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 March 29, 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 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 - 1,842.5 shares issued and outstanding
as of May 1, 2002.







                                        1

<PAGE>



                       GFSI HOLDINGS, INC. AND SUBSIDIARY
                          Quarterly Report on Form 10-Q
                      For the Quarter Ended March 29, 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                                               8

         ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES
                    ABOUT MARKET RISK                                       11

PART II - OTHER INFORMATION                                                 12


SIGNATURE PAGE                                                              13



                                        2

<PAGE>



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


                                                                                  March 29,          June 29,
                                                                                    2002               2001
                                                                                -----------        -----------
<S>                                                                             <C>                 <C>

ASSETS
Current assets:
     Cash and cash equivalents                                                  $    1,028         $    5,324
     Accounts receivable, net                                                       28,532             22,694
     Inventories, net                                                               40,653             37,736
     Income tax receivable                                                              92              1,691
     Prepaid expenses and other current assets                                       1,220              1,143
     Deferred income taxes                                                             882                911
                                                                                ----------         -----------
Total current assets                                                                72,407             69,499

Property, plant and equipment, net                                                  19,850             18,574
Other assets:
     Deferred financing costs, net                                                   4,083              5,409
     Other                                                                           1,260              2,006
                                                                                ----------         -----------
Total assets                                                                    $   97,600         $   95,488
                                                                                ==========         ==========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
     Accounts payable                                                           $   10,250          $  12,778
     Accrued interest expense                                                          999              3,775
     Accrued expenses                                                                5,916              5,895
     Current portion of long-term debt                                                 191              6,699
                                                                                -----------         ----------
Total current liabilities                                                           17,356             29,147

Deferred income taxes                                                                  746              1,189
Revolving credit agreement                                                          29,262                 --
Other long-term obligations                                                            802                527
Long-term debt, less current portion                                               208,019            221,729
Redeemable preferred stock                                                           5,328              5,145
Stockholders' equity (deficiency):
     Common stock, $.01 par value 2,105 shares authorized,
       2,000 shares issued at March 29, 2002 and June 29, 2001                          --                 --
     Additional paid-in capital                                                        200                200
     Accumulated deficiency                                                       (164,102)          (162,442)
     Treasury stock, at cost (142.5 and 100 series A shares at
       March 29, 2002 and June 29, 2001, respectively)                                 (11)                (7)
                                                                                ----------          ----------
Total stockholders' equity (deficiency)                                           (163,913)          (162,249)
                                                                                ----------          -----------
Total liabilities and stockholders' equity (deficiency)                         $   97,600          $  95,488
                                                                                ===========         ==========


NOTE: The consolidated  balance sheet at June 29, 2001 has been derived from the
audited  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.

See notes to consolidated financial statements.
</TABLE>



                                        3

<PAGE>



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

                                                                        Quarter Ended                 Nine Months Ended
                                                                 --------------------------      ---------------------------
                                                                   March 29,     March 30,        March 29,       March 30,
                                                                     2002           2001            2002             2001
                                                                 ----------     ----------       ----------       ---------
<S>                                                              <C>             <C>              <C>             <C>

Net sales                                                        $  41,520      $  42,493        $ 147,897        $146,466
Cost of sales                                                       26,258         25,870           92,348          90,451
                                                                 ---------      ----------       ----------       ---------
Gross profit                                                        15,262         16,623           55,549          56,015

Operating expenses:
     Selling                                                         6,603          5,760           18,553          16,779
     General and administrative                                      6,753          6,620           19,662          20,833
                                                                 ----------     ----------       ----------       ---------
                                                                    13,356         12,380           38,215          37,612
                                                                 ----------     ----------       ----------       ---------
Operating income                                                     1,906          4,243           17,334          18,403

