SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


             For the Quarter ended (Commission File Number): 1-4814
                               September 30, 2003


                              ARIS INDUSTRIES, INC.
             (Exact name of registrant as specified in its charter)


            New York                                   22-1715274
            --------                                   ----------
(State or other jurisdiction of                      (IRS Employer
 incorporation or organization)                    Identification No.)


                  463 SEVENTH AVENUE, NEW YORK, NEW YORK 10018
                  ---------------------------------------------
               (Address of principal executive offices) (Zip Code)


Registrant's telephone number, including area code: (646) 473-4200

Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section 13 or 15 of the  Securities  Exchange  Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

                               YES [X]         NO _____


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

                               YES _____       NO [X]


Number of shares of Common Stock outstanding                         108,819,527
As of November 13, 2003


<PAGE>


                              ARIS INDUSTRIES, INC.

                                TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

     Item 1.  Financial Statements

              a.  Consolidated Condensed Balance Sheets as of September
                  30, 2003 and December 31, 2002                               3

              b.  Consolidated Condensed Statements of
                  Operations for the Nine-Months Ended
                  September 30, 2003 and September 30, 2002                    4

              c.  Consolidated Condensed Statements of
                  Operations for the Three-Months Ended
                  September 30, 2003 and September 30, 2002                    5

              d.  Consolidated Condensed Statements of
                  Cash Flows for the Nine-Months Ended
                  September 30, 2003 and September 30, 2002                    6

              e.  Notes to Consolidated Condensed
                  Financial Statements                                         7


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

     Item 3.  Quantitative and Qualitative Disclosures
                       About Market Risk                                      18

     Item 4.  Controls and Procedures                                         18


PART II. OTHER INFORMATION

     Item 1.  Legal Proceedings                                               19

     Item 2.  Changes in Securities and Use of Proceeds                       21

     Item 3.  Defaults upon Senior Securities                                 21

     Item 4.  Submission of Matters to a Vote of
              Security Holders                                                21

     Item 5.  Other Information                                               21

     Item 6.  Exhibits and Reports on Form 8-K                                22

SIGNATURES                                                                    23


<PAGE>


                              ARIS INDUSTRIES, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED CONDENSED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                   September 30, December 31,
ASSETS                                                                 2003         2002
                                                                   ------------- ------------
                                                                    (Unaudited)
<S>                                                                   <C>         <C>
Current assets:
   Cash                                                               $    243    $     --
   Receivables, net                                                         --         626
   Receivable from related party                                         3,740         375
   Inventories                                                             218         183
   Prepaid expenses and other current assets                                --           3
                                                                      --------    --------

                         Total current assets                            4,201       1,187

Property and equipment, net                                              1,173       2,909

Goodwill, net                                                               --      33,930

Other assets                                                             3,796         310
                                                                      --------    --------

                           TOTAL ASSETS                               $  9,170    $ 38,336
                                                                      ========    ========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
   Borrowings under revolving credit facility                         $     --    $    456
   Loans payable to related parties, including accrued interest             --      13,026
   Current portion of long-term debt                                        --       9,642
   Current portion of capitalized lease obligations                        899         415
   Accounts payable                                                      4,399       3,620
   Accounts payable to related parties                                     259       1,096
   Accrued expenses and other current liabilities                        5,391       8,175
                                                                      --------    --------
                       Total current liabilities                        10,948      36,430

Long-term debt, net of current portion                                      --       7,500
Capitalized lease obligations                                                5         569
Other liabilities                                                        1,426       1,637
                                                                      --------    --------
                           Total liabilities                            12,379      46,136
                                                                      --------    --------

Commitments and contingencies

Stockholders' deficiency:
   Preferred stock, $.01 par value: 10,000 shares authorized; none
      issued and outstanding                                                --          --
   Common stock, $.01 par value: 200,000 shares authorized
      108,819 issued and outstanding at September 30, 2003
     and December 31, 2002                                               1,088       1,088
   Additional paid-in capital                                           86,146      86,146
   Accumulated deficit                                                 (90,443)    (95,027)
   Unearned compensation                                                    --          (7)
                                                                      --------    --------

                    Total stockholders' deficiency                      (3,209)     (7,800)
                                                                      --------    --------


TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                        $  9,170    $ 38,336
                                                                      ========    ========
</TABLE>

See accompanying notes to consolidated condensed financial statements



                                      -3-
<PAGE>


                     ARIS INDUSTRIES, INC. AND SUBSIDIARIES

                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                             Nine-           Nine-
                                                         Months Ended    Months Ended
                                                         September 30,   September 30,
                                                             2003            2002
                                                         -------------   -------------
<S>                                                        <C>            <C>
REVENUES:
   SALES TO CUSTOMERS                                      $   3,482      $   2,460
   ROYALTY INCOME                                              5,743          6,946
                                                           ---------      ---------

TOTAL REVENUES                                                 9,225          9,406

COST OF GOODS SOLD                                            (1,300)        (1,259)
                                                           ---------      ---------

GROSS PROFIT                                                   7,925          8,147

OPERATING EXPENSES:
   SELLING AND ADMINISTRATIVE EXPENSES                       (10,207)       (14,564)
   IMPAIRMENT OF GOODWILL                                    (14,641)          (412)
   IMPAIRMENT OF PROPERTY AND EQUIPMENT                         (539)          (441)
   RESTRUCTURING AND OTHER COSTS                                  --           (709)
                                                           ---------      ---------

LOSS FROM OPERATIONS                                         (17,462)        (7,979)

INTEREST EXPENSE, NET                                           (973)        (1,567)

GAIN ON SALE OF TRADEMARK, NET                                23,027             --
                                                           ---------      ---------

INCOME/(LOSS) BEFORE INCOME TAX PROVISION                      4,592         (9,546)

INCOME TAX (PROVISION) BENEFIT                                    (8)             8
                                                           ---------      ---------

NET INCOME/(LOSS)                                          $   4,584      ($  9,538)
                                                           =========      =========


BASIC INCOME (LOSS) PER SHARE                              $    0.04      ($   0.11)
                                                           ---------      ---------

DILUTED INCOME (LOSS) PER SHARE                            $    0.04      ($   0.11)
                                                           ---------      ---------

PER SHARE DATA:
   Weighted average shares outstanding - Basic               108,819         87,184

   Weighted average shares outstanding - Diluted             108,819         87,184
</TABLE>

See accompanying notes to consolidated condensed financial statements



                                      -4-
<PAGE>


                     ARIS INDUSTRIES, INC. AND SUBSIDIARIES

                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                             Three-          Three-
                                                         Months Ended    Months Ended
                                                         September 30,   September 30,
                                                             2003            2002
                                                         -------------   -------------
<S>                                                        <C>            <C>
REVENUES:
   SALES TO CUSTOMERS                                      $     955      $     773
   ROYALTY INCOME                                              1,025          2,376
                                                           ---------      ---------

TOTAL REVENUES                                                 1,980          3,149

COST OF GOODS SOLD                                              (326)          (333)
                                                           ---------      ---------

GROSS PROFIT                                                   1,654          2,816

OPERATING EXPENSES:
   SELLING AND ADMINISTRATIVE EXPENSES                        (2,885)        (3,277)
   IMPAIRMENT OF GOODWILL                                    (14,641)            --
   IMPAIRMENT OF PROPERTY AND EQUIPMENT                         (539)            --
   RESTRUCTURING AND OTHER COSTS                                  --           (200)
                                                           ---------      ---------

LOSS FROM OPERATIONS                                         (16,411)          (661)

INTEREST EXPENSE, NET                                           (104)          (512)

GAIN ON SALE OF TRADEMARK, NET                                23,027             --
                                                           ---------      ---------

INCOME/(LOSS) BEFORE INCOME TAX PROVISION                      6,512         (1,173)

INCOME TAX (PROVISION) BENEFIT                                    (2)           (17)
                                                           ---------      ---------

NET INCOME/(LOSS)                                          $   6,510      ($  1,190)
                                                           =========      =========


BASIC INCOME (LOSS) PER SHARE                              $    0.06      ($   0.01)
                                                           ---------      ---------

DILUTED INCOME (LOSS) PER SHARE                            $    0.06      ($   0.01)
                                                           ---------      ---------

PER SHARE DATA:
   Weighted average shares outstanding - Basic               108,819         95,522

   Weighted average shares outstanding - Diluted             108,819         95,522
</TABLE>

See accompanying notes to consolidated condensed financial statements



                                      -5-
<PAGE>


                     ARIS INDUSTRIES, INC. AND SUBSIDIARIES

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                      Nine-          Nine-
                                                                                  Months Ended   Months Ended
                                                                                  September 30,  September 30,
                                                                                      2003           2002
                                                                                  -------------  -------------
<S>                                                                                 <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                                                               $  4,584      ($ 9,538)

     Adjustments to reconcile net income (loss) to net cash
         provided by (used in) operating activities:
          Depreciation and amortization                                                1,197         1,760
          Non-cash stock transaction charged to expense                                   --         1,300
          Non-cash stock based compensation                                                7            64
          Provision for accrued restructuring charges                                     --           709
          Gain on sale of trademark                                                  (23,027)           --
          Write-off of receivables from licensee                                          --         1,959
          Impairment on property and equipment                                           539           440
          Impairment of goodwill                                                      14,641           412
    Change in assets and liabilities :
          (Increase) / decrease in receivables                                        (2,739)          970
          Decrease in due from licensee                                                   --         2,994
          (Increase) / decrease in inventories                                           (35)          333
          Decrease in prepaid expenses and other current assets                            3           242
          (Increase) / decrease in other assets                                       (3,486)           18
          Increase / (decrease) in accounts payable                                      779        (1,789)
          (Decrease) / increase in accounts payable to related parties                  (837)          275
          (Decrease) / increase in accrued expenses and other current liabilities     (2,784)        2,680
          Decrease in other liabilities                                                 (211)         (864)
                                                                                    --------      --------

                         Net cash (used in) provided by operating activities         (11,369)        1,965
                                                                                    --------      --------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures                                                                  --           (28)
    Proceeds from sale of trademark                                                   42,316            --
                                                                                    --------      --------

                         Net cash provided by (used in) investing activities          42,316           (28)
                                                                                    --------      --------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Repayments of long-term debt, other debt and capital leases                      (19,658)       (2,093)
    Advances from (repayments to) related parties                                    (10,590)        3,394
    Decrease in borrowings under revolving credit facility                              (456)       (3,632)

                                                                                    --------      --------

                         Net cash used in financing activities                       (30,704)       (2,331)
                                                                                    --------      --------


NET INCREASE (DECREASE) IN CASH                                                          243          (394)

CASH, BEGINNING OF PERIOD                                                                  0           457
                                                                                    --------      --------

CASH, END OF PERIOD                                                                 $    243      $     63
                                                                                    ========      ========

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES
    Issuance of common stock in settlement of accounts payable                            --      $  2,250
                                                                                    ========      ========
</TABLE>

See accompanying notes to consolidated condensed financial statements



                                      -6-

<PAGE>


                     ARIS INDUSTRIES, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1. BASIS OF PRESENTATION

         The  consolidated  condensed  financial  statements as of September 30,
2003 and for the nine and three-month  periods ended September 30, 2003 and 2002
are  unaudited  and  reflect  all  adjustments  consisting  of normal  recurring
adjustments  and  restructuring  and other  costs  which are,  in the opinion of
management,  necessary for a fair presentation of financial position,  operating
results and cash flows for the periods.

         The  consolidated  condensed  balance sheet as of December 31, 2002 was
derived from audited  financial  statements but does not include all disclosures
required by  accounting  principles  generally  accepted in the United States of
America. The accompanying  consolidated condensed financial statements have been
prepared  in  accordance  with  accounting  standards  appropriate  for  interim
financial  statements  and  should  be read in  conjunction  with the  financial
statements and notes thereto included in Aris  Industries,  Inc. (the "Company",
the  "Registrant"  or  "Aris")  Annual  Report on Form  10-K for the year  ended
December 31, 2002. The operating  results for the nine and  three-month  periods
ended September 30, 2003 are not necessarily indicative of the operating results
to be expected for the year ending December 31, 2003.

2. FINANCIAL ACCOUNTING STANDARDS NO. 146, "ACCOUNTING FOR COSTS ASSOCIATED WITH
EXIT OR DISPOSAL ACTIVITIES"

         In June 2002, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial  Accounting  Standard  ("SFAS") No. 146,  "Accounting for
Costs  Associated  with Exit or  Disposal  Activities".  SFAS No. 146  addresses
financial  accounting and reporting for costs  associated  with exit or disposal
activities  and nullifies  Emerging  Issues Task Force  ("EITF") Issue No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other Costs
to  Exit an  Activity".  SFAS  No.  146  requires  that a  liability  for a cost
associated with an exit or disposal activity be recognized when the liability is
incurred.  This Statement also  established that fair value is the objective for
initial  measurement  of the  liability.  The  provisions  of SFAS  No.  146 are
effective for exit or disposal  activities that are initiated after December 31,
2002.  The  adoption  of SFAS No.  146 did not  have a  material  impact  on the
consolidated financial statements.

3. LIQUIDITY RISKS

         These consolidated  condensed  financial  statements have been prepared
assuming that the Company will continue as a going concern,  which  contemplates
the  realization of assets and  satisfaction of liabilities in the normal course
of business.

         The Company has  continued  to incur losses from  operations  and had a
working  capital  deficit of  $6,747,000  at September 30, 2003 as compared to a
working  capital deficit of $35,243,000 at December 31, 2002. As a result of the
sale of the Company's XOXO(R) trademark and certain related



                                        7

<PAGE>


assets  (see  Note 4) the  Company  has  satisfied  all  obligations  that  were
previously outstanding under its credit facility and other debt instruments.

         During 2002, the Company completed its first full year as a licensor or
sub-licensor  of its owned or licensed  trademarks.  In April 2002,  the Company
terminated its license agreement with Grupo Xtra of New York, Inc. ("Grupo") and
shortly thereafter Grupo filed for bankruptcy protection under Chapter XI of the
Bankruptcy  Code.  On April  25,  2002,  Judge E.  Robles of the  United  States
Bankruptcy  Court,  Central  District of  California,  terminated  the Trademark
License  Agreement  and  ordered  Grupo to  immediately  discontinue  all use of
trademark bearing XOXO(R) , Baby Phat(R),  Brooks Brothers  Golf(R),  Fragile(R)
and Members Only(R). Following the effectiveness of the termination of the Grupo
Agreement,   the  Company  reached  an  agreement  with  Adamson  Apparel,  Inc.
("Adamson")  to license  from the  Company  and its  subsidiaries  the XOXO(R) ,
Members Only(R) and Baby Phat(R) trademarks that had been previously licensed by
Grupo (Note 5).

         As a  result  of  the  trademark  assets  sale  the  Company  repaid  a
substantial  portion of its  existing  indebtedness  and  intends to finance its
remaining  operations  through (i) continued  negotiated  settlements with trade
creditors, (ii) substantially reducing its overhead and (iii) royalties from its
remaining trademarks and license (See Note 4).

         There  can be no  assurance  that the  timing  of cash  receipts  to be
realized  from  working  capital  and  operations  will  be  sufficient  to meet
obligations as they become due. These factors raise  substantial doubt about the
Company's  ability to continue as a going concern.  The  consolidated  condensed
financial   statements   do  not  include  any   adjustments   relating  to  the
recoverability  and  classification  of asset carrying amounts or the amount and
classification  of  liabilities  that might be  necessary  should the Company be
unable to continue as a going concern.

4. SALE OF XOXO TRADEMARK

         On May 7, 2003,  the Company  signed a  definitive  trademark  purchase
agreement with Global Brand Holdings,  LLC ("Global")  providing for the sale of
the trade name and service  mark  XOXO(R) and the  trademarks  XOXO(R),  XOXO IN
AMERICA AND ABROAD(R),  LOLA(R) and FRAGILE(R) along with certain related assets
and  accompanying  goodwill  for a  total  sum  of  $43  million  in  cash.  The
transaction was approved by the Company's stockholders at a special meeting held
on Monday, June 30, 2003. On July 2, 2003, the Company completed the sale of the
trade name and service mark. The Company received $43 million in cash at closing
of which $2 million  was set aside in one escrow  account and $1 million was set
aside  in  an  additional  escrow  account,   to  secure  certain   post-closing
obligations of the Company.

