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

                       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 January 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, 5,976,889 shares issued and outstanding as of March 31, 2004.
================================================================================
<PAGE>

                             SIGNATURE EYEWEAR, INC.

                               INDEX TO FORM 10-Q

PART I    FINANCIAL INFORMATION                                             Page
                                                                            ----
Item 1    Financial Statements ..........................................    1

          Balance Sheets ................................................   1-2

          Statements of Operations ......................................    3

          Statements of Cash Flows ......................................    4

          Notes to the Financial Statements .............................  5-11


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


Item 3    Quantitative and Qualitative Disclosures about Market Risk ....   17


Item 4    Controls and Procedures .......................................   18


PART II   OTHER INFORMATION .............................................   18

Item 6    Exhibits and Reports on Form 8-K ..............................   18



















                                        i
<PAGE>

PART I    FINANCIAL INFORMATION

Item 1    Financial Statements

                                                         SIGNATURE EYEWEAR, INC.
                                                                        CONTENTS
                               OCTOBER 31, 2003 AND JANUARY 31, 2004 (UNAUDITED)
================================================================================



                                                                          Page

FINANCIAL STATEMENTS

     Balance Sheets                                                        1-2

     Statements of Operations                                               3

     Statements of Cash Flows                                               4

     Notes to Financial Statements                                         5-11

















                                      iii
<PAGE>
                                                         SIGNATURE EYEWEAR, INC.
                                                                  BALANCE SHEETS
                               OCTOBER 31, 2003 AND JANUARY 31, 2004 (UNAUDITED)
================================================================================
<TABLE><CAPTION>

                                     ASSETS

                                                                January 31,       October 31,
                                                                   2004              2003
                                                               ------------      ------------
                                                                (unaudited)
<S>                                                            <C>               <C>

CURRENT ASSETS
    Cash and cash equivalents, including restricted cash
       of $340,679 (unaudited) and $340,567                    $    526,671      $    663,251
    Accounts receivable - trade, net of allowance for
       doubtful accounts of $430,914 (unaudited) and
       $503,490                                                   3,102,132         2,281,255
    Inventories, net of reserves for obsolete inventories
       of $1,528,527 (unaudited) and $1,506,007                   5,977,340         5,955,253
    Prepaid expenses and other current assets                        17,151            28,718
                                                               ------------      ------------

       Total current assets                                       9,623,294         8,928,477

PROPERTY AND EQUIPMENT, net                                       1,249,626         1,354,362
DEPOSITS AND OTHER ASSETS                                           117,177           115,055
                                                               ------------      ------------

          TOTAL ASSETS                                         $ 10,990,097      $ 10,397,894
                                                               ============      ============
</TABLE>












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

                                        1
<PAGE>
                                                         SIGNATURE EYEWEAR, INC.
                                                                  BALANCE SHEETS
                               OCTOBER 31, 2003 AND JANUARY 31, 2004 (UNAUDITED)
================================================================================
<TABLE><CAPTION>

                      LIABILITIES AND SHAREHOLDERS' DEFICIT

                                                                January 31,       October 31,
                                                                   2004              2003
                                                               ------------      ------------
                                                                (unaudited)
<S>                                                            <C>               <C>
CURRENT LIABILITIES
    Accounts payable - trade                                   $  5,716,718      $  5,367,576
    Accrued expenses and other current liabilities                1,850,648         1,722,825
    Reserve for customer returns                                    635,700           619,460
    Current portion of long-term debt                             1,008,833           550,748
                                                               ------------      ------------

       Total current liabilities                                  9,211,899         8,260,609

LONG-TERM DEBT, net of current portion                            6,768,994         6,873,535
                                                               ------------      ------------

          Total liabilities                                      15,980,893        15,134,144
                                                               ------------      ------------

