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

                       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 September 30, 1997      (Commission File Number):  1-4814
                                                                         ------

                              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                         14,852,544
At September 30, 1997

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



                              ARIS INDUSTRIES, INC.

                                TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

    Item 1. Financial Statements

            a.    Consolidated Balance Sheets as of
                  September 30, 1997, December 31, 1996 and
                  November 2, 1996                                           3

            b.    Consolidated Statements of Operations for
                  the Nine Months Ended September 30, 1997
                  and Thirty-Nine Weeks Ended November 2,
                  1996.                                                      4

            c.    Consolidated Statements of Operations for
                  the Three Months Ended September 30, 1997
                  and Thirteen Weeks Ended November 2,
                  1996.                                                      5

            d.    Consolidated Statements of Cash Flows for
                  the Nine Months Ended September 30, 1997
                  and Thirty-Nine Weeks Ended November 2,
                  1996                                                       6

            e.    Condensed Notes to Consolidated Financial
                  Statements                                                 7

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

PART II. OTHER INFORMATION

      Item 1. Legal Proceedings                                             26

      Item 2. Changes in Securities                                         26

      Item 3. Defaults upon Senior Securities                               26

      Item 4. Submission of Matters to a Vote of
              Security Holders                                              26

      Item 5. Other Information                                             26

      Item 6. Exhibits and Reports on Form 8-K                              27

SIGNATURES                                                                  28


<PAGE>

<TABLE>

                              ARIS INDUSTRIES, INC.
                                AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
<CAPTION>


                                                               September 30,    December 31,    November 2,
                                                                   1997             1996            1996
                                                                (Unaudited)      (Audited)      (Unaudited)
                                                                -----------     ------------    -----------
ASSETS 

CURRENT ASSETS:
<S>                                                             <C>             <C>             <C>        
   Cash and cash equivalents .................................  $   955,000     $ 6,278,000     $   224,000
   Receivables ...............................................   39,712,000       7,324,000      38,917,000
   Inventories ...............................................   20,510,000       9,234,000       5,089,000
   Prepaid expenses and other current assets .................    2,962,000       1,976,000       1,439,000
                                                                -----------     -----------     -----------
                Total current assets .........................   64,139,000      24,812,000      45,669,000

PROPERTY, PLANT AND EQUIPMENT, NET ...........................    1,323,000       1,233,000       1,176,000

OTHER ASSETS .................................................    1,195,000       1,188,000         681,000


GOODWILL .....................................................   17,963,000      17,622,000      17,733,000
                                                                -----------     -----------     -----------
                                                                $84,620,000     $44,855,000     $65,259,000
                                                                ===========     ===========     ===========
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Trade acceptances payable .................................  $ 5,107,000     $ 5,602,000     $ 3,478,000
   Accounts payable - trade ..................................    4,409,000         922,000       1,782,000
   Accrued expenses and other current liabilities ............    5,487,000       4,497,000       4,028,000
   Current portion of long-term debt .........................    1,297,000         749,000         381,000
   Line of credit payable ....................................   32,500,000             -        21,000,000
                                                                -----------     -----------     -----------
             Total current liabilities .......................   48,800,000      11,770,000      30,669,000

OTHER LIABILITIES ............................................    1,487,000       1,628,000       1,844,000

LONG-TERM DEBT,  LESS CURRENT PORTION ........................   17,104,000      16,702,000      16,734,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
   Common stock, par value $.01: 50,000,000 shares 
      authorized; issued and outstanding 14,852,544 
      at Sept. 30, 1997, 11,852,544 at December 31, 1996,
      and 11,925,416 at November 2, 1996......................      149,000         119,000         119,000
   Additional paid-in capital ................................   44,746,000      44,057,000      44,061,000
   Accumulated deficit .......................................  (27,666,000)    (29,421,000)    (28,168,000)
                                                                -----------     -----------     -----------
            Total stockholders' equity .......................   17,229,000      14,755,000      16,012,000
                                                                -----------     -----------     -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...................  $84,620,000     $44,855,000     $65,259,000
                                                                ===========     ===========     ===========

</TABLE>

See condensed notes to consolidated financial statements

                                       -3-
<PAGE>

<TABLE>

                              ARIS INDUSTRIES INC.
                                AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<CAPTION>
                                                                   Nine          Thirty-Nine
                                                               Months Ended      Weeks Ended
                                                              Sept. 30, 1997    Nov. 2, 1996
                                                              --------------    ------------
<S>                                                             <C>             <C>         
NET REVENUES ................................................   $64,085,000     $124,703,000
                                                                -----------     ------------
OPERATING COSTS:
    Cost of sales ...........................................    43,685,000       99,482,000
    Selling and administrative ..............................    16,580,000       21,861,000
                                                                -----------     ------------
TOTAL OPERATING COSTS .......................................    60,265,000      121,343,000
                                                                -----------     ------------
INCOME BEFORE INTEREST AND DEBT EXPENSE,
   SALE OF SUBSIDIARY, INCOME TAXES AND
   EXTRAORDINARY ITEM .......................................     3,820,000        3,360,000

INTEREST AND DEBT EXPENSE, NET ..............................     1,917,000        6,333,000
                                                                -----------     ------------
INCOME (LOSS) BEFORE SALE OF SUBSIDIARY,
   INCOME TAXES AND EXTRAORDINARY ITEM ......................     1,903,000       (2,973,000)

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

INCOME TAXES ................................................       148,000          303,000
                                                                -----------     ------------
INCOME BEFORE EXTRAORDINARY ITEM ............................     1,755,000        3,801,000

EXTRAORDINARY ITEM:
   Gain on debt forgiveness .................................           -         11,527,000
                                                                -----------     ------------
NET INCOME ..................................................   $ 1,755,000     $ 15,328,000
                                                                ===========     ============
PER SHARE DATA:
      Income before extraordinary item ......................         $0.13            $0.32
      Extraordinary item ....................................          0.00             0.97
                                                                -----------     ------------
NET INCOME ..................................................         $0.13            $1.29
                                                                ===========     ============
Weighted average number of common
   and common equivalent shares .............................    13,085,897       11,925,416
                                                                  
