SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                -----------------
                                    FORM 10-Q
(Mark One)

[X]        QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
           EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1996
                                               ------------------
                                       OR

[_]        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 1-5354
                                                 ------

                                   SWANK, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           Delaware                                             04-1886990
--------------------------------------------------------------------------------
(State or other jurisdiction of                               (IRS employer
 incorporation or organization)                           identification Number)


6 Hazel Street, Attleboro, Massachusetts                           02703
--------------------------------------------------------------------------------
(Address of principal executive offices)                         (Zip code)

Registrant's telephone number, including area code     508-222-3400
                                                      --------------

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

           Indicate  by X 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 [_]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

           Indicate by check mark whether the registrant has filed all documents
and reports  required  to be filed by Section 12, 13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court: Yes ___   No ___

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

           Indicate  the number of shares  outstanding  of each of the  issuer's
classes of common stock as of the latest practicable date:

      Title of Class                      Shares Outstanding on October 25, 1996
      --------------                      --------------------------------------
Common stock, $.10 par value                          16,509,523


<PAGE>
                          PART I - FINANCIAL STATEMENTS

Item 1.    Financial  Statements. CONDENSED  CONSOLIDATED  BALANCE  SHEETS
--------------------------------------------------------------------------
           (UNAUDITED)
           -----------
(Dollars in thousands)
<TABLE>
<CAPTION>
                                     ASSETS                          SEPTEMBER 30, 1996             DECEMBER 31, 1995
                                                                   ----------------------         -----------------------
Current:
<S>                                                             <C>              <C>             <C>              <C>    
  Cash and temporary cash investments                                            $    924                         $ 1,121
  Accounts receivable, less allowances
    of $6,491 and $9,907                                                           16,006                          10,704
  Inventories, at the lower of cost
    or market
            Raw materials                                          $ 5,324                         $ 5,092
            Work-in-process                                          7,269                           6,476
            Finished goods                                          14,968         27,561           17,602         29,170
                                                                 ---------                       ---------
  Recoverable income taxes                                                                                          1,665
  Deferred income taxes                                                             1,890                           1,890
  Prepaid and other                                                                 1,735                           1,218
                                                                                ---------                       ---------

                        Total current assets                                       48,116                          45,768
Property, plant and equipment, at cost                              22,764                          22,472
Obligations under capital lease                                      1,404                           1,466
   Less accumulated depreciation
      and amortization                                             (17,234)         6,934          (16,481)          7,457
                                                                 ---------                       ---------

Deferred income taxes                                                                 399                             399
Other assets                                                                        2,965                           3,700
                                                                                ---------                       ---------
Total Assets                                                                      $58,414                         $57,324
                                                                                =========                       =========

                                   LIABILITIES
Current:
  Notes payable to banks                                                          $19,472                         $14,800
  Current portion of long-term
    obligations                                                                       235                             235
  Accounts payable, trade                                                           4,299                           5,870
  Accrued employee compensation                                                     1,075                           1,408
  Other liabilities                                                                 9,578                           8,696
                                                                                ---------                       ---------
                        Total current liabilities                                  34,659                          31,009

Long-term obligations                                                               5,557                           5,782
                                                                                ---------                       ---------
                        Total liabilities                                          40,216                          36,791
                                                                                ---------                       ---------

                    STOCKHOLDERS' EQUITY

  Preferred stock, par value $1.00
    Authorized 1,000,000 shares 
  Common stock, par value $.10:
    Authorized 43,000,000 shares
            Issued 16,843,042 and 16,843,042                         1,684                           1,684
  Capital in excess of par value                                       852                             852
  Retained earnings                                                 17,576         20,112           19,477         22,013
                                                                 ---------                       ---------

  Deferred employees' benefits,
            1,167,617 and 664,461 shares                                            1,205                             771
Treasury stock, at cost 333,519
            and 333,519 shares                                                        709                             709
                                                                                ---------                       ---------
               Total stockholders' equity                                          18,198                          20,533
                                                                                ---------                       ---------
Total liabilities and stockholders' equity                                        $58,414                         $57,324
                                                                                =========                       =========
</TABLE>
               The accompanying notes are an integral part of the
                  condensed consolidated financial statements.

                                       -2-
<PAGE>

                                   SWANK, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
               FOR THE QUARTERS ENDED SEPTEMBER 30, 1996 AND 1995
                             (Dollars in thousands)
                                ----------------





                                                      1996             1995
                                                  ------------     ------------


Net Sales                                         $     31,630     $     35,320

Cost of goods sold                                      18,673           22,457
                                                  ------------     ------------

Gross profit                                            12,957           12,863

Selling and administrative expenses                     12,846           14,323
                                                  ------------     ------------

Income (loss) from operations                              111           (1,460)

Interest charges                                           471              689
                                                  ------------     ------------

Loss before income taxes                                  (360)          (2,149)

Benefit for income taxes                                   (90)            (774)
                                                  ------------     ------------

Net loss                                          $       (270)    $     (1,375)
                                                  ------------     ------------

Share and per share information:

Weighted average common shares outstanding          15,776,448       15,957,024

Net loss per share                                $       (.02)    $       (.09)
                                                  ------------     ------------





               The accompanying notes are an integral part of the
                  condensed consolidated financial statements.

                                       -3-

<PAGE>

                                   SWANK, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                             (Dollars in thousands)
                                ----------------




                                                      1996              1995
                                                  ------------     ------------

Net Sales                                         $     91,587     $     93,539

Cost of goods sold                                      54,148           57,726
                                                  ------------     ------------

Gross profit                                            37,439           35,813

Selling and administrative expenses                     38,537           43,144
                                                  ------------     ------------

Loss from operations                                    (1,098)          (7,331)

Interest charges                                         1,437            1,432
                                                  ------------     ------------

Loss before income taxes                                (2,535)          (8,763)

Benefit for income taxes                                  (634)          (3,155)
                                                  ------------     ------------

Net loss                                          $     (1,901)    $     (5,608)
                                                  ------------     ------------


Share and per share information:

Weighted average common shares outstanding          15,688,155       16,210,222

Net loss per share                                $       (.12)    $       (.35)
                                                  ------------     ------------








               The accompanying notes are an integral part of the
                  condensed consolidated financial statements.

                                       -4-

<PAGE>



                                   SWANK, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                             (Dollars in thousands)
                                   ----------
<TABLE>
<CAPTION>
                                                                      1994        1995
                                                                    --------    --------
<S>                                                                 <C>         <C>      
Cash flow from operating activities:

  Net loss                                                          $ (1,901)   $ (5,608)

  Adjustments to reconcile net loss to operating cash flows:

  Increase in post-retirement benefits                                   264         203
  Depreciation and amortization                                        1,026         842
  Loss on disposals of fixed assets                                       55
  Decrease in receivable reserves                                     (2,606)     (2,681)

  Change in assets and liabilