SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


       X        Quarterly Report Under Section 13 or 15(d) of the
      ---       Securities Exchange Act of 1934

                For the quarter ended March 31, 2002


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


                For the transition period from             to
                                               ----------      ----------

      Commission File Number 1-5893

                                MOVIE STAR, INC.
           -----------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

                New York                           13-5651322
      -------------------------------     ------------------------------------
     (State or other jurisdiction of           (I.R.S. Employer
      incorporation or organization)          Identification Number)

                       1115 Broadway, New York, N.Y. 10010
           -----------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (212) 684-3400
           -----------------------------------------------------------
              (Registrant's telephone number, including area code)

           -----------------------------------------------------------
                 (Former name, former address, and former fiscal
                      year, if changed since last report.)

      Indicate by check mark whether the Registrant (1) has filed all reports
      required to be filed by Section 13 or 15(d) of the Securities Exchange Act
      of 1934 during the preceding 12 months (or for such shorter period that
      the Registrant was required to file such reports), and (2) has been
      subject to such filing requirements for the past 90 days.

                                  Yes  X      No
                                      -----       ----

      The number of common shares outstanding on April 30, 2002 was 15,084,975.


<Page>



                                MOVIE STAR, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                     (In Thousands, Except Number of Shares)
<Table>
<Caption>



                                                                                March 31,         June 30,        March 31,
                                                                                  2002              2001*           2001
                                                                               ----------        ----------      ----------
                                                                               (Unaudited)                       (Unaudited)

<S>                                                                                     <C>             <C>             <C>
                                     Assets

Current Assets
 Cash                                                                           $   258           $   261         $   396
 Receivables, net                                                                 8,035             7,859          10,535
 Inventory                                                                        7,911            11,947          11,785
 Prepaid expenses and other current assets                                        2,283             2,544           1,997
                                                                                -------           -------         -------
        Total current assets                                                     18,487            22,611          24,713

Property, plant and equipment, net                                                1,321             2,217           2,215
Other assets                                                                      2,989             2,971           2,571
                                                                                -------           -------         -------

        Total assets                                                            $22,797           $27,799         $29,499
                                                                                =======           =======         =======

                      Liabilities and Shareholders' Equity

Current Liabilities
 Notes payable                                                                  $ 5,107           $ 3,734         $ 3,372
 Current maturities of long-term debt and capital lease obligations                  32             6,593           8,848
 Accounts payable and accrued expenses                                            3,543             4,351           4,454
                                                                                -------           -------         -------
         Total current liabilities                                                8,682            14,678          16,674
                                                                                -------           -------         -------

Long-term debt and capital lease obligations                                         50                70              85
                                                                                -------           -------         -------

Deferred lease liability                                                            112                30               -
                                                                                -------           -------         -------


Commitments and Contingencies                                                         -                 -               -

Shareholders' equity
 Common stock, $.01 par value - authorized 30,000,000 shares;
   issued 17,102,000 shares in March 2002,
   16,954,000 in June 2001 and 16,914,000 in March 2001                             171               170             169
 Additional paid-in capital                                                       4,147             4,092           4,078
 Retained earnings                                                               13,253            12,377          12,111
                                                                                -------           -------         -------
                                                                                 17,571            16,639          16,358

 Less: Treasury stock, at cost - 2,017,000 shares                                 3,618             3,618           3,618
                                                                                -------           -------         -------

         Total shareholders' equity                                              13,953            13,021          12,740
                                                                                -------           -------         -------

Total liabilities and shareholders' equity                                      $22,797           $27,799         $29,499
                                                                                =======           =======         =======
</Table>


* Derived from audited financial statements.

See notes to consolidated condensed unaudited financial statements.


<Page>


                                MOVIE STAR, INC.
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                   (Unaudited)
                    (In Thousands, Except Per Share Amounts)

<Table>
<Caption>


                                                                      Three Months Ended             Nine Months Ended
                                                                           March  31,                    March  31,
                                                                    ------------------------      ------------------------
                                                                       2002          2001            2002          2001
                                                                       ----          ----            ----          ----
<S>                                                               <C>                   <C>             <C>        <C>

Net sales                                                           $13,567       $13,908         $43,884        $51,039
Cost of sales                                                         9,786         9,715          31,492         35,535
                                                                    -------       -------         -------        -------
  Gross profit                                                        3,781         4,193          12,392         15,504

Selling, general and administrative expenses                          3,365         3,702          10,390         11,508
Loss on closing of distribution facility                                  -           136               -          1,144
                                                                    -------       -------         -------        -------

  Operating income from continuing operations                           416           355           2,002          2,852

Interest income                                                           -            (2)             (2)            (5)
Interest expense                                                        115           301             616          1,181
                                                                    -------       -------         -------        -------

Income from continuing operations before income taxes and
  extraordinary gain                                                    301            56           1,388          1,676
Income taxes                                                            121             2             555             34
                                                                    -------       -------         -------        -------

  Income from continuing operations before extraordinary gain           180            54             833          1,642

Discontinued operations
  Income from operations of discontinued retail stores,
    net of income taxes                                                   -             -              43            189
  Loss on disposal of discontinued retail stores,
    including provision for operating losses during
    phase-out period, net of income taxes                                 -             -               -           (731)
                                                                    -------       -------         -------        -------

  Income (loss) before extraordinary gain                               180            54             876          1,100

Extraordinary gain on purchases of subordinated debentures,
     net of income taxes                                                  -             -              -             348
                                                                    -------       -------         -------        -------

  Net income                                                        $   180       $    54         $   876        $ 1,448
                                                                    =======       =======         =======        =======

  BASIC NET INCOME (LOSS) PER SHARE
    From continuing operations                                      $   .01       $     -         $   .06        $   .11
    From discontinued operations                                          -             -               -           (.04)
    From extraordinary gain                                               -             -               -            .03
                                                                    -------       -------         -------        -------
    Net income per share                                            $   .01       $     -         $   .06        $   .10
                                                                    =======       =======         =======        =======

  DILUTED NET INCOME (LOSS) PER SHARE
    From continuing operations                                      $   .01       $     -         $   .06        $   .11
    From discontinued operations                                          -             -               -           (.04)
    From extraordinary gain                                               -             -               -            .02
                                                                    -------       -------         -------        -------
    Net income per share                                            $   .01      $     -          $   .06        $   .09
                                                                    =======       =======         =======        =======

Basic weighted average number of shares outstanding                  15,085        14,897          15,085         14,897
                                                                    =======       =======         =======        =======
Diluted weighted average number of shares outstanding                15,087        15,378          15,118         15,370
                                                                    =======       =======         =======        =======

</Table>

      See notes to consolidated condensed unaudited financial statements.


<Page>


                                MOVIE STAR, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In Thousands)

<Table>
<Caption>

                                                                                                  Nine Months Ended
                                                                                                      March 31,
                                                                                       ----------------------------------------
                                                                                             2002                     2001
                                                                                       ----------------          --------------
<S>                                                                                      <C>                     <C>

CASH FLOWS FROM CONTINUING OPERATING ACTIVITIES:
 Net income                                                                                     $   876                $ 1,448
    Adjustments to reconcile net income to net cash provided by
      continuing operating activities:
    Extraordinary gain on purchases of subordinated debentures
      and senior notes                                                                                -                   (348)
    Depreciation and amortization                                                                   288                    380
    Provision for allowance for doubtful accounts                                                    (9)                   123
    Non-cash impairment charge                                                                        -                    915
    Deferred income taxes                                                                            29                      -
    Deferred lease liability                                                                         82                      -
  (Gain) loss on discontinued operations                                                            (43)                   542
 (Increase) decrease in operating assets:
    Receivables                                                                                    (167)                (2,698)
    Inventory                                                                                     4,036                  1,324
    Prepaid expenses and other current assets                                                       261                    136
    Other assets                                                                                    (56)                   271
  Decrease in operating liabilities:
    Accounts payable and accrued expenses                                                          (748)                  (788)
                                                                                       ----------------         --------------

    Net cash provided by continuing operating activities                                          4,549                   1,305
                                                                                       ----------------         --------------

 CASH FLOWS FROM CONTINUING INVESTING ACTIVITIES:
  Purchases of property, plant and equipment                                                       (119)                  (459)
  Proceeds from sale of property, plant and equipment                                               729                    105
                                                                                       ----------------         --------------

      Net cash provided by continuing investing activities                                          610                    (354)
                                                                                       ----------------         --------------

 CASH FLOWS FROM CONTINUING FINANCING ACTIVITIES:
  Repayments on and purchases of long-term debt and
    capital lease obligations                                                                    (6,525)                (2,905)
  Proceeds from (repayment of) revolving line of credit, net                                      1,373                  1,682
                                                                                       ----------------         --------------

      Net cash used in continuing financing activities                                           (5,152)                (1,223)
                                                                                       ----------------         --------------

     Cash used by discontinued operations                                                           (10)                   (44)
                                                                                       ----------------         --------------

 NET DECREASE IN CASH                                                                                (3)                  (316)
 CASH, beginning of period                                                                          261                    712
                                                                                       ----------------         --------------

 CASH, end of period                                                                           $    258                $   396
                                                                                       ================         ==============
                                                                                                               (Cont'd)
</Table>


<Page>


                                MOVIE STAR, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In Thousands)

<Table>
<Caption>

                                                                                                  Nine Months Ended
                                                                                                      March 31,
                                                                                       ----------------------------------------
                                                                                             2002                     2001
                                                                                       ----------------          --------------
<S>                                                                                   <C>                        <C>

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during period for:
     Interest                                                                                   $   791                $   981
                                                                                       ================         ==============

     Income taxes (net of refunds received)                                                     $    19                $    58
                                                                                       ================         ==============


SUPPLEMENTAL DISCLOSURES OF NONCASH
  FINANCING ACTIVITIES:
  Conversion of long-term debt for common stock                                                 $   (56)               $     -
  Issuance of common stock                                                                           56                      -
                                                                                       ----------------         --------------

                                                                                                $     -                $     -
                                                                                       ================         ==============



                                                                                                                   (Concluded)
</Table>







      See notes to consolidated condensed unaudited financial statements.


<Page>




                                MOVIE STAR, INC.
         NOTES TO CONSOLIDATED CONDENSED UNAUDITED FINANCIAL STATEMENTS

1.       In the opinion of the Company, the accompanying consolidated condensed
         unaudited financial statements contain all adjustments (consisting of
         normal recurring accruals) necessary to present fairly the financial
         position as of March 31, 2002 and the results of operations for the
         interim periods presented and cash flows for the nine months ended
         March 31, 2002 and 2001, respectively.

         The consolidated condensed financial statements and notes are presented
         as required by Form 10-Q and do not contain certain information
         included in the Company's year-end consolidated financial statements.
         The year-end consolidated condensed balance sheet was derived from the
         Company's audited financial statements. The results of operations for
         the three and nine months ended March 31, 2002 are not necessarily
         indicative of the results to be expected for the full year. This Form
         10-Q should be read in conjunction with the Company's consolidated
         financial statements and notes included in the 2001 Annual Report on
         Form 10-K.


2.        The inventory consists of the following (in thousands):

                                March 31,          June 30,         March 31,
                                  2002               2001             2001
                                ---------          ---------        ---------

          Raw materials            $  890            $ 2,204          $ 2,133
          Work-in process             514                692              674
          Finished goods            6,507              9,051            8,978
                                ---------          ---------        ---------
                                   $7,911            $11,947          $11,785
                                =========          =========        =========

3.       Effective June 30, 2001, the Company renegotiated its revolving credit
         facility to provide borrowings of up to $30,000,000 until its maturity
         date, July 1, 2004. Interest on outstanding borrowings is payable at
         the prime rate, but not less than 5.75% per annum.

4.       On September 4, 2001, the Company paid its 8% Senior Notes of
         $2,284,000 at maturity and its 12.875% Subordinated Debentures of
         $4,180,000 one-month early utilizing its three-year credit facility.
         Additionally, in July 2001, non-affiliated holders of $55,500 in
         principal amount of the 8% Convertible Senior Notes converted their
         Notes into approximately 148,000 shares of the Company's common stock.

         During the second quarter ended December 31, 2000, the Company
         purchased $3,050,000 in principal amount of its 8% Senior Notes and
         $157,000 in principal amount of its 12.875% Subordinated Debentures. As
         a result of these purchases, the Company recorded an extraordinary gain
         of $348,000, net of related costs and income taxes of $20,000 and
         $7,000, respectively. The Company applied the principal amount of the
         8% Senior Notes against the final payment due on September 1, 2001 and
         the principal amount of the 12.875% Subordinated Debentures against the
         final payment due on October 1, 2001.

         During September 2000, the Company purchased $10,000 in principal
         amount of its 12.875% Subordinated Debentures. The Company further
         reduced its final payment due in October 2001 with these debentures.

<page>

5.       Net Income Per Share - The Company's calculation of Basic and Diluted
         Net Income Per Share are as follows (in thousands, except per share
         amounts):
<Table>
<Caption>

                                                                      Three Months Ended          Nine Months Ended
                                                                           March 31,                   March 31,
                                                                      ------------------          -----------------
                                                                       2002        2001            2002       2001
                                                                      ------      ------          ------     ------
        <S>                                                          <C>        <C>            <C>           <C>

          BASIC:
       Income from continuing operations                             $   180     $    54         $   833     $ 1,642
       Income (loss) from discontinued operations                          -           -              43        (542)
       Extraordinary gain                                                  -           -               -         348
                                                                     -------     -------          ------     -------
       Net income                                                    $   180     $    54         $   876     $ 1,448
                                                                     =======     =======         =======     =======


       Basic weighted average number of shares outstanding            15,085      14,897          15,085      14,897
                                                                     =======     =======         =======     =======

       Basic net income (loss) per share:
         From continuing operations                                  $   .01     $     -         $   .06     $   .11
         From discontinued operations                                      -           -               -        (.04)
         From extraordinary gain                                           -           -               -         .03
                                                                     -------     -------          ------     -------
       Basic net income per share                                    $   .01     $     -         $   .06     $   .10
                                                                     =======     =======         =======     =======

          DILUTED:
       Income from continuing operations                             $   180     $    54         $   833     $ 1,642
       Income (loss) from discontinued operations                          -           -              43        (542)
       Extraordinary gain                                                  -           -               -         348
       Plus: Interest Expense on 8% Convertible Senior Notes               -           1               -           4
                                                                     -------     -------          ------     -------
       Adjusted net income                                           $   180     $    55         $   876     $ 1,452
                                                                     =======     =======         =======     =======

       Weighted average number of shares outstanding                  15,085      14,897          15,085      14,897
       Plus: Shares Issuable Upon Conversion of
               8% Convertible Senior Notes                                 -         191               -         191
             Shares Issuable Upon Conversion of Stock Options              -         270              23         262
             Shares Issuable Upon Conversion of Warrants                   2          20              10          20
                                                                     -------     -------          ------     -------
       Total average number of equivalent shares outstanding          15,087      15,378          15,118      15,370
                                                                     =======     =======         =======     =======

       Diluted net income per share:
         From continuing operations                                  $   .01     $     -         $   .06     $   .11
         From discontinued operations                                      -           -               -        (.04)
         From extraordinary gain                                           -           -               -         .02
                                                                     -------     -------          ------     -------
       Diluted net income per share                                  $   .01     $     -          $  .06     $   .09
                                                                     =======     =======         =======     =======
</Table>

         Options to purchase 2,420,000 shares of common stock at prices ranging
         from $.50 to $1.125 per share and options to purchase 525,000 shares of
         common stock at prices ranging from $.875 to $1.75 per share were
         outstanding as of March 31, 2002 and 2001, respectively, but were not
         included in the computation of diluted net income per share since they
         would be considered antidilutive.

<page>

6.       During fiscal 2001, the Company closed its remaining distribution
         facility located in Lebanon, Virginia. The action was taken by the
         Company to enhance the Company's competitiveness, to reduce expenses
         and to improve efficiencies. The Company recorded charges of $136,000
         and $1,144,000 in the three and nine months ended March 31, 2001,
         respectively, in connection with this closure. The charges consisted of
         a non-cash charge for the impairment of assets of $915,000 and
         severance, employee benefits and other exit costs totaling $229,000.

         In September 2001, the Company sold its two non-operating facilities
         for $729,000. No gain or loss was recognized during the period. As of
         March 31, 2002, there are no remaining accruals relating to severance
         and other employee benefits and exit costs.

7.       In December 2000, management decided to discontinue the retail segment
         of it business and finalized all operations in March 2001. Accordingly,
         the Company recorded no income from discontinued operations for the
         three months ended March 31, 2002 and recorded income of $43,000, net
         of income taxes of $29,000 for the nine months ended March 31, 2002 as
         compared to no income from discontinued operations for the three months
         ended March 31,2001 and income of $189,000, net of income taxes of
         $4,000 for the nine months ended March 31, 2001. The Company's income
         for the nine months ended March 31, 2002 resulted primarily from a gain
         on the sale of the remaining assets of the retail segment and the
         reversal of certain liabilities that are no longer deemed necessary.

         The estimated loss on disposal provided for the write-down of assets to
         the estimated realizable value, the loss on fulfilling lease
         obligations, the costs of disposal and future operating losses of
         $102,000, $94,000, $200,000 and $350,000, respectively. Accordingly,
         the Company recorded an estimated loss on disposal of $731,000, net of
         a benefit from income taxes of $15,000, for the nine months ended March
         31, 2001.

         Operating results of discontinued operations are as follows (in
         thousands, unaudited):
<Table>
<Caption>


                                                                      Three Months Ended          Nine Months Ended
                                                                           March 31,                   March 31,
                                                                      ------------------          -----------------
                                                                       2002        2001            2002       2001
                                                                      ------      ------          ------     ------
        <S>                                                         <C>          <C>            <C>        <C>
       Net sales                                                     $     -     $   709         $     -     $ 4,342
       Costs and expenses, net of other income                             -         709             (72)
                                                                                                               4,149
       Income taxes                                                        -           -              29           4
                                                                     -------     -------         -------     -------
       Net income from discontinued operations                       $     -     $     -         $    43     $   189
                                                                     =======     =======         =======     =======
</Table>

       The net assets and liabilities of discontinued operations included in the
        accompanying consolidated balance sheets are as follows (in thousands,
        unaudited):

                                                   March 31,        June 30,
                                                     2002             2001*
                                                   --------         --------

       Cash                                          $      -         $    12
       Property, plant and equipment, net                   -             106
       Other assets                                       189             218
                                                     --------         -------
       Total assets of discontinued operations       $    189         $   336
                                                     ========         =======

       Accounts payable and accrued expenses         $     68         $   105
                                                     --------         -------
       Total liabilities of discontinued operations  $     68         $   105
                                                     ========         =======

       As of March 31, 2002, the Company has $68,000 accrued for certain
       commitments relating to the retail operations and a deferred tax asset of
       $189,000 primarily due to net operating loss carryforwards.


<Page>


                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


The following discussion contains certain forward-looking statements with
respect to anticipated results, which are subject to a number of risks and
uncertainties. Among the factors that could cause actual results to differ
materially are: business conditions and growth in the Company's industry;
general economic conditions; the addition or loss of significant customers; the
loss of key personnel; product development; competition; foreign government
regulations; fluctuations in foreign currency exchange rates; rising costs of
raw materials and the unavailability of sources of supply; the timing of orders
placed by the Company's customers; and the risk factors listed from time to time
in the Company's SEC reports .

Critical Accounting Policies and Estimate

The preparation of financial statements in conformity with generally accepted
accounting principles requires the appropriate application of certain accounting
policies, many of which require us to make estimates and assumptions about
future events and their impact on amounts reported in the financial statements
and related notes. Since future events and their impact cannot be determined
with certainty, the actual results will inevitably differ from our estimates.
Such differences could be material to the consolidated financial statements.

We believe application of accounting policies, and the estimates inherently
required by the policies, are reasonable. These accounting policies and
estimates are constantly reevaluated, and adjustments are made when facts and
circumstances dictate a change. Historically, we have found the application of
accounting policies to be appropriate, and actual results have not differed
materially from those determined using necessary estimates.

Our accounting policies are more fully described in Note 1 to the consolidated
financial statements, located in our Annual Report on Form 10-K filed with the
Securities and Exchange Commission. We have identified certain critical
accounting policies that are described below.

Inventory - Our inventory is carried at the lower of cost or market on a
first-in, first-out basis. We write down inventory for estimated obsolescence or
unmarketable inventory equal to the difference between the cost of inventory and
the estimated market value based upon assumptions about future demand and market
conditions. If actual market conditions are less favorable than those projected
by management, additional inventory write-downs may be required.

Allowance for doubtful accounts - The Company maintains allowances for doubtful
accounts for estimated losses resulting from the inability of its customers to
make required payments. If the financial condition of our customers were to
deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required.

Long-lived asset. In evaluation of the fair value and future benefits of
long-lived assets, we perform an analysis of the anticipated undiscounted future
net cash flows of the related long-lived assets. If the carrying value of the
related asset exceeds the undiscounted cash flows, we reduce the carrying value
to its fair value, which is generally calculated using discounted cash flows.
Various factors including future sales growth and profit margins are included in
this analysis. To the extent these future projections or our strategies change,
the conclusion regarding impairment may differ from our current estimates.

<page>

Deferred tax valuation allowance - In assessing the need for a deferred tax
valuation allowance, we consider future taxable income and ongoing prudent and
feasible tax planning strategies. Since we were able to determine that we would
be able to realize our deferred tax assets in the future, in excess of its
recorded amount, an adjustment to the deferred tax asset was not deemed
necessary. Likewise, should we determine that we would not be able to realize
all or part of our net deferred tax asset in the future, an adjustment to the
deferred tax asset would be charged to income in the period such determination
was made.


Results of Continuing Operations

Net sales were $13,567,000 and $43,884,000 for the three and nine months ended
March 31, 2002 as compared to $13,908,000 and $51,039,000 for the comparable
periods in 2001. The decrease in sales was due primarily to a soft retail
environment and a reduction in programs with certain customers.

The gross profit percentage decreased to 27.9% for the three months ended March
31, 2002 from 30.1% in the similar period in 2001. The gross profit percentage
decreased to 28.2% for the nine months ended March 31, 2002 from 30.4% in the
similar period in 2001. The lower margins resulted primarily from increased
pricing pressures from certain customers and an increase in the sale of excess
inventory at discounted prices.

Selling, general and administrative expenses decreased to $3,365,000, or 24.8%
of sales, for the three months ended March 31, 2002 as compared to $3,702,000,
or 26.6% of sales, for the similar period in 2001. This decrease of $337,000
resulted primarily from decreases in salary expense of $211,000, commission
expense of $53,000, shipping expense of $51,000 and an overall net decrease in
other selling, general and administrative expenses, offset partially by an
increase in rent expense of $154,000.

Selling, general and administrative expenses decreased to $10,390,000 or 23.7%
of sales, for the nine months ended March 31, 2002 as compared to $11,508,000,
or 22.5% of sales, for the similar period in 2001. This decrease of $1,118,000
resulted primarily from decreases in salary expense of $423,000, shipping
expense of $370,000, bad debt expense of $224,000, commission expense of
$172,000 and an overall net decrease in other selling, general and
administrative expenses, offset partially by an increase in rent expense of
$456,000.

During the second quarter of fiscal 2001, the Company implemented a plan to
close the distribution operation at its Virginia facility and to consolidate
these operations with the warehouse and distribution facility located in
Mississippi. This decision was made to increase the overall efficiencies of the
Mississippi facility and reduce overall shipping costs. The Company recorded a
charge in the second quarter of fiscal 2001 of $1,008,000 in connection with
this closure. The charge consisted of a non-cash charge for the impairment of
assets of $915,000 and other charges totaling $93,000. The Company incurred
additional costs in the third quarter of fiscal 2001 of approximately $136,000
related to severance for certain employees not notified of the closure until the
third quarter and to prepare the facility for closure.

Income from operations was $416,000 and $2,002,000 for the three and nine months
ended March 31, 2002, as compared to $355,000 and $2,852,000 for the similar
periods in 2001. The increase for the three months was due to lower selling,
general and administrative expenses and a loss on the disposal of the Virginia
distribution facility in the prior year, partially offset by a decrease in sales
and gross margins. The decrease for the nine months was due to lower sales and
gross margins partially offset by a decrease in selling, general and
administrative expenses and a loss on the disposal of the Virginia distribution
facility in the prior year.


<page>

Interest income for the three and nine months ended March 31, 2002 was $0 and
$2,000, respectively, as compared to $2,000 and $5,000 for the similar periods
in 2001.

Interest expense for the three and nine months ended March 31, 2002 was $115,000
and $616,000, respectively, as compared to $301,000 and $1,181,000 for the
similar periods in 2001. These reductions were due to lower borrowing levels and
interest rates.

The Company provided for income taxes of $121,000 and $555,000 for the three and
nine months ended March 31, 2002, as compared to an alternative minimum tax of
$2,000 and $34,000 for the same period in 2001. In the fourth quarter of fiscal
year 2001, the Company reversed its valuation allowance on its deferred tax
asset. The Company reversed its deferred tax valuation allowance because it was
considered more likely than not that the Company would utilize the entire asset.


Results of Discontinued Operations

In December 2000, the Company decided to dispose of the majority of the assets
of its retail division. Accordingly, the operating results of this division were
reclassified as discontinued operations.

The retail division had no activity for the three months ended March 31, 2002
and March 31, 2001. The retail division had income from discontinued operations
of $43,000 for the nine months ended March 31, 2002 as compared to a loss from
discontinued operations of $542,000 for the similar period in 2001. In the
second quarter of fiscal 2001, the Company recorded a loss on the disposal of
the retail stores of $731,000, net of a benefit from income taxes of $15,000.
The income in the current nine-month period relates to the sale of assets that
were fully depreciated.

Extraordinary Gain

During the second quarter of fiscal 2001, the Company purchased $3,050,000 in
principal amount of its 8% Senior Notes and $157,000 in principal amount of its
12.875% Subordinated Debentures. As a result of these purchases, the Company
recorded an extraordinary gain of $348,000, net of related costs and income
taxes.

<page>

Net Income

The Company had net income of $180,000 and $876,000 for the three and nine
months ended March 31, 2002, respectively, as compared to $54,000 and $1,448,000
for the similar periods in 2001. The increase for the three months was due to
lower selling, general and administrative expenses, lower net interest costs and
a loss in the prior year on the disposal of it Virginia distribution center,
partially offset by lower sales and gross margins, and a larger provision for
income taxes in the current year. The decrease for the nine months was due to
lower sales and gross margins, a gain on the purchase of the Company's 12.875%
Subordinated Debentures and 8% Senior Notes in the prior year and a larger
provision for income taxes in the current year partially offset by lower
selling, general and administrative expenses, lower net interest costs, a loss
in the prior year on the disposal of it Virginia distribution center and on the
disposal of its retail stores.


Liquidity and Capital Resources

For the nine months ended March 31, 2002, the Company's working capital
increased by $1,872,000 to $9,805,000 primarily from profitable operations and
the sale of non-operating assets offset partially by the payment of long-term
debt.

During the nine months ended March 31, 2002, cash decreased by $3,000. The
Company used cash of $119,000 for the purchase of fixed assets, $6,525,000 for
the repayment and purchases of long-term debt and the payment of lease
obligations and $10,000 in its discontinued operations. Cash generated from
continuing operations of $4,549,000, an increase in short-term borrowings of
$1,373,000 and proceeds from the sale of certain non-operating assets
aggregating $729,000 funded these activities.

Receivables at March 31, 2002 increased by $176,000 to $8,035,000 from
$7,859,000 at June 30, 2001. This increase is due to normal shipping
fluctuations within the period.

Inventory at March 31, 2002 decreased by $4,036,000 to $7,911,000 from
$11,947,000 at June 30, 2001. The decrease was the result of the Company's
effort to lower overall inventory levels and a reduction in the need for raw
materials due to the continued shift of production to full package manufactures
from cut, make and trim manufactures.

During the quarter ended September 2001, the Company sold two non-operating
facilities located in Virginia and a one retail store located in Mississippi,
for approximately $780,000.

On September 1, 2001, the Company paid the remaining balance of $4,180,000 of
its 12.875% Subordinated Debentures, $2,283,000 of its 8% Senior Notes, and
$1,000 (the unconverted portion) of its 8% Convertible Senior Notes. The Company
utilized its secured revolving line of credit to make these payments.

The Company's has a secured revolving line of credit of up to $30,000,000. The
revolving line of credit expires July 1, 2004 and is sufficient for the
Company's projected needs for operating capital and letters of credit to fund
the purchase of imported goods through July 1, 2004. Direct borrowings under
this line bear interest at the prime rate of Chase Manhattan Bank but not less
than 5.75% per annum. Availability under the line of credit is subject to the
Company's compliance with certain agreed upon financial formulas. Under the
terms of this financing, the Company has agreed to pledge substantially all of
its assets, except the Company's real property.

In July 2001, holders of $55,500 in principal amount of the Company's 8%
Convertible Senior Notes converted their Notes into 148,000 shares of the
Company's common stock, par value $.01.

Management believes the available borrowing under its secured revolving line of
credit, along with anticipated internally generated funds, will be sufficient to
cover its working capital requirements through July 1, 2004.

The Company does not anticipate making any purchases of its stock and
anticipates that capital expenditures for fiscal 2002 will be less than
$350,000.


<page>



Contractual Obligations and Commercial Commitments

To facilitate an understanding of our contractual obligations and commercial
commitments, the following data is provided (in thousands):

<Table>
<Caption>

                                                                       Payments Due by Period
                                                         --------------------------------------------------
                                                           Within                                   After 5
                                            Total          1 Year       2-3 Years    4-5 Years       Years
                                          ----------     ----------     ---------    ---------      -------
<S>                                      <C>           <C>             <C>          <C>          <C>

  Contractual Obligations
  Credit Facility                         $    5,107     $    5,107     $       -    $       -      $     -
  Capital Leases                                  82             32            50            -            -
  Operating Leases                            10,276          1,122         2,331        2,338        4,485
  Consulting Agreement                           450            200           250            -            -
  Employment Contract                          1,088            469           619            -            -
                                          ----------     ----------     ---------    ---------      -------
  Total Contractual Obligations              $17,003     $    6,930     $   3,250    $   2,338      $ 4,485
                                          ==========     ==========     =========    =========      =======
</Table>

<Table>
<Caption>

                                                               Amount of Commitment Expiration Per Period
                                                             ---------------------------------------------
                                           Total Amounts     Within                                After 5
                                            Committed        1 Year     2-3 Years    4-5 Years      Years
                                           -------------     ------     ---------    ---------     -------
<S>                                       <C>              <C>          <C>          <C>          <C>

  Other Commercial Commitments
  Letters of Credit                        $       5,704     $5,704     $       -    $       -     $     -
                                           -------------     ------     ---------    ---------     -------
  Total Commercial Commitments             $       5,704     $5,704     $       -    $       -     $     -
                                           =============     ======     =========    =========     =======

</Table>

Recently Issued Accounting Standards

In June 2001, the Financial Accounting Standards Board (the "FASB") issued two
new pronouncements: Statement of Financial Accounting Standards ("SFAS") No.
141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible
Assets."

SFAS No. 141 addresses financial accounting and reporting for business
combinations and supersedes APB No. 16, "Business Combinations," and FASB
Statement No.38, "Accounting for Preacquisition Contingencies of Purchased
Enterprises." All business combinations in the scope of this Statement are to be
accounted for using one method, the purchase method. SFAS No. 141 is effective
as follows: (a) use of the pooling of interest method is prohibited for business
combinations initiated after June 30, 2001; and (b) the provisions of SFAS No.
141 also apply to all business combinations accounted for by the purchase method
that are completed after June 30, 2001 (that is, the date of acquisition is July
2001 or later). The Company has determined that the adoption of this Statement
will not have an impact on the consolidated financial statements.

<page>

SFAS No. 142 addresses financial accounting and reporting for acquired goodwill
and other intangible assets and supersedes APB No. 17, "Intangible Assets." It
changes the accounting for goodwill from an amortization method to an impairment
only approach. SFAS No. 142 is effective for fiscal years beginning December 15,
2001 to all goodwill and other intangible assets recognized in an entity's
statement of financial position at that date, regardless of when those assets
were initially recognized. The Company has determined that the adoption of this
Statement will not have an impact on the consolidated financial statements.

In August 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. This Statement addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. The Statement requires that the fair value of
a liability for an asset retirement obligation be recognized in the period in
which it is incurred if a reasonable estimate of fair value can be made. The
associated asset retirement costs are capitalized as part of the carrying amount
of the long-lived asset. SFAS No. 143 is effective for the first quarter 2003.
The Company does not believe that the adoption of this pronouncement will have a
material impact on their consolidated results of operations.

In October of 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." This Statement supersedes SFAS No. 121 but
retains the fundamental provisions of SFAS No. 121 for recognition and
measurement of the impairment of long-lived assets to be held and used and
measurement of long-lived assets to be disposed of by sale. However, SFAS No.
144 applies the fair value method for testing of impairment, which differs from
SFAS No, 121. SFAS No, 144 also supersedes the accounting and reporting
provisions of APB Opinion No. 30 as it pertains to disposal of a business
segment but retains the requirement of that opinion to report discontinued
operations separately from continuing operations and extends that reporting to a
component of an entity that either has been disposed of or is classified as led
for sale. SFAS No. 144 is effective for fiscal years beginning after December
15, 2001. The Company is evaluating the impact on the adoption of this standard
and has not yet determined the effect of adoption on its financial position and
results of operations.

Quantitative and Qualitative Disclosures About Market Risk

The Company is subject to changes in the prime rate based on the Federal Reserve
actions and general market interest fluctuations. The Company believes that
moderate interest rate increases will not have a material adverse impact on its
results of operations, or financial position, in the foreseeable future.

Imports

The Company's transactions with its foreign manufacturers and suppliers are
subject to the risks of doing business abroad, including any instability that
might be associated with ongoing military actions against terrorism. In recent
months, the Company has increased its purchases of its finished goods from
manufacturers in Pakistan; however, to date the Company has not experienced any
interruption in the supply of finished goods from Pakistan. In light of recent
events, the Company has begun to identify alternative sources of supply outside
of this region to meet the needs of its customers. The Company's import and
offshore operations are subject to constraints imposed by agreements between the
United States and a number of foreign countries in which the Company does
business. These agreements impose quotas on the amount and type of goods that
can be imported into the United States from these countries. Such agreements
also allow the United States to impose, at any time, restraints on the
importation of categories of merchandise that, under the terms of the
agreements, are not subject to specified limits. The Company's imported products
are also subject to United States customs duties and, in the ordinary course of
business, the Company is from time to time subject to claims by the United
States Customs Service for duties and other charges. The United States and other
countries in which the Company's products are manufactured may, from time to
time, impose new quotas, duties, tariffs or other restrictions, or adversely
adjust presently prevailing quotas, duty or tariff levels, which could adversely
affect the Company's operations and its ability to continue to import products
at current or increased levels. The Company cannot predict the likelihood or
frequency of any such events occurring.


<Page>


              SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS UNDER THE
                    SECURITIES LITIGATION REFORM ACT OF 1995



Except for historical information contained herein, this Report on Form 10-Q
contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, which involve certain risks and uncertainties.
The Company's actual results or outcomes may differ materially from those
anticipated. Important factors that the Company believes might cause differences
are discussed in the cautionary statement under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in
this Form 10-Q. In assessing forward-looking statements contained herein,
readers are urged to carefully read those statements.

<page>

Part II  Other Information

Item 1   -    Legal Proceedings - Not Applicable

Item 2   -    Changes in Securities - Not Applicable

Item 3   -    Defaults Upon Senior Securities - Not Applicable

Item 4   -    Submission of Matters to a Vote of Security Holders - None

Item 5   -    Other Information - None

Item 6   -    (a) Exhibits - None

              (b) Form 8-K Report - None



                                   SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                           MOVIE STAR, INC.


                                           By: /s/ MELVYN KNIGIN
                                              ----------------------------------
                                                 MELVYN KNIGIN
                                                 Chief Executive Officer;
                                                 President

                                           By: /s/ THOMAS RENDE
                                              ----------------------------------
                                                 THOMAS RENDE
                                                 Chief Financial Officer


May 10, 2002