</TABLE>

See condensed notes to consolidated financial statements

                                      -4-
<PAGE>

<TABLE>


                              ARIS INDUSTRIES INC.
                                AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<CAPTION>

                                                                 Three          Thirteen
                                                              Months Ended     Weeks Ended
                                                             Sept. 30, 1997    Nov. 2, 1996
                                                             --------------    ------------
<S>                                                            <C>             <C>        
NET REVENUES ................................................  $44,402,000     $55,570,000
                                                               -----------     -----------
OPERATING COSTS:
   Cost of sales ............................................   30,427,000      42,955,000
    Selling and administrative ..............................    7,596,000       7,950,000
                                                               -----------     -----------
TOTAL OPERATING COSTS .......................................   38,023,000      50,905,000
                                                               -----------     -----------
INCOME BEFORE INTEREST AND DEBT EXPENSE,
   SALE OF SUBSIDIARY, INCOME TAXES AND
   EXTRAORDINARY ITEM .......................................    6,379,000       4,665,000

INTEREST AND DEBT EXPENSE, NET ..............................      941,000       1,878,000
                                                               -----------     -----------
INCOME BEFORE SALE OF SUBSIDIARY,  INCOME
   TAXES AND EXTRAORDINARY ITEM .............................    5,438,000       2,787,000

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

INCOME TAXES ................................................      334,000         448,000
                                                               -----------     -----------
INCOME BEFORE EXTRAORDINARY ITEM ............................    5,104,000       9,416,000
                                                               ===========     ===========
EXTRAORDINARY ITEM:
   Gain on debt forgiveness .................................     -             11,527,000
                                                               -----------     -----------
NET INCOME ..................................................  $ 5,104,000     $20,943,000
                                                               ===========     ===========
PER SHARE DATA:
   Income before extraordinary item .........................        $0.34           $0.79
   Extraordinary item .......................................         0.00            0.97
                                                               -----------     -----------
NET INCOME ..................................................        $0.34           $1.76
                                                               ===========     ===========
Weighted average number of common
   and common equivalent shares .............................   14,923,790      11,925,416


</TABLE>

See condensed notes to consolidated financial statements

                                      -5-
<PAGE>

<TABLE>

                              ARIS INDUSTRIES, INC.
                                AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<CAPTION>

                                                                                       Nine         Thirty-Nine
                                                                                   Months Ended     Weeks Ended
                                                                                   Sept. 30, 1997   Nov. 2, 1996
                                                                                   --------------   ------------

<S>                                                                                 <C>             <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income .....................................................................   $  1,755,000    $ 15,328,000

  Adjustments to reconcile net income to net cash (used in)
   provided by operating activities:
   Depreciation and amortization ................................................      1,011,000       1,227,000
   Capitalized Interest .........................................................        982,000       4,926,000
   Gain on sale of subsidiary ...................................................                     (7,077,000)
   Gain on debt forgiveness .....................................................                    (11,527,000)
  Change in assets and liabilities:
   Increase in receivables ......................................................    (33,462,000)    (26,014,000)
   (Increase)/decrease in inventories ...........................................     (7,765,000)      6,266,000
   Increase in prepaid expenses and other current assets ........................       (901,000)       (368,000)
   Decrease in other assets .....................................................          5,000          15,000
   (Decrease)/increase in trade acceptances payable .............................       (495,000)      1,471,000
   Increase/(decrease) in accounts payable - trade ..............................      2,150,000        (364,000)
   Increase/(decrease) in accrued expenses and other current liabilities ........        573,000      (2,747,000)
   Decrease  in other liabilities ...............................................       (872,000)        (13,000)
                                                                                    ------------    ------------
        Total Adjustments .......................................................    (38,774,000)    (34,205,000)
                                                                                    ------------    ------------
                  Net cash used in operating activities .........................    (37,019,000)    (18,877,000)
                                                                                    ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital expenditures ...........................................................       (194,000)       (217,000)
 Proceeds from sale of subsidiary ...............................................           --        40,857,000
 Acquisition of Davco............................................................       (500,000)           --
                                                                                    ------------    ------------
                  Net cash (used in) provided by  investing activities ..........       (694,000)     40,640,000
                                                                                    ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Principal payments of long-term debt ...........................................       (110,000)    (40,857,000)
 Proceeds from issuance of long term debt .......................................           --              --
 Net proceeds/(repayments) on bank line of credit ...............................     32,500,000      17,000,000
                                                                                    ------------    ------------
                  Net cash provided by (used in) financing activities ...........     32,390,000     (23,857,000)

EFFECT OF EXCHANGE RATE CHANGES ON CASH .........................................           --

NET DECREASE IN CASH AND CASH EQUIVALENTS .......................................     (5,323,000)     (2,094,000)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ..................................      6,278,000       2,318,000
                                                                                    ------------    ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD ........................................   $    955,000    $    224,000
                                                                                    ============    ============

CASH PAID DURING THE YEAR FOR:
   Interest .....................................................................   $    570,000    $  3,106,000
   Income Taxes .................................................................         49,000         106,000

</TABLE>

See condensed 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 September 30, 1997 and November 2,
      1996, the consolidated statements of operations for the nine months ended
      September 30, 1997 and thirty-nine weeks ended November 2, 1996, the
      consolidated statements of operations for the three months ended September
      30, 1997 and thirteen weeks ended November 2, 1996, the consolidated
      statements of cash flows for the nine months ended September 30, 1997 and
      thirty-nine weeks ended November 2, 1996 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 flows for these
      periods 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
      December 31, 1996. The operating results for the nine months ended
      September 30, 1997 are not necessarily indicative of the operating results
      for the year ending December 31, 1997. Certain reclassifications have been
      made to the prior quarter financial statements to conform with the
      presentation in the current quarter.

      Effective July 15, 1997, ECI Sportswear, Inc. ("ECI Sportswear"), an
      indirect wholly owned subsidiary of the Company, acquired substantially
      all of the assets of Davco Industries, Inc. ("Davco"), a maker of men's
      and boy's sportswear, activewear, swimwear and loungewear under the "Perry
      Ellis", "Perry Ellis America", and "Jeffrey Banks" labels. The operating
      results for ECI Sportswear for the three month period ended September 30,
      1997 are included in the Company's results of operations for the nine and
      three month periods ended September 30, 1997.

