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
November 2, 1996

                              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.)

                   475 FIFTH AVENUE, NEW YORK, NEW YORK 10017
                -------------------------------------------------
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (212) 686-5050

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 
                       ----                    ----

Number of shares of Common Stock outstanding                        11,925,416
At November 2, 1996


<PAGE>



                              ARIS INDUSTRIES, INC.

                                TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

  Item 1. Financial Statements

         a.   Consolidated Balance Sheets as of
                November 2, 1996, February 3, 1996 and
                October 28, 1995                            3

         b.   Consolidated Statements of Operations for
                the Thirty-Nine Weeks Ended November 2,
                1996 and October 28, 1995.                  4

         c.   Consolidated Statements of Operations for
                the Thirteen Weeks Ended November 2, 1996
                and October 28, 1995                        5

         d.   Consolidated Statements of Cash Flows for
                the Thirty-Nine Weeks Ended November 2,
                1996 and October 28, 1995                   6

         e.   Condensed Notes to Consolidated Financial
                Statements                                  7

 Item 2. Management's Discussion and Analysis of
           Financial Condition and Results of
           Operations                                      11

PART II. OTHER INFORMATION

     Item 1.  Legal Proceedings                            19

     Item 2.  Changes in Securities                        19

     Item 3.  Defaults upon Senior Securities              19

     Item 4.  Submission of Matters to a Vote of
                Security Holders                           19

     Item 5.  Other Information                            19

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

SIGNATURES                                                 20

                                       -2-


<PAGE>

                              ARIS INDUSTRIES INC.
                                AND SUBSIDIARIES

<TABLE>

CONSOLIDATED BALANCE SHEETS

<CAPTION>

                                                                            November 2,         February 3,           October 28,
                                                                               1996               1996                   1995
ASSETS                                                                      (Unaudited)          (Audited)             (Unaudited)
                                                                            -----------         ------------          -------------
<S>                                                                            <C>                <C>                  <C>    
CURRENT ASSETS:
   Cash and cash equivalents .........................................         $   224,000        $ 2,318,000        $  2,024,000
   Receivables .......................................................          38,917,000         16,970,000          38,684,000
   Inventories .......................................................           5,089,000         35,272,000          42,165,000
   Prepaid expenses and other current assets .........................           1,439,000          1,312,000           2,818,000
                                                                               -----------        -----------        ------------
     Total current assets ............................................          45,669,000         55,872,000          85,691,000

PROPERTY, PLANT AND EQUIPMENT, NET ...................................           1,176,000         13,462,000          13,502,000
OTHER ASSETS .........................................................             681,000            834,000             877,000
GOODWILL .............................................................          17,733,000         23,760,000          23,975,000
                                                                               -----------        -----------        ------------
                                                                               $65,259,000        $93,928,000        $124,045,000
                                                                               ===========        ===========        ============

LIABILITIES AND STOCKHOLDERS' EQUITY
 CURRENT LIABILITIES:
   Trade acceptances payable .........................................         $ 3,478,000        $ 2,007,000         $ 3,525,000
   Accounts payable - trade ..........................................           1,782,000          8,592,000          10,808,000
   Accrued expenses and other current liabilities ....................           4,028,000          7,431,000           6,143,000
   Current portion of long-term debt .................................             381,000          1,302,000             739,000
   Line of credit payable ............................................          21,000,000          6,000,000          27,500,000
                                                                               -----------         ----------          ----------
     Total current liabilities .......................................          30,669,000         25,332,000          48,715,000

OTHER LIABILITIES ....................................................           1,844,000          1,527,000           1,516,000

LONG-TERM DEBT, LESS CURRENT PORTION .................................          16,734,000         66,505,000          67,212,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
   Common stock, par value $.01: 50,000,000 shares authorized;
    issued and outstanding 11,925,416 ................................             119,000            119,000             119,000
   Additional paid-in capital ........................................          44,061,000         44,061,000          44,061,000
   Accumulated deficit ...............................................         (28,168,000)       (42,387,000)        (36,343,000)
   Cumulative foreign currency translation adjustment ................                 --          (1,229,000)         (1,235,000)
                                                                               -----------        -----------         -----------
     Total stockholders' equity ......................................          16,012,000            564,000           6,602,000
                                                                               -----------        -----------        ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...........................         $65,259,000        $93,928,000        $124,045,000
                                                                               ===========        ===========        ============
</TABLE>

See condensed notes to consolidated financial statements

                                       -3-

<PAGE>


                              ARIS INDUSTRIES INC.
                                AND SUBSIDIARIES

<TABLE>

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<CAPTION>
                                                            Thirty-Nine Weeks Ended
                                                       -----------------------------------
                                                       November 2,            October 28,
                                                          1996                   1995
                                                       ------------           ------------
<S>                                                      <C>                  <C>


NET REVENUES ....................................        $124,703,000         $130,016,000
                                                         ------------         ------------

OPERATING COSTS:
Cost of sales ...................................          99,482,000          101,805,000
Selling and administrative ......................          21,861,000           22,414,000
Production facility shutdown costs ..............                 --               531,000
                                                          -----------          -----------
TOTAL OPERATING COSTS ...........................         121,343,000          124,750,000
                                                          -----------          -----------