         The  proceeds  from the  trademark  sale were used to, (i)  satisfy the
Company's  outstanding  obligations  with CIT Commercial  Services  Group,  Inc.
("CIT"), (ii) retire the $7,500,000 in Convertible  Debentures issued to KC Aris
Fund I, L.P.  ("KC") (See Note 6), (iii) pay- off the Company's  Series A Junior
Secured Note with BNY Financial  Corporation ("BNY"), (iv) satisfy secured loans
and  advances to the Company  from  related  parties  (See Note 10), (v) satisfy
liens  placed  against  the  Company's  XOXO(R)  by CIT and  (vi)  reduce  trade
obligations.



                                        8

<PAGE>


5. ADAMSON LICENSE AGREEMENT

         Following the  effectiveness of the termination of the Grupo Agreement,
the Company reached an agreement with Adamson Apparel,  Inc. to license from the
Company and its  subsidiaries  the  XOXO(R),  Members  Only(R) and Baby  Phat(R)
trademarks that had been previously licensed by Grupo. Adamson is a newly-formed
New York  corporation of which the majority owner is the Company's  chairman and
chief  executive  officer  and  principal  stockholder.  Adamson  was  initially
capitalized with a $7 million investment.  Adamson is utilizing many of the same
employees  that were employed by Grupo,  all of whom were formerly  employees of
XOXO or one or more of the Company's subsidiaries.

         The Adamson Agreement has an initial term which expires on December 31,
2003, which may be automatically renewed for a further one year term, subject to
agreement by both parties,  to manufacture,  market and distribute at wholesale,
women's  clothing,  jeanswear  and  sportswear  under the XOXO and Members  Only
trademarks and, subject to Aris' rights as licensee with respect  thereto,  Baby
Phat apparel.  The royalty rate for XOXO and Members Only products was 9% and is
3.5% for Baby Phat branded  products.  In addition,  Adamson is also responsible
for amounts due under the Company's  license agreement with the licensor of Baby
Phat.

          The Global  agreement  required the Adamson  license  relating to XOXO
branded  products  to be  terminated  as of  closing.  Under  the  terms  of the
trademark purchase agreement Adamson ceased shipping XOXO branded products as of
September 30, 2003. In addition, Adamson closed the XOXO Outlet Stores, which it
had been operating as part of the license agreement, in August 2003.


6. SALE OF CONVERTIBLE DEBENTURES

         In  February  2001,  the  Company  issued   $7,500,000  in  Convertible
Debentures  which  bore  interest  at 8.5% per annum and were  convertible  into
shares of common stock at the rate of $.46 per share (See Note 4).

7. RESTRUCTURING AND OTHER COSTS

         Under  Financial  Accounting  Standards  No. 142,  "Goodwill  and Other
Intangible  Assets"  ("SFAS  142")  goodwill  and other  intangible  assets with
indefinite  useful  lives are no longer  amortized.  Instead such assets will be
subject to reduction only when the carrying  amount exceed their  estimated fair
value based on  impairment  tests  established  by SFAS 142 that will be made at
least  annually.  In accordance  with SFAS 142 the Company  determined  that the
carrying value of goodwill  associated with its Members Only(R)  trademark to be
impaired.  As a result  of this  impairment  the  Company  recorded  a  goodwill
impairment  charge of $14,641,000  during the quarter ended  September 30, 2003.
The Company's  remaining  retail store and all of the XOXO(R) outlet stores were
closed in July of 2003.  The Company  recorded an impairment  charge of $539,000
relating to property



                                        9

<PAGE>


and equipment  previously  used at those  locations.  The Company has negotiated
favorable lease  settlements with its retail landlord and nine of the ten outlet
store landlords and has been released from all liabilities for these locations.

          The Company  closed three of its four full price XOXO retail stores in
the first  quarter  of fiscal  2002.  The  Company  recorded  restructuring  and
impairment  charges  aggregating  $2,257,000  in  the  first  quarter  of  2002,
consisting  of  an  accrual  of  approximately  $1,113,000  for  2002  rent,  an
additional   $291,000  of  lease   termination   costs   relating  to  the  2000
restructuring   reserve,   property  and  equipment  impairment  write-downs  of
approximately   $441,000  and  goodwill   impairment  charges  of  approximately
$412,000.  The Company included in its accrual a liability for one year of store
rent for each of the closed  stores since each store lease  contains a provision
that the  landlord  will use its best  efforts to re-lease  the  premises in the
event that the  premises  are vacated by the  Company.  The  Company  accrued an
additional year of rent covering these locations at December 31, 2002.  However,
no  assurances  can be given that the premises will be re-leased by December 31,
2003 and the Company will have to periodically review its accrual.

         In June of 2002,  the  Company  reached  a  settlement  agreement  with
TrizecHahnSwig, LLC ("Trizec"), the landlord of the Company's former premises at
1411 Broadway in New York.  Under the terms of the  settlement  the Company paid
$550,000 on June 26, 2002, to Trizec and was released from all obligations under
its lease.  As a result of this  agreement  the  Company  recorded  a  favorable
reversal  of  a  previously  recorded  restructuring  reserve  of  approximately
$895,000 in the second quarter of fiscal 2002.

         In  connection  with the  Trizec  settlement  the  Company  recorded  a
liability for $200,000 representing a broker's fee in connection with securing a
tenant for the space. This fee is being paid out over approximately two years.

8. PER SHARE DATA

         Basic  earnings  (loss) per common  share is computed  by dividing  net
income  (loss)  by the  weighted  average  number  of  shares  of  common  stock
outstanding during each period. Diluted earnings per share has been computed for
the quarter and nine-months  ended September 30, 2003 by dividing the applicable
net income by the  weighted  average  number of common  shares  outstanding  and
potentially dilutive common shares.

         Options and warrants to purchase  10,136,345 and  11,346,845  shares of
Common Stock were  outstanding as of September 30, 2003 and 2002,  respectively,
but were not included in the  computation of diluted  earnings  (loss) per share
because the effect would be anti-dilutive.

9. STOCK INCENTIVE PLAN

         The Company has a stock incentive plan which is described more fully in
Note 9 of the  Company's  Annual  Report  on Form  10-K for  2002.  The  Company
accounts for this plan using the  intrinsic  value method under the  recognition
and measurement  principles of APB Opinion No. 25,  "ACCOUNTING FOR STOCK ISSUED
TO EMPLOYEES", and related interpretations. No stock-based employee compensation
cost is reflected in net income  (loss),  as all options  granted under the plan
have an exercise price equal to the market value of the underlying  common stock
on the date of grant.  The following table  illustrates the effect on net income
(loss) and income (loss) per share if the Company



                                       10

<PAGE>


had applied the fair value  recognition  provisions  of FASB  Statement No. 123,
"ACCOUNTING FOR STOCK-BASED COMPENSATION", to stock-based employee compensation.
(in thousands, except per share data)

--------------------------------------------------------------------------------
                                      Nine-Months Ended       Nine-Months Ended
                                      September 30, 2003     September 30, 2002
--------------------------------------------------------------------------------
Net income (loss), as reported           $    4,584             $   (9,538)
--------------------------------------------------------------------------------
Deduct: Total stock-based                       435                  1,496
employee compensation expenses
determined under fair value based
method for all awards
--------------------------------------------------------------------------------
Net income (loss), pro forma                  4,149                (11,034)
--------------------------------------------------------------------------------
Net income (loss) per share-basic
--------------------------------------------------------------------------------
   As reported                           $     0.04             $    (0.11)
--------------------------------------------------------------------------------
   Pro forma                                   0.04                  (0.13)
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
                                      Three-Months Ended     Three-Months Ended
                                      September 30, 2003     September 30, 2002
--------------------------------------------------------------------------------
Net income (loss) as reported            $    6,510             $   (1,190)
--------------------------------------------------------------------------------
Deduct: Total stock-based                       145                    498
employee compensation expenses
determined under fair value based
method for all awards
--------------------------------------------------------------------------------
Net income (loss), pro forma                  6 365                 (1,688)
--------------------------------------------------------------------------------
Net income (loss) per share-basic
--------------------------------------------------------------------------------
   As reported                           $     0.06             $    (0.01)
--------------------------------------------------------------------------------
   Pro forma                                   0.06                  (0.02)
--------------------------------------------------------------------------------

10. RELATED PARTY TRANSACTIONS

         In June 2000, First A.H.S.  Acquisition Corp.  ("AHS"), a company owned
by the Company's chief executive officer, entered into an agreement (the "Letter
of  Credit  Agreement")  with  the  Company's  principal  commercial  lender  to
facilitate  the opening of up to  $17,500,000 in letters of credit for inventory
for the  Company.  Pursuant  to the Letter of Credit  Agreement,  AHS  purchased
inventory  which  was to be held at the  Company's  warehouse  facilities.  Such
inventory was sold to the Company at cost when the Company was ready to ship the
merchandise to the customer (See Note 4).

