SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

      For the quarter ended March 31, 2000


      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)

              136 Madison Avenue, New York, N.Y.         10016
-------------------------------------------------------------------------------
           (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 28, 2000 was 14,896,977.


<PAGE>


                                MOVIE STAR, INC.

                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (In Thousands)

                                                March 31,             June 30,
                                                  2000                  1999*
                                              -------------           --------
                                               (Unaudited)

                        Assets

Current Assets
 Cash                                               $ 2,491           $ 4,597
 Receivables, net                                     9,489             6,864
 Inventory                                           11,661            16,460
 Prepaid expenses and other current assets            2,218             2,585
                                                    -------           -------
        Total current assets                         25,859            30,506

Property, plant and equipment, net                    3,256             3,495
Other assets                                          2,730             2,758
                                                    -------           -------

        Total assets                                $31,845           $36,759
                                                    =======           =======

                        Liabilities and Stockholders' Equity

Current Liabilities
 Current maturities of capital lease
    obligations                                     $    53           $    45
 Accounts payable and accrued expenses                5,488             7,845
                                                    -------           -------
         Total current liabilities                    5,541             7,890
                                                    -------           -------

Long-term debt and capital lease obligations         15,052            20,703
                                                    -------           -------

Commitments and Contingencies                             -                 -

Stockholders' equity
 Common stock, $.01 par value - authorized
  30,000,000 shares; issued 16,914,000 shares           169               169
 Additional paid-in capital                           4,078             4,072
 Retained earnings                                   10,623             7,543
                                                    -------           -------
                                                     14,870            11,784

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

         Total stockholders' equity                  11,252             8,166
                                                    -------           -------

Total liabilities and stockholders' equity          $31,845           $36,759
                                                    =======           =======


* Derived from audited financial statements.

See notes to consolidated condensed financial statements.


<PAGE>


                                MOVIE STAR, INC.

                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                   (Unaudited)

                    (In Thousands, Except Per Share Amounts)

<TABLE>
                                                                      Three Months Ended              Nine Months Ended
                                                                          March 31,                        March 31,
                                                                  -------------------------           ---------------------
                                                                    2000            1999              2000            1999
                                                                  --------        --------            -----           -----
<S>                                                                <C>            <C>                <C>             <C>
Net sales                                                          $14,487        $14,715            $57,060         $59,462

Cost of sales                                                        9,882         10,334             40,269          42,038
                                                                   -------        -------            -------         -------

  Gross profit                                                       4,605          4,381             16,791          17,424

Selling, general and administrative
 expenses                                                            4,006          3,637             12,534          11,588
                                                                   -------        -------            -------         -------

  Income from operations                                               599            744              4,257           5,836

Gain on purchases of subordinated debentures                             -              -               (164)              -

Interest income                                                        (33)           (56)               (53)           (59)

Interest expense                                                       384            594              1,481           2,104
                                                                   -------        -------            -------         -------

  Income before provision for income taxes
      and extraordinary gain                                           248            206              2,993           3,791

Provision for income taxes                                               8              4                 63              76
                                                                   -------        -------            -------         -------

  Income before extraordinary gain                                     240            202              2,930           3,715

Extraordinary gain on purchases of
 subordinated debentures                                                 -              -               (150)              -
                                                                   -------        -------            -------         -------

  Net income                                                       $   240        $   202            $ 3,080         $ 3,715
                                                                   =======        =======            =======         =======

  BASIC
Income before extraordinary gain per share                            $.02           $.01               $.20            $.26
Extraordinary gain per share                                             -              -                .01               -
                                                                      ----          -----               ----            ----
Net income per share                                                  $.02           $.01               $.21            $.26
                                                                      ====           ====               ====            ====

  DILUTED
Income before extraordinary gain per share                            $.02           $.01               $.18            $.24
Extraordinary gain per share                                             -              -                .01               -
                                                                      ----           ----                ---            ----
Net income per share                                                  $.02           $.01               $.19            $.24
                                                                      ====           ====               ====            ====

Basic weighted average number of shares
 outstanding                                                        14,892         14,131             14,884          14,122
                                                                   =======         ======             ------          ======

Diluted weighted average number of shares
 outstanding                                                        15,804         16,326             16,041          15,639
                                                                    ======         ======             ======          ======
</TABLE>


See notes to consolidated condensed financial statements.