INCOME BEFORE INTEREST AND DEBT EXPENSE,
 SALE OF SUBSIDIARY, INCOME TAXES AND
 EXTRAORDINARY ITEM .............................           3,360,000            5,266,000
INTEREST AND DEBT EXPENSE, NET ..................           6,333,000            7,150,000
                                                          -----------          -----------

LOSS BEFORE SALE OF SUBSIDIARY, INCOME
 TAXES AND EXTRAORDINARY ITEM ...................          (2,973,000)          (1,884,000)

SALE OF SUBSIDIARY:
 Gain on sale of Perry Manufacturing Company ....           7,077,000                  --

INCOME TAXES ....................................             303,000              129,000
                                                           ----------          -----------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM .........           3,801,000           (2,013,000)

EXTRAORDINARY ITEM:
 Gain on debt forgiveness .......................          11,527,000                  --
                                                          -----------          -----------
NET INCOME (LOSS) ...............................         $15,328,000          ($2,013,000)
                                                          ===========          ===========

PER SHARE DATA:
 Income (loss) before extraordinary item ........               $0.32               ($0.17)
 Extraordinary item .............................                0.97                  --
                                                          -----------          -----------
NET INCOME (LOSS) ...............................               $1.29               ($0.17)
                                                          ===========          ===========

Weighted average number of common
 and common equivalent shares ...................          11,925,416           11,925,416
</TABLE>

See condensed notes to consolidated financial statements

                                       -4-

<PAGE>


                      ARIS INDUSTRIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>

                                                               Thirteen Weeks Ended
                                                           ---------------------------
                                                           November 2,     October 28,
                                                              1996            1995
                                                           -----------     -----------
<S>                                                        <C>             <C>        
NET REVENUES ........................................      $55,570,000     $54,118,000
                                                           -----------     -----------
OPERATING COSTS:                                          
Cost of sales .......................................       42,955,000      42,285,000
Selling and administrative ..........................        7,950,000       8,496,000
Production facility shutdowncosts ...................             --              --
TOTAL OPERATING COSTS ...............................       50,905,000      50,781,000
                                                           -----------     -----------
INCOME BEFORE INTEREST AND DEBT EXPENSE,                  
  SALE OF SUBSIDIARY, INCOME TAXES AND                    
  EXTRAORDINARY ITEM ................................        4,665,000       3,337,000
                                                          
INTEREST AND DEBT EXPENSE, NET ......................        1,878,000       2,530,000
                                                           -----------     -----------
                                                          
INCOME BEFORE SALE OF SUBSIDIARY, INCOME                  
  TAXES AND EXTRAORDINARY ITEM ......................        2,787,000         807,000
                                                          
SALE OF SUIBSIDIARY:                                      
  Gain on sale of Perry Manufacturing Company .......        7,077,000            --
                                                          
INCOME TAXES ........................................          448,000         163,000
                                                           -----------     -----------
INCOME BEFORE EXTRAORDINARY ITEM ....................        9,416,000         644,000
                                                          
EXTRAORDINARY ITEM:                                       
  Gain on debt forgiveness ..........................       11,527,000            --
                                                           -----------     -----------
NET INCOME ..........................................      $20,943,000     $   644,000
                                                           ===========     ===========
PER SHARE DATA:                                           
  Income before extraordinary item ..................            $0.79           $0.05
  Extraordir~ary item ...............................             0.97            --
                                                           -----------     -----------
NET INCOME ..........................................            $1.76           $0.05
                                                           ===========     ===========
                                                          
Weighted average number of common                         
  and common equivalent shares ......................       11,925,416      11,925,416
</TABLE>
                                                    
See condensed notes to consolidated financial statements

                                       -5-

<PAGE>


                              ARIS INDUSTRIES INC.
                                AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                  Thirty Nine Weeks Ended
                                                                               ------------------------------
                                                                                November 2,       October 28,
                                                                                   1996              1995
                                                                               ------------      ------------
<S>                                                                            <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss) ......................................................     $ 15,328,000      ($ 2,013,000)
                                                                               
  Adjustments to reconcile net income/(loss) to net cash                       
    used in operating activities:                                              
    Depreciation and amortization ........................................        1,227,000         2,417,000
    Gain on sale of subsidiary ...........................................       (7,077,000)             --
    Gain on debt forgiveness .............................................      (11,527,000)             --
  Change in assets and liabilities:                                            
    Decrease in restricted cash                                                        --              10,000
    (Increase) in receivables ............................................      (26,014,000)      (19,555,000)
    Decrease/(increase) in inventories ...................................        6,266,000        (6,885,000)
    (Increase) in prepaid expenses and other current assets ..............         (368,000)       (1,146,000)
    Decrease/(increase) in other assets ..................................           15,000           (64,000)
    Increase in trade acceptances ........................................        1,471,000         1,108,000
    (Decrease)/increase in accounts payable--trade .......................         (364,000)          700,000
    (Decrease) in accrued expenses and other current liabilities .........       (2,747,000)         (551,000)
    (Decrease) in other liabilities ......................................          (13,000)         (191,000)
                                                                               ------------      ------------
      Total Adjustments ..................................................      (39,131,000)      (24,157,000)
                                                                               ------------      ------------
        Net cash used in operating activities ............................      (23,803,000)      (26,170,000)
                                                                               ------------      ------------
                                                                               