         During January 2001, the Company's chief  executive  officer loaned the
Company  $2,000,000.  In 2002 , the Company's chief executive officer loaned the
Company  an  additional  $1,500,000.  The loans are  payable  on demand and bear
interest at prime plus one quarter percent (See Note 4).

         Adamson is majority owned by the Company's chairman and chief executive
officer and principal  stockholder  (Note 5). As of September 30, 2003,  Adamson
was  indebted  to the Company in the amount of  $3,740,000,  which is payable on
demand and bears no interest.



                                       11

<PAGE>


11. BUSINESS SEGMENTS

         In  accordance  with SFAS No.  131,  "Disclosure  About  Segments of an
Enterprise and Related Information",  our principal segments are grouped between
the  generation  of revenues  from  royalties  and retail  sales.  The licensing
segment  derives its  revenues  from  royalties  associated  from the use of the
Company's brand names,  principally XOXO,  Fragile and Members Only and, subject
to Aris'  rights as a licensee  with  respect  thereto,  Baby  Phat.  The Retail
segment is comprised of one  full-price  retail store and an internet sales site
which principally sell XOXO and Baby Phat branded  products.  As a result of the
trademark  assets sale, the Company  closed the remaining  retail stores in July
2003 and will not receive  royalties  on sales of XOXO  branded  products  after
September 30, 2003 (See Note 4).

         Segment  information  for the  nine  and  three-  month  periods  ended
September 30, 2003 and 2002,  for both  segments are set forth below.  Corporate
overhead is included in the licensing segment data.


--------------------------------------------------------------------------------
        Retail Segment Financial         Three Months Ended   Three Months Ended
               Information               September 30, 2003   September 30, 2002
             (in thousands)
--------------------------------------------------------------------------------
Revenues                                        $955                 $773
--------------------------------------------------------------------------------
Cost of Goods Sold                               326                  333
--------------------------------------------------------------------------------
Selling and administrative expenses             889                  549
--------------------------------------------------------------------------------
Impairment of long-lived assets                 539                  ---
--------------------------------------------------------------------------------
Net loss                                       (799)                (109)
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
       Licensing Segment Financial       Three Months Ended   Three Months Ended
               Information               September 30, 2003   September 30, 2002
             (in thousands)
--------------------------------------------------------------------------------
Revenues                                       $1,025               $2,376
--------------------------------------------------------------------------------
Selling and administrative expenses            1,996                2,728
--------------------------------------------------------------------------------
Restructuring and other costs                   ---                  200
--------------------------------------------------------------------------------
Impairment of long-lived assets                14,641                ---
--------------------------------------------------------------------------------
Gain on sale of trademark, net                (23,027)               ---
--------------------------------------------------------------------------------
Interest expense                                104                  512
--------------------------------------------------------------------------------
Income tax provision                             2                    17
--------------------------------------------------------------------------------
Net income (loss)                              7,309               (1,081)
--------------------------------------------------------------------------------



                                       12
<PAGE>


--------------------------------------------------------------------------------
        Retail Segment Financial         Nine Months Ended    Nine Months Ended
               Information               September 30, 2003   September 30, 2002
             (in thousands)
--------------------------------------------------------------------------------
Revenues                                       $3,482               $2,460
--------------------------------------------------------------------------------
Cost of Goods Sold                             1,300                 1,259
--------------------------------------------------------------------------------
Selling and administrative expenses            2,413                2,584
--------------------------------------------------------------------------------
Impairment of long lived assets                 539                  853
--------------------------------------------------------------------------------
Restructuring and other costs                   ---                 1,404
--------------------------------------------------------------------------------
Net loss                                       (770)               (3,640)
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
       Licensing Segment Financial       Nine Months Ended    Nine Months Ended
               Information               September 30, 2003   September 30, 2002
             (in thousands)
--------------------------------------------------------------------------------
Revenues                                       $5,743               $6,946
--------------------------------------------------------------------------------
Selling and administrative expenses            7,794                11,980
--------------------------------------------------------------------------------
Impairment of long-lived assets                14,641                ---
--------------------------------------------------------------------------------
Restructuring and other costs                   ---                 (695)
--------------------------------------------------------------------------------
Gain on sale of trademark                     (23,027)               ---
--------------------------------------------------------------------------------
Interest expense                                973                 1,567
--------------------------------------------------------------------------------
Income tax provision/(benefit)                   8                   (8)
--------------------------------------------------------------------------------
Net loss                                       5,354               (5,898)
--------------------------------------------------------------------------------


         The Company  generated  revenues of $1,762,000 and $797,000 from retail
sales for the year ended December 31, 2002 and  nine-months  ended September 30,
2003,  respectively.  The Company  received  royalty  revenues of $4,531,000 and
$2,818,000  from  Adamson's  sales of XOXO  branded  products for the year ended
December 31, 2002 and nine-months  ended September 30, 2003,  respectively.  The
Company also received  royalty  revenues of $3,177,000 and  $2,002,000  directly
from its XOXO  licensees  for the year ended  December 31, 2002 and  nine-months
ended  September  30,  2003,  respectively.  These  revenues  will no  longer be
available to the Company as a result of the trademark assets sale (See Note 4).

12.      CONTINGENCIES

         The Company, in the ordinary course of its business, is the subject of,
or a party to,  various  pending or threatened  legal  actions.  While it is not
possible at this time to predict the outcome of any litigation,  the Company may
not be able to satisfy an adverse judgement in certain of these actions,



                                       13
<PAGE>


which may have a material adverse effect on its financial  position,  results of
operations  and cash flows.  The  following  actions,  to which the Company is a
party, have been updated since the Company's last filing.

Fashion World-Santa v. Lola, Inc.:
---------------------------------
 On February 11, 2002,  Fashion  World-Santa  filed an unlawful  detainer action
against  Lola,  Inc.  ("Lola") in the Los Angeles  Superior  Court.  That action
sought to evict Lola,  on grounds of non-  payment of rent,  from an XOXO retail
store located in Beverly Hills, California. Lola is a party to a five-year lease
for that store,  and that lease does not expire until April 2006.  XOXO Clothing
Company,  Inc. responded to the complaint as successor in interest to Lola, Inc.
On August 21,  2003,  the Company and Fashion  World-Santa  agreed to settle the
dispute. The Company has agreed to pay Fashion World-Santa $900,000, $20,000 was
paid on signing and the Company has agreed to pay $20,000 monthly on the 15th of
each month beginning in October 2003, and continuing for the next 44 months.

Christi Wilson v. Aris:
----------------------
On July 31, 2002, Christi Wilson, a former employee of the Company filed suit in
the Supreme  Court of the State of New York,  County of New York,  claiming that
her  commission  agreement  was  breached by the  Company.  Ms.Wilson is seeking
damages  for  commissions  allegedly  due under the  agreement,  and an unstated
amount of alleged damages regarding a claim of slander. The material allegations
of the  complaint  have been  denied  and the  Company  has filed  counterclaims
alleging  breach of  contract,  breach of duty of good  faith and fair  dealing,
breach of fiduciary duty, theft of trade secrets and tortious  interference with
prospective  economic advantage.  Discovery in this matter is ongoing. The Court
recently  dismissed a substantial part of Ms. Wilson's slander claim and granted
her motion to amend her claim to increase the amount of damages


                     ARIS INDUSTRIES, INC. AND SUBSIDIARIES

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

INTRODUCTION

The following  analysis of the financial  condition and results of operations of
Aris Industries, Inc. (the "Company") for the nine and three-month periods ended
September 30, 2003 and 2002 should be read in conjunction  with the consolidated
condensed financial statements, including the notes thereto, included on pages 3
through 13 of this report.

