 34,375
                                                                              ----------   ----------

                                                                               6,990,714    7,424,283
            Less current portion                                                 426,641      550,748
                                                                              ----------   ----------

                        LONG-TERM PORTION                                     $6,564,073   $6,873,535
                                                                              ==========   ==========
</TABLE>

     Future maturities of long-term debt at July 31, 2004 were as follows:

                        12 Months
                          Ending
                          July 31
                        -----------
                        (unaudited)

                            2005                            $   426,641
                            2006                                505,685
                            2007                                542,741
                            2008                              3,121,951
                            2009                                170,974
                            Thereafter                        2,222,722
                                                            -----------

                                    TOTAL                   $ 6,990,714
                                                            ===========

                                       11
<PAGE>

                                                         SIGNATURE EYEWEAR, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
                                  OCTOBER 31, 2003 AND JULY 31, 2004 (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 5 - SHAREHOLDERS' DEFICIT

     Issuance of Common Stock for Cash
     ---------------------------------
     On April 30, 2004, four Directors each purchased 62,500 shares of the
     Company's Common Stock at $0.16 per share for a total of $40,000 under the
     Company's 1997 stock plan. In connection with these purchases, the
     Directors agreed not to sell the shares for one year.

     Issuance of Stock Options to Employees
     --------------------------------------
     On February 1, 2004, the Company issued options to purchase 12,500 shares
     of the Company's common stock each to five employees under the 1997 Stock
     Plan. The stock options have an exercise price of $0.20 per share, expire
     on September 1, 2007 and vest over a period of five years. As the fair
     value of the Company's common stock was less than the exercise price of the
     stock options on the grant date, the Company recorded no compensation
     expense for these options.

















                                       12
<PAGE>

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

         The following discussion and analysis, which should be read in
connection with the Company's Financial Statements and accompanying footnotes,
contain forward-looking statements that involve risks and uncertainties.
Important factors that could cause actual results to differ materially from the
Company's expectations are set forth in "Factors That May Affect Future Results"
in this Item 2 of this Form 10-Q, as well as those discussed elsewhere in this
Form 10-Q. All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by "Factors That May Affect Future Results." Those
forward-looking statements relate to, among other things, the Company's plans
and strategies, new product lines, and relationships with licensors,
distributors and customers, distribution strategies and the business environment
in which the Company operates.

         The following discussion and analysis should be read in connection with
the Company's Financial Statements and related notes and other financial
information included elsewhere in this Form 10-Q.

OVERVIEW

         The Company derives revenues primarily through the sale of eyeglass
frames under licensed brand names, including Laura Ashley Eyewear, Eddie Bauer
Eyewear, Hart Schaffner & Marx Eyewear, bebe eyes, Nicole Miller Eyewear, Dakota
Smith Eyewear and under its proprietary brands Signature. The Company's
best-selling product lines are Laura Ashley Eyewear and Eddie Bauer Eyewear. Net
sales of Laura Ashley Eyewear and Eddie Bauer Eyewear together accounted for 62%
and 57% of the Company's net sales in fiscal 2002 and fiscal 2003, respectively.
The Company's cost of sales consists primarily of payments to foreign contract
manufacturers that produce frames and cases to the Company's specifications.

         The Company continues to suffer sluggish sales as the optical frame
industry remains slow. Many optical frame retailers and frame manufacturers have
reported declines in sales in the past year. According to the Jobson Report
published in March 2004, the frame sector in which the Company's products
compete declined more than other frame sectors. The fastest growing segment in
the industry is the mass merchandisers and deep discount retailers, and the
Company does not sell frames to retailers in that segment.

         The Company has further reduced general and administrative expenses in
an effort to return to operating profitability, to the point that additional
material reductions are unlikely. As a result, the Company believes that
improving revenues is necessary to return to profitability.

         The Company is attempting to increase revenues in the United States by
expanding its direct sales force, including independent sales representatives,
for sales to independent optical retailers, and by adding an additional
distributor who covers the Midwest. The Company believes that this distributor
will be able to give the Company greater sales penetration in those states than
it has been able to achieve with its direct sales force. In the past several
months, the Company believes it has increased the morale of its direct sales
force through regular sales contests supported by weekly scripted program
announcing the status of the competition.