COMMITMENTS

SHAREHOLDERS' DEFICIT
    Preferred stock, $0.001 par value 5,000,000 shares
       authorized Series A 2% convertible preferred stock,
       $0.001 par value; 1,360,000 shares authorized
       1,200,000 shares issued and outstanding                        1,200             1,200
    Common stock, $0.001 par value 30,000,000 shares
       authorized 5,976,889 (unaudited) and 5,976,889
       shares issued and outstanding                                  5,977             5,977
    Additional paid-in capital                                   15,236,041        15,236,041
    Accumulated deficit                                         (20,234,014)      (19,979,468)
                                                               ------------      ------------

       Total shareholders' deficit                               (4,990,796)       (4,736,250)
                                                               ------------      ------------

          TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT          $ 10,990,097      $ 10,397,894
                                                               ============      ============
</TABLE>




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

                                        2
<PAGE>
                                                         SIGNATURE EYEWEAR, INC.
                                                        STATEMENTS OF OPERATIONS
                FOR THE THREE MONTHS ENDED JANUARY 31, 2004 AND 2003 (UNAUDITED)
================================================================================
<TABLE><CAPTION>

                                                                   2004              2003
                                                               ------------      ------------
<S>                                                            <C>               <C>
NET SALES                                                      $  5,837,614      $  7,243,119
COST OF SALES                                                     2,342,407         2,910,502
                                                               ------------      ------------

GROSS PROFIT                                                      3,495,207         4,332,617
                                                               ------------      ------------

OPERATING EXPENSES
    Selling                                                       1,751,106         1,960,894
    General and administrative                                    1,752,496         2,330,867
    Depreciation and amortization                                   104,341           157,979
                                                               ------------      ------------

       Total operating expenses                                   3,607,943         4,449,740
                                                               ------------      ------------

LOSS FROM OPERATIONS                                               (112,736)         (117,123)
                                                               ------------      ------------

OTHER INCOME (EXPENSE)
    Sundry income                                                     6,726             2,813
    Interest expense, net                                          (142,653)          (99,165)
                                                               ------------      ------------

       Total other income (expense)                                (135,927)          (96,352)
                                                               ------------      ------------

LOSS BEFORE  INCOME TAXES                                          (248,663)         (213,475)

INCOME TAXES                                                          1,882                --
                                                               ------------      ------------

NET LOSS                                                           (250,545)         (213,475)
PREFERRED STOCK DIVIDENDS                                            (4,000)               --
                                                               ============      ============

Net loss available to common stock shareholders                $   (254,545)     $   (213,475)
                                                               ============      ============

BASIC AND DILUTED LOSS PER SHARE                               $      (0.04)     $      (0.04)
                                                               ============      ============

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING                        5,976,889         5,556,889
                                                               ============      ============
</TABLE>



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

                                        3
<PAGE>
                                                         SIGNATURE EYEWEAR, INC.
                                                        STATEMENTS OF CASH FLOWS
                FOR THE THREE MONTHS ENDED JANUARY 31, 2004 AND 2003 (UNAUDITED)
================================================================================
<TABLE><CAPTION>

                                                                   2004              2003
                                                               ------------      ------------
<S>                                                            <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                    $   (254,545)     $   (213,475)
   Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities
          Depreciation and amortization                             104,736           160,230
          Provision for bad debts                                   (72,577)           28,962
          Change in estimate in reserve for obsolete
            inventories                                              22,520          (201,566)
          (Increase) decrease in
              Accounts receivable - trade                          (748,301)         (558,611)
              Inventories                                           (44,607)        1,113,636
              Promotional products and materials                      9,425            22,630
              Prepaid expenses and other current assets               2,142            41,414
              Deposits and other assets                              (2,122)           (1,131)
          Increase (decrease) in
              Accounts payable - trade                              349,142          (512,460)
              Accrued expenses and other current liabilities        127,823          (417,837)
              Reserve for customer returns                           16,240           210,339
                                                               ------------      ------------

Net cash used in operating activities                              (490,124)         (327,869)
                                                               ------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Net borrowings (payments) on line of credit                           --          (169,239)
   Net borrowings (payments) on long-term debt                      353,544          (251,696)
                                                               ------------      ------------

