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 December 31, 2001


                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. 1001
 -------------------------------------------------------------------------------
               (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 January 31, 2002 was
15,084,975.



<page>

<Table>
<Caption>

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



                                                                                            December 31,        June 30,
                                                                                                 2001            2001*
                                                                                             -----------       --------
                                                                                             (Unaudited)

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

Current Assets
 Cash                                                                                        $   209           $   261
 Receivables, net                                                                              8,017             7,859
 Inventory                                                                                    10,977            11,947
 Prepaid expenses and other current assets                                                     2,307             2,544
                                                                                              ------            ------
        Total current assets                                                                  21,510            22,611

Property, plant and equipment, net                                                             1,400             2,217
Other assets                                                                                   2,990             2,971
                                                                                              ------            ------

        Total assets                                                                         $25,900           $27,799
                                                                                             =======           =======

                      Liabilities and Shareholders' Equity

Current Liabilities
 Notes payable                                                                               $ 8,157           $ 3,734
 Current maturities of long-term debt and capital lease obligations                               49             6,593
 Accounts payable and accrued expenses                                                         3,786             4,351
                                                                                              ------            ------
         Total current liabilities                                                            11,992            14,678
                                                                                              ------            ------

Capital lease obligations                                                                         50                70
                                                                                              ------            ------

Deferred lease liability                                                                          85                30
                                                                                              ------            ------

Commitments and Contingencies                                                                     -                  -

Shareholders' equity
 Common stock, $.01 par value - authorized 30,000,000 shares; issued 17,102,000
  shares in December 2001
   and 16,954,000 in June 2001                                                                   171               170
 Additional paid-in capital                                                                    4,147             4,092
 Retained earnings                                                                            13,073            12,377
                                                                                              ------            ------
                                                                                              17,391            16,639

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

         Total shareholders' equity                                                           13,773            13,021
                                                                                              ------            ------

Total liabilities and shareholders' equity                                                   $25,900           $27,799
                                                                                             =======           =======
</Table>


* Derived from audited financial statements.

See notes to consolidated condensed unaudited financial statements.


<Page>

<Table>
<Caption>

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

                                                                              Three Months Ended             Six Months Ended
                                                                                   December 31,                 December 31,
                                                                              -------------------            -------------------
                                                                               2001          2000            2001            2000
<S>                                                                        <C>             <C>               <C>         <C>

Net sales                                                                   $15,354        $19,880           $30,317        $37,131
Cost of sales                                                                10,893         14,015            21,706         25,820
                                                                             -------        -------            -------       -------
  Gross profit                                                                4,461          5,865             8,611         11,311

Selling, general and administrative expenses                                  3,575          4,152             7,025          7,806
Loss on closing of distribution facility                                          -          1,008                            1,008
                                                                             ------        -------            -------        ------

  Operating income from continuing operations                                   886            705             1,586          2,497

Interest income                                                                  (1)            (2)               (2)            (3)
Interest expense                                                                228            446               501            880
                                                                             -------        -------            -------        ------
  Income from continuing operations before income taxes and
    extraordinary gain                                                          659            261             1,087          1,620
Income taxes                                                                    264              5               434             32
                                                                              ------        -------            -------        ------

  Income from continuing operations before extraordinary gain                   395            256               653          1,588

Discontinued operations
  Income from operations of discontinued retail stores, net of income
    taxes                                                                         -            251                43            189
  Loss on disposal of discontinued retail stores, including provision
    for operating losses during phase-out period, net of income taxes             -           (731)                -           (731)
                                                                              ------        -------            -------        ------

  Income (loss) before extraordinary gain                                       395           (224)              696          1,046

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

  Net income                                                                  $ 395          $ 124             $ 696        $ 1,394
                                                                             ======        =======            ======        =======

  BASIC NET INCOME (LOSS) PER SHARE
    From continuing operations                                                $ .03          $.02               $.05           $.11
    From discontinued operations                                                 -           (.03)                 -           (.04)
    From extraordinary gain                                                      -            .02                  -            .02
                                                                              ------        -------            -------        ------
    Net income per share                                                      $ .03          $.01               $.05           $.09
                                                                              ------        -------            -------        ------

  DILUTED NET INCOME (LOSS) PER SHARE
    From continuing operations                                                $.03           $.02               $.05           $.11
    From discontinued operations                                                 -           (.03)                 -           (.04)
    From extraordinary gain                                                      -            .02                 -             .02
                                                                            ------        -------             ------         ------
    Net income per share                                                      $.03           $.01              $.05           $.09
                                                                            ======        =======             ======         =======

Basic weighted average number of shares outstanding                         15,085         14,897             15,085         14,897
                                                                            ======        =======             ======         ======
Diluted weighted average number of shares outstanding                       15,110         15,313             15,134         15,366
                                                                            ======        =======             ======         ======
</Table>

See notes to consolidated condensed unaudited financial statements.