         Since the recapitalization, the Company has also attempted to increase
revenues through increasing sales to retail optical chains. Sales to existing
retail optical chain customers, most of which are based in the United States,
could be increased through the chains purchasing additional eyewear lines and/or
purchasing the Company's products for sales through additional market channels,
such as stores outside the United States or different retail outlets. In
addition, the Company has started to market to retail optical chains based
outside of the United States. Notwithstanding these efforts, sales to retail
optical chains have decreased during the period.

         The Company is further attempting to increase revenues through
expanding international sales. Its strategy to accomplish this is to engage
additional international distributors and to sell additional eyewear lines in
selected countries.

         Lastly, the Company is in discussions with several well-known companies
to license their brand names for eyewear and sunwear. In July 2004, the Company
obtained an exclusive license through December 31, 2007 from General Motors
Corporation to create a Hummer Eyewear Line which will include eyewear and
sunwear. The Company intends to market Hummer sunwear to its traditional
customer base as well as specialty sunwear stores and department stores. No
assurance can be given that the Company will obtain any additional licenses or
that the Hummer Eyewear Line will be successful.

                                        13
<PAGE>

RESULTS OF OPERATIONS

         The following table sets forth for the periods indicated selected
statements of operations data shown as a percentage of net sales.
<TABLE><CAPTION>

                                                           THREE MONTHS ENDED             NINE MONTHS ENDED
                                                                JULY 31,                       JULY 31
                                                      --------------------------     --------------------------
                                                           2004           2003            2004            2003
                                                      --------------------------     --------------------------
<S>                                                        <C>            <C>             <C>            <C>
Net sales.......................................           100.0%         100.0%          100.0%         100.0%
Cost of sales...................................            36.6           36.5            37.3           36.5
                                                      -----------    -----------     -----------    -----------
Gross profit....................................            63.4           63.5            62.7           63.5
                                                      -----------    -----------     -----------    -----------
Operating expenses:
    Selling.....................................            31.5           34.2            33.0           30.8
    General and administrative..................            25.4           31.6            27.2           34.2
    Depreciation and amortization...............             1.7            0.7             1.8            1.9
                                                      -----------    -----------     -----------    -----------
         Total operating expenses...............            58.7           66.5            62.0           66.9
                                                      -----------    -----------     -----------    -----------
 Income (loss) from operations..................             4.7           (3.0)            0.7           (3.4)
                                                      -----------    -----------     -----------    -----------
 Other income (expense), net....................            (2.3)          (2.4)           (2.3)           1.9
                                                      -----------    -----------     -----------    -----------
 Income (loss) before provision for income taxes             2.4           (5.4)           (1.6)          (1.5)
                                                      -----------    -----------     -----------    -----------
 Provision (benefit) for income taxes...........             0.1           (0.2)            0.1           (0.1)
 Gain on extinguishment of debt                             --             (0.7)           --             21.2
                                                      ===========    ===========     ===========    ===========
 Net income (loss)..............................             2.3%          (6.3)%          (1.7)%         19.8%
                                                      ===========    ===========     ===========    ===========
</TABLE>

         NET SALES. Net sales decreased by $0.3 million or 5.1% from the quarter
ended July 31, 2003 (the "2003 Quarter") to the quarter ended July 31, 2004 (the
"2004 Quarter") and decreased $1.7 million or 8.7% from the nine months ended
July 31, 2003 (the "2003 Nine Months") to the nine months ended July 31, 2004
(the "2004 Nine Months"). The following table shows certain information
regarding net sales for the periods indicated:
<TABLE><CAPTION>