CASH FLOWS FROM INVESTING ACTIVITIES:                                          
  Capital expenditures ...................................................         (217,000)       (1,260,000)
  Proceeds from sale of assets ...........................................             --             189,000
  Proceeds from sale of subsidiary .......................................       40,857,000              --
                                                                               ------------      ------------
        Net cash provided by/(used in) investing activities ..............       40,640,000        (1,071,000)
                                                                               ------------      ------------
                                                                               
CASH FLOWS FROM FINANCING ACTIVITIES:                                          
  Principal payments of long-term debt ...................................      (40,857,000)       (1,325,000)
  Proceeds from issuance of long term debt ...............................        4,926,000              --
  Net proceeds from bank line of credit ..................................       17,000,000        27,500,000
                                                                               ------------      ------------
        Net cash (used in)Iprovided by financing activities ..............      (18,931,000)       26,175,000
                                                                               
EFFECT OF EXCHANGE RATE CHANGES ON CASH ..................................             --               4,000
                                                                               
NET DECREASE IN CASH AND CASH EQUIVALENTS ................................       (2,094,000)       (1,062,000)
                                                                               
CASH AND CASH EQUIVALENTS1 BEGINNING OF PERIOD ...........................        2,318,000         3,086,000
                                                                               ------------      ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD .................................     $    224,000      $  2,024,000
                                                                               ============      ============
                                                                               
CASH PAID DURING THE YEAR FOR:                                                 
  Interest ...............................................................     $  3,106,000      $  7,084,000
  Income Taxes ...........................................................          106,000           184,000
</TABLE>

See notes to consolidated financial statements

                                       -6-

<PAGE>


                     ARIS INDUSTRIES, INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.  CONSOLIDATED FINANCIAL STATEMENTS

The consolidated balance sheets as of November 2, 1996 and October 28,
1995, the consolidated statements of operations for the thirty-nine and
thirteen-week periods ended November 2, 1996 and October 28, 1995, and the
consolidated statements of cash flows for the thirty-nine week periods
ended November 2, 1996 and October 28, 1995 were all prepared by the
Company without audit. In management's opinion, adjustments consisting of
only normal recurring adjustments necessary to present fairly the financial
position, results of operations and changes in cash flow for this period
have been made.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been omitted or abridged in this submission. It is
suggested, therefore, that these consolidated statements be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the fiscal year ended February 3,
1996. The operating results for the thirty-nine and thirteen week periods
ended November 2, 1996 are not necessarily indicative of the operating
results for the fiscal year ending December 31, 1996 (changed from February
1, 1997 fiscal year end). Effective September 30, 1996, the Company sold
100% of the stock of an operating subsidiary, Perry Manufacturing Company
("Perry") for a total consideration of approximately $55,384,000, and
reduced its indebtedness to Heller Financial, Inc. ("Heller") from
approximately $53,000,000 to $1,000,000.

The operating results for the thirty-nine and thirteen week periods ended
November 2, 1996 include Perry's operating results through September 30,
1996 and also include a gain of $18,604,000 resulting from the sale of
Perry and the reduction of indebtedness to Heller. Certain
reclassifications have been made to the prior quarter financial statements
to conform with the presentation in the current quarter.

2.  DEBT SERVICE

The Company's long-term indebtedness consists of the debt obligations of the
Company to Heller Financial, Inc. ("Heller"), BNY Financial Corporation ("BNY")
and AIF-II, L.P., a Delaware limited partnership and an affiliate of Apollo
Advisors, L.P. ("AIF II").

                                       -7-


<PAGE>


o    Effective September 30, 1996, the Company sold 100% of the stock of a
     wholly-owned subsidiary, Perry Manufacturing Company ("Perry") to Page
     Holding Company, a company controlled by William K. Woltz, Jr., the CEO of
     Perry (the "Perry Sale"). The total consideration was approximately
     $55,384,000 consisting of $40,857,000 paid by the purchaser, $11,527,000 in
     forgiveness of indebtedness, and the assumption of approximately $3,000,000
     of Perry debt by the purchaser. The proceeds of this sale (including
     forgiveness of indebtedness), were applied to reduce the Company's debt
     obligations to Heller from approximately $53,000,000 of principal and
     accrued interest to only $1,000,000. The Company retains ownership of
     Europe Craft Imports, Inc.("ECI"), its sole remaining operating subsidiary.

     Effective September 30, 1996, the Company entered into an amendment and
     restatement of its Senior Secured Note Agreement with Heller("Amended
     Heller Agreement"), pursuant to which Heller received a note in the
     principal amount of $1,000,000 ("New Heller Note"), with a maturity date of
     November 2, 2001, with interest at 10% per annum, such interest to accrue
     and be added to principal, on a quarterly basis in arrears and to be due
     and payable November 2, 2001. Pursuant to the Amended Heller Agreement,
     Heller forgave all other indebtedness of the Company to Heller remaining
     after application of the proceeds of the Perry Sale, and eliminated all
     financial covenants. Heller retained a pledge of the stock (but not the
     assets) of ECI, the Company's remaining operating subsidiary. The New
     Heller Note provides that no principal or interest be paid on the Company's
     indebtedness to both BNY and AIF-II until all principal and interest on the
     New Heller Note is paid in full.

o    On June 30, 1993, the Company entered into a Series A Junior Secured Note
     Agreement with BNY, pursuant to which BNY received a nine-year, $7 million
     note, bearing interest at a rate of 7% per annum. BNY shares with AIF II a
     second lien on the stock of ECI. With the consent of BNY, the quarterly
     interest payments under such note due for the period May 6, 1996 through
     February 3, 1997 inclusive will not be made in cash and instead will be
     added to the principal of such note. BNY's note is required to be paid in
     six annual installments, payable on November 3 of each year commencing in
     1997 as follows:

                                       -8-


<PAGE>

                  Year              Amount
                  ----             ----------
                  1997 ....        $  300,000
                  1998 ....           300,000
                  1999 ....           500,000
                  2000 ....           600,000
                  2001 ....         1,100,000
                  2002 ....         4,200,000

o    On June 30, 1993 the Company entered into a Series B Junior Secured Note
     Agreement with AIF II, pursuant to which AIF II received a $7.5 million
     note bearing interest at 13% per annum. AIF II shares with BNY a second
     lien on the stock of ECI. With the consent of AIF II, the quarterly
     interest payments under such note due for the period February 5, 1996
     through February 3, 1997 inclusive will not be made in cash and instead
     will be added to the principal of such note. AIF II's note is required to
     be paid in two equal installments payable on November 3 in each of 2001 and
     2002.

Once the Heller obligations are paid in full, AIF II and BNY will share in
mandatory prepayments based upon 50% of certain "excess cash flows".

3.  GOODWILL

Goodwill represents the unamortized excess of the cost of acquiring a
business over the fair values of the net assets received at the date of
acquisition. Amortization expense is computed by use of the straight-line
method over an estimated life of 40 years. The Company continuously
evaluates goodwill for any potential impairment. The Company assesses the
recoverability of goodwill by determining whether the amortization of the
goodwill balance over its remaining life can be recovered through projected
undiscounted future results.

4.  INVENTORIES

                              November 2     February 3       October 28
                                 1996            1996             1995
                              ----------     ----- ----       -----------
                                           (In Thousands)

 Finished goods ..........     $5,089          $18,681         $25,002
 Work-in process .........        -0-            7,493           8,314
 Raw materials ...........        -0-            9,098           8,849
                               ------          -------         -------
                               $5,089          $35,272         $42,165
                               ======          =======         =======

                                       -9-


<PAGE>

5. DISPOSITIONS

The Company completed a transaction on September 30, 1996 in which it sold 100%
of the stock of its wholly owned subsidiary, Perry Manufacturing Company, to
Page Holding Company.

The significant terms of the transaction called for the company to receive total
consideration of approximately $55,384,000, consisting of $40,857,000 paid by
the purchaser, $11,527,000 in forgiveness of indebtedness and the assumption of
approximately $3,000,000 of Perry debt by the purchaser. The proceeds of this
sale (including forgiveness of indebtedness) were applied to reduce the
Company's debt obligations to Heller Financial Inc., from approximately
$53,000,000 of principal and accrued interest to only $1,000,000.

The following pro forma information is presented assuming the sale of Perry had
been completed at the beginning of the Company's current fiscal year. Pro forma
adjustments have been made to exclude the operating results of Perry and to
decrease interest expense for loans repaid from the proceeds of the transaction.

                                                  Historical       Pro Forma
                                                  ----------       ---------
(Unaudited, in thousands, except earnings
per share)

Revenue .......................................    $124,703         $60,064
Gross profit ..................................      25,221          17,234
Selling, general and administrative
 expenses .....................................      21,861          14,896
Interest expense ..............................       6,333           1,812
(Loss) income before taxes ....................      (2,973)            526
Income tax expense ............................         303             332
(Loss) income from continuing operations ......      (3,276)            194
(Loss) income per share, continuing operations        (0.27)           0.02

6. INCOME TAXES

Due to a significant net operating loss carryforward, the Company does not
anticipate paying any federal income taxes for the fiscal year ending December
31, 1996, except for the alternative minimum income tax which was part of the
1986 Tax Reform Act. As a result of the extraordinary gain recognized by the
Company due to the sale of its Perry Manufacturing

                                      -10-


<PAGE>

Company subsidiary, the Company will utilize approximately $12,000,000 of net
operating loss carryforwards. Approximately $88,000,000 of tax net operating
loss carryforwards remain to offset future federal taxable income.

SFAS 109 requires a valuation allowance to be recognized for those deferred tax
assets that may not be realized. At November 2, 1996, the Company had gross
deferred tax assets of approximately $37,130,000. At this time, the Company has
determined that such a valuation allowance be equal to the gross federal
deferred tax asset, except for a portion of the alternative minimum tax credit
carryforwards. The alternative minimum tax credit carryforwards do not expire,
and in the Company's opinion, it is more likely than not that a portion of this
credit carryforward will be realized. The valuation allowance was decreased by a
net amount of $3,687,000 in connection with the extraordinary gain incurred on
the Perry Sale and the reduction of indebtedness to Heller on September 30,
1996, partially offset by the losses from operations for the thirty-nine weeks
ended November 2, 1996.

7. PER SHARE DATA

Income per share for the thirteen and thirty-nine week periods ended November 2,
1996 was computed based upon the weighted average number of common shares
outstanding during such period. Anti-dilutive common stock equivalents were not
included in the computation.

8. CONTINGENCIES

The Company and/or its subsidiaries, in the ordinary course of their business,
from time to time may be the subject of, or a party to, various legal actions
involving private interests. While the Company cannot guaranty the outcome of
any litigation, the Company and/or its subsidiaries believe that any ultimate
liability arising from any such actions which may be pending will not have a
material adverse effect on its consolidated financial position at November 2,
1996.

                                      -11-


<PAGE>


                     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") should be read in conjunction with the
consolidated financial statements, including the notes thereto, included on
pages 3 through 11 of this report.

FORWARD LOOKING STATEMENTS

Statements included in Management's Discussion and Analysis of Financial
Condition and Results of Operations which are not historical in nature, are
intended to be, and are hereby identified as, "forward looking statements" for
purposes of the safe harbor provided by Section 21E of the Securities Exchange
Act of 1934, as amended by Public Law 104-67. The Company cautions readers that
forward looking statements, including without limitation, those relating to the
Company's future business prospects, revenues, working capital, liquidity,
capital needs, interest costs, and income, are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
indicated in the forward looking statements, due to several important factors
herein identified, among others, and other risks and factors identified from
time to time in the Company's reports filed with the SEC:

     o    The apparel industry in general is volatile and unpredictable due to
          cyclical and seasonal swings caused in part by consumer buying
          patterns.

     o    During the past fiscal year and at the current time, there is an
          extremely adverse environment in the retail apparel industry, which is
          likely to continue to impact the Company, and increase the risk of
          reduced orders, loss of particular customers or particular selling
          programs of customers, shorter production lead times, reduced margins
          and earlier and more extensive borrowing against working capital
          lines.

     o    The Company has only one remaining operating subsidiary, Europe Craft
          Imports, Inc. ("ECI") and is dependent on the revenues and
          profitability of ECI within ECI's product lines. The Company does not
          have a diversified group of operating subsidiaries, either within the
          apparel industry or in other industries.

                                      -12-


<PAGE>


     o    The Company's ECI subsidiary, which sells primarily outerwear, is
          particularly impacted by unusually warm weather or late arrival of
          cold weather.

     o    Interest on the Company's subsidiary level debt obligations could
          increase substantially with changes in the prime lending rate.

     o    Virtually all of the Company's corporate cash flow is required to
          service its principal long-term debt obligations.

     o    While in the past two fiscal years, the Company has been able to
          obtain the necessary waivers and amendments, and the Company considers
          its relationship with its lenders to be good, there are no assurances
          that the Company will continue to obtain amendments to its secured
          debt obligations to adjust debt service schedules to offset the impact
          of the adverse retail apparel environment and other adverse factors
          affecting the Company's financial results.

     o    Depending upon the performance of the Company's ECI operating
          subsidiary, which in turn is dependent on a number of factors,
          including the retail apparel industry environment, the Company may be
          required, in the future, to obtain additional waivers under its
          existing corporate-level secured debt obligations and/or its
          subsidiary working capital lines. There are no assurances that the
          Company will be able to obtain such reductions in its debt service
          requirements.

     o    There has been a substantial consolidation of formerly independent
          major department store chains such that the consolidated customers
          exert greater influence on suppliers such as the Company, resulting in
          greater demands for price reductions, advertising support, returns and
          markdowns of apparel products.

     o    Numerous retail organizations in the apparel industry have undergone
          Chapter 11 reorganizations, bankruptcy liquidations, downsizing and/or
          cessation of business, and others have suffered credit difficulties
          whereby factors delay or deny credit to such retail organizations. As
          a result, the Company may experience difficulty in obtaining factoring
          and credit approval on certain customers.

     o    Although the Company's ECI subsidiary markets a wide variety of
          products, they must compete with other apparel suppliers which
          specialize in particular niche products which may have greater
          resources, reputation and efficiencies in such particular product
          areas.

                                      -13-


<PAGE>



     o    The substantial portion of the Company's products are manufactured
          overseas, subjecting the Company to the generic risks of import and
          delivery from distant locations, delays due to U.S. or foreign
          government regulation and controls, and customs and transportation
          difficulties. From time to time, the United States has proposed a 100%
          tariff on various categories of Chinese imports to the United States,
          including some categories of apparel. Should these tariffs be applied
          to include outerwear or other apparel product lines of the Company,
          the Company could be materially adversely affected.

     o    ECI imports its products primarily from manufacturing plants which it
          does not own. While ECI through its agents exercises quality control
          over such factories, there are inherent risks in such manufacturing
          which can result in delivery delays and ultimately in cancellation of
          orders by ECI's customers.

     o    Increasingly, retail customers of the Company are ordering their
          products closer to the actual delivery date and selling season. In
          order for the Company to deliver such products on time, it must often
          now commit to production in advance of obtaining hard orders from its
          retail customers.

     o    There is an increasing trend by retail customers to develop their own
          private label apparel lines to compete with products supplied by
          importers and manufacturers such as the Company.

     o    The Company's apparel products are sold on the main selling floor
          areas of its retail store customers and are facing increasing
          competition from such customer's expanded dedication of retail floor
          space to "designer collections".

FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

As of November 2, 1996, the Company had working capital of approximately
$15,000,000 as compared to $30,540,000 at February 3, 1996 and $36,976,000 at
October 28, 1995. The decrease in working capital from February 3, 1996 to
November 2, 1996 is attributable to exclusion of the working capital of the
Perry Manufacturing Company ("Perry") subsidiary, which was sold on
September 30, 1996.

The Company's debt repayments previously scheduled for the thirty-nine weeks
ended November 2, 1996 were deferred or paid in kind pursuant to amendments to
the Company's loan agreements. During this period, the Company financed its
capital expenditures principally through internally generated funds.

                                      -14-


<PAGE>

As described below, effective September 30, 1996, the Company's debt obligations
to its senior secured lender, Heller Financial, Inc.("Heller") were reduced from
approximately $53,000,000 of principal and accrued interest to only
$1,000,000("New Heller Note"), with principal and interest on the New Heller
Note not required to be paid until November 2, 2001. Furthermore, all financial
covenants in the Company's note agreement with Heller were eliminated. The New
Heller Note provides that no principal or interest be paid on the Company's
indebtedness to both BNY and AIF-II until all principal and interest on the New
Heller Note is paid in full.

On May 1, 1996, the Company entered into amendments of its note agreements with
its junior secured lenders, BNY Financial Corporation("BNY") and AIF-II,
L.P ("AIF-II"), whereby the quarterly interest payments under such notes due for
the period May 6, 1996 through February 3, 1997 inclusive will not be made in
cash and instead will be added to the principal of such notes. Accordingly, the
Company's next required debt service payments are the quarterly interest
payments to BNY and AIF-II due May 3, 1997. The Company believes that its
current cash resources, together with available credit facilities and cash flow
from operations, assuming the Company's present business plans are met, will be
sufficient for the Company's ongoing working capital needs, for the fiscal year
ending December 31, 1996 and for the period ending prior to May 3, 1997.

In addition to the interest payments due to BNY and AIF-II on May 3, 1997, the
Company is also obligated to make scheduled payments of quarterly interest to
BNY and AIF-II in future quarterly periods and to make scheduled annual payments
of principal to BNY commencing November 3, 1997. The Company cannot make such
payments to both BNY and AIF-II until the New Heller Note is paid in full. The
Company is uncertain as to whether it would have sufficient cash resources to
pay off the New Heller Note to permit such payments as well as to make all
scheduled interest payments, and scheduled principal payments, if any, to AIF-II
and BNY commencing May 3, 1997. The Company intends to discuss with its lenders
the renegotiation of required payments so as to be in compliance with its
agreements with such lenders. While such lenders have in the past granted
consents to the payment of scheduled interest in kind rather than in cash,
and/or the deferral of principal amortization, there are no assurances that the
Company will be able to obtain such consents in the future. If the Company
cannot obtain such consents or a renegotiation of payment schedules, the Company
could, on quarterly payment dates from and after May 3, 1997, be in default of
its obligations to such lenders.

                                      -15-


<PAGE>

DEBT SERVICE AND CAPITAL NEEDS

The Company's long-term indebtedness consists of the debt obligations of the
Company to Heller Financial, Inc. ("Heller"), BNY Financial Corporation ("BNY")
and AIF-II, L.P., a Delaware limited partnership and an affiliate of Apollo
Advisors, L.P. ("AIF-II").

     o   Effective September 30, 1996, the Company sold 100% of the stock of a
         wholly-owned subsidiary, Perry Manufacturing Company ("Perry") to Page
         Holding Company, a company controlled by William K. Woltz, Jr., the CEO
         of Perry (the "Perry Sale"). The total consideration was approximately
         $55,384,000 consisting of approximately $40,857,000 paid by the
         purchaser, $11,527,000 in forgiveness of indebtedness, and the
         assumption of approximately $3,000,000 of Perry debt by the purchaser.
         The proceeds of this sale, (including forgiveness of indebtedness),
         were applied to reduce the Company's debt obligations to Heller from
         approximately $53,000,000 of principal and accrued interest to only
         $1,000,000. The Company retains ownership of Europe Craft Imports,
         Inc.("ECI"), its sole remaining operating subsidiary.

         Effective September 30, 1996, the Company entered into an amendment and
         restatement of its Senior Secured Note Agreement with Heller("Amended
         Heller Agreement"), pursuant to which Heller received a note in the
         principal amount of $1,000,000 ("New Heller Note"), with a maturity
         date of November 2, 2001, with interest at 10% per annum, such interest
         to accrue and be added to principal, on a quarterly basis in arrears
         and to be due and payable November 2, 2001. Pursuant to the Amended
         Heller Agreement, Heller forgave all other indebtedness of the Company
         to Heller remaining after application of the proceeds of the Perry
         Sale, and eliminated all financial covenants. Heller retained a pledge
         of the stock (but not the assets) of ECI, the Company's remaining
         operating subsidiary. The New Heller Note provides that no principal or
         interest be paid on the Company's indebtedness to both BNY and AIF-II
         until all principal and interest on the New Heller Note is paid in
         full.

     o   On June 30, 1993, the Company entered into a Series A Junior Secured
         Note Agreement with BNY, pursuant to which BNY received a nine-year, $7
         million note, bearing interest at a rate of 7% per annum. BNY shares
         with AIF II a second lien on the stock of ECI. With the consent of BNY,
         the quarterly interest payments under such note due for the period May
         6, 1996 through February 3, 1997 inclusive will not be made in cash and
         instead will be added to the principal of such note. BNY's note is


                                      -16-


<PAGE>


required to be paid in six annual installments, payable on November 3 of each
year commencing in 1997 as follows:

                  Year              Amount
                  ----             ----------
                  1997 ........    $  300,000
                  1998 ........       300,000
                  1999 ........       500,000
                  2000 ........       600,000
                  2001 ........     1,100,000
                  2002 ........     4,200,000

     o   On June 30, 1993 the Company entered into a Series B Junior Secured
         Note Agreement with AIF II, pursuant to which AIF-II received a $7.5
         million note bearing interest at 13% per annum. AIF-II shares with BNY
         a second lien on the stock of ECI. With the consent of AIF-II, the
         quarterly interest payments under such note due for the period February
         5, 1996 through February 3, 1997 inclusive will not be made in cash and
         instead will be added to the principal of such note. AIF-II's note is
         required to be paid in two equal installments payable on November 3 in
         each of 2001 and 2002.

         Once the Heller obligations are paid in full, AIF-II and BNY will share
         in mandatory prepayments based upon 50% of certain "excess cash flows".

RESULTS OF OPERATIONS

The Company reported net income of $20,943,000 and $15,328,000 for the thirteen
and thirty-nine weeks ended November 2, 1996, inclusive of the gain on the Perry
Sale and reduction of indebtedness to Heller implemented on September 30, 1996.

The Company reported net income (before the sale of Perry and the extraordinary
gain on forgiveness of indebtedness) of $2,339,000 for the thirteen weeks ended
November 2, 1996, compared to net income of $644,000 for the comparable period
in the prior year. During the thirteen weeks ended November 2, 1996, ECI
experienced an increase in net income, partially offset by losses at Perry,
whose results are included through September 30, 1996.

The Company reported a net loss (before the sale of Perry and the extraordinary
gain on forgiveness of indebtedness) of $3,276,000 for the thirty-nine weeks
ended November 2, 1996, compared to a net loss of $2,013,000 for the comparable
period in the prior year. During the thirty-nine weeks ended November 2, 1996,
ECI experienced an increase in net income, partially offset by losses at Perry,
whose results are included through September 30, 1996.

At ECI, the increase in net income for the thirteen week period was due to
increased revenues which resulted from improved product, favorable cooler
weather and improvement in the retail apparel environment, as well as due to
initiatives introduced to reduce

                                      -17-


<PAGE>

overhead and increased gross margins. The increased revenues resulted in
increased margins. The decrease in net income at ECI for the thirty-nine week
period was due to results in the first two quarters, which were impacted by a
general slowdown in the retail apparel environment which caused a decrease in
revenue, as well as the selling of certain inventory which adversely impacted
gross margins during the first two quarters.

The decrease in net income at Perry for the thirteen and thirty-nine week
periods was primarily due to gross margins being adversely affected by the
difficulty in obtaining knit fabric which caused production and factory
inefficiencies and price pressure from major retail customers.

The Company's revenues increased from $54,118,000 during the thirteen week
period ended October 28, 1995 to $55,570,000 during the thirteen week period
ended November 2, 1996. The Company's revenues decreased from $130,016,000
during the thirty-nine week period ended October 28, 1995 to $124,703,000 during
the thirty-nine week period ended November 2, 1996. The revenue increase of
$1,452,000 for the thirteen week period ended November 2, 1996 compared to the
same period in the prior year was due to an increase in revenues at ECI of
$8,425,000 offset by a decrease in revenues at Perry of $6,973,000 due to the
exclusion of revenues of Perry from and after the date of the Perry Sale,
September 30, 1996. The revenue decrease of $5,313,000 for the thirty-nine week
period ended November 2, 1996 compared to the same period in the prior year was
due to the decrease in Perry revenue contribution of $6,703,000, which revenue
was excluded from and after the Perry Sale on September 30, 1996, partially
offset by an increase in revenues at ECI of $1,390,000.

The increases in revenues at ECI for the thirteen and thirty-nine weeks ended
November 2, 1996 compared to the same periods in the prior year were due to
improved product together with favorable cooler weather and improvement in the
retail apparel environment in the third quarter.

Costs of Sales for the thirteen week period ended November 2, 1996 as a
percentage of revenue was 77.3% compared to 78.1% of revenues for the thirteen
week period ended October 28, 1995. This reduction in this percentage was
primarily due to gross margin percentages increasing at ECI over the comparable
period in the prior year as a result of early sell throughs at the retail level
aided by the favorable cool weather along with an increase in the proportion of
branded product, compared to private label, sales of ECI. The increase in gross
margin percentages at ECI was partially offset by lower gross margins at Perry,
whose results were included through September 30, 1996, and which had been
experiencing knit fabric problems due to its primary supplier of knit fabric
closing down their knit facilities which created manufacturing inefficiencies.

                                      -18-


<PAGE>

Costs of Sales for the thirty-nine week period ended November 2, 1996 as a
percentage of revenue was 79.8% compared to 78.3% of revenue for the thirty-nine
week period ended October 28, 1995. At ECI, gross margins increased due to the
cooler weather in the third quarter along with the increase in the proportion of
branded product, compared with private label, sales at ECI. This percentage
increase in gross margins was offset by lower gross margins at Perry, whose
results were included through September 30, 1996, and which had been adversely
affected by the difficulty in obtaining knit fabric which caused production and
manufacturing inefficiencies.

Selling and Administrative expenses as a percentage of revenues for the thirteen
and thirty-nine weeks ending November 2, 1996 were 14.3% and 17.5% compared to
15.7% and 17.2% for the thirteen and thirty-nine weeks ended October 28, 1995.
The percentage decrease for the thirteen weeks ended November 2, 1996 from the
comparable period in the prior year was due primarily to the overall reduction
of expenses at ECI. The percentage increase for the thirty-nine week period from
the comparable period in the prior year was due to Perry opening a warehouse and
distribution center in Miami, Florida, near its Caribbean manufacturing base
during the second quarter of fiscal 1995, offset by an overall reduction in
expenses at ECI.

Selling and Administrative expenses for the thirteen week period ended November
2, 1996 were $7,950,000 compared to $8,496,000 for the thirteen week period
ended October 28, 1995, a decrease of $546,000 or 6.4%. Selling and
Administrative expenses for the thirty-nine week period ended November 2, 1996
were $21,861,000 compared to $22,414,000 for the thirty-nine week period ended
October 28, 1995, a decrease of $553,000 or 2.5%. Selling and Administrative
expenses decreased for the thirteen and thirty-nine week period ended November
2, 1996 over the comparable period in the prior year due to cost savings at ECI
realized from its 1995 repositioning program and the completion of the move of
ECI from its California warehouse to its new warehouse facility in New Jersey,
along with the exclusion of Perry expenses from and after its sale on September
30, 1996.

Interest and debt expense for the thirteen and thirty-nine week periods ended
November 2, 1996 decreased by $652,000 or 25.8% and $817,000 or 11.4% compared
to the thirteen and thirty-nine week periods ended October 28, 1995. This
decrease is primarily due to the sale of Perry on September 30, 1996 which
reduced the Heller debt and corresponding interest after such date, as well as
the exclusion of Perry debt expense after September 30, 1996. In addition, there
was a reduction in the prime lending rate from the comparable periods last year
for both Aris' and Perry's variable rate debt of approximately 50 basis points.

                                      -19-


<PAGE>


                          PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

NONE

ITEM 2 CHANGES IN SECURITIES

NONE

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

NONE

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

NONE

ITEM 5. OTHER INFORMATION

On December 10, 1996, the Company determined to change its fiscal year to the
calendar year ending December 31st rather than a 52-53 week year ending on the
Saturday closest to January 31st. The Company's Annual Report on Form 10K for
the fiscal year ending December 31, 1996 will cover the transition period. The
Company determined to change its fiscal year end to the calendar year ending
December 31 so its tax and financial accounting fiscal years would end on the
same date and to better reflect the seasonal nature of the Company's apparel
business.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS - NONE

(b)  REPORTS ON FORM 8-K

     1. Current Report on Form 8-K dated September 30, 1996 with respect to the
sale by the Company, effective September 30, 1996, of 100% of the stock of a
wholly-owned subsidiary, Perry Manufacturing Company ("Perry"), and the
application of the proceeds of this sale (including forgiveness of
indebtedness), to reduce the Company's debt obligations to Heller Financial,
Inc. from approximately $53,000,000 of principal and accrued interest to only
$1,000,000.

                                      -20-


<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: December 12, 1996                  By      /s/ PAUL SPECTOR
                                            ------------------------------
                                            Paul Spector,
                                            Senior Vice President
                                            Chief Financial Officer

                                        By     /s/ VINCENT F. CAPUTO
                                            -------------------------------
                                            Vincent F. Caputo,
                                            Vice President
                                            Assistant Secretary and
                                             Assistant Treasurer

                                      -21-