<Page>

<Table>
<Caption>

                                MOVIE STAR, INC.

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


                                                                                                    Six Months Ended
                                                                                                      December 31,

                                                                                             2001                   2000
                                                                                       ----------------          -----------
<S>                                                                                   <C>                          <C>

CASH FLOWS FROM CONTINUING OPERATING ACTIVITIES:
 Net income                                                                                       $ 696          $ 1,394
    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                                                                   200              279
    Provision for allowance for doubtful accounts                                                    88              282
    Non-cash impairment charge                                                                        -              915
    Deferred income taxes                                                                            29                -
    Deferred lease liability                                                                         55                -
  (Gain) loss on discontinued operations                                                            (43)             542
 (Increase) decrease in operating assets:
    Receivables                                                                                    (246)           (1,520)
    Inventory                                                                                       970            2,162
    Prepaid expenses and other current assets                                                       237               53
    Other assets                                                                                    (56)              284
  Decrease in operating liabilities:
    Accounts payable and accrued expenses                                                          (515)             (416)
                                                                                                 -------         --------

    Net cash provided by continuing operating activities                                           1,415             3,627
                                                                                                  ------          --------

 CASH FLOWS FROM CONTINUING INVESTING ACTIVITIES:
  Purchases of property, plant and equipment                                                        (111)             (70)
  Proceeds from sale of property, plant and equipment                                                729              105
                                                                                                  ------         --------
      Net cash provided by continuing investing activities                                           618               35
                                                                                                  ------         --------

 CASH FLOWS FROM CONTINUING FINANCING ACTIVITIES:
  Repayments on and purchases of long-term debt and
    capital lease obligations                                                                    (6,508)          (2,883)
  Proceeds from (repayment of) revolving line of credit, net                                      4,423           (1,105)
                                                                                                 ------          --------

      Net cash used in continuing financing activities                                           (2,085)           (3,988)
                                                                                                 ------          --------

     Cash provided by discontinued operations                                                         -                66
                                                                                                -------           -------

 NET DECREASE IN CASH                                                                               (52)             (260)
 CASH, beginning of period                                                                          261               712
                                                                                                 ------          --------

 CASH, end of period                                                                              $ 209            $  452
                                                                                                 ======          ========

                                                                                                                (Cont'd)



<Page>


                                MOVIE STAR, INC.

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




                                                                                                      Six Months Ended
                                                                                                        December 31,
                                                                                                      ----------------
                                                                                                  2001              2000
                                                                                                 ------             ----

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during period for:
     Interest                                                                                     $ 707             $ 927
                                                                                                  =====             =====

     Income taxes (net of refunds received)                                                       $   2              $ 43
                                                                                                  =====             =====


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 December 31, 2001 and the results of operations for the
       interim periods presented and cash flows for the six months ended
       December 31, 2001 and 2000, 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 consolidated condensed balance sheet was derived from the
       Company's audited financial statements. The results of operations for the
       three and six months ended December 31, 2001 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):

                                       December 31,                June 30,
                                         2001                       2001
                                       -----------              -----------

          Raw materials                  $1,329                   $2,204
          Work-in process                   452                      692
          Finished goods                  9,196                    9,051
                                         ------                   ------
                                        $10,977                  $11,947
                                        =======                  =======


3.     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>

4.     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          Six Months Ended
                                                                         December 31,                December 31,
                                                                     -------------------          ----------------
                                                                        2001        2000          2001         2000
                                                                       -----       ------        -----        -----
<S>                                                                     <C>             <C>       <C>        <C>

     BASIC:
  Income from continuing operations to common shareholders               $395       $256          $653      $1,588
  Income (loss) from discontinued operations                                -       (480)           43        (542)
  Extraordinary gain                                                        -        348             -         348
                                                                        -----     ------         -----       -----
  Net income attributable to common shareholders                        $ 395      $ 124         $ 696      $1,394
                                                                        =====       ====         =====       =====