                                  THREE MONTHS ENDED JULY 31                           NINE MONTHS ENDED JULY 31
                           ----------------------------------------             ----------------------------------------
                                   2004                 2003           CHANGE           2004                2003            CHANGE
                           ------------------   -------------------   --------  -------------------   ------------------   --------
<S>                          <C>     <C>          <C>      <C>         <C>        <C>      <C>          <C>     <C>        <C>
----------------------
Laura Ashley Eyewear..        $1,745  29.2%        $1,807   28.7%      (3.4)%      $4,646   24.9%        $6,115  31.6%     (24.0)%
Eddie Bauer Eyewear...         1,107  18.5          1,625   25.8      (31.9)%       3,672   22.0          4,886  25.3      (24.8)%
Nicole Miller.........         1,155  19.3            882   14.0        31.0%       3,576   20.8          2,831  14.7        24.3%
Other Sales (1).......         1,976  33.0          1,988   31.5       (0.6)%       5,740   32.3          5,489  28.4         4.6%
                           ------------------   -------------------             -------------------   ------------------
Total.................        $5,983 100.0%        $6,302  100.0%      (5.1)%     $17,634  100.0%       $19,321 100.0%      (8.7)%
                           ==================   ===================             ===================   ==================
</TABLE>
-------------------
(1) Includes net sales of other designer eyewear and private label frames.

         Net sales were lower in the 2004 Quarter than the 2003 Quarter
primarily because of the sluggish optical frame industry in the sectors in which
the Company's products compete. The Company believes that sales of Eddie Bauer
Eyewear, particularly to the retail optical chains, have been adversely affected
by the bankruptcy of Eddie Bauer Diversified Sales LLC, the licensor on the
Eddie Bauer Eyewear license. In addition, during the past several years, sales
have been adversely affected by an increasing number of direct competitors to
the Eddie Bauer and Laura Ashley Eyewear lines.

         Net sales reflect gross sales less a reserve for product returns
established by the Company. The Company has a product return policy which it
believes is standard in the optical industry. Under that policy, the Company
generally accepts returns of non-discontinued product for credit. The Company's
product returns for the 2003 Quarter and the 2004 Quarter amounted to 17.7% and
16.4% of gross sales, respectively. Historically, returns have been higher from
independent optical retailers in the United States and lower from optical retail
chains and international customers.

         GROSS PROFIT AND GROSS MARGIN. Gross profit decreased $0.2 million or
5.3% from the 2003 Quarter to the 2004 Quarter and $1.2 million or 9.9% from the
2003 Nine Months to the 2004 Nine Months. The gross margin decreased from 63.5%
in the 2003 Quarter to 63.4% in the 2004 Quarter, and from 63.5% in the 2003
Nine Months to 62.7% in the 2004 Nine Months. The gross margin decreased in the
Nine Months due in part to a higher percentage of international sales, which
have lower margins, and price competition resulting in sales at greater
discounts.

                                        14
<PAGE>

         SELLING EXPENSES. Selling expenses decreased $0.3 million or 12.5% from
the 2003 Quarter to the 2004 Quarter and $0.1 million or 2.2% from the 2003 Nine
Months to the 2004 Nine Months. The change in the third quarter was due
primarily to a decrease in advertising expenses of $0.2 million. The change in
the nine-month periods was due primarily to an decrease in advertising expenses
of $0.1 million.

         GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses decreased $0.4 million or 23.5% from the 2003 Quarter to the 2004
Quarter and $1.8 million or 27.4% from the 2003 Nine Months to the 2004 Nine
Months. The change in the quarter was due primarily to decreases of salaries of
$0.3 million from fewer personnel and the allowance for bad debts of $0.1
million. The change in the Nine Months was due primarily to decreases in
salaries of $0.9 million from fewer personnel, in the allowance for bad debts of
$0.3 million, in legal and consulting fees of $0.2 million, in bank charges of
$0.1 million and in insurance costs of $0.1 million.

         OTHER INCOME (EXPENSE), NET. Other expenses included primarily interest
expense and in the 2003 Nine Months a $0.5 million gain on the sale of the
Dakota Smith trademark and inventory. Interest expense increased in the 2004
Quarter and Nine Months because higher level of borrowings.

         EXTRAORDINARY ITEM. In the 2003 Nine Months the Company recognized an
gain on the settlement of debt of $4.1 million in connection with its
recapitalization.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

         The Company's accounts receivable (net of allowance for doubtful
accounts) increased from $2.3 million at October 31, 2003 to $2.8 million at
July 31, 2004 due to a higher level of sales than the fourth quarter of 2003.