Net cash provided by (used in) financing activities                 353,544          (420,935)
                                                               ------------      ------------

Net decrease in cash and cash equivalents                          (136,580)         (748,804)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                      663,251         1,077,388
                                                               ------------      ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                       $    526,671      $    328,584
                                                               ============      ============

Supplemental disclosures of cash flow information

   INTEREST PAID                                               $    104,282      $    102,034
                                                               ============      ============

   INCOME TAXES REFUNDED                                       $         --      $        (56)
                                                               ============      ============

</TABLE>

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

                                        4
<PAGE>
                                                         SIGNATURE EYEWEAR, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
                               OCTOBER 31, 2003 AND JANUARY 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-X. 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 three months ended January 31,
         2004 are not necessarily indicative of the results that may be expected
         for the year ended October 31, 2004.

         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, accounts payable - trade, and
         line of credit, 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.

                                        5
<PAGE>
                                                         SIGNATURE EYEWEAR, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
                               OCTOBER 31, 2003 AND JANUARY 31, 2004 (UNAUDITED)
================================================================================

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Loss per Share
         --------------
         The Company calculates loss per share in accordance with SFAS No. 128,
         "Earnings per Share." Basic loss per share is computed by dividing the
         loss available to common shareholders 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 months ended January 31, 2004 and 2003.

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

            Stock options                             346,700        346,700
            Warrants                                   50,000         50,000
                                                  -----------    -----------
                Total                                 396,700        396,700
                                                  ===========    ===========

         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.

                                        6
<PAGE>
                                                         SIGNATURE EYEWEAR, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
                               OCTOBER 31, 2003 AND JANUARY 31, 2004 (UNAUDITED)
================================================================================

NOTE 3 - PROPERTY AND EQUIPMENT

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

                                                            2004         2003
                                                        -----------  -----------
                                                        (unaudited)

            Office furniture and equipment              $   912,756  $   912,756
            Computer equipment                            1,498,393    1,497,096
            Software                                      1,123,340    1,123,340
            Machinery and equipment                         427,701      429,394
            Machinery and equipment held under
              capital lease agreements                      294,609      294,609
            Leasehold improvements                        1,195,190    1,195,190
                                                        -----------  -----------
                                                          5,451,989    5,452,385

            Less accumulated depreciation and
              amortization (including accumulated
              depreciation and amortization of
              $272,563 in 2003 and $278,493
              (unaudited) in 2004 for equipment
              under capital lease agreements)             4,202,363    4,098,023
                                                        -----------  -----------
                     Total                              $ 1,249,626  $ 1,354,362
                                                        ===========  ===========

         Depreciation and amortization expense was $104,341 and $160,230 for
         three months ended January 31, 2004 and 2003, respectively, (including
         depreciation and amortization expense of $5,930 and $10,156,
         respectively, on machinery and equipment held under capital leases).


NOTE 4 - CREDIT FACILITIES

         Home Loan Investment Company ("HLIC") Credit Facility
         -----------------------------------------------------
         In April 2003, the Company obtained a $3,500,000 credit facility from
         HLIC. The credit facility is secured by all of the assets of the
         Company and includes a $3,000,000 term loan and a $500,000 revolving
         line of credit.

         The term loan bears interest at 10% per annum, is payable interest only
         for the first year of payments, with payments of principal and interest
         on a 10-year amortization commencing in the second year, and is due and
         payable in April 2008. The revolving credit facility bears interest at
         a rate of 1% per month, payable monthly, with all advances subject to
         approval of HLIC, and is due and payable in April 2008. The Company may
         prepay the credit facility without premium or penalty at any time.