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

  Basic net income (loss) per share:
    From continuing operations                                          $ .03      $ .02         $ .05       $ .11
    From discontinued operations                                            -       (.03)            -        (.04)
    From extraordinary gain                                                 -        .02             -         .02
                                                                        -----      ------        -----       -----
  Basic net income per share                                            $ .03      $ .01         $ .05       $ .09
                                                                        =====      =====         =====       =====

     DILUTED:
  Income from continuing operations to common shareholders               $395       $256         $ 653     $ 1,588
  Income (loss) from discontinued operations                                -       (480)           43        (542)
  Extraordinary gain                                                        -        348             -         348
  Plus: Interest Expense on 8% Convertible Senior Notes                     -          1             -           3
                                                                        -----      ------        -----       -----
  Adjusted net income attributable to common shareholders               $ 395      $ 125         $ 696     $ 1,397
                                                                        =====      =====         =====     =======

  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                   13        206            35         258
        Shares Issuable Upon Conversion of Warrants                        12         19            14          20
                                                                        -----     ------         -----       -----
   Total average number of equivalent shares outstanding               15,110     15,313        15,134      15,366
                                                                       ======     ======        ======      ======

  Diluted net income per share:
    From continuing operations                                          $ .03      $ .02         $ .05       $ .11
    From discontinued operations                                            -       (.03)            -        (.04)
    From extraordinary gain                                                 -        .02             -         .02
                                                                        -----      ------        -----       -----
  Diluted net income per share                                          $ .03      $ .01         $ .05       $ .09
                                                                        =====      =====         =====       =====
</Table>

       Options to purchase 2,560,000 shares of common stock at prices
       ranging from $.625 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 December 31, 2001 and 2000, respectively, but were
       not included in the computation of diluted net income per share since
       they would be considered antidilutive. In addition, in the six-month
       period ended December 31, 2000, no potential common shares have been
       included in the calculation of diluted net income per share from
       discontinued operations because of the loss reported.

5.     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 a charge in the second
       quarter ended December 31, 2000 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.
<page>

       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
       December 31, 2001, there are no remaining accruals relating to severance
       and other employee benefits and exit costs.

6.     In December 2000, management decided to shutdown the retail segment and
       discontinued all operations in March 2001. Accordingly, the Company
       recorded no income (loss) from discontinued operations for the three
       months ended December 31, 2001 and recorded income of $43,000 for the six
       months ended December 31, 2001, net of income taxes of $29,000 as
       compared to income from discontinued operations of $251,000 and $189,000,
       net of income taxes of $5,000 and $4,000 for the three and six months
       ended December 31, 2000, respectively. The Company's income for the six
       months ended December 31, 2001 resulted primarily from a gain on the sale
       of the remaining property of the retail segment of $55,000 and the
       reversal of certain liabilities in the amount of $17,000 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 three months ended
       December 31, 2000.

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

                                                                   Three Months Ended              Six Months Ended
                                                                       December 31,                   December 31,
                                                                     2001           2000          2001         2000
                                                                    -----         ------         -----        -----
<S>                                                                   <C>             <C>         <C>        <C>

       Net sales                                                       $ -        $2,290           $ -       $3,633
       Costs and expenses, net of other income                           -         2,034           (72)       3,440
       Income taxes                                                      -             5            29            4
                                                                     -----        ------         -----        -----
       Net income from discontinued operations                         $ -         $ 251          $ 43        $ 189
                                                                     =====        ======        ======        =====
</Table>

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


                                                       December 31,     June 30,
                                                         2001            2001*
                                                      ---------         --------
       Cash                                              $ 2              $ 12
       Property, plant and equipment, net                  -               106
       Other assets                                      189               218
                                                      -------            -------
       Total assets of discontinued operations         $ 191              $336
                                                      =======            =======

       Accounts payable and accrued expenses            $ 74              $105
                                                       ------            ------
       Total liabilities of discontinued operations     $ 74              $105
                                                       ======            ======


       As of December 31, 2001, the Company has $74,000 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.

Results of Continuing Operations

Net sales were $15,354,000 and $30,317,000 for the three and six months ended
December 31, 2001 as compared to $19,880,000 and $37,131,000 for the comparable
periods in 2000. 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 29.1% for the three months ended
December 31, 2001 from 29.5% in the similar period in 2000. The gross profit
percentage decreased to 28.4% for the six months ended December 31, 2001 from
30.5% in the similar period in 2000. 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 $3,575,000, or 23.3%
of sales, for the three months ended December 31, 2001 as compared to
$4,152,000, or 20.9% of sales, for the similar period in 2000. This decrease of
$577,000 resulted primarily from decreases in bad debt expense of $268,000,
shipping expense of $175,000, salary expense of $158,000 and an overall net
decrease in other selling, general and administrative expenses, offset partially
by an increase in rent expense of $147,000.