FORWARD LOOKING STATEMENTS

This report includes "forward-looking  statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended,  which represent the Company's expectations or
beliefs concerning future events that involve risks and uncertainties, including
the ability of the Company to satisfy the  conditions  and  requirements  of the
credit  facilities of the Company,  the effect of national and regional economic
conditions,  the overall  level of consumer  spending,  the  performance  of the
Company's products within prevailing retail environment,  customer acceptance of
both new designs and newly-introduced



                                       14
<PAGE>


product  lines,  and  financial  difficulties   encountered  by  customers.  All
statements  other than  statements of historical  facts  included in this Annual
Report,  including,  without  limitation,  the  statements  under  "Management's
Discussion  and  Analysis  of  Financial   Condition,"   are  forward-   looking
statements.  Although the Company believes that  expectations  reflected in such
forward- looking  statements are reasonable,  it can give no assurance that such
expectations will prove to have been correct.

ADOPTION OF STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 146

     In June 2002, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standard  ("SFAS") No. 146,  "Accounting for
Costs  Associated  with Exit or  Disposal  Activities".  SFAS No. 146  addresses
financial  accounting and reporting for costs  associated  with exit or disposal
activities  and nullifies  Emerging  Issues Task Force  ("ETIF") Issue No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other Costs
to  Exit an  Activity".  SFAS  No.  146  requires  that a  liability  for a cost
associated with an exit or disposal activity be recognized when the liability is
incurred.  This Statement also  established that fair value is the objective for
initial  measurement  of the  liability.  The  provisions  of SFAS  No.  146 are
effective for exit or disposal  activities that are initiated after December 31,
2002.  The  adoption  of SFAS No.  146 did not  have a  material  impact  on the
consolidated financial statements.

FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

            These consolidated condensed financial statements have been prepared
assuming that the Company will continue as a going concern,  which  contemplates
the  realization of assets and  satisfaction of liabilities in the normal course
of business.

            As of September 30, 2003, the Company had a working  capital deficit
of   approximately   $6,747,000   compared  to  a  working  capital  deficit  of
approximately  $35,243,000  at December  31,  2002.  The decrease in the working
capital  deficit was primarily  due to the proceeds  from the  trademark  assets
sale. The Company's  working  capital was  negatively  impacted by its loss from
operations.  During the  nine-months  ended  September  30,  2003,  the  Company
financed its working capital requirements  principally through licensing revenue
from Adamson and the Company's  other licensees along with the proceeds from the
trademark assets sale.

            In April 2002,  the Company  terminated  its license  agreement with
Grupo and shortly thereafter Grupo filed for bankruptcy protection under Chapter
XI of the  Bankruptcy  Code.  On April 25,  2002,  Judge E. Robles of the United
States  Bankruptcy  Court,  Central  District  of  California,   terminated  the
Trademark License Agreement and ordered Grupo to immediately discontinue all use
of trademark bearing XOXO(R) , Baby Phat(R), Brooks Brothers Golf(R), Fragile(R)
and Members Only(R). Following the effectiveness of the termination of the Grupo
Agreement,   the  Company  reached  an  agreement  with  Adamson  Apparel,  Inc.
("Adamson"),  where the majority  stockholder is the Company's  chief  executive
officer,  to license from the Company and its subsidiaries the XOXO(R),  Members
Only(R) and Baby Phat(R)  trademarks that had been previously  licensed by Grupo
(Note 5). The royalty due from Adamson is based on a percentage of net sales.



                                       15

<PAGE>


            On May 7, 2003, the Company signed a definitive  trademark  purchase
agreement with Global Brand Holdings,  LLC ("Global")  providing for the sale of
the trade name and service  mark  XOXO(R) and the  trademarks  XOXO(R),  XOXO IN
AMERICA AND ABROAD(R),  LOLA(R) and FRAGILE(R) along with certain related assets
and  accompanying  goodwill for a total sum of $43 million in cash (Note 4). The
transaction was approved by the Company's stockholders at a special meeting held
on Monday, June 30, 2003. On July 2, 2003, the Company completed the sale of the
trade name and service mark. The Company received $43 million in cash at closing
of which $2 million  was set aside in one escrow  account and $1 million was set
aside  in  an  additional  escrow  account,   to  secure  certain   post-closing
obligations of the Company.

            On July 2, 2003,  the  Company  repaid all of its  indebtedness  for
borrowed money.

            The Company's chief executive  officer had personally  guaranteed $3
million of indebtedness  outstanding under a financing  agreement with CIT. This
guaranty expired upon re-payment of the Company's obligations to CIT.

            As a  result  of the  trademark  assets  sale the  Company  repaid a
substantial  portion of its  existing  indebtedness  and  intends to finance its
remaining  operations  through (i) continued  negotiated  settlements with trade
creditors, (ii) substantially reducing its overhead and (iii) royalties from its
remaining trademarks and license.

            There can be no  assurance  that the timing of cash  receipts  to be
realized  from  working  capital  and  operations  will  be  sufficient  to meet
obligations as they become due. These factors raise  substantial doubt about the
Company's  ability to continue as a going concern.  The  consolidated  condensed
financial   statements   do  not  include  any   adjustments   relating  to  the
recoverability  and  classification  of asset carrying amounts or the amount and
classification  of  liabilities  that might be  necessary  should the Company be
unable to continue as a going concern.


RESULTS OF OPERATIONS

            The Company reported net income of $6,510,000 and $4,584,000 for the
three and nine- month periods ended September 30, 2003 compared to net losses of
$1,190,000 and $9,538,000 for the three and nine-month  periods ended  September
30, 2002.

            During the  three-months  ended  September  30, 2003,  the Company's
income was  primarily  attributable  to the gain  realized by the Company on the
sale of its  XOXO(R)  trademark  and  related  assets.  This gain was  offset by
impairment  charges recorded relating to goodwill  associated with the Company's
Members  Only(R)  trademark  and property and  equipment  used by the  Company's
retail and outlet stores which were closed during the quarter. In addition,  the
Company  continued  to incur  operating  losses as  royalties  generated  by its
XOXO(R)  trademark wound down as the result of the trademark asset sale.  During
the  three-months  ended  September  30,  2002,  the  Company's  loss was partly
attributable  to the default by Grupo of its license  agreement.  As a result of
the default by Grupo, the Company incurred $220,000 in charges that were Grupo's
direct obligation.  In addition,  the Company recorded a $200,000  restructuring
charge  representing  a broker's  fee in  connection  with  securing a tenant in
connection with the Trizec settlement.  The Company also recorded a write off of
royalty receivable as the result of a default by one of its XOXO licensees.



                                       16

<PAGE>


            During the  nine-months  ended  September  30, 2003,  the  Company's
income was  primarily  attributable  to the gain  realized by the Company on the
sale of its  XOXO(R)  trademark  and  related  assets.  This gain was  offset by
impairment  charges recorded relating to goodwill  associated with the Company's
Members  Only(R)  trademark  and property and  equipment  used by the  Company's
retail and outlet  stores which were closed  during the third  quarter of fiscal
2003. In addition,  the Company continued to incur operating losses as royalties
generated  by its XOXO(R)  trademark  wound down as the result of the  trademark
asset sale.  During the nine-months ended September 30, 2002, the Company's loss
was largely  attributable  to the default by Grupo of its license  agreement and
the closing by the Company of three retail store  locations.  As a result of the
default by Grupo the Company did not receive approximately $1,000,000 in license
royalties  and  wrote  off   approximately   $1,959,000  in  operating   expense
reimbursements  and incurred  $1,023,000  in charges  that were  Grupo's  direct
obligation.  In addition, the Company recorded restructuring charges aggregating
$2,257,000  in  the  first  quarter  of  2002,   consisting  of  an  accrual  of
approximately  $1,113,000  for  2002  rent,  an  additional  $292,000  of  lease
termination  costs  relating to the 2000  restructuring  reserve,  property  and
equipment  impairment   write-downs  of  approximately   $440,000  and  goodwill
impairment charges of approximately $412,000. The Company was required to record
a non-cash  charge in the  amount of  $1,300,000  relating  to the  issuance  of
10,000,000  shares of the Company's  common stock to an unrelated third party as
consideration  for him making an  investment in Adamson.  The  management of the
Company  believes  that this was vital to the success of Aris.  The Company also
recorded  a  $200,000   restructuring  charge  representing  a  broker's fee  in
connection with securing a tenant in connection  with the Trizec  settlement and
recorded a write off of royalty  receivable as the result of a default by one of
its XOXO  licensees.  This was offset by the favorable  reversal of a previously
recorded  restructuring  reserve of  approximately  $895,000  under a settlement
agreement  with the landlord of the  Company's  premises at 1411 Broadway in New
York during the three-months ended June 30, 2002.