         The Company's inventories (net of obsolescence reserve) increased from
$6.0 million at October 31, 2003 to $6.1 million at July 31, 2004.

         The Company's long-term debt at July 31, 2004 included principally: (i)
$3.7 million under three credit facilities with Home Loan Investment Company
("HLIC"), including a $200,000 loan obtained in June 2004 bearing interest at
12% and due in June 2005; (ii) $2.9 million under a credit facility with
Bluebird Finance Limited; and (iii) $0.6 million under a commercial bank loan
the proceeds of which were used to purchase its computer system and related
equipment. At July 31, 2004, the Company had fully utilized its borrowing
capacity under its existing credit facilities. See Note 4 of Notes to Financial
Statements.

         In April 2004 the Company obtained an unsecured term loan in the amount
of $350,000 due October 29, 2004. The loan bears interest at the rate of 3% per
annum, is payable in monthly installments of $50,000 which commenced in April
2004, and had an outstanding balance of $200,000 at July 31, 2004.

         Of the Company's accounts payable at July 31, 2004, approximately $1.1
million were payable in foreign currency. To monitor risks associated with
currency fluctuations, the Company on a weekly basis assesses the volatility of
certain foreign currencies and reviews the amounts and expected payment dates of
its purchase orders and accounts payable in those currencies. Based on those
factors, the Company may from time to time mitigate some portion of that risk by
purchasing forward commitments to deliver foreign currency to the Company. The
Company held no forward commitments for foreign currencies at July 31, 2004.

         The Company's bad debt write-offs, net of recoveries, were $28,601 and
$-0- in the 2003 Nine Months and 2004 Nine Months, respectively. As part of the
Company's management of its working capital, the Company performs most customer
credit functions internally, including extensions of credit and collections.

         The Company believes that at least through 2004, assuming there are no
unanticipated material adverse developments, no material decrease in revenues
and continued compliance with its credit facilities, its cash flows from
operations and through credit facilities will be sufficient to enable the
Company to pay its debts and obligations as they mature. The Company has

                                        15
<PAGE>
benefited in fiscal 2004 from expense reductions through reduced number of
employees and other expenses undertaken in fiscal 2003 and the first quarter of
fiscal 2004. However, the Company's current sources of funds are not sufficient
to provide the working capital for material growth, and it would be required to
obtain additional debt or equity financing to support such growth.

INFLATION

         The Company does not believe its business and operations have been
materially affected by inflation.

FACTORS THAT MAY AFFECT FUTURE RESULTS

         NEED TO IMPROVE REVENUES AND TO RETURN TO PROFITABILITY; SHAREHOLDERS'
DEFICIT

         The Company suffered material operating losses in its last four fiscal
years, causing a significant deterioration in its financial condition. At July
31, 2004, the Company's stockholders' deficit was $5.0 million. The Company's
future viability depends on its ability to return to profitability on a
consistent basis.

         During the past several years, the Company has significantly reduced
its general, administrative and other expenses to the extent that it does not
believe further material reductions are possible. Accordingly, the ability of
the Company to return to profitability will depend most significantly on its
ability to improve its revenues. The Company's revenues during the past several
years have been adversely affected by the continued significant downturn in the
optical frame industry. While the Company has adopted several strategies to
increase revenues, no assurance can be given that the Company will be able to
increase revenues sufficient to return to profitability on a consistent basis.

         SUBSTANTIAL DEPENDENCE UPON LAURA ASHLEY AND EDDIE BAUER LICENSES

         Net sales of Laura Ashley Eyewear and Eddie Bauer Eyewear accounted for
62% and 57% of the Company's net sales in fiscal years 2002 and 2003,
respectively. While the Company intends to continue reducing its dependence on
the Laura Ashley Eyewear and Eddie Bauer Eyewear lines through the development
and promotion of Nicole Miller Eyewear, Dakota Smith Eyewear, bebe eyes and its
Signature line, the Company expects the Laura Ashley and Eddie Bauer Eyewear
lines to continue to be the Company's leading sources of revenue for the near
future. The Laura Ashley license is automatically renewed through January 2008
so long as the Company is not in breach of the license agreement and the royalty
payment for the prior two contract years exceeds the minimum royalty for those
years. Laura Ashley may also terminate the license agreement if minimum sales
requirements are not met in any two years. The Company did not meet the minimum
sales requirement for the license years ended January 2003 and 2004, but Laura
Ashley waived noncompliance. The Company markets Eddie Bauer Eyewear through an
exclusive license which terminates in December 2005, but may be renewed by the
Company at least through 2007 so long as the Company is not in material default
and meets certain minimum net sales and royalty requirements. Each of Laura
Ashley and Eddie Bauer may terminate its respective license before its term
expires under certain circumstances, including a material default by the Company
or certain defined changes in control of the Company.