Other income (expense):
     Interest expense                                               (6,161)        (6,385)         (18,581)        (18,785)
     Other, net                                                          2            168               13             324
                                                                 ----------     ----------       ----------       ---------
                                                                    (6,159)        (6,217)         (18,568)        (18,461)
                                                                 ----------     ----------       ----------       ---------
Loss before income taxes and extraordinary item                     (4,253)        (1,974)          (1,234)            (58)
Provision for income taxes (benefit)                                (1,659)          (770)            (481)            (23)
                                                                 ----------     ----------       ----------       ---------
Net loss before extraordinary item                                  (2,594)        (1,204)            (753)            (35)
Extraordinary item, net of tax benefit                                 606             --              606              --
                                                                 ----------     ----------       ----------       ---------
Net loss                                                            (3,200)        (1,204)          (1,359)            (35)
Preferred stock dividends                                             (100)          (101)            (301)           (311)
                                                                 ----------     ----------      -----------       ---------
Net loss attributable to common shareholders                     $  (3,300)     $  (1,305)      $   (1,660)       $   (346)
                                                                 ==========     ==========      ===========       =========


See notes to consolidated financial statements.
</TABLE>



                                        4

<PAGE>



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

                                                                                       Nine Months Ended
                                                                                --------------------------------
                                                                                  March 29,           March 30,
                                                                                   2002                 2001
                                                                                -----------          ----------
<S>                                                                             <C>                  <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                        $   (1,359)          $    (35)
Adjustments to reconcile net income to net cash provided by
   operating activities:
     Depreciation                                                                    2,338              2,308
     Amortization of deferred financing costs                                          929                905
     Amortization of other intangibles                                                 750                 --
     (Gain) loss on sale or disposal of property, plant and equipment                    6                (55)
     Accretion of discount on long-term debt                                         6,562              5,874
     Deferred income taxes                                                            (414)                --
     Extraordinary loss on early extinguishment of debt                                994                 --
Changes in operating assets and liabilities:
     Accounts receivable, net                                                       (5,837)              (148)
     Inventories, net                                                               (2,917)             8,677
     Prepaid expenses, other current assets and other assets                           (82)              (676)
     Income taxes receivable and payable                                             1,600               (221)
     Accounts payable, accrued expenses and other
        long-term obligations                                                       (5,199)            (1,010)
                                                                                 ----------          ---------
Net cash provided by (used in) operating activities                                 (2,629)            15,619
                                                                                 ----------          ---------

CASH FLOWS FROM INVESTING ACTIVITIES
     Proceeds from sales of property, plant and equipment                                3                141
     Purchases of property, plant and equipment                                     (3,622)            (1,275)
                                                                                 ----------          ---------
Net cash used in investing activities                                               (3,619)            (1,134)
                                                                                 ----------          ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net borrowings under revolving credit agreements                               29,262                 --
     Issuance of long-term debt                                                        300                 --
     Deferred financing costs                                                         (683)              (190)
     Redemption of preferred stock                                                    (771)              (173)
     Treasury stock purchase                                                           (28)                (5)
     Proceeds from sale of stock                                                       676                 --
     Payments on long-term debt                                                    (26,804)           (13,714)
                                                                                 ----------          ---------
Net cash provided by (used in) financing activities                                  1,952            (14,082)
                                                                                 ----------          ----------

Net increase (decrease)  in cash and cash equivalents                               (4,296)               403
Cash and cash equivalents at beginning of period                                     5,324              1,461
                                                                                 ----------          ---------
Cash and cash equivalents at end of period                                       $   1,028           $  1,864
                                                                                 ==========          =========
Supplemental cash flow information:
     Interest paid                                                               $  13,876           $ 15,899
                                                                                 ==========          =========
     Income taxes paid (refunded)                                                $  (2,053)          $    651
                                                                                 ==========          =========


See notes to consolidated financial statements.
</TABLE>



                                        5

<PAGE>


                       GFSI HOLDINGS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                                 March 29, 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 subsidiary,  GFSI, Inc. ("GFSI").  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 and results of operations 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.  For further  information,  refer to the financial  statements  and
footnotes  thereto  for the year ended June 29, 2001  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.   ACQUISITION AND DIVESTITURE

     In June 2001, the Company acquired CCP,  formerly a wholly owned subsidiary
of Sara Lee  Corporation.  CCP had sales of $7.1  million and $32.7  million and
produced operating contribution of $700,000 and $5.9 million for the quarter and
nine month periods ended March 29, 2002,  respectively.  CCP is an unconditional
guarantor of the Senior Subordinated Notes.