REVENUES

SALES TO CUSTOMERS

            The  Company's  net sales to customers  increased  from $773,000 and
$2,460,000  during the three and  nine-month  period ended  September  30, 2002,
respectively, to $955,000 and $3,482,000 during the three and nine-month periods
ended  September  30, 2003,  respectively.  This  increase was  attributable  to
increased  retail sales at the  Company's  internet  sales  operation due to the
inclusion of the Company's Baby Phat(R)  branded  products to the site. This was
offset by a decrease in sales at the  Company's  retail store  operations as the
Company closed its remaining retail store in August 2003. The Company  generated
revenues  of  $1,762,000  and  $797,000  from  retail  sales for the year  ended
December 31, 2002 and nine-months ended September 30, 2003, respectively.  These
revenues will no longer be available to the Company as a result of the trademark
assets sale (See Note 4).

ROYALTY INCOME

            The Company's  royalty income  decreased from $2,376,000  during the
three-months  ended September 30, 2002 to $1,025,000 for the three-months  ended
September 30, 2003. This decrease was  attributable to the trademark asset sale.
As a result of the sale the Company  received no royalty  income from its former
XOXO  licensees  during the quarter.  In addition,  royalties  under the Adamson
license  were  reduced as Adamson  wound down its  distribution  of XOXO branded
products in accordance with the trademark asset sale.



                                       17

<PAGE>


            The Company's  royalty income  decreased from $6,946,000  during the
nine-months  ended  September 30, 2002 to $5,743,000 for the  nine-months  ended
September 30, 2003. This decrease was  attributable to the trademark asset sale.
As a result of the sale the Company  received no royalty  income from its former
XOXO  licensees  after July 2, 2003 the effective  date of the  transaction.  In
addition, royalties under the Adamson license were reduced as Adamson wound down
its distribution of XOXO branded products in accordance with the trademark asset
sale.  The Company also  wrote-off  royalty  receivables in the first quarter of
2003 as the result of  defaults  by two XOXO  licensees.  The  Company  received
royalty  revenues of $4,531,000  and  $2,818,000  from  Adamson's  sales of XOXO
branded  products  for the year ended  December 31, 2002 and  nine-months  ended
September 30, 2003, respectively.  The Company also received royalty revenues of
$3,177,000  and  $2,002,000  directly from its XOXO licensees for the year ended
December 31, 2002 and nine-months ended September 30, 2003, respectively.  These
revenues will no longer be available to the Company as a result of the trademark
assets sale (See Note 4).

GROSS PROFIT

            Gross  profit for the  three-months  ended  September  30,  2003 was
$1,654,000 or 83.5% of revenues  compared to $2,816,000 or 89.4% of revenues for
the  three-months  ended  September  30, 2002.  Gross profit as a percentage  of
revenues for the three-months  ended September 30, 2003 was negatively  impacted
by the closing of the  Company's  retail store along with a reduction in royalty
income as the result of the trademark  asset sale and lower  revenues  generated
under the Company's license agreement with Adamson.

            Gross  profit  for the  nine-months  ended  September  30,  2003 was
$7,925,000 or 85.9% of revenues  compared to $8,147,000 or 86.6% of revenues for
the  nine-months  ended  September  30, 2002.  Gross  profit as a percentage  of
revenues for the nine-months ended September 30, 2003 was positively impacted by
increased  retail sales at the Company's  internet site.  This was offset by the
closing of the Company's  retail store along with a reduction in royalty  income
as the result of the trademark asset sale and lower revenues generated under the
Company's license agreement with Adamson.


 SELLING AND ADMINISTRATIVE EXPENSES

            Selling and  Administrative  expenses  were  $2,885,000 or 145.7% of
revenues  for  the  three-  months  ended  September  30,  2003 as  compared  to
$3,277,000 or 104.1% of revenues for the three- months ended September 30, 2002.
Selling  and  Administrative  expenses  as a  percentage  of  revenues  for  the
three-months  ended September 30, 2003 were adversely  affected by the trademark
assets  sale which  resulted  in a reduction  of royalty  revenues.  Selling and
Administrative  expenses as a percentage of revenue for the  three-months  ended
September 30, 2002 were adversely affected by the Grupo default.  As a result of
the  default  the  Company  was  forced to incur  operating  expenses  that were
previously shared with Grupo while receiving no royalty income. The Company also
incurred $803,000 in charges that were Grupo's direct  obligation.  In addition,
the Company was required to record a non-cash charge in the amount of $1,300,000
relating to the commitment to issue  10,000,000  shares of the Company's  common
stock to an unrelated  third party as  consideration  for an  investment  by the
third party in Adamson.



                                       18

<PAGE>


            Selling and  Administrative  expenses were  $10,207,000 or 110.6% of
revenue for the nine- months ended September 30, 2003 as compared to $14,564,000
or 154.8% of revenue for the nine- months ended September 30, 2002.  Selling and
Administrative  expenses as a percentage  of revenue for the  nine-months  ended
September 30, 2003 continue to be negatively impacted by legal expenses incurred
in connection  with the  Company's  defense of various  lawsuits  along with the
reduction in royalty revenue as a result of the trademark  assets sale.  Selling
and  Administrative  expenses as a percentage  of revenues  for the  nine-months
ended September 30, 2002 have been adversely affected by the Grupo default. As a
result of the default the Company was forced to write off receivables from Grupo
for shared operating expenses and incurred $803,000 in charges that were Grupo's
direct obligation.  In addition, the Company was liable for excess royalties due
under the Baby Phat license for 2001 which Grupo failed to pay. The total charge
to the Company for these items was approximately $2,803,000 which, when combined
with  a  $1,000,000  shortfall  in  minimum  royalty  income,  resulted  in  the
percentage of selling and  administrative  expenses to revenue being  abnormally
high. The Company also was required to record a non-cash charge in the amount of
$1,300,000  relating  to  the  commitment  to  issue  10,000,000  shares  of the
Company's  common  stock to an  unrelated  third party as  consideration  for an
investment by the third party in Adamson.

IMPAIRMENT OF LONG-LIVED ASSETS

            The Company reviews long-lived assets for impairment whenever events
or changes in business  circumstances  indicate that the carrying  amount of the
assets may not be fully  recoverable.  Goodwill is evaluated  for  impairment at
least  annually.  The Company  evaluates  the carrying  value of its  long-lived
assets in relation to the operating  performance  and future  undiscounted  cash
flows of the underlying assets when indications of impairment are present. If an
impairment  is determined to exist,  any related  impairment  loss is calculated
based on fair value.

            In accordance with SFAS 142 the Company determined that the carrying
value of goodwill  associated with its Members Only(R) trademark to be impaired.
As a result of this  impairment  the Company  recorded an  impairment  charge of
$14,641,000  during the quarter  ended  September  30, 2003.  In  addition,  the
Company's  remaining  retail  store and all of the  XOXO(R)  outlet  stores were
closed in August of 2003. The Company recorded an impairment  charge of $539,000
relating to property and equipment previously used at those locations.

During the nine-month  period ended September 30, 2002, the Company  recorded an
impairment  charge  of  $441,000  relating  to  property  and  equipment  and an
impairment  charge of $412,000  relating to goodwill  associated with its retail
store operations.  The Company closed three of its four retail stores during the
three-months  ended March 31,  2002,  and  recorded  the  impairment  charges in
connection with the closing.

RESTRUCTURING AND OTHER COSTS

            The Company  closed three of its four full price XOXO retail  stores
in the  first  quarter  of  fiscal  2002.  As a  result,  the  Company  recorded
restructuring  charges  aggregating  $1,404,000  in the first  quarter  of 2002,
consisting  of  an  accrual  of  approximately  $1,113,000  for  2002  rent  and
additional   $291,000  of  lease   termination   costs   relating  to  the  2000
restructuring reserve.