<PAGE>


                                MOVIE STAR, INC.

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



                                                              Nine Months Ended
                                                                  March 31,
                                                             -----------------
                                                             2000         1999
                                                           -------       ------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                $ 3,080       $3,715
 Adjustments to reconcile net income to net cash
  provided by operating activities:
   Extraordinary gain on purchases of subordinated
    debentures                                                (150)           -
   Depreciation and amortization                               462          428
   Gain on purchases of subordinated debentures               (164)           -
   Loss on sale of property, plant and equipment                 5            2
 (Increase) decrease in operating assets:
   Receivables                                              (2,625)      (2,781)
   Inventory                                                 4,799        7,369
   Prepaid expenses and other current assets                   367          101
   Other assets                                                (95)         (28)
  Decrease in operating liabilities:
   Accounts payable and accrued expenses                    (2,360)      (2,388)
                                                         ---------      -------

     Net cash provided by operating activities               3,319        6,418
                                                         ---------      -------

 CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property, plant and equipment                  (141)        (458)
  Proceeds from sale of property, plant and equipment           32          200
                                                         ---------      -------

      Net cash used in investing activities                   (109)        (258)
                                                         ---------      -------

 CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayments on and purchases of long-term debt and
   capital lease obligations                                (5,316)         (39)
  Repayment of revolving line of credit, net                     -         (328)
  Issuance of common stock under stock option plan               -            7
                                                         ---------      -------

      Net cash used in financing activities                 (5,316)        (360)
                                                         ---------      -------

 NET (DECREASE) INCREASE IN CASH                            (2,106)       5,800
 CASH, beginning of period                                   4,597          546
                                                         ---------      -------

 CASH, end of period                                       $ 2,491      $ 6,346
                                                         =========      =======


                                                                     (Cont'd)


<PAGE>


                                MOVIE STAR, INC.

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



                                                              Nine Months Ended
                                                                  March 31,
                                                             -----------------
                                                             2000         1999
                                                           -------       ------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during period for:
     Interest                                              $1,241        $1,495
                                                           ======        ======

     Income taxes (net of refunds received)                $   26        $   16
                                                           ======        ======


SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES:
  Acquisition of equipment through assumption of capital
   lease obligation                                        $   18        $   56
                                                           ======        ======



SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING ACTIVITIES:
  Conversion of long-term debt for common stock            $  (6)        $ (278)
  Issuance of common stock                                     6            278
                                                           ------        ------
                                                           $   -         $    -
                                                           ======        ======


                                                                     (Concluded)



See notes to consolidated condensed financial statements.


<PAGE>




                                MOVIE STAR, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1.   In the opinion of the Company, the accompanying unaudited consolidated
     condensed financial statements contain all adjustments (consisting of
     normal recurring accruals) necessary to present fairly the financial
     position as of March 31, 2000 and the results of operations for the interim
     periods presented and cash flows for the nine months ended March 31, 2000
     and 1999, respectively.

     The condensed consolidated 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
     condensed consolidated balance sheet was derived from the Company's audited
     financial statements. The results of operations for the three and nine
     months ended March 31, 2000 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 1999 Annual Report on Form 10-K.

2.   Certain items included in these statements are based upon estimates. The
     cost of sales is determined utilizing estimated gross profit rates. The
     calculation of the actual cost of sales is predicated upon a physical
     inventory taken at the end of each fiscal year.

     An approximate breakdown of the inventory in thousands is as follows:

                                               March 31,          June 30,
                                                2000               1999
                                               -------            --------

          Raw materials                        $ 2,403            $ 5,513
          Work-in process                          448              2,121
          Finished goods                         8,810              8,826
                                              --------            -------
                                               $11,661            $16,460
                                               =======            =======


3.   During the second quarter ending December 31, 1999, the Company purchased
     an aggregate of $2,786,000 in principal amount of its 12.875% subordinated
     debentures. With $903,000 of these debentures and in conjunction with
     previously acquired debentures, the Company will satisfy its sinking fund
     requirement due October 1, 2000. As a result of the purchase of these
     $903,000 of debentures, the Company recorded a pre-tax gain of $50,000, net
     of related costs. The remaining $1,883,000 of repurchased debentures will
     be applied to the final payment due on October 1, 2001. As a result of the
     purchase of these $1,883,000 of debentures, the Company recorded an
     extraordinary gain of $150,000, net of related costs and income taxes.

4.   In the first quarter of fiscal 2000, the Company purchased an aggregate of
     $2,834,000 in principal amount of its 12.875% subordinated debentures and
     recorded a pre-tax gain of $114,000, net of related costs. The Company will
     use these debentures to reduce its mandatory sinking fund requirement due
     on October 1, 2000.

<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>
                                                                           Three Months Ended               Nine Months Ended
                                                                                March 31,                       March 31,
                                                                          --------------------            ---------------------
                                                                          2000          1999              2000            1999
                                                                          ----         -----              ----            ----
<S>                                                                         <C>          <C>           <C>               <C>
          Basic Income Before Extraordinary Gain Per Share:
          ------------------------------------------------

         Income Before Extraordinary Gain
            to Common Stockholders                                          $ 240        $ 202         $ 2,930           $ 3,715
         Basic Weighted Average Shares Outstanding                         14,892       14,131          14,884            14,122
         Basic Income Before Extraordinary Gain Per  Share                   $.02         $.01            $.20              $.26
                                                                             ====         ====            ====              ====

          Diluted Income Before Extraordinary Gain Per Share:
          --------------------------------------------------

          Income Before Extraordinary Gain
             to Common Stockholders                                          $240         $202          $2,930           $ 3,715
          Plus: Interest Expense on 8% Convertible Senior Notes                 2            -               5                21
                                                                             ----         ----          ------           -------
          Adjusted Income Before Extraordinary Gain                          $242         $202          $2,935           $ 3,736
                                                                             ====         ====          ======           =======

          Weighted Average Shares Outstanding                              14,892       14,131          14,884            14,122
          Plus: Shares Issuable Upon Conversion of
                    8% Convertible Senior Notes                               196          943             204               948
                  Shares Issuable Upon Conversion of
                    Stock Options                                             689        1,252             922               569
                  Shares Issuable Upon Conversion of  Warrants                 27           -               31                 -
                                                                          -------      -------         -------            ------
          Diluted Weighted Average Shares Outstanding                      15,804       16,326          16,041            15,639
                                                                          =======      =======         =======            ======
          Diluted Income Before Extraordinary Gain Per Share                 $.02         $.01            $.18              $.24
                                                                             ====         ====            ====              ====


                                                                                                   Nine Months Ended
                                                                                                     March 31, 2000
                                                                                                   ------------------
          Basic Extraordinary Gain Per Share:
          ----------------------------------

         Extraordinary Gain  to Common Stockholders                                                      $ 150
         Basic Weighted Average Shares Outstanding                                                      14,884
         Basic Extraordinary Gain Per  Share                                                              $.01
                                                                                                          ====

          Diluted Extraordinary Gain Per Share:
          ------------------------------------

          Extraordinary Gain to Common Stockholders                                                      $ 150
          Plus: Interest Expense on 8% Convertible Senior Notes
                                                                                                             -
                                                                                                        ------
          Adjusted Extraordinary Gain                                                                    $ 150
                                                                                                         =====

          Weighted Average Shares Outstanding                                                           14,884
          Plus: Shares Issuable Upon Conversion of
                    8% Convertible Senior Notes                                                            204
                  Shares Issuable Upon Conversion of
                    Stock Options                                                                          922
                  Shares Issuable Upon Conversion of  Warrants                                              31
                                                                                                       -------
          Diluted Weighted Average Shares Outstanding                                                   16,041
                                                                                                       =======
          Diluted Extraordinary Gain Per Share                                                            $.01
                                                                                                          ====
</TABLE>



<PAGE>


<TABLE>
                                                                           Three Months Ended               Nine Months Ended
                                                                                March 31,                       March 31,
                                                                          --------------------            ---------------------
                                                                          2000          1999              2000            1999
                                                                          ----         -----              ----            ----
<S>                                                                        <C>          <C>            <C>               <C>
          Basic Net Income Per Share:
          --------------------------

         Net Income to Common Stockholders                                 $ 240        $ 202          $3,080            $3,715
         Basic Weighted Average Shares Outstanding                        14,892       14,131          14,884            14,122
         Basic Net Income Per  Share                                        $.02         $.01            $.21              $.26
                                                                            ====         ====            ====              ====

          Diluted Net Income Per Share:
          ----------------------------

          Net Income to Common Stockholders                                $ 240        $ 202          $3,080            $3,715
          Plus: Interest Expense on 8% Convertible Senior Notes                2            -               5                21
                                                                          ------        -----          ------            ------
          Adjusted Net Income                                              $ 242        $ 202          $3,085            $3,736
                                                                           =====        =====          ======            ======

          Weighted Average Shares Outstanding                             14,892       14,131          14,884            14,122
          Plus: Shares Issuable Upon Conversion of
                    8% Convertible Senior Notes                              196          943             204               948
                  Shares Issuable Upon Conversion of
                    Stock Options                                            689        1,252             922               569
                  Shares Issuable Upon Conversion of  Warrants                27            -              31                 -
                                                                         -------      -------         -------            -------
          Diluted Weighted Average Shares Outstanding                     15,804       16,326          16,041            15,639
                                                                          ======       ======          ======            ======
          Diluted Net Income Per Share                                      $.02         $.01            $.19              $.24
                                                                            ====         ====            ====              ====
</TABLE>



     Options to purchase 290,000 shares of common stock at prices ranging from
     $1.0625 to $1.75 per share were outstanding as of March 31, 2000, but were
     not included in the computation of diluted net income per share since they
     would be considered antidilutive.



<PAGE>

6.   SEGMENT-RELATED INFORMATION

     The Company has two reportable business segments: intimate apparel and
     retail. The Company's reportable segments are individual business units
     that offer different products and services. They are managed separately
     because each segment requires different strategic initiatives, marketing,
     and advertising based on its own positioning in the market. Additionally,
     these segments reflect the reporting basis used internally by senior
     management to evaluate performance and the allocation of resources.

     The Company's intimate apparel segment designs, sources, manufactures,
     markets and sells an extensive line of ladies' intimate apparel. This
     segment primarily sells to discount, specialty, national and regional
     chain, mass merchandise and department stores and direct mail catalog
     marketers throughout the United States, as well as its Company-owned retail
     stores.

     The retail segment sells apparel products purchased primarily from external
     suppliers, as well as from the Company's intimate apparel segment.

     Intersegment sales and transfers are recorded at cost and treated as a
     transfer of inventory. Senior management does not consider these sales when
     evaluating segment performance. The Company's senior management evaluates
     each segment's performance based upon income or loss from operations before
     interest, nonrecurring gains and losses and income taxes. The operational
     results for the retail division are based on direct operating expenses and
     do not include any indirect corporate overhead.

     The Company's net sales and income from operations for each segment for the
     three and nine months ended March 31, 2000 and 1999 and total assets for
     each segment as of March 31, 2000 and June 30, 1999 were as follows:

                                    Three Months Ended      Nine Months Ended
                                        March 31,               March 31,
                                    ------------------      ------------------
                                     2000      1999          2000         1999
                                    -----      ------       -------       -----
    Net Sales:
         Intimate Apparel         $12,898    $13,024        $50,618     $52,021
         Retail                     1,589      1,691          6,442       7,441
                                  -------    -------        -------     -------
                                  $14,487    $14,715        $57,060     $59,462
                                  =======    =======        =======     =======

    Income (Loss) From Operations:
         Intimate Apparel         $   599    $   789        $ 4,036     $ 5,485
         Retail                         -        (46)           221         351
                                  -------    -------        -------     -------
                                  $   599    $   743        $ 4,257     $ 5,836
                                  =======    =======        =======     =======


                                                           March 31,   June 30,
                                                             2000       1999
                                                           --------    --------
    Segment Assets:
         Intimate Apparel                                   $29,675     $34,061
         Retail                                               2,170       2,698
                                                           -------      ------
                                                           $31,845     $36,759
                                                           =======     =======


<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 Registrant'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 Registrant's customers; and the risk factors listed from time to
time in the Company's SEC reports.

Results of Operations

Net sales for the three months ended March 31, 2000 decreased by 1.5% to
$14,487,000 from $14,715,000 in the comparable period in 1999. The decrease in
sales resulted from lower sales in both the intimate apparel division and the
retail division of approximately $126,000 and $102,000, respectively. Net sales
in the intimate apparel division decreased to $12,898,000 and net sales in the
Company's retail division decreased to $1,589,000.

Net sales for the nine months ended March 31, 2000 decreased by 4% to
$57,060,000 from $59,462,000 in the comparable period in 1999. The decrease in
sales resulted from lower sales in both the intimate apparel division and the
retail division of approximately $1,403,000 and $999,000, respectively. Net
sales in the intimate apparel division decreased to $50,618,000 due to programs
with certain customers being discontinued or reduced which were partially offset
by new programs. Net sales in the Company's retail division decreased to
$6,442,000 due to a reduction in the number of customers that visited our
stores.

At the end of March 2000, the Company closed two of its retail stores that
specialized in plus sized clothing for women. The plus sized lines that were
sold in these stores have been consolidated into existing stores in the same
area.

At the end of January 2000, the Company completed the elimination of the sewing
operation at its manufacturing facility in Virginia. This action was taken to
eliminate the operational inefficiencies the Company experienced in the six
months ended December 31, 1999 at its Virginia manufacturing facility and to
lower overall manufacturing costs. The Company now operates three domestic
distribution facilities and has a minimal amount of domestic production to
accommodate small customer orders or orders with short lead times.

The gross profit percentage increased to 31.8% for the three months ended March
31, 2000 from 29.8% in the similar period in 1999. The gross margin in the
Company's intimate apparel division increased to 30.9% for the three months
ended March 31, 2000 from 29.1% in the similar period in 1999. The higher
margins in the Company's intimate apparel division resulted from an improved




<PAGE>

product mix and cost efficiencies due to the continued shift of production to
offshore locations and the elimination of the sewing operation at its
manufacturing facility in Virginia. The gross margin for the retail division
increased to 39.3% for the three months ended March 31, 2000 as compared to
34.9% in the similar period in 1999. The higher margins in the retail division
resulted from lower markdowns taken in the current three-month period as
compared to the same period in the prior year.

The gross profit percentage increased to 29.4% for the nine months ended March
31, 2000 from 29.3% in the similar period in 1999. The gross margin in the
Company's intimate apparel division decreased to 28.6% for the nine months ended
March 31, 2000 from 28.8% in the similar period in 1999. The lower margins in
the intimate apparel division resulted primarily from the sale of excess
inventory at discounted prices, additional duties on the Company's finished
products and operational inefficiencies at the Company's Virginia manufacturing
facility during the first six months partially offset by an improved product mix
and operational efficiencies in the third quarter. The additional duties were
imposed on finished goods manufactured in Mexico as a result of the Tariff
Preference Levels ("TPL") on certain of the raw materials used in the Company's
products expiring nearly four months earlier in calendar year 1999 as compared
to 1998. Operational inefficiencies were due to the Company's increased reliance
on offshore production which caused an uneven flow of production at the
Company's remaining domestic manufacturing facility during the first two
quarters.

The gross profit percentage for the retail division increased to 35.6% for the
nine months ended March 31, 2000 as compared to 32.8% in the similar period in
1999. The higher margins in the retail division resulted from lower markdowns
taken in the current nine-month period as compared to the same period in the
prior year.

Selling, general and administrative expenses increased to $4,006,000, or 27.7%
of sales, for the three months ended March 31, 2000 as compared to $3,637,000,
or 24.7% of sales, for the similar period in 1999.

Selling, general and administrative expenses attributable to the Company's
intimate apparel division were $3,382,000, or 26.2% of net sales for the three
months ended March 31, 2000, as compared to $3,000,000, or 23.0% of net sales
for the similar period in 1999. This increase of $382,000 resulted primarily
from start-up costs associated with the development of the Company's new Meant
To Be line, salaries and salary related costs and a net increase in other
general overhead expenses. The increase in percentage was due to higher expenses
for the period.

The Company's retail division had selling, general and administrative expenses
of $624,000 or 39.3% of net sales for the three months ended March 31, 2000, as
compared to $637,000, or 37.7% of net sales for the similar period in 1999. This
increase in percentage was primarily due to lower sales for the division.


<PAGE>

Selling, general and administrative expenses increased to $12,534,000 or 22.0%
of sales, for the nine months ended March 31, 2000 as compared to $11,588,000,
or 19.5% of sales, for the similar period in 1999.

Selling, general and administrative expenses attributable to the Company's
intimate apparel division were $10,461,000 or 20.7% of net sales for the nine
months ended March 31, 2000, as compared to $ 9,501,000 or 18.3% of net sales
for the similar period in 1999. This increase of $960,000 resulted primarily
from start-up costs associated with the development of the Company's new Meant
To Be line and the now-discontinued Flora Nikrooz Intimates line, increases in
salaries and salary related costs, utilities and a net increase in other general
overhead expenses. The increase in percentage was due to lower sales for the
division and higher expenses.

The Company's retail division had selling, general and administrative expenses
of $2,073,000, or 32.2% of net sales for the nine months ended March 31, 2000,
as compared to $2,086,000, or 28.0% of net sales for the similar period in 1999.
This increase in percentage was due to lower sales for the division.

Income from operations decreased to $599,000 and $4,257,000 for the three and
nine months ended March 31, 2000 from $744,000 and $5,836,000 for the similar
periods in 1999. The decrease for the three months was due to lower sales and an
increase in selling, general and administrative expenses partially offset by an
increase in gross margins. The decrease for the nine months was due to lower
sales and gross margins and an increase in selling, general and administrative
expenses.

The Company's intimate apparel division had income from operations of $599,000
and $4,036,000 for the three and nine months ended March 31, 2000 as compared to
income from operations of $789,000 and $5,485,000 for the similar periods in
1999. The decrease for the three months was due to lower sales and an increase
in selling, general and administrative expenses partially offset by an increase
in gross margins. The decrease for the nine months was due to lower sales and
gross margins and an increase in selling, general and administrative expenses.

The Company's retail division had no income from operations for the three months
ended March 31, 2000 and had income from operations of $221,000 for the nine
months ended March 31, 2000 as compared to a loss from operations of $46,000 and
income from operations of $351,000 for the similar periods in 1999. The
improvement for the three months was due to an increase in gross margins offset
by a decrease in sales. The decrease for the nine months was due to lower sales
partially offset by an increase in gross margins. The operational results for
the retail division are based on direct operating expenses and do not include
any indirect corporate overhead.

During the second quarter ended December 31, 2000, the Company purchased an
aggregate of $2,786,000 in principal amount of its 12.875% subordinated
debentures. With $903,000 of these debentures and in conjunction with previously
acquired debentures, the Company will satisfy its sinking fund requirement due
October 1, 2000. As a result of the purchase of $903,000 of these debentures,



<PAGE>

the Company recorded a pre-tax gain of $50,000, net of related costs. The
remaining $1,883,000 will be applied to the final payment due on October 1,
2001. As a result of the purchase of $1,883,000 of these debentures, the Company
recorded an extraordinary gain of $150,000, net of related costs and income
taxes.

During the first quarter ended September 30, 1999, the Company purchased an
aggregate of $2,834,000 in principal amount of its 12.875% subordinated
debentures. As a result, the Company recorded a pre-tax gain of $114,000, net of
related costs. The Company will reduce its mandatory sinking fund requirement
due on October 1, 2000 with these debentures.

Interest income for the three and nine months ended March 31, 2000 was $33,000
and $53,000, respectively, as compared to $56,000 and $59,000 for the similar
periods in 1999.

Interest expense for the three and nine months ended March 31, 2000 was $384,000
and $1,481,000, respectively, as compared to $594,000 and $2,104,000 for the
similar periods in 1999. These reductions were due to reduced overall borrowing
needs, a lower interest rate on the Company's revolving line of credit and the
purchases of its 12.875% subordinated debentures.

The Company provided for an alternative minimum tax of $5,000 and $63,000 for
the three and nine months ended March 31, 2000, respectively, as compared to
$4,000 and $76,000 for the similar periods in 1999.

The Company had net income of $240,000 and $3,080,000 for the three and nine
months ended March 31, 2000, respectively, as compared to $202,000 and
$3,715,000 for the similar periods in 1999. The increase for the three months
was due to an increase in gross margins and lower net interest costs offset
partially by lower sales and an increase in selling, general and administrative
expenses and a higher provision for income taxes. The reduction for the nine
months was due to lower sales and an increase in selling, general and
administrative expenses offset partially by an increase in gross margins, a gain
on the purchase of the Company's 12.875% subordinated debentures, lower net
interest costs and a lower provision for income taxes.

Liquidity and Capital Resources

For the nine months ended March 31, 2000, the Company's working capital
decreased by $2,298,000 to $20,318,000, principally from the purchases of
long-term debt, partially offset by operating profits.

During the nine months ended March 31, 2000, cash decreased by $2,106,000. The
Company used cash of $141,000 for the purchase of fixed assets, and $5,316,000
for the repayments on and purchases of long-term debt. These activities were
funded with cash generated from profitable operations of $3,319,000 and the sale
of fixed assets of $32,000.


<PAGE>

Receivables at March 31, 2000 increased by $2,625,000 to $9,489,000 from
$6,864,000 at June 30, 1999. This increase is due to normal seasonal shipping
fluctuations within the period in the Company's intimate apparel division.

Inventory at March 31, 2000 decreased by $4,799,000 to $11,661,000 from
$16,460,000 at June 30, 1999. This decrease, was reflected in both the intimate
apparel and retail division inventories. The decrease in the intimate apparel
division was the result of normal fluctuations in sales and the Company's
decision to purchase more finished good packages in fiscal 2000, thereby
reducing the Company's need to purchase and maintain an inventory of the raw
materials associated with those finished goods. Also, the Company has continued
to reduce the level of excess and closeout finished goods on hand. The inventory
for the retail division decreased due to normal fluctuations in sales during the
July through December period and the decision to carry a lower inventory in an
effort to minimize markdowns.

In January 2000, holders of $6,500 in principal amount of the Company's 8%
Convertible Senior Notes converted their Notes into 17,333 shares of the
Company's common stock, par value $.01.

During the second quarter ended December 31, 2000, the Company purchased an
aggregate of $2,786,000 in principal amount of its 12.875% subordinated
debentures. With $903,000 of these debentures and in conjunction with previously
acquired debentures, the Company will satisfy its sinking fund requirement due
October 1, 2000. As a result of the purchase of $903,000 of these debentures,
the Company recorded a pre-tax gain of $50,000, net of related costs. The
remaining $1,883,000 will be applied to the final payment due on October 1,
2001. As a result of the purchase of $1,883,000 of these debentures, the Company
recorded an extraordinary gain of $150,000, net of related costs and income
taxes.

During the first quarter ended September 30, 1999, the Company purchased an
aggregate of $2,834,000 in principal amount of its 12.875% subordinated
debentures. As a result, the Company recorded a pre-tax gain of $114,000, net of
related costs. The Company will reduce its mandatory sinking fund requirement
due on October 1, 2000 with these debentures.

The Company does not anticipate making any purchases of its stock and
anticipates that capital expenditures for fiscal 2000 will be less than
$400,000.

Following the first and second quarter purchases of the Company's 12.875%
subordinated debentures, the Company has $14,988,500 in long-term debt and a
secured revolving line of credit of up to $13,500,000. The long-term debt
consists of $4,367,000 of 12.875% Subordinated Debentures, $10,550,000 8% Senior
Notes, and $71,500 8% Convertible Senior Notes. The remaining balance of
$4,367,000 of the 12.875% Subordinated Debentures is due on October 1, 2001. The
8% Senior Notes and the 8% Convertible Senior Notes do not require any
amortization and mature on September 1, 2001. The $71,500 8% Convertible Senior



<PAGE>

Notes are convertible into the Company's common stock, at any time prior to
maturity, at a price of $0.375 per share.

The Company's secured revolving line of credit does not expire until July 1,
2001 and is sufficient for the Company's projected needs for operating capital
and letters of credit to fund the purchase of imported goods. Direct borrowings
under this line bear interest at the prime rate of Chase Manhattan Bank.
Availability under the line of credit is subject to certain agreed upon
formulas. Under the terms of this financing, the Company has agreed to pledge
substantially all of its assets, except the Company's domestic inventory and
real property.

Management believes its available borrowing under its secured revolving line of
credit, along with anticipated internally generated funds, will be sufficient to
cover its working capital requirements. Management is also currently exploring
alternatives for refinancing the long-term debt.

Recently Issued Accounting Standard

Recently Issued Accounting Standard - In June 1998, the Financial Accounting
Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities." This Statement establishes accounting and reporting
standards for derivative instruments and hedging activities. It requires the
recognition of all derivatives as either assets or liabilities in the statement
of financial position and measurement of those instruments at fair value. The
accounting for changes in the fair value of a derivative is dependent upon the
intended use of the derivative. SFAS No. 133 will be effective in the Company's
first quarter of the fiscal year ending June 30, 2001 and retroactive
application is not permitted. The Company has not yet determined whether the
application of SFAS No. 133 will have a material impact on its financial
position or results of operations.

Imports

The Company's transactions with its foreign manufacturers and suppliers are
subject to the risks of doing business abroad. 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>

Year 2000

Overview

The Year 2000 issue is primarily the result of computer programs only accepting
a two-digit date code, as opposed to four digits, to indicate the year.
Beginning in the Year 2000, and in certain instances prior to the Year 2000,
these date code fields needed to accept four digit entries to distinguish 21st
century dates from 20th century dates.

Internal Systems and Equipment

The Company completed its comprehensive program of identifying, assessing and,
when necessary, upgrading and/or replacing its systems and equipment that were
vulnerable to Year 2000 problems. The Company has also successfully tested,
implemented and installed all new systems and equipment that were required to
make the Company's systems and equipment Year 2000 compliant.

Third Party Relationships

The Company formally communicated with its significant suppliers and customers
to determine if those parties had appropriate plans to remedy Year 2000 issues
when their systems interface with the Company's systems or may otherwise impact
the operations of the Company. The Company substantially completed its review
and believes that its major customers and suppliers have addressed their Year
2000 issues. The Company has been successfully interfacing with its customers
and suppliers and has not encountered any Year 2000 issues to date. However,
there can be no assurance, that the Company has interfaced with all of its
significant suppliers and customers or that the systems of other companies on
which the Company's processes rely have been timely converted, or that a failure
to successfully convert by another company, or a conversion that is incompatible
with the Company's systems, would not have an impact on the Company's operations
in the future.

Costs

Management currently estimates that the cost, in connection with bringing its
own systems and equipment into compliance, was less than $50,000 for fiscal
1998, less than $150,000 for fiscal 1999 and less than $50,000 for fiscal 2000.


<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

        Number       Exhibit
        ------       -------

        10.13        Employment Agreement dated as of February 22, 2000
                     Between Saul Pomerantz and the Company *

        10.14        Employment Agreement dated as of February 22, 2000
                     Between Melvyn Knigin and the Company  *

              (b) Form 8-K Report - None

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

*    Filed herewith.


                                   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
                                                  Principal Financial &
                                                  Accounting Officer

May 15, 2000