     In June 2001, the Company sold the assets of its Tandem Marketing business.
Tandem  Marketing had revenues of $2.7 million and $9.4 million and an operating
loss of $356,000  and an  operating  income of $668,000 for the quarter and nine
month periods ended March 30, 2001, respectively.


3.   LONG TERM DEBT AND REVOLVING CREDIT AGREEMENT

     During the third  quarter of fiscal 2002 the Company  replaced its existing
bank Credit Agreement by entering into a Revolving Credit Agreement with a group
of financial institutions to provide a revolving line of credit which matures in
January 2005.  Proceeds from borrowings  under the replacement  Revolving Credit
Agreement  were used to  retire  the  Company's  existing  bank  debt  which was
comprised of both term loans and revolving debt. The Revolving  Credit Agreement
provides for borrowings on a revolving basis of up to $65 million at an interest
rate based upon LIBOR or prime.  The weighted average interest rate in effect at
March 29, 2002 was 5.0%. In addition,  the Revolving Credit  Agreement  provides
for the  issuance  of letters of credit on behalf of the  Company.  At March 29,
2002 the Company had $29.3 million in borrowings  and $5.5 million in letters of
credit  outstanding under the Revolving Credit Agreement.  At March 29, 2002 the
Company had $20 million in unused  borrowing  availability  under the  Revolving
Credit Agreement.

     The Revolving Credit  Agreement is secured by  substantially  all of GFSI's
assets and is guaranteed  by both of GFSI's  wholly-owned  subsidiaries  and the
Company.  Borrowings under the Revolving Credit Agreement are subject to certain
restrictions  and  covenants.  The  Company  is limited  with  respect to paying
dividends and  distributions,  the incurrence of certain debt, the incurrence of
certain liens,  and restricted  regarding  certain  consolidations,  mergers and
business combinations, asset acquisitions and dispositions. The Revolving Credit
Agreement requires the Company,  among other things, to maintain a minimum fixed
charge coverage ratio as defined in the Revolving Credit Agreement.  At the most
restrictive  level,  the Company must maintain a fixed charge  coverage ratio of
1.15 to 1.0.


                                       6

<PAGE>




4.   EXTRAORDINARY ITEM, NET OF TAX BENEFIT

     In connection with the early  extinguishment  of its bank Credit Agreement,
the Company  recognized a pre-tax  loss for the quarter  ended March 29, 2002 of
$994,000  ($606,000 on an after-tax  basis).  The loss  consisted of unamortized
debt origination  costs which were being recognized as interest expense over the
original term of the bank Credit Agreement.  The extraordinary loss is reflected
in the Consolidated Statements of Income net of the associated tax benefit.


5.   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.


6.   NEW ACCOUNTING STANDARDS

     The FASB's Emerging  Issues Task Force ("EITF")  released its consensus No.
00-22,  "Accounting  for 'Points' and Certain Other  Time-Based or  Volume-Based
Sales Incentive Offers, and Offers for Free Products or Services to be Delivered
in  the   Future"  and   consensus   No.   00-25,   "Vendor   Income   Statement
Characterization  of Consideration Paid to a Reseller of the Vendor's Products".
The consensus'  concluded that  consideration from a vendor to a reseller of the
vendor's  products  is  generally  presumed to be an  adjustment  to the selling
prices of the  vendor's  products  and,  therefore,  should be  classified  as a
reduction of revenue.

     The  Company  implemented  both of these  pronouncements  during  the third
quarter of fiscal  2002,  and as a result,  decreased  net sales by $494,000 and
$125,000  for the  fiscal  quarters  ended  March 29,  2002 and March 30,  2001,
respectively,  to  reclassify  certain  customer  incentive  programs and volume
rebates that had previously been recorded as operating  expenses.  Net sales for
the nine month periods ended March 29, 2002 and March 30, 2001 were decreased by
$1.4 million and $838,000,  respectively, as a result of the reclassification of
these   previously   reported   operating   expenses   to  conform   with  these
pronouncements.


7.   RECLASSIFICATION

     Certain  reclassifications  have been made to the fiscal 2001  consolidated
financial statements to conform to the fiscal 2002 presentation.




                                        7

<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,  2001.  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 ability
of the Company 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  ability of the Company 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,   restructuring  reserves,  other  post-retirement  benefits,
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 the
historical  data used to calculate  these  estimates  does not properly  reflect
future sales, 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.

     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.  The Company  also  records  changes in
valuation  allowances  due to changes  in its  operating  strategy,  such as the
discontinuances  of  certain  product  lines and other  merchandising  decisions
related to changes in demand.  It is possible  that further  changes in required
inventory  allowances  may be  necessary  in the  future  as a result  of market
conditions and competitive pressures.


                                        8

<PAGE>



          COMPARISON OF OPERATING RESULTS FOR THE QUARTERS ENDED
                       MARCH 29, 2002 AND MARCH 30, 2001.

         NET SALES.  Net sales for the quarter  ended  March 29, 2002  decreased
2.3% to $41.5  million from $42.5  million for the quarter ended March 30, 2001.
The decrease in net sales from the third  quarter of last year was primarily due
to lower sales from the Corporate  division and the loss of sales related to the
divestiture of the Tandem Marketing business, which offset $7.1 million of sales
produced by the CCP college  bookstore  business  which was acquired on June 29,
2001.  Sales in the Corporate  division  have been directly  affected by general
cost savings  initiatives  which have reduced  company  sponsored  marketing and
employee incentive programs in response to the softened economy.

         GROSS  PROFIT.  Gross  profit  for the  quarter  ended  March 29,  2002
decreased  8.2% to $15.3  million from $16.6 million for the quarter ended March
30, 2001.  Gross profit as a percentage of net sales decreased to 36.8% compared
to 39.1%  last  year.  The  decrease  in gross  profit  was the  result of lower
Corporate  division sales,  which  generally  provide a higher gross profit than
sales from the  recently  acquired  CCP  college  bookstore  business.  Start-up
production costs were also incurred during the third quarter of this year due to
the opening of a new screen print production facility in Northwestern  Missouri.
The new  facility  will  allow the  Company  to source a greater  portion of its
decoration needs internally.

         OPERATING EXPENSES.  Operating expenses for the quarter ended March 29,
2002 increased 7.9% to $13.4 million from $12.4 million. Operating expenses as a
percentage  of net sales were 32.2% in the third quarter of fiscal 2002 compared
to 29.1% in the third quarter of fiscal 2001. The increase in operating expenses
resulted  primarily from higher selling  expenses.  A greater  portion of fiscal
2002 sales were generated from college  bookstore  licensed  apparel which carry
royalty fees and are marketed through more expensive  distribution  channels. In
addition,  the Company  increased  its bad debt expense by raising its allowance
for  uncollectable  accounts due to the general economic downturn in the resort,
golf and leisure markets.

         EBITDA.  EBITDA  decreased  41% to $2.9 million in the third quarter of
fiscal 2002 from $4.9 million in the third  quarter of fiscal 2001.  EBITDA as a
percentage  of net sales  decreased to 7.0% in the quarter  ended March 29, 2002
from 11.6% in the quarter  ended March 30,  2001.  The  decrease in EBITDA was a
result of the decline in gross profit and the increase in operating expenses.

         OPERATING  INCOME.  Operating income decreased 55.1% to $1.9 million in
the third  quarter  of fiscal  2002 from $4.2  million  in the third  quarter of
fiscal 2001.  Operating  income as a percentage  of net sales was 4.6%  compared
with 10.0% last  year.  The  decrease  in  operating  income was a result of the
decline in gross profit and the increase in operating expenses.

         INTEREST EXPENSE. Interest expense of $6.2 million in the third quarter
of fiscal 2002 was  $224,000  less than the  comparable  period  last year.  The
decline in interest rates and reduced borrowings under the Company's bank credit
agreements created the decrease in interest expense.

         NET  INCOME  (LOSS)  BEFORE   EXTRAORDINARY   ITEM.   Net  loss  before
extraordinary  item for the  third  quarter  of  fiscal  2002  was $2.6  million
compared to net loss  before  extraordinary  item of $1.2  million for the third
quarter of fiscal  2001.  The  decrease  in gross  profit  and higher  operating
expenses created the $1.4 million increase in net loss from the third quarter of
last year.

         EXTRAORDINARY  ITEM,  NET OF TAX  BENEFIT.  In March 2002,  the Company
entered into a $65 million Revolving Credit facility and repaid its existing $40
million  bank credit  facility  ahead of its  scheduled  expiration.  A $606,000
extraordinary  charge,  net of related tax  benefits,  was recorded in the third
quarter on fiscal 2002 to write off deferred debt  origination  costs related to
the previous bank credit facility.


       COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED
                       MARCH 29, 2002 AND MARCH 30, 2001.

         NET SALES. Net sales for the nine months ended March 29, 2002 increased
1.0% to $147.9  million from $146.5  million for the nine months ended March 30,
2001.  The  increase  in net sales from last year was  primarily  related to the
addition of CCP college  bookstore  sales of $32.7  million.  The sales increase
from CCP was  offset by  declines  in  Corporate  and Resort  division  sales in
comparison to the prior year.  The  terrorist  attacks of September 11, 2001 and
the  resulting  political  and economic  uncertainties  created in the aftermath
directly  affected the travel  plans and the  marketing  and employee  incentive
programs of the customers of these two sales divisions. Additionally, the Tandem
Marketing  business was sold in June 2001.  Tandem  Marketing  contributed  $9.4
million in sales for the nine months ended March 30, 2001.



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<PAGE>



         GROSS  PROFIT.  Gross  profit for the nine months  ended March 29, 2002
decreased  0.8% to $55.5  million  from $56.0  million for the nine months ended
March 30, 2001.  Gross profit as a  percentage  of net sales  decreased to 37.6%
compared  to 38.2% last year.  The  decrease  in gross  profit was  created by a
number of factors:  1) lower Corporate division sales, which generally provide a
higher gross profit than the recently acquired CCP college  bookstore  business;
2) the  Company  incurred  higher  production  costs in the  months  immediately
following the  acquisition of CCP to produce and deliver  products on time; 3) a
new screen print facility was  constructed and started-up to add to capacity and
source  more CCP product  decoration  internally;  and 4) the Company  regularly
accesses  secondary apparel markets to sell its production  seconds,  irregular,
overstocked and excess goods.  Higher discounts on secondary goods were required
during the first nine months of fiscal 2002 which  contributed to the decline in
gross profit from the comparable period last year.

         OPERATING EXPENSES.  Operating expenses for the nine months ended March
29, 2002  increased 1.6% to $38.2 million from $37.6 million for the nine months
ended March 30, 2001. Operating expenses as a percentage of net sales were 25.8%
in fiscal 2002  compared to 25.7% in fiscal  2001.  A greater  portion of fiscal
2002 sales were generated from college  bookstore  licensed  apparel which carry
royalty fees and are marketed through more expensive  distribution  channels. In
addition,  the Company  increased  bad debt expense by raising its allowance for
uncollectable  accounts due to the general economic downturn in the resort, golf
and leisure markets.

          EBITDA.  EBITDA  decreased  1.4% to $20.4  million  in the first  nine
months of fiscal  2002 from $20.7  million  in the first  nine  months of fiscal
2001.  EBITDA as a percentage of net sales decreased to 13.8% in the nine months
ended March 29, 2002 from 14.1% in the comparable period last year. The decrease
in EBITDA was a result of the decline in gross profit.

          OPERATING INCOME.  Operating income decreased 5.9% to $17.3 million in
fiscal 2002 from $18.4 million in fiscal 2001.  Operating income as a percentage
of net sales decreased to 11.7% in fiscal 2002 from 12.6% in fiscal 2001.  Lower
gross profit created the decrease in operating income.

         INTEREST EXPENSE.  Interest expense of $18.6 million in fiscal 2002 was
$204,000  less than the  comparable  period  last year.  The decline in interest
rates and reduced  borrowings under the Company's bank credit agreements created
the decrease in interest expense.

          NET LOSS BEFORE EXTRAORDINARY ITEM. Net loss before extraordinary item
for the first nine  months of fiscal  2002 was  $753,000,  compared to a loss of
$35,000  for the first nine  months of fiscal  2001.  The  increased  loss was a
result of the decline in operating  income  partially  offset by the decrease in
interest expense.