                                        7
<PAGE>
                                                         SIGNATURE EYEWEAR, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
                               OCTOBER 31, 2003 AND JANUARY 31, 2004 (UNAUDITED)
================================================================================

NOTE 4 - CREDIT FACILITIES (Continued)

         HLIC Credit Facility (Continued)
         --------------------------------
         As additional security for the credit facility, an irrevocable letter
         of credit was issued in favor of HLIC by a commercial bank in the
         amount of $1,250,000, subject to reduction if the credit facility is
         less than $1,250,000. The letter of credit delivered to obtain the
         credit facility was secured by a related party. Furthermore, the
         Company purchased a $250,000 debenture from HLIC as additional
         security. This debenture earns interest at 3% per annum, adjusted
         annually to the one-year debenture rate offered by HLIC, and will
         remain as collateral until the credit facility is paid in full.

         The terms of the agreement include certain financial and non-financial
         covenants, which include that the Company must maintain inventories,
         accounts receivable, and cash of not less than $7,000,000; and that the
         Company cannot incur any additional debt, engage in any merger or
         acquisition, or pay any dividends or make any distributions to
         shareholders other than stock dividends without the consent of HLIC.

         As further consideration for the credit facility, the Company also
         granted HLIC warrants to purchase 100,000 shares of common stock. The
         warrants are vested, expire on April 30, 2008, and have an exercise
         price of $0.67 per share.

         In January 2004, the Company obtained a term loan in the amount of
         $153,000 at 12% interest per annum. This loan matures on May 31, 2004,
         and principal and interest payments are not due until the maturity
         date.

         Bluebird Credit Facility
         ------------------------
         In April 2003, the Company obtained from Bluebird a credit facility of
         up to $4,150,000 secured by the assets of the Company. The credit
         facility includes a revolving credit line in the amount of $2,900,000
         and support for the $1,250,000 letter of credit securing the HLIC
         credit facility. The loan bears interest at 5% per annum, payable
         annually for the first two years, and every three months thereafter,
         and is due and payable in April 2013.

         Bluebird's loan commitment will be reduced by $72,500 in July 2005 and
         by the same amount every three months thereafter. This loan is
         subordinate to the HLIC credit facility. The Company must comply with
         certain financial and non-financial covenants, which include that
         without the consent of Bluebird it may not make any acquisition or
         investment in excess of an aggregate of $150,000 each fiscal year
         outside the ordinary course of business or enter into any merger or
         similar reorganization.

         Term loan
         ---------
         In December 2003, the Company obtained a loan from an unaffiliated
         third party in the amount of $350,000, bearing interest at 3% per
         annum. The loan is payable in seven monthly installments of $50,000,
         commencing on April 30, 2004, with interest payable when the last
         installment is due on October 29, 2004.

                                        8
<PAGE>
                                                         SIGNATURE EYEWEAR, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
                               OCTOBER 31, 2003 AND JANUARY 31, 2004 (UNAUDITED)
================================================================================

NOTE 5 - LONG-TERM DEBT

         Long-term debt at October 31, 2003 and January 31, 2004 consisted of
         the following:
<TABLE><CAPTION>
                                                                                   2004                2003
                                                                               ------------        ------------
                                                                                (unaudited)
<S>                                                                            <C>                 <C>
              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.                         $  3,000,000        $  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.                                               100,000             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.                            61,691              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.                                                           56,833              66,834
</TABLE>
                                        9
<PAGE>
                                                         SIGNATURE EYEWEAR, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
                               OCTOBER 31, 2003 AND JANUARY 31, 2004 (UNAUDITED)
================================================================================

NOTE 5 - LONG-TERM DEBT (Continued)
<TABLE><CAPTION>
                                                                                   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.                             $    627,464        $    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.                                28,839              34,375

         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, bearing interest
             at 3% per annum due on October 29, 2004                                350,000                 --

         Term note payable to HLIC in the original amount of $153,000
             bearing interest at 12% per annum; principal and interest
             are due on May 31, 2004 (maturity date)                                153,000                 --
                                                                               ------------        ------------