         BANKRUPTCY OF EDDIE BAUER

         Eddie Bauer Diversified Sales LLC, the licensor on the Eddie Bauer
Eyewear license, and its parent Spiegel, Inc and other affiliates, have filed
voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy
Code. As a result, the licensor has the rights of a debtor under the Bankruptcy
Code with respect to executory contracts such as the Eddie Bauer Eyewear
license, including the right to assume or reject the license. The rejection of
the license would have a material adverse affect on the Company. The Company has
received no indication or notice from the licensor regarding the licensor's
intentions with respect to the license agreement.

         DEPENDENCE UPON SALES TO RETAIL OPTICAL CHAINS

         Net sales to major optical retail chains amounted to 35% and 32% of net
sales in fiscal years 2002 and 2003, respectively. Net sales to EyeCare Centers
of America in fiscal 2002 and fiscal 2003 amounted to 13% and 11% of the

                                        16
<PAGE>

Company's net sales for such fiscal years. The loss of one or more major optical
retail chains as a customer would have a material adverse affect on the
Company's business.

         APPROVAL REQUIREMENTS OF BRAND-NAME LICENSORS

         The Company's business is predominantly based on its brand-name
licensing relationships. Each of the Company's licenses requires mutual
agreement of the parties for significant matters. Each of these licensors has
final approval over all eyeglass frames and other products bearing the
licensor's proprietary marks, and the frames must meet the licensor's general
design specifications and quality standards. Consequently, each licensor may, in
the exercise of its approval rights, delay the distribution of eyeglass frames
bearing its proprietary marks. The Company expects that each future license it
obtains will contain similar approval provisions. Accordingly, there can be no
assurance that the Company will be able to continue to maintain good
relationships with each licensor, or that the Company will not be subject to
delays resulting from disagreements with, or an inability to obtain approvals
from, its licensors.

         LIMITATIONS ON ABILITY TO DISTRIBUTE OTHER BRAND-NAME EYEGLASS FRAMES

         Each of the Company's licenses limits the Company's right to market and
sell products with competing brand names. The Laura Ashley license prohibits the
Company from selling any range of designer eyewear that is similar to Laura
Ashley Eyewear in price and style, market position and market segment. The Eddie
Bauer license and the bebe license prohibit the Company from entering into
license agreements with companies which Eddie Bauer and bebe, respectively,
believe are its direct competitors. The Hart Schaffner & Marx license prohibits
the Company from marketing and selling another men's brand of eyeglass frames
under a well-known fashion name with a wholesale price in excess of $40. The
Company expects that each future license it obtains will contain some
limitations on competition within market segments. The Company's growth,
therefore, will be limited to capitalizing on its existing licenses in the
prescription eyeglass market, introducing eyeglass frames in other segments of
the prescription eyeglass market, and manufacturing and distributing products
other than prescription eyeglass frames such as sunglasses. In addition, there
can be no assurance that disagreements will not arise between the Company and
its licensors regarding whether certain brand-name lines would be prohibited by
their respective license agreements. Disagreements with licensors could
adversely affect sales of the Company's existing eyeglass frames or prevent the
Company from introducing new eyewear products in market segments the Company
believes are not being served by its existing products.

         PRODUCT RETURNS

         The Company has a product return policy that it believes is standard in
the optical industry and is followed by its competitors. Under that policy, the
Company generally accepts returns of non-discontinued product for credit, upon
presentment and without charge, and as a general policy the Company does not
make cash refunds. The Company's product returns for fiscal years 2002 and 2003
amounted to 22% and 22% of gross sales (sales before returns), respectively. The
Company maintains reserves for product returns that which it considers adequate;
however, an increase in returns that significantly exceeds the amount of those
reserves would have a material adverse impact on the Company's business,
operating results and financial condition.