            In June of 2002,  the Company  reached a settlement  agreement  with
TrizecHahnSwig,  LLC ("Trizec"),  the landlord of the Company's premises at 1411
Broadway in New York. Under the terms



                                       19

<PAGE>


of the  settlement  the Company  paid  $550,000  to its former  landlord at 1411
Broadway and was released from all  obligations  under its lease. As a result of
this agreement the Company recorded a favorable reversal of previously  recorded
restructuring reserve of approximately $895,000

            In  connection  with the Trizec  settlement  the Company  recorded a
liability for $200,000 representing a broker's fee in connection with securing a
tenant for the space.  This fee is being paid out over  approximately  two years
and was recorded in July of 2002.

GAIN ON SALE OF TRADEMARK

            On July 2, 2003,  the Company  completed  the sale of the trade name
and service mark. The Company received $43 million in cash at closing.  This was
offset by a write-off of approximately  $19,289,000 in goodwill  relating to the
XOXO(R) trademark and approximately $684,000 of legal and other fees incurred in
connection with the transaction, resulting in a net gain of $23,027,000.

INTEREST EXPENSE

            Interest expense for the  three-months  ended September 30, 2003 was
$104,000 as compared to $512,000 for the three-months  ended September 30, 2002.
This decrease was primarily  attributable  to the  satisfaction of the Company's
indebtedness under its credit facility and other interest bearing instruments.

            Interest  expense for the  nine-months  ended September 30, 2003 was
$973,000 as compared to $1,567,000 for the nine-months ended September 30, 2002.
This decrease was primarily  attributable  to the  satisfaction of the Company's
indebtedness under its credit facility and other interest bearing instruments.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable

ITEM 4.  CONTROLS AND PROCEDURES

            At the end of the period covered by this report, the Company carried
out an  evaluation,  under the  supervision  and with the  participation  of the
Company's  management,  including  the  Chief  Executive  Officer  and the Chief
Financial Officer, of the Company's  disclosure controls and procedures pursuant
to Exchange Act Rule 13a-15(e).  Based upon that evaluation, the Chief Executive
Officer and the Chief Financial Officer, concluded that the Company's disclosure
controls and procedures are effective.  During the third quarter of 2003,  there
were no changes in the Company's internal control over financial  reporting that
have materially  affected,  or are reasonably likely to materially  affect,  the
Company's internal control over financial reporting.


                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS



                                       20

<PAGE>


            The Company,  in the ordinary  course of its  business,  is party to
various  legal  actions  the outcome of which the  Company  believes  may have a
material  adverse effect on its consolidated  financial  position and results of
operations.  Several of these actions stem from Grupo incurring  expenses in the
Company's  name.  Although the Company did not  authorize  these  expenses,  the
Company  mat be subject to  liability  for them.  Because of Grupo's  bankruptcy
filing,  it is unlikely  that the  Company  will be able to recover any of these
amount from Grupo.  In addition,  the following  updates  information  regarding
certain litigation to which the Company is subject:

     Fashion World-Santa v. Lola, Inc.:
     ---------------------------------
      On February  11,  2002,  Fashion  World-Santa  filed an unlawful  detainer
     action against Lola, Inc.  ("Lola") in the Los Angeles Superior Court. That
     action  sought to evict Lola,  on grounds of non- payment of rent,  from an
     XOXO retail store located in Beverly Hills, California.  Lola is a party to
     a  five-year  lease for that  store,  and that lease does not expire  until
     April 2006.  XOXO  Clothing  Company,  Inc.  responded to the  complaint as
     successor  in interest to Lola,  Inc. On August 21,  2003,  the Company and
     Fashion World-Santa agreed to settle the dispute. The Company has agreed to
     pay  Fashion  World-Santa  $900,000,  $20,000  was paid on signing  and the
     Company  has  agreed  to pay  $20,000  monthly  on the  15th of each  month
     beginning in October 2003, and continuing for the next 44 months.

     Christi Wilson v. Aris:
     ----------------------
     On July 31, 2002,  Christi  Wilson,  a former employee of the Company filed
     suit in the  Supreme  Court of the State of New  York,  County of New York,
     claiming  that  her  commission  agreement  was  breached  by the  Company.
     Ms.Wilson  is  seeking  damages  for  commissions  allegedly  due under the
     agreement,  and an unstated amount of alleged damages  regarding a claim of
     slander. The material allegations of the complaint have been denied and the
     Company has filed counterclaims alleging breach of contract, breach of duty
     of good faith and fair dealing,  breach of fiduciary  duty,  theft of trade
     secrets and tortious  interference  with  prospective  economic  advantage.
     Discovery  in this  matter is  ongoing.  The  Court  recently  dismissed  a
     substantial  part of Ms.  Wilson's  slander claim and granted her motion to
     amend her claim to increase the amount of damages.


     Campers  World  International,  Inc. v. Perry Ellis  International and Aris
     Industries,  Inc.:
     ---------------------------------------------------------------------------
     Campers World  instituted an action in the United States District Court for
     the  Southern  District  of New York in January  2002  against  Perry Ellis
     International,  Inc.  ("PEI") and the Company.  The complaint  alleges that
     Campers World purchased  approximately 460,000 pairs of PEI jeans from Aris
     for  approximately  $4,600,000 and subsequently sold those jeans to Costco.
     PEI thereafter  informed Costco that the sale by Campers World to it was an
     unauthorized  use of PEI's  trademarks  and that Aris was not authorized to
     sell the jeans to Campers  World or to permit it to allow  Campers World to
     sell jeans to Costco.  Campers World seeks return of the purchase price and
     other damages from Aris.  PEI has also asserted a cross-claim  against Aris
     and its  subsidiaries  and the Company's chief executive  officer  alleging
     that Aris violated various license  agreements  regarding PEI's trademarks.
     Aris  has  answered  the  Campers  World  complaint  denying  the  material
     allegations.  Aris' motion for summary  judgement to dismiss the  trademark
     infringement  claims brought by PEI, was recently  denied.  Aris intends to
     vigorously defend the claims and cross-claims.

     Melville  Realty  Company,  Inc.v XOXO,  Europe Craft  Imports and Aris, as
     successor to Lola Inc.
     ---------------------------------------------------------------------------



                                       21

<PAGE>



     Melville  instituted  an  action in the  Supreme  Court of the State of New
     York,  County of New York claiming that the Company is liable on an alleged
     guaranty by Lola, Inc. on rent obligations of 8-3 Retailing Inc. ("8-3"), a
     subsidiary  of Aris,  pertaining  to a  sublease  of a retail  store at 732
     Broadway,  New York, New York.  This action does not allege an acceleration
     of rent obligations.  This action seeks  compensatory  damages of $391,964,
     along with sums "to become due pursuant to the terms of the Sublease". This
     litigation is being vigorously defended.

     426 West Broadway Associates, L.P. v Aris, 8-3, XOXO, 8-3 d/b/a XOXO, Lola,
     Inc.,  XOXO Outlets Inc., 8-3 a/k/a 8-3 Retail Inc.  a/k/a XOXO,  ECI, XOXO
     Clothing Company, In.
     ---------------------------------------------------------------------------
     426 West Broadway  Associates  instituted an action in the Supreme Court of
     the State of New York, County of New York claiming rent arrears on a retail
     store located at 426 West Broadway,  New York, New York.  This action seeks
     compensatory  damages in the sum of $177,127 with interest from 2/1/02, and
     compensatory damages on a claim of "anticipatory breach of lease agreement"
     (however,  this is alleged in lieu of a claim for accelerated  rent,  which
     the lease does not contain or provide for as a remedy).  This litigation is
     being vigorously defended.

     BEK TEKSTIL has sued Aris and its subsidiaries allegedly for the nonpayment
     of certain  merchandise  that it claims Aris  wrongfully  refused to accept
     and/or pay for.  The  Company  intends to defend the action on the  grounds
     that it has no evidence of having received the merchandise.

     HITCH & TRAIL,  INC. ET AL. have commenced an action against the Company in
     the State Supreme Court for the County of New York,  all of which have been
     consolidated,   seeking  an   aggregate  of   approximately   $250,000  for
     merchandise  allegedly  delivered  to the  Company and for  commissions  in
     connection  therewith.  The  Company  intends  to defend  the action on the
     grounds  that it has no  evidence of having  received  the  merchandise  in
     question.