      Effective September 30, 1996, the Company sold 100% of the stock of an
      operating subsidiary, Perry Manufacturing Company ("Perry"). The Company's
      operating results for the thirty-nine week and thirteen-week periods ended
      November 2, 1996 include Perry's operating results.

      2.    DEBT SERVICE

      The Company's long-term indebtedness consists of the debt obligations of
      the Company to Heller Financial, Inc.

                                    -7-


<PAGE>



      ("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 Perry for a total consideration of $54,719,000, consisting of
            $40,857,000 paid by the purchaser, $10,862,000 in forgiveness of
            indebtedness, and the assumption of approximately $3,000,000 of
            Perry debt by the purchaser (the "Perry Sale"). 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 $1,665,000,
            which includes principal of $1,000,000 and accrued interest of
            $665,000. The Company retained ownership of Europe Craft Imports,
            Inc.("ECI"), its only other operating subsidiary on September 30,
            1996.

            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, and a warrant to purchase 584,345 shares of the
            Company's common stock at an exercise price of $.01 per share. Such
            transaction has been accounted for as a modification of terms to the
            original Heller debt. Accordingly, the Company recorded the New
            Heller Note at the total future cash payments to be made in
            accordance with the New Heller Note which is principal of $1,000,000
            and accrued interest of $665,000. 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 New Heller Note
            provides that no principal or interest be paid on the Company's
            indebtedness to AIF-II until all principal and interest on the New
            Heller Note is paid in full. In addition, the New Heller Note allows
            the Company to make regularly scheduled interest payments on its
            indebtedness to BNY (the "BNY Note") for interest accruing after
            February 3, 1997 and principal payments thereon. However, if the
            Company makes an interest payment on the BNY Note, it shall
            immediately make an interest payment to Heller in an amount equal to
            the amount of interest which shall have accrued on the New Heller
            Note in accordance with its terms during the same period of time for
            which interest is being paid pursuant to the interest payment on the
            BNY Note, and, if the Company makes a principal payment on the BNY
            Note, it shall immediately on the same day prepay the New Heller
            Note in an amount equal to the lesser of the principal payment on
            the BNY Note or the

                                    -8-


<PAGE>



            then outstanding amount of the remaining obligation on the New
            Heller Note.

      o     On June 30, 1993, the Company entered into a Series A Junior
            Secured Note Agreement with BNY, pursuant to which BNY received a $7
            million note, bearing interest at a rate of 7% per annum, with a
            final maturity date of November 3, 2002. BNY shares with AIF II a
            second lien on the stock of ECI. On September 12, 1997, the Company
            and BNY entered into an amendment of the BNY Note Agreement
            providing that (1) scheduled interest accruing under the BNY Note
            Agreement for the period February 1, 1996 through January 31, 1998
            was not and will not be paid in cash and instead shall be added to
            principal and shall be payable on November 3, 2002, (2) scheduled
            interest under the BNY Note Agreement accruing for the periods
            commencing February 1, 1998 will be made in cash on quarterly
            payment dates commencing May 4, 1998 and (3) the principal on the
            BNY Note Agreement of $300,000 otherwise due November 3, 1997 shall
            be rescheduled and paid quarterly in installments of $15,000 each on
            the last day of each calendar quarter commencing on December 31,
            1997, with any remaining balance due on November 3, 2002. The
            remaining principal of BNY's note is required to be paid in five
            annual installments, payable on November 3 of each year commencing
            in 1998 as follows:

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

            In addition, on November 3, 2002, the Company is obligated to pay
            BNY $1,042,000, representing the quarterly interest payments
            accruing for the period February 1, 1996 through January 31, 1998,
            which were not and will not be paid in cash and instead added to the
            principal of the BNY Note.

      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. On September 12, 1997, the
            Company and AIF-II entered into an amendment of the AIF-II Note
            Agreement providing that (1) scheduled interest accruing under the
            AIF-II Note Agreement for the period November 1, 1995 through
            January 31, 1998 was not and will not be paid in cash and instead
            shall be added to principal and shall be payable on November 3, 2002
            and (2) scheduled interest under the AIF-II Note Agreement accruing
            for periods commencing February 1, 1998 will be made in cash on
            quarterly payment dates commencing May 4,

                                    -9-


<PAGE>



            1998. Principal of AIF-II's note is required to be paid in two equal
            installments payable on November 3 in each of 2001 and 2002.

            In addition, on November 3, 2002, the Company is obligated to pay
            AIF-II $2,502,000, representing the quarterly interest payments
            accruing for the period November 1, 1995 through January 31, 1998,
            which were not and will not be paid in cash and instead added to the
            principal of the AIF-II Note.

            In the September 12, 1997 amendments to the BNY and AIF- II Note
            Agreements, the Company covenanted in favor of BNY and AIF-II that
            on or before January 31, 1998, the Company shall repay in full all
            principal and interest under the New Heller Note in the original
            principal amount of $1,000,000. The September 12, 1997 amendments to
            the BNY and AIF-II Note Agreements were made with the consent of
            Heller. Once the Heller obligations are paid in full, AIF-II and BNY
            will share a first lien on the stock of ECI and will share in
            mandatory prepayments based upon 50% of certain "excess cash flows"
            of the Company.

      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 relating to the Company's goodwill
      balance prior to the acquisition of the assets of Davco by ECI Sportswear
      is computed by use of the straight-line method over an estimated life of
      40 years. Included in goodwill on the Company's September 30, 1997
      consolidated balance sheet is a preliminary calculation of approximately
      $844,000 of goodwill relating to the issuance of 3,000,000 shares of Aris
      common stock and certain transaction expenses incurred in connection with
      the July 15, 1997 Davco acquisition. The final amount of goodwill relating
      to the Davco acquisition cannot be determined until after the conclusion
      of the Company's December 31, 1997 operating year. At such time the
      Company will determine the contingent cash purchase price as specified in
      the Davco Asset Purchase Agreement, which is computed as the pre-tax net
      income of the Davco apparel business as owned by ECI Sportswear from the
      closing date through December 31, 1997 (subject to certain adjustments),
      but not to exceed a maximum payment of $3,600,000. 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 cash flows.