         AVAILABILITY OF VISION CORRECTION ALTERNATIVES

         The Company's future success could depend to a significant extent on
the availability and acceptance by the market of vision correction alternatives
to prescription eyeglasses, such as contact lenses and refractive (optical)
surgery. While the Company does not believe that contact lenses, refractive
surgery or other vision correction alternatives materially and adversely impact
its business at present, there can be no assurance that technological advances
in, or reductions in the cost of, vision correction alternatives will not occur
in the future, resulting in their more widespread use. Increased use of vision
correction alternatives could result in decreased use of the Company's eyewear
products, which would have a material adverse impact on the Company's business,
operating results and financial condition.

         COMPETITION

         The markets for prescription eyewear are intensely competitive. There
are thousands of frame styles, including hundreds with brand names. At retail,
the Company's eyewear styles compete with styles that do and do not have brand

                                        17
<PAGE>

names, styles in the same price range, and styles with similar design concepts.
To obtain board space at an optical retailer, the Company competes against many
companies, both foreign and domestic, including Luxottica Group S.p.A, Safilo
Group S.p.A., Marchon Eyewear, Inc. and Marcolin S.p.A.. Signature's largest
competitors have significantly greater financial, technical, sales,
manufacturing and other resources than the Company. They also employ direct
sales forces that have existed far longer, and are significantly larger than the
Company's. At the major retail chains, the Company competes not only against
other eyewear suppliers, but also against the chains themselves, which license
some of their own brand names for design, manufacture and sale in their own
stores. Luxottica, one of the largest eyewear companies in the world, is
vertically integrated, in that it manufactures frames, distributes them through
direct sales forces in the United States and throughout the world, and owns
LensCrafters, one of the largest United States retail optical chains.

         The Company competes in its target markets through the quality of the
brand names it licenses, its marketing, merchandising and sales promotion
programs, the popularity of its frame designs, the reputation of its styles for
quality, and its pricing policies. There can be no assurance that the Company
will be able to compete successfully against current or future competitors or
that competitive pressures faced by the Company will not materially and
adversely affect its business, operating results and financial condition.

         CONTROL BY DIRECTORS AND EXECUTIVE OFFICERS

         As of August 31, 2004, the directors and executive officers of the
Company owned beneficially approximately 49% of the Company's outstanding shares
of Common Stock. As a result, the directors and executive officers control the
Company and its operations, including the approval of significant corporate
transactions and the election of at least a majority of the Company's Board of
Directors and thus the policies of the Company. The voting power of the
directors and executive officers could also serve to discourage potential
acquirors from seeking to acquire control of the Company through the purchase of
the Common Stock, which might depress the price of the Common Stock.

         NO DIVIDENDS ALLOWED

         As a California corporation, under the California General Corporation
Law, generally the Company may not pay dividends in cash or property except (i)
out of positive retained earnings or (ii) if, after giving effect to the
distribution, the Company's assets would be at least 1.25 times its liabilities
and its current assets would exceed its current liabilities (determined under
generally accepted accounting principles). At July 31, 2004, the Company had an
accumulated deficit of $20.3 million. As a result, the Company will not be able
to pay dividends for the foreseeable future. In addition, the payment of
dividends is prohibited under its credit facilities.

         POSSIBLE ANTI-TAKEOVER EFFECTS

         The Company's Board of Directors has the authority to issue up to
5,000,000 shares of Preferred Stock and to determine the price, rights,
preferences, privileges and restrictions, including voting rights, of those
shares without any further vote or action by the shareholders. The Preferred
Stock could be issued with voting, liquidation, dividend and other rights
superior to those of the Common Stock. The Company issued 1,200,000 shares of
Series A Preferred in the recapitalization, and has no present intention to
issue any other shares of Preferred Stock. However, the rights of the holders of
Common Stock will be subject to, and may be adversely affected by, the rights of
the holders of any Preferred Stock that may be issued in the future. The
issuance of Preferred Stock, while providing desirable flexibility in connection
with possible acquisitions and other corporate purposes, could have the effect
of making it more difficult for a third party to acquire a majority of the
outstanding voting stock of the Company, which may depress the market value of
the Common Stock. In addition, each of the Laura Ashley, Hart Schaffner & Marx,
Eddie Bauer and bebe licenses allows the licensor to terminate its license upon
certain events which under the license are deemed to result in a change in
control of the Company unless the change of control is approved by the licensor.
The licensors' rights to terminate their licenses upon a change in control of
the Company could have the effect of discouraging a third party from acquiring
or attempting to acquire a controlling portion of the outstanding voting stock
of the Company and could thereby depress the market value of the Common Stock.



ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company is exposed to market risks, which include foreign exchange
rates and changes in U.S. interest rates. The Company does not engage in
financial transactions for trading or speculative purposes.

                                        18
<PAGE>
         FOREIGN CURRENCY RISKS. At any month-end during the quarter ended July
31, 2004, a maximum of $1.2 million were payable in foreign currency. These
foreign currencies included Japanese yen. Any significant change in foreign
currency exchange rates could therefore materially affect the Company's
business, operating results and financial condition. To monitor risks associated
with currency fluctuations, the Company on a weekly basis assesses the
volatility of certain foreign currencies and reviews the amounts and expected
payment dates of its purchase orders and accounts payable in those currencies.
Based on those factors, the Company may from time to time mitigate some portion
of that risk by purchasing forward commitments to deliver foreign currency to
the Company. The Company held no forward commitments for foreign currencies at
July 31, 2004.

         International sales accounted for approximately 14% of the Company's
net sales in the three months ended July 31, 2004. Although the Company's
international sales are principally in United States dollars, sales to
international customers may also be affected by changes in demand resulting from
fluctuations in interest and currency exchange rates. There can be no assurance
that these factors will not have a material adverse effect on the Company's
business, operating results and financial condition. For frames purchased other
than from Hong Kong/China manufacturers, the Company pays for its frames in the
currency of the country in which the manufacturer is located and thus the costs
(in United States dollars) of the frames vary based upon currency fluctuations.
Increases and decreases in costs (in United States dollars) resulting from
currency fluctuations generally do not affect the price at which the Company
sells its frames, and thus currency fluctuation can impact the Company's gross
margin.

         INTEREST RATE RISK. The Company's credit facilities existing at July
31, 2004 had fixed interest rates. Accordingly, the Company does not believe it
is subject to material interest rate risk.

         In addition, the Company has fixed income investments consisting of
cash equivalents, which are also affected by changes in market interest rates.
The Company does not use derivative financial instruments in its investment
portfolio. The Company places its cash equivalents with high-quality financial
institutions, limits the amount of credit exposure to any one institution and
has established investment guidelines relative to diversification and maturities
designed to maintain safety and liquidity.


ITEM 4 - CONTROLS AND PROCEDURES

         The Company's management, with the participation of the Chief Executive
Officer and Chief Financial Officer, has conducted an evaluation of the
effectiveness of the Company's disclosure controls and procedures pursuant to
Rule 13a-14 under the Securities Exchange Act of 1934, as amended, as of the end
of the period covered by this report. Based on that evaluation, the Chief
Executive Officer and the Chief Financial Officer believe that the Company's
disclosure controls and procedures reasonably ensure that information required
to be disclosed by the Company in this annual report has been made known to them
in a timely manner.

         There was no change in the Company's internal control over financial
reporting during the Company's most recently completed fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.



                                    PART II.
                                OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         See Exhibit Index Attached

         Reports on Form 8-K

                   None

                                       19
<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.


Date:    October 13, 2004                 SIGNATURE EYEWEAR, INC.


                                          By: /s/ Michael Prince
                                              --------------------------
                                              Michael Prince
                                              Chief Executive Officer
                                              Chief Financial Officer

















                                       20
<PAGE>

                                  EXHIBIT INDEX

Exhibit
Number          Exhibit Description
------          -------------------

 31.1           Certification Pursuant to SEC Rule 13a-14(a)/15d-14(a)

 32.1           Certification Pursuant to 18 U.S.C. ss.  1350



























                                       21