                                                                                  7,777,827           7,424,283
         Less current portion                                                     1,008,833             550,748
                                                                               ------------        ------------
                  Long-term portion                                            $  6,768,994        $  6,873,535
                                                                               ============        ============
</TABLE>

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

                   12 Months
                    Ending
                  January 31,
                  -----------
                      2005                                   $ 1,008,833
                      2006                                       522,426
                      2007                                       527,468
                      2008                                       566,298
                      2009                                       974,384
                      Thereafter                               4,178,418
                                                             -----------
                           Total                             $ 7,777,827
                                                             ===========

                                       10
<PAGE>
                                                         SIGNATURE EYEWEAR, INC.
                                                   NOTES TO FINANCIAL STATEMENTS
                               OCTOBER 31, 2003 AND JANUARY 31, 2004 (UNAUDITED)
================================================================================

NOTE 6 - COMMITMENTS AND CONTINGENCIES

         License Agreements
         The Company has several license agreements with various vendors. The
         agreements expire through 2008, and the Company is required to make
         minimum royalty payments as indicated in the agreements.

         Litigation
         The Company is involved in certain legal proceedings and claims which
         arise in the normal course of business. Management does not believe
         that the outcome of these matters will have a material effect on the
         Company's financial position or results of operations.


























                                       11
<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 Consolidated 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 Consolidated 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 have reported declines in
sales in the past year. According to industry publications, the domestic eyewear
frame sectors in which the Company's products compete declined more than other
frame sectors. The fastest growing segments in the industry are the mass
merchandisers and deep discount retailers, and the Company does not sell frames
to retailers in those segments.

     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
increasing 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 programs
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 companies regarding the
licensing of their brand name for eyewear and sunwear to be designed,
manufactured and marketed by the Company. No assurance can be given that the
Company will obtain any new licenses.

                                       12
<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.

                                                           Three Months Ended
                                                               January 31,
                                                         ---------------------
                                                           2004         2003
                                                         --------     --------
          Net sales .................................       100.0%       100.0%
          Cost of sales .............................        40.1         40.2
                                                         --------     --------
          Gross profit ..............................        59.9         59.8
                                                         --------     --------
          Operating expenses:
               Selling ..............................        30.0         27.1
               General and administrative ...........        30.0         32.2
               Depreciation and amortization ........         1.8          2.1
                                                         --------     --------
                       Total operating expenses .....        61.8         61.4
                                                         --------     --------
           (Loss) from operations ...................        (1.9)        (1.6)
                                                         --------     --------
           Other income (expense), net ..............        (2.3)        (1.3)
                                                         --------     --------
           Income (loss) before provision for
             income taxes ...........................        (4.2)        (2.9)
                                                         --------     --------
           Provision (benefit) for income taxes .....         0            0
                                                         --------     --------
           (Loss) ...................................        (4.2)%       (2.9)%
                                                         ========     ========


     Net Sales. Net sales decreased by 19.4% or $1.4 million from the quarter
ended January 31, 2003 (the "2003 Quarter") to the quarter ended January 31,
2004 (the "2004 Quarter"). The following table shows certain information
regarding net sales for the periods indicated:

                                   Three Months Ended January 31,
                              ---------------------------------------
Dollars in thousands                 2004                 2003            Change
                              ------------------   ------------------     ------

Laura Ashley Eyewear......     $1,529      26.2%    $2,594      35.8%    (41.1)%
Eddie Bauer Eyewear.......      1,417      24.3      2,022      27.9     (29.9)%
Nicole Miller.............        948      16.2        936      12.9        1.3%
Other Sales (1)...........      1,944      33.3      1,691      23.3       15.0%
                              --------  --------   --------  --------
Total.....................     $5,838     100.0%    $7,243     100.0%    (19.4)%
                              ========  ========   ========  ========

-------------------
     (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, has 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, upon
presentment and without charge. The Company's product returns for the 2003
Quarter and the 2004 Quarter amounted to 17.7% and 15.4% 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 $0.8 million or 19.3%
from the 2003 Quarter to the 2004 Quarter due to lower net sales. The gross
margin was 59.9% in the 2004 Quarter compared to 59.8% in the 2003 Quarter.