                                   -10-


<PAGE>



      4.  INVENTORIES

                                   September 30,     December 31,    November 2,
                                       1997             1996            1996
                                   -------------     -----------     ----------
                                                   (In Thousands)
 
      Finished goods ...............  $20,510          $9,234          $5,089
      Work-in process ..............      -0-            -0-             -0-
      Raw materials ................      -0-            -0-             -0-
                                        -----           -----            ---
                                      $20,510          $9,234          $5,089
                                      =======          ======          ======

      5.  ACQUISITIONS

      Effective July 15, 1997, ECI Sportswear, Inc. ("ECI Sportswear"), an
      indirect wholly owned subsidiary of the Company, acquired substantially
      all of the assets of Davco Industries, Inc. ("Davco"), a maker of men's
      and boy's sportswear, activewear, swimwear and loungewear under the "Perry
      Ellis", "Perry Ellis America", and "Jeffrey Banks" labels. The Davco Asset
      Purchase Agreement provides for the issuance to Davco of 3,000,000 shares
      of restricted Common Stock of the Company. In addition, a contingent cash
      purchase price to be computed as the pre-tax net income of the Davco
      apparel business as owned by ECI Sportswear from the closing date through
      December 31, 1997 (subject to certain adjustments), but not to exceed a
      maximum payment of $3,600,000, is required to be paid by the Company. Such
      contingent cash amount is payable subsequent to the issuance of the
      Company's December 31, 1997 audited financial statements on Form 10K. On
      the closing date, ECI Sportswear paid to Davco $500,000 as an advance
      towards the contingent cash purchase price and agreed to pay an additional
      advance following completion of ECI Sportswear's third fiscal quarter
      ending September 30, 1997 equal to twenty-five (25%) of ECI Sportswear's
      pre-tax net income from the Davco apparel business through such date, less
      the initial advance of $500,000 paid on the closing date.

      The Davco acquisition was accounted for as a purchase and, accordingly,
      operating results of this business subsequent to the date of acquisition
      were included in the Company's consolidated financial statements. The
      Company's consolidated financial statements also reflect the preliminary
      allocation of purchase price, specifically that portion of the Davco
      purchase price relating to the value of the Company's shares issued, as
      the total purchase price allocation cannot be finalized until the amount
      of the contingent cash payment is determined. ECI Sportswear's source of
      funds for the cash payments of the purchase price will be its internally
      generated funds and working capital credit lines.

      The following unaudited pro forma consolidated results of operations for
      the nine months ended September 30, 1997 and

                                   -11-


<PAGE>



      the twelve months ended December 31, 1996 are presented as if the
      acquisition of Davco's assets had been made at the beginning of each
      period presented. In addition, the pro forma results of operations for the
      twelve months ended December 31, 1996 exclude (1) the operating results of
      the Company's former Perry subsidiary, which was sold on September 30,
      1996 (2) the gain recorded by the Company on the sale of the Company's
      former Perry subsidiary and (3) the extraordinary gain recorded by the
      Company on the cancellation of indebtedness relating to the debt
      forgiveness on the part of Heller in conjunction with the sale of the
      Company's former Perry subsidiary. The unaudited pro forma information is
      not necessarily indicative of either the results of operations that would
      have occurred had the purchase been made during the periods presented or
      the future results of the combined operations.

                                 Nine Months Ended      Twelve Months Ended
                                September, 30 1997       December, 31 1996
                                ------------------      -------------------
Net Revenues..................     $81,123,000              $85,911,000
Gross Profit..................      25,184,000               23,833,000
Income (loss) before                 
taxes and extraordinary item..       1,914,000               (5,085,000)
Income tax expense ...........         148,000                   66,000
Net income (loss).............       1,766,000               (5,151,000)
Net income (loss) per share.       $       .13              $      (.43)


     6.  INCOME TAXES

      Due to significant net operating loss carryforwards, the Company does not
      anticipate paying any federal income taxes for the year ending December
      31, 1997, except for the alternative minimum income tax which was part of
      the 1986 Tax Reform Act.

      A valuation allowance is recognized for those deferred tax assets that may
      not be realized. At this time, the Company has determined that such a
      valuation allowance be equal to the gross federal deferred tax asset,
      except for the alternative minimum tax credit carryforwards and a portion
      of the state net operating loss carryforwards at ECI. The alternative
      minimum tax credit carryforwards do not expire, and in the Company's
      opinion, it is more likely than not that this credit carryforward will be
      realized.

                                   -12-


<PAGE>



      7.    PER SHARE DATA

      Income per share was computed based upon the weighted average number of
      common shares and common stock equivalents outstanding during the
      applicable period.

      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, results of operations or cash flows
      at September 30, 1997.

     9.   NEW ACCOUNTING PRONOUNCEMENTS

      In February 1997, the FASB issued Statement No. 128, "Earnings per Share,"
      which simplifies the standards for computing earnings per share (EPS).
      Statement No. 128 replaces the standards for computing and presenting EPS
      found in Accounting Principles Board Opinion No. 15, "Earnings per Share"
      (APB 15). Statement No. 128 requires dual presentation of Basic (which
      replaces APB 15's Primary EPS) and Diluted EPS on the face of the income
      statement for all entities with complex capital structures. Statement No.
      128 will be effective for financial statements for the year ended December
      31, 1997. The Company does not expect that the adoption of this statement
      will have a material effect on its calculation of EPS.

      In June 1997, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 130, "Reporting Comprehensive Income",
      ("SFAS 130") and No. 131 "Disclosures about Segments of an Enterprise and
      Related Information" ("SFAS 131"). SFAS 130 establishes standards for
      reporting the display of comprehensive income and its components in a full
      set of general-purpose financial statements. This Statement requires that
      an enterprise (a) classify items of other comprehensive income by their
      nature in a financial statement and (b) display the accumulated balance of
      other comprehensive income separately from retained earnings and
      additional paid-in capital in the equity section of a statement of
      financial position.

      SFAS 131 establishes standards for the way that public business
      enterprises report information about operating segments in annual
      financial statements and requires that those enterprises report selected
      information about operating segments in interim financial reports issued
      to shareholders. It also establishes standards for related disclosures
      about products and services, geographic areas, and major customers.

                                   -13-


<PAGE>



      SFAS 130 and SFAS 131 are effective for fiscal periods beginning after
      December 15, 1997. The Company does not expect the adoption of these
      standards will have a material effect on its financial statements.

                                   -14-


<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 14 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 several fiscal years an adverse environment has
            predominated in the apparel industry. Although improvement in the
            apparel environment was experienced commencing in the latter half of
            1996, adverse trends may return at any time, may severely 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, increased inventory levels
            and earlier and more extensive borrowing against working capital
            lines.

      o     Prior to July 15, 1997, the Company had only one operating
            subsidiary, Europe Craft Imports, Inc. ("ECI"). On July 15, 1997, a
            subsidiary of ECI, ECI Sportswear, Inc. ("ECI Sportswear"), acquired
            the assets and business of Davco Industries, Inc. The Company is
            dependent on the revenues and profitability of such subsidiaries
            within their product lines. The Company does not have a diversified
            group of operating subsidiaries, either within the apparel industry
            or in other industries.

                                   -15-


<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 apparel environment and other
            adverse factors affecting the Company's financial results.

       o    Depending upon the performance of the Company's ECI and ECI
            Sportswear operating subsidiaries, which in turn is dependent on a
            number of factors, including the 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 and ECI Sportswear subsidiaries market 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.

                                   -16-


<PAGE>



      o     A 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
            material tariff on various categories of Chinese imports to the
            United States, including some categories of apparel. Should these
            tariffs be applied to include outerwear, sportswear, activewear or
            other apparel product lines of the Company, the Company could be
            materially adversely affected. In addition, the Company could be
            adversely affected by tariffs, embargos and quotas involving
            countries from which the Company imports its product lines.

      o     ECI and ECI Sportswear import their products primarily from
            manufacturing plants which they do not own. While ECI and ECI
            Sportswear through their agents exercise 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 there 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".

      o     No assurance can be made that the Company's Licensors do not change
            policies on advertising and distribution which can have a materially
            adverse affect on the Company.



FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 1997, the Company had working capital of approximately
$15,339,000 as compared to $13,042,000 at December 31, 1996 and $15,000,000 at
November 2, 1996. The increase in working capital from December 31, 1996 to
September 30, 1997 is due to the Company's operating profit in the first nine
months as well as the inclusion of ECI Sportswear, which acquired the assets of
Davco on July 15, 1997. During this period, the Company financed its capital
expenditures principally through internally generated funds and credit
facilities.

                                   -17-


<PAGE>



The Company's interest payments scheduled for the nine months ended September
30, 1997 were paid in kind pursuant to amendments to the Company's loan
agreements.

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 $1,665,000
("New Heller Note"), which includes principal of $1,000,000 and accrued interest
of $665,000. Furthermore, all financial covenants in the Company's note
agreement with Heller were eliminated. The New Heller Note has a maturity date
of November 3, 2001.

On September 12, 1997, the Company entered into amendments of its note
agreements with its junior secured lenders, BNY and AIF-II, whereby the Company
covenanted in favor of BNY and AIF-II that on or before January 31, 1998, the
Company shall repay in full all principal and interest under the New Heller Note
in the original principal amount of $1,000,000. The Company is uncertain as to
whether it would have sufficient cash resources to pay off the New Heller Note
by January 31, 1998 to comply with these covenants in favor of BNY and AIF-II.
If the Company does not have sufficient cash resources to effect repayment of
the New Heller Note by January 31, 1998, the Company intends to discuss with its
lenders the renegotiation of such repayment. While such lenders have in the past
granted consents to the deferral of required payments, there are no assurances
that the Company will be able to obtain such consent with respect to its
covenants to BNY and AIF-II to pay off the New Heller Note. If the Company
cannot obtain such consent, the Company could on January 31, 1998 be in default
of its obligations to its lenders.

The New Heller Note provides for certain restrictions on payments to BNY and
AIF-II, which restrictions will remain in effect unless and until repayment of
the New Heller Note.

The New Heller Note provides that no principal or interest be paid on the
Company's indebtedness to AIF-II until all principal and interest on the New
Heller Note is paid in full. In addition, the New Heller Note allows the Company
to make regularly scheduled interest payments on the BNY Note for interest
accruing after February 3, 1997 and principal payments thereon. However, if the
Company makes an interest payment on the BNY Note, it shall immediately make an
interest payment to Heller in an amount equal to the amount of interest which
shall have accrued on the New Heller Note in accordance with its terms during
the same period of time for which interest is being paid pursuant to the
interest payment on the BNY Note, and, if the Company makes a principal payment
on the BNY Note, it shall immediately on the same day prepay the New Heller Note
in an amount equal to the lesser of the principal payment on the BNY Note or the
then outstanding amount of the remaining obligation on the New Heller Note. The
September 12, 1997 amendments to the Company's BNY and AIF-II Note Agreements
provide that cash payments of scheduled interest to BNY and AIF-II will resume
on quarterly payment dates commencing May 4, 1998, and that the Company must
make principal payments to BNY of $15,000 on

                                   -18-


<PAGE>



the last day of each calendar quarter commencing December 31, 1997. In addition,
the Company is required to make annual principal payments to BNY in accordance
with the original amortization schedule of the BNY Note Agreement, commencing
with a $300,000 payment on November 3, 1998. The Company is uncertain as to
whether it would have sufficient cash resources to pay off the New Heller Note
to permit such payments on dates commencing May 4, 1998, in the event that the
New Heller Note is still unpaid on such payment dates. If the Company does not
have sufficient cash resources to effect such repayment, the Company would
intend 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 interest payments and 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 4, 1998, be in default of its obligations to such lenders, in
addition to defaults occurring on January 31, 1998 in the event the New Heller
Note is not paid off on such date.

Effective July 15, 1997, ECI Sportswear, Inc. ("ECI Sportswear"), an indirect
wholly owned subsidiary of the Company, acquired substantially all of the assets
of Davco Industries, Inc. ("Davco"), a maker of men's and boy's sportswear,
activewear, swimwear and loungewear under the "Perry Ellis", "Perry Ellis
America", and "Jeffrey Banks" labels. The acquisition will be accounted for as a
purchase. The purchase price to be paid by ECI Sportswear for such assets
consisted of (a) the issuance to Davco of 3,000,000 shares of restricted Common
Stock of the Company and (b) a contingent cash purchase price to Davco to be
computed as the pre-tax net income of the Davco apparel business as owned by ECI
Sportswear from the closing date through December 31, 1997 (subject to certain
adjustments), but not to exceed a maximum payment of $3,600,000. Such contingent
cash amount is payable subsequent to the issuance of the Company's December 31,
1997 audited financial statements on Form 10K. On the closing date, ECI
Sportswear paid to Davco $500,000 as an advance towards the contingent cash
purchase price and agreed to pay an additional advance following completion of
ECI Sportswear's third fiscal quarter ending September 30, 1997 equal to
twenty-five (25%) of ECI Sportswear's pre-tax net income from the Davco apparel
business through such date, less the initial advance of $500,000 paid on the
closing date. ECI Sportswear's source of funds for the cash payments of the
purchase price will be its internally generated funds and working capital credit
lines.

                                   -19-


<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")
            for a total consideration of $54,719,000 consisting of $40,857,000
            paid by the purchaser, $10,862,000 in forgiveness of indebtedness,
            and the assumption of approximately $3,000,000 of Perry debt by the
            purchaser (the "Perry Sale"). 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 $1,665,000, which includes
            principal of $1,000,000 and accrued interest of $665,000. The
            Company retained ownership of Europe Craft Imports, Inc.("ECI"), its
            only other operating subsidiary on September 30, 1996.

            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, and a warrant to purchase 584,345 shares of the
            Company's common stock at an exercise price of $.01 per share. Such
            transaction has been accounted for as a modification of terms to the
            original Heller debt. Accordingly, the Company recorded the New
            Heller Note at the total future cash payments to be made in
            accordance with the New Heller Note which is principal of $1,000,000
            and accrued interest of $665,000. 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 New Heller Note
            provides that no principal or interest be paid on the Company's
            indebtedness to AIF-II until all principal and interest on the New
            Heller Note is paid in full. In addition, the New Heller Note allows
            the Company to make regularly scheduled interest payments on its
            indebtedness to BNY (the "BNY Note") for interest accruing after
            February 3, 1997 and principal payments thereon. However, if the
            Company makes an interest payment on the BNY Note, it shall
            immediately make an interest payment to Heller in an amount equal to
            the amount of interest which shall have accrued on the New Heller
            Note in accordance with its terms during the same period of time for
            which interest is being paid pursuant to the interest payment

                                   -20-


<PAGE>



            on the BNY Note, and, if the Company makes a principal payment on
            the BNY Note, it shall immediately on the same day prepay the New
            Heller Note in an amount equal to the lesser of the principal
            payment on the BNY Note or the then outstanding amount of the
            remaining obligation on the New Heller Note.

      o     On June 30, 1993, the Company entered into a Series A Junior
            Secured Note Agreement with BNY, pursuant to which BNY received a $7
            million note, bearing interest at a rate of 7% per annum, with a
            final maturity date of November 3, 2002. BNY shares with AIF II a
            second lien on the stock of ECI. On September 12, 1997, the Company
            and BNY entered into an amendment of the BNY Note Agreement
            providing that (1) scheduled interest accruing under the BNY Note
            Agreement for the period February 1, 1996 through January 31, 1998
            was not and will not be paid in cash and instead shall be added to
            principal and shall be payable on November 3, 2002, (2) scheduled
            interest under the BNY Note Agreement accruing for the periods
            commencing February 1, 1998 will be made in cash on quarterly
            payment dates commencing May 4, 1998 and (3) the principal on the
            BNY Note Agreement of $300,000 otherwise due November 3, 1997 shall
            be rescheduled and paid quarterly in installments of $15,000 each on
            the last day of each calendar quarter commencing on December 31,
            1997, with any remaining balance due on November 3, 2002. The
            remaining principal of BNY's note is required to be paid in five
            annual installments, payable on November 3 of each year commencing
            in 1998 as follows:

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

            In addition, on November 3, 2002, the Company is obligated to pay
            BNY $1,042,000, representing the quarterly interest payments
            accruing for the period February 1, 1996 through January 31, 1998,
            which were not and will not be paid in cash and instead added to the
            principal of the BNY Note.

      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. On
            September 12, 1997, the Company and AIF-II entered into an amendment
            of the AIF-II Note Agreement providing that (1) scheduled interest
            accruing under the AIF-II Note Agreement for the period November 1,
            1995 through January 31, 1998 was not and will not be paid in cash
            and instead shall be added

                                   -21-


<PAGE>



            to principal and shall be payable on November 3, 2002 and (2)
            scheduled interest under the AIF-II Note Agreement accruing for
            periods commencing February 1, 1998 will be made in cash on
            quarterly payment dates commencing May 4, 1998. Principal of
            AIF-II's note is required to be paid in two equal installments
            payable on November 3 in each of 2001 and 2002.

            In addition, on November 3, 2002, the Company is obligated to pay
            AIF-II $2,502,000, representing the quarterly interest payments
            accruing for the period November 1, 1995 through January 31, 1998,
            which were not and will not be paid in cash and instead added to the
            principal of the AIF-II Note.

            In the September 12, 1997 amendments to the BNY and AIF-II Note
            Agreements, the Company covenanted in favor of BNY and AIF-II that
            on or before January 31, 1998, the Company shall repay in full all
            principal and interest under the New Heller Note in the original
            principal amount of $1,000,000. The September 12, 1997 amendments to
            the BNY and AIF-II Note Agreements were made with the consent of
            Heller. Once the Heller obligations are paid in full, AIF II and BNY
            will share a first lien on the stock of ECI and will share in
            mandatory prepayments based upon 50% of certain "excess cash flows"
            of the Company.

RESULTS OF OPERATIONS

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 determined to change its fiscal
year end to the calendar year ending December 31st so its tax and financial
accounting years would end on the same date and to better reflect the seasonal
nature of the Company's apparel business by having the Spring, Holiday and Fall
seasons all included in the same calendar year whereas in the past the Spring
season overlapped two fiscal years. The operating results for the three and nine
month periods ended September 30, 1997 as compared to last year's fiscal
results, the thirteen and thirty-nine week periods ended November 2, 1996
(herein referred to as the three and nine month periods ended November 2, 1996),
are subject to variations due to the seasonality of the business as mentioned
above. In addition, this year's operating results for the three and nine month
periods ended September 30, 1997 include the operating results of the Company's
newly acquired ECI Sportswear apparel business and last year's operating results
for the three and nine month periods ended November 2, 1996 include the
financial results of Perry, which was sold on September 30, 1996.

The Company has not restated last year's operating results, the three and nine
month periods ended November 2, 1996, to three and

                                   -22-


<PAGE>



nine month calendar reporting periods due to the inability to obtain operating
results for Perry on a calendar month basis, since Perry is no longer owned by
Aris, and the difficulty in restating the Company's 1996 results to a monthly
basis since all monthly closings were computed based on thirteen week fiscal
quarters.

NET INCOME

The Company reported net income of $5,104,000 and $1,755,000 for the three and
nine month periods ended September 30, 1997 respectively, compared to net income
of $20,943,000 and $15,328,000, respectively for the three and nine month
periods 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 income before the sale of subsidiary, taxes and
extraordinary item of $5,438,000 for the three month period ended September 30,
1997, compared to income of $2,787,000 for the three month period ended November
2, 1996. The increase in profitability was due to the inclusion of the
profitable operating results of ECI Sportswear, which acquired the assets of
Davco on July 15, 1997, a reduction of interest expense by $937,000 due to the
Perry Sale on September 30, 1996 which significantly reduced the Heller debt,
the exclusion of interest expense attributable to Perry's debt after September
30, 1996, along with the exclusion of Perry's operating loss of $430,000 for the
three month period ended November 2, 1996. ECI reported a lower quarterly profit
for the three month period ended September 30, 1997 as compared to the profit
reported for the three month period ended November 2, 1996. This was primarily
due to the conversion to a calendar quarter from a fiscal quarter. This
conversion resulted in reduced sales and related gross margins in the current
quarter by including the month of July in the third calendar quarter of 1997
compared with including the month of October (a stronger sales month) in the
third fiscal quarter of 1996.

The Company reported income before the sale of subsidiary, taxes and
extraordinary item of $1,903,000 for the nine month period ended September 30,
1997, compared to a loss of $2,973,000 for the nine month period ended November
2, 1996. The increase in profitability was due to the inclusion of the
profitable operating results of ECI Sportswear, which acquired the assets of
Davco on July 15, 1997, a reduction of interest expense by $4,416,000 due to the
Perry Sale on September 30, 1996 which significantly reduced the Heller debt,
the exclusion of interest expense attributable to Perry's debt after September
30, 1996, along with the exclusion of Perry's marginal operating loss for the
nine period ended November 2, 1996. This was offset by lower profitability at
ECI primarily due to the conversion to a calendar year from a fiscal year. This
conversion resulted in reduced sales and related gross margins in the current
year by including the month of January 1997 in the nine month period ended
September 30, 1997 compared with including the month of October (a stronger
sales month than January) in the nine month period ended November 2, 1996.

                                   -23-


<PAGE>



REVENUE

The Company's revenues decreased from $55,570,000 during the three months ended
November 2, 1996 to $44,402,000 during the three months ended September 30,1997.
The revenue decrease of $11,168,000 was primarily due to the exclusion of Perry,
which had revenues of $15,547,000 in the three months ended November 2, 1996. In
addition, revenues at ECI decreased by $8,510,000 which was due to the
conversion to a calendar quarter from a fiscal quarter. This resulted in reduced
revenues by including in the third calendar quarter the month of July compared
with including the month of October (a stronger sales month) in the third
fiscal quarter of 1996. The conversion to a calendar year was done to truly
reflect the entire Spring, Holiday and Fall seasons all within the same
reporting year whereas in the past fiscal years the spring season was spread
over two years. In addition, last year, due to the adverse retail environment,
ECI sold excess inventory in order to maintain a clean inventory position. The
revenue decrease was offset by the inclusion of ECI Sportswear's revenues of
$12,889,000 from the July 15, 1997 date of the Davco acquisition.

The Company's revenues decreased from $124,703,000 during the nine month period
ended November 2, 1996 to $64,085,000 during the nine month period ended
September 30, 1997. The revenue decrease of $60,618,000 was primarily due to
the exclusion in 1997 of Perry, which had revenues of $64,639,000 in the nine
months ended November 2, 1996. In addition, ECI's revenues decreased by
$8,868,000. This was offset by the inclusion of ECI Sportswear's revenues of
$12,889,000 from the July 15, 1997 date of the Davco acquisition.

COST OF SALES

Costs of Sales for the three months ended September 30, 1997 as a percentage of
revenue was 68.5% compared to 77.3% for the three months ended November 2, 1996.
The favorable reduction in this percentage was primarily due to the exclusion of
Perry, which historically had substantially lower gross margins due to being a
private label manufacturer. Gross margins increased at ECI due to a better
product mix. Last year, due to the adverse retail environment, ECI sold excess
inventory at lower gross margins in order to maintain a clean inventory level.
In addition, this year's gross margin also reflects the inclusion of ECI
Sportswear's sales at higher branded margins, similar to ECI's, since ECI
Sportswear's acquisition of Davco on July 15, 1997.

Costs of Sales for the nine months ended September 30, 1997 as a percentage of
revenue was 68.2% compared to 79.8% for the nine months ended November 2, 1996.
The favorable reduction in this percentage was due to improved gross margins at
ECI due to a better product mix in the nine months ended September 30, 1997 as
compared to the nine months ended November 2, 1996. Last year, due to the
adverse retail environment, ECI sold excess inventory at lower gross margins in
order to maintain a clean inventory position. In addition, this year's gross
margin also reflects the inclusion of ECI Sportswear's sales at higher branded
margins, similar to ECI's,

                                   -24-


<PAGE>



since ECI Sportswear's's acquisition of Davco on July 15, 1997. Gross margins
for the nine months ended November 2, 1996 were also affected by the lower gross
margins at Perry, which historically as a private label manufacturer, had
substantially lower gross margins than ECI.

SELLING AND ADMINISTRATIVE EXPENSES

Selling and Administrative expenses as a percentage of revenues for the three
and nine month periods ended September 30, 1997 were 17.1% and 25.9%,
respectively, compared to 14.3% and 17.5% for the three and nine month periods
ended November 2, 1996, respectively. The increase for the three and nine month
periods ended September 30, 1997 in Selling and Administrative expenses as a
percentage of revenue was due primarily to the conversion to a calendar year
from a fiscal year which caused a reduction in sales for the three and nine
month periods ended September 30, 1997. At ECI sales commissions expense
increased this year, the result of selling a branded product at higher
commission rates, while last year's comparable periods reflected lower sales
commissions expense which resulted from the selling of excess inventory at lower
prices in order to maintain an optimum inventory level. The increase in Selling
and Administrative expenses as a percentage of revenue also reflects the
exclusion, in 1997, of Perry's results of operations. Perry historically had a
much lower Selling and Administrative expense structure than ECI. There was an
increase in depreciation expense in 1997 due to the purchase of product data
management equipment and other computer equipment allowing ECI to more
efficiently control its merchandising, production, sourcing and shipping.

Selling and Administrative expenses for the three months ended September 30,
1997 were $7,596,000 compared to $7,950,000 for the three months ended November
2, 1996, a decrease of $354,000 or 4.5%. The decrease in Selling and
Administrative expenses was due to the exclusion of Perry's Selling and
Administrative expenses from the three month period ended September 30, 1997
offset by the inclusion of ECI Sportswear's Selling and Administrative expenses
since its acquisition of Davco on July 15, 1997. In addition, the conversion to
a calendar year from a fiscal year resulted in reduced revenues (see Revenue
discussion above) and a corresponding decrease in such variable expenses as
factoring costs, and shipping and warehousing expenses, partially offset by an
increase in depreciation expense due to the purchase of product data management
equipment and other computer equipment allowing ECI to more efficiently control
its merchandising, production, sourcing and shipping.

Selling and Administrative expenses for the nine months ended September 30, 1997
were $16,580,000 compared to $21,861,000 for the nine months ended November 2,
1996, a decrease of $5,281,000 or 24.2%. Selling and Administrative expenses
decreased due primarily to the exclusion of Perry expenses of $6,965,000, after
its sale on September 30, 1996, offset by the inclusion of ECI Sportswear's
expenses of $1,349,000, since its acquisition of Davco on July 15, 1997. This
reduction was further offset by increases at ECI relating to depreciation
expense (as explained above) along with a new print advertising program and
increases in expenses for trade

                                   -25-


<PAGE>



shows, that relate to the change to a calendar year from a fiscal
year.

INTEREST AND DEBT EXPENSE

Interest and debt expense for the three and nine month periods ended September
30, 1997 decreased by $937,000 or 49.9% and $4,416,000 or 69.7% compared to the
three and nine month periods ended November 2, 1996. 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, ECI had a reduction of interest
expense due to lower borrowings against its line of credit.


                           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

Effective July 15, 1997, ECI Sportswear, Inc. ("ECI Sportswear"), an indirect
wholly owned subsidiary of the Company, acquired substantially all of the assets
of Davco Industries, Inc. ("Davco"), a maker of men's and boy's sportswear,
activewear, swimwear and loungewear under the "Perry Ellis", "Perry Ellis
America", and "Jeffrey Banks" labels. Davco's shareholders, Steven Arnold ("SA")
and Christopher Healy ("CH"), each entered into employment agreements with ECI
Sportswear to manage the Davco business as owned by ECI Sportswear. The purchase
price to be paid by ECI Sportswear for such assets consisted of (a) the issuance
to Davco of 3,000,000 shares of restricted Common Stock of the Company and (b) a
contingent cash purchase price to Davco to be computed as the pre-tax net income
of the Davco apparel business as owned by ECI Sportswear from the closing date
through December 31, 1997 (subject to certain adjustments), but not to exceed a
maximum payment of $3,600,000, such cash amount payable approximately April
1998. On the closing date, ECI Sportswear paid to Davco $500,000 as an advance
towards the contingent cash purchase price and agreed to

                                   -26-


<PAGE>



pay an additional advance following completion of ECI Sportswear's third fiscal
quarter ending September 30, 1997 equal to twenty-five (25%) of ECI Sportswear's
pre-tax net income from the Davco apparel business through such date less the
initial advance of $500,000 paid on the closing date. ECI Sportswear is a
wholly-owned subsidiary of Europe Craft Imports, Inc.("ECI").

Immediately following the issuance of 3,000,000 shares of the Company's Common
Stock to Davco, the Company has issued and outstanding 14,852,544 shares of
Common Stock, and Davco became the record owner of (and Davco, SA and CH as a
group became the beneficial owners of) 3,000,000 of such shares, corresponding
to 20.2% of such class. SA owns 60% of, and CH owns 40% of, the voting Common
Stock of Davco.

All 3,000,000 of the shares of the Company's Common Stock delivered to Davco as
part of the purchase price on the closing date is subject to the terms,
conditions and restrictions of a Shareholders Agreement entered into on the
Closing Date between Davco, SA, CH, ECI Sportswear, the Company and certain
other shareholders of the Company.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits - NONE

(b)   Reports on Form 8-K

      Current Report on Form 8-K dated July 15, 1997 with respect to acquisition
      of assets of Davco Industries, Inc.

      Current report on Form 8K dated September 12, 1997 with respect to
      amendment of the Company's Note Agreements dated June 30, 1993 with BNY
      Financial Corporation and AIF-II,L.P.

                                   -27-


<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, 1997             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

                                   -28-