     NORWOOD COLLECTION L.P. has commenced an action against the Company seeking
     approximately  $92,000 it allegedly  forwarded to the Company as an advance
     payment for Brooks  Brothers Golf  merchandise.  The Company  contends that
     Grupo  Xtra of New  York,  Inc.  sold the goods  directly  to  Norwood  and
     deposited  such check  without  producing  the goods at issue or delivering
     them to Norwood. The Company intends to defend the claims on that basis.

     CORPORACION  FABRIL has  commenced  an action  against  the  Company in the
     United States District Court for the Southern  District of New York seeking
     $146,431.50  for the delivery of  merchandise it claims the Company did not
     pay for. The Company  intends to defend the action on the basis that it has
     no evidence of having received the goods in question.



                                       22

<PAGE>


     Europe Craft Imports,  Inc. vs.  Corporate Realty Income Fund I, LP and 475
     Fifth Avenue Limited Partnership
     ---------------------------------------------------------------------------
     Europe Craft  Imports  commenced  legal action during July 2003 against the
     defendant  in the  Supreme  Court of the State of New  York,  County of New
     York, in which Europe Craft Imports seeks  declaratory  relief claiming all
     or a portion  of a New York City  commercial  lease has been  rescinded  or
     terminated  by the acts or omissions  by  defendants  action.  Europe Craft
     Imports also seeks monetary damages.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

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

Form 8K filed July 15, 2003 - Acquisition and Disposition of Assets





                                       23

<PAGE>


                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) 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.


                                ARIS INDUSTRIES, INC.
                                (Registrant)


Date: November 13,  2003        By /s/ Paul Spector
                                   -----------------------------------
                                   Paul Spector
                                   Chief Financial Officer / Treasurer









                                       24

<PAGE>


      (c) INDEX TO EXHIBITS

<TABLE>
<CAPTION>
                                                                              Filed as Indicated
                                                                              Exhibit to Document
    Exhibit No.                            Description                           Referenced in
    -----------                            -----------                           Footnote No.
                                                                                 ------------
<S>                  <C>                                                             <C>
        3.3          Restated Certificate of Incorporation filed on June              (3)
                     30, 1993
        3.4          Amended and Restated By-Laws effective June 30,                  (3)
                     1993
        3.5          Amendment to the Restated Certificate of                        (20)
                     Incorporation filed with the Secretary of State on
                     July 29, 1999
        3.6          Amendment to the Restated Certificate of                        (21)
                     Incorporation filed with the Secretary of State in
                     January 2001
       10.67         Series A Junior Secured Note Agreement dated as of               (3)
                     June 30, 1993 between Registrant and BNY
                     Financial Corporation.
       10.68         Series A Junior Secured Note dated as of June 30,                (3)
                     1993 issued by Registrant to BNY Financial
                     Corporation.
       10.72         Secondary Pledge Agreement dated as of June 30,                  (3)
                     1993 between Registrant, BNY Financial
                     Corporation and AIF II, L.P.
       10.81         Form of Indemnification Agreement dated as of June               (3)
                     30, 1993 between Registrant and each member of
                     Registrant's Board of Directors.
       10.99         Warrant dated September 30, 1996 issued by Aris                 (10)
                     Industries, Inc. to Heller Financial, Inc.
      10.111         Securities Purchase Agreement, dated as of February             (17)
                     26, 1999, between Aris Industries, Inc., Apollo Aris
                     Partners, L.P., AIF, L.P., The Simon Group, L.L.C.
                     and Arnold Simon.
      10.112         Shareholders Agreement, dated as of February 26,                (17)
                     1999, between Aris Industries, Inc., Apollo Aris
                     Partners, L.P., AIF, L.P., The Simon Group, L.L.C.
                     and Charles S. Ramat.
</TABLE>



                                       25

<PAGE>



<TABLE>
<CAPTION>
                                                                              Filed as Indicated
                                                                              Exhibit to Document
    Exhibit No.                            Description                           Referenced in
    -----------                            -----------                           Footnote No.
                                                                                 ------------
<S>                  <C>                                                             <C>
      10.113         Equity Registration Rights Agreement, dated as of               (17)
                     February 26, 1999, between Aris Industries, Inc.,
                     Apollo Aris Partners, L.P., AIF, L.P., The Simon
                     Group, L.L.C. and Charles S. Ramat.
      10.115         Financing Agreement dated February 26, 1999 by                  (18)
                     and among the Company and its Subsidiaries and
                     CIT Commercial Group, Inc. and the other Financial
                     Industries named therein.
      10.118         Employment Agreement by and among the                           (19)
                     Registrant, Europe Craft Imports, Inc., ECI
                     Sportswear, Inc., XOXO and Gregg Fiene, dated
                     August 10, 1999.
      10.119         Employment Agreement by and among the                           (19)
                     Registrant, ECI, ECI Sportswear, Inc., XOXO and
                     Gregg Fiene, dated August 10, 1999.
      10.120         Shareholders' Agreement by and among the                        (19)
                     Registrant, The Simon Group, LLC, Gregg Fiene, Michele
                     Bohbot and Lynne Hanson, dated August 10, 1999.
      10.121         Amendment No. 2 to Financing Agreement by and                   (19)
                     among Aris Industries, Inc., Europe Craft Imports,
                     Inc., ECI Sportswear, Inc., Stetson Clothing
                     Company, Inc., XOXO; the Financial Institutions
                     from time to time party to the Financing Agreement,
                     as Lenders; and The CIT Group/Commercial
                     Services, Inc. as Agent, dated
                     August 10, 1999.
      10.122         Amended and Restated 1993 Stock Option Plan                     (16)
      10.123         Employment Agreement with Steven Feiner                         (21)
      10.125         Agreement between the Company and certain of its                (21)
                     subsidiaries and Grupo Xtra dated January, 2001
      10.126         Form Securities Purchase Agreement Dated as of                  (21)
                     February, 2001 between the Company and KC Aris
                     Fund I, L.P.
      10.127         Trademark License Agreement Adamson Apparel,                    (22)
                     Inc.
      10.128         Trademark Purchase Agreement                                    (23)
        21           List of Subsidiaries                                            (21)
</TABLE>



                                       26

<PAGE>


<TABLE>
<CAPTION>
                                                                              Filed as Indicated
                                                                              Exhibit to Document
    Exhibit No.                            Description                           Referenced in
    -----------                            -----------                           Footnote No.
                                                                                 ------------
<S>                  <C>                                                             <C>
       31.1          Certification of Chief Executive Officer pursuant to            (24)
                     Section 302 of the Sarbanes/Oxley Act of 2002
       31.2          Certification of Chief Financial Officer pursuant to            (24)
                     Section 302 of the Sarbanes/Oxley Act of 2002
        32           Certification under Section 906 of  the                         (24)
                     Sarbanes/Oxley Act
</TABLE>
------------
(1)      Omitted
(2)      Omitted.

(3)      Filed as the indicated Exhibit to the Report on Form 8-K dated June 30,
         1993 and incorporated herein by reference.

(4)-(9)  Omitted.

(10)     Filed  as the  indicated  Exhibit  to the  Report  on  Form  8-K  dated
         September 30, 1996 and incorporated herein by reference.

(11)     Omitted.
(13)     Omitted
(14)     Omitted
(15)     Omitted

(16)     Filed  as  Annex A to the  Company's  Proxy  Statement  filed  with the
         Commission on May 27, 1999, and incorporated herein by reference.

(17)     Filed as the indicated Exhibit to the Report on Form 8-K dated February
         26, 1999 and incorporated herein by reference.

(18)     Filed as Exhibit  10.115 to the  Annual  Report on Form 10-K filed with
         the  Commission on or about April 13, 1999 and  incorporated  herein by
         reference.

(19)     Filed as Exhibit to the Report on Form 8-K dated August 24, 1999.

(20)     Omitted.

(21)     Filed  as  Exhibit  to  Annual  Report  on Form  10-K  filed  with  the
         Commission on April 15, 2002.

(22)     Filed as an Exhibit to Form 10Q for the  Quarter  Ended  September  30,
         2002

(23)     Filed as an Exhibit to Form 8K filed May 8, 2003



                                       27

<PAGE>


(24)     Filed herewith

-----------------------------
*     The Schedules and Exhibits to such  Agreements  have not been filed by the
      Company,  who hereby  undertakes to file such  schedules and exhibits upon
      request of the Commission.








                                       28