         EXTRAORDINARY  ITEM,  NET OF TAX  BENEFIT.  In March 2002,  the Company
entered into a $65 million Revolving Credit facility and repaid its existing $40
million  bank credit  facility  ahead of its  scheduled  expiration.  A $606,000
extraordinary  charge, net of related tax benefits,  was recorded in fiscal 2002
to write off deferred debt origination costs related to the previous bank credit
facility.


     LIQUIDITY AND CAPITAL RESOURCES

         During  the third  quarter  of fiscal  2002 the  Company  replaced  its
existing  bank Credit  Agreement by entering into a Revolving  Credit  Agreement
with a group of  financial  institutions  to provide a revolving  line of credit
which matures in January 2005. At March 29, 2002,  $20 million was available for
future  borrowings  under the Revolving Credit  Agreement.  The Company believes
that cash flow from  operating  activities  and  borrowings  under the Revolving
Credit Agreement will be adequate to meet the Company's short-term and long-term
liquidity requirements, although no assurance can be given in this regard.

         Cash used in operating  activities  for the first nine months of fiscal
2002 was $2.6 million  compared to cash  provided of $15.6  million in the first
nine months of fiscal 2001.  The change in cash  provided by (used in) operating
activities between the two periods was primarily due to the increase in accounts
receivable  and the increase in inventory as a result of the addition of the CCP
college bookstore business.



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<PAGE>



         Cash used in  investing  activities  in the first nine months of fiscal
2002 was $3.6 million compared to $1.1 million in the first nine months of 2001.
The cash used in both periods was related to the purchase of property, plant and
equipment.  The  increase  over last year  resulted  from the  construction  and
outfitting of the new screen print facility in Northwest Missouri.

         Cash  provided  by  financing  activities  for the first nine months of
fiscal 2002 was $2.0 million compared to cash used of $14.1 million in the first
nine  months  of fiscal  2001.  The net $2.0  million  provided  from  financing
activities during the first nine months of fiscal 2002 was created by borrowings
under the Revolving  Credit  Agreement to replace the existing bank loans and to
support increased working capital and equipment needs related to the acquisition
of the CCP  business.  During the first nine  months of fiscal  2001 the Company
made  significant  advance  payments  on its term loans  which  created the cash
outflow from financing activities last year.

         The  Company  is  dependent  upon  the cash  flows of its  wholly-owned
subsidiary,  GFSI,  to provide  funds to pay certain  ordinary  course  expenses
incurred on behalf of the Company and to service the indebtedness represented by
the  $50.0  million  of  11.375%  Series B Senior  Discount  Notes due 2009 (the
"Discount  Notes").  The  Discount  Notes  will  accrete  at a rate of  11.375%,
compounded  semi-annually to an aggregate  principal amount of $108.5 million at
September 15, 2004.  Thereafter,  the 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.  The Company will be
dependent on GFSI to provide  funds to service the  indebtedness.  Additionally,
the  remaining  cumulative  non-cash  preferred  stock  issued  by  the  Company
("Holdings  Preferred  Stock")  will  accrue  dividends  totaling  approximately
$402,000  annually.  Holdings  Preferred  Stock may be redeemed at stated  value
(approximately $3.3 million) plus accrued dividends with mandatory redemption in
2009.

     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 volume during the first two
fiscal quarters. Sales at the Company's Resort and Corporate divisions typically
show no significant 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
percent  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.



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<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

                  Exhibit 10.23 - Credit  Agreement,  dated March 29, 2002 among
                  the financial  institutions named therein as the Lenders, Bank
                  of America, N.A. as the Agent and GFSI, Inc. as the Borrower.*

            *     Incorporated  by reference to form 10-Q of GFSI,  Inc.,  filed
                  with the  Securities  and Exchange  Commission on May 10, 2002
                  (Commission File No. 333-24189).

            (b)   Reports on Form 8-K

                  No reports on Form 8-K were filed by the Registrant during the
                  reporting period.

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<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.
May 10, 2002


                            /s/  J. CRAIG PETERSON
                            -----------------------------------------
                            J. Craig Peterson, Sr. Vice President of Finance and
                            Principal Accounting Officer



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