                                       13
<PAGE>

     Selling Expenses. Selling expenses decreased $0.2 million or 10.7% from the
2003 Quarter to the 2004 Quarter due primarily to $0.1 decrease in advertising
expense and $0.1 million decrease in promotion expense.

     General and administrative expenses. General and administrative expenses
decreased $0.6 million or 24.8% from the 2003 Quarter to the 2004 Quarter due to
decreases of $0.3 million in salary expenses, $0.1 million in bank charges and
$0.1 million in insurance expense partially offset by a $0.1 million increase in
audit, legal and consulting expense.

     Other Income (Expense), Net. Other expenses included primarily interest
expense, which increased due to a greater level of debt.

     Provision (Benefit) for Income Taxes. As a result of the Company's net loss
in the 2004 Quarter, the Company had no income tax expense.

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 $3.1 million at January 31,
2004 due to higher net sales for the quarter ended January 31, 2004 as compared
to the quarter ended October 31, 2003.

     The Company's inventories (net of obsolescence reserve) remained at $6.0
million at October 31, 2003 and January 2004.

     In December 2003 the Company obtained an unsecured term loan in the amount
of $350,000 from an unaffiliated third party. The loan bears interest at the
rate of 3% per annum, is payable in monthly installments of $50,000 commencing
April 2004 with the balance due and payable on October 29, 2004.

     In January 2004 the Company obtained an additional secured loan from Home
Loan Investment Company ("HLIC") in the amount of $153,000. This loan bears
interest at a rate of 12% per annum and is due and payable on May 31, 2004.

     In addition to the loans described in the preceding two paragraphs, the
Company's long-term debt at January 31, 2004 included principally: (i)
$3,500,000 under another two credit facilities with HLIC; (ii) $2,900,000 under
a credit facility with Bluebird Finance Limited; and (iii) $627,464 under a
commercial bank loan the proceeds of which were used to purchase its computer
system and related equipment. At January 31, 2004, the Company has fully
utilized its borrowing capacity under its existing credit facilities. See Note 5
of Notes to Consolidated Financial Statements.

     Of the Company's accounts payable at January 31, 2004, $0.8 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 January 31, 2004.

     The Company's bad debt write-offs, net of recoveries, were $28,932 and
$(276) in the quarters ended January 31, 2003 and 2004, 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 fiscal 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 will
benefit in fiscal 2004 from expense reductions through a 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.

                                       14
<PAGE>

INFLATION

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

FACTORS THAT MAY AFFECT FUTURE RESULTS

     NEED TO INCREASE 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
January 31, 2004, the Company's stockholders' deficit was $5.0 million. The
Company's recapitalization in April 2003 significantly improved the Company's
financial condition and liquidity through increasing capital, reducing
liabilities and replacing current obligations and debts with long-term
obligations. However, following the recapitalization the Company continues to
have a stockholders' deficit, and the Company's long-term viability will depend
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 increase 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
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.

                                       15
<PAGE>

     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 anticipates that product returns may increase as a result of the
downturn in the optical frame industry and general economic conditions. The
Company maintains reserves for product returns 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
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

                                       16
<PAGE>
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 March 31, 2004, the directors and executive officers of the Company
owned beneficially approximately 45% 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 on a
consolidated basis under generally accepted accounting principles). At January
31, 2004, the Company had an accumulated deficit of $20.2 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.

                                       17
<PAGE>

     Foreign Currency Risks. At any month-end during the quarter ended January
31, 2004, a maximum of $1.1 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
January 31, 2004.

     International sales accounted for approximately 13.8 % of the Company's net
sales in the three months ended January 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 January 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


                                       18
<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: April 8, 2004                             SIGNATURE EYEWEAR, INC.


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























                                       19
<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




























                                       20