Selling, general and administrative expenses decreased to $7,025,000 or 23.2% of
sales, for the six months ended December 31, 2001 as compared to $7,806,000, or
21.0% of sales, for the similar period in 2000. This decrease of $781,000
resulted primarily from decreases in shipping expense of $319,000, bad debt
expense of $268,000, salary expense of $198,000, commission expense of $118,000
and an overall net decrease in other selling, general and administrative
expenses, offset partially by an increase in rent expense of $301,000.

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.

Income from operations was $886,000 and $1,586,000 for the three and six months
ended December 31, 2001, as compared to $705,000 and $2,497,000 for the similar
periods in 2000. 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 six 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 six months ended December 31, 2001 was $1,000
and $2,000, respectively, as compared to $2,000 and $3,000 for the similar
periods in 2000.

Interest expense for the three and six months ended December 31, 2001 was
$228,000 and $501,000, respectively, as compared to $446,000 and $880,000 for
the similar periods in 2000. These reductions were due to lower borrowing levels
and interest rates.

The Company provided for income taxes of $264,000 and $434,000 for the three and
six months ended December 31, 2001, as compared to an alternative minimum tax of
$5,000 and $32,000 for the same period in 2000. 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 determined 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 December 31, 2001
and had income from discontinued operations of $43,000 for the six months ended
December 31, 2001 as compared to a loss from discontinued operations of $480,000
and $542,000 for the similar periods in 2000. In the second quarter ended
December 31, 2000, 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 six-month period relates to the sale of certain assets that were
fully depreciated.

Extraordinary Gain

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.

Net Income

The Company had net income of $395,000 and $696,000 for the three and six months
ended December 31, 2001, respectively, as compared to $124,000 and $1,394,000
for the similar periods in 2000. The increase for the three months was due to
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, partially offset by 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. The decrease for the six 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.

<page>
Liquidity and Capital Resources

Our cash requirements are primarily for working capital and historically, have
been met through cash flow from operations and borrowings under our credit
facility.

For the six months ended December 31, 2001, the Company's working capital
increased by $1,585,000 to $9,518,000 primarily from profitable operations and
the sale of non-operating assets offset partially by the payment of long-term
debt.

During the six months ended December 31, 2001, cash decreased by $52,000. The
Company used cash of $111,000 for the purchase of fixed assets and $6,508,000
for the repayment and purchases of long-term debt and the payment of lease
obligations. Cash generated from continuing operations of $1,415,000, an
increase in short-term borrowings of $4,423,000 and proceeds from the sale of
certain non-operating assets aggregating $729,000 funded these activities.

Receivables at December 31, 2001 increased by $158,000 to $8,017,000 from
$7,859,000 at June 30, 2001. This increase is due to normal shipping
fluctuations within the period.

Inventory at December 31, 2001 decreased by $970,000 to $10,977,000 from
$11,947,000 at June 30, 2001. The decrease was the result of normal fluctuations
in the period.

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.

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.

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 that
expires July 1, 2004. Direct borrowings under this line bear interest at the
prime rate of Chase Manhattan Bank but not less than 6% 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. At December 31, 2001, the Company had borrowings of $8,081,000
outstanding under this line of credit at an interest rate of 6% and also had
approximately $2,239,000 of outstanding letters of credit. At February 8, 2002,
the Company had borrowings of $7,476,000 outstanding and $3,797,000 was
available to be borrowed under the credit facility.

The Company has lease commitment obligations at December 31, 2001 through
December 31, 2010 of $10,556,000 associated with its leased property in New
York. Historically, the Company has financed such commitments with cash from
operations. The Company believes it will continue to finance these obligations
in this fashion during 2002.

<page>

The Company anticipates that capital expenditures for fiscal 2002 will be less
than $350,000. Historically, the Company has financed such capital expenditures
with cash from operations. The Company believes it will continue to finance
certain capital expenditures in this fashion during 2002.

The Company currently believes that the cash generated by operations, together
with the borrowing availability under the credit facility, will be sufficient
for the Company's projected needs for working capital and letters of credit to
fund the purchase of imported goods during 2002.


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.

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 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.
<page>

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>



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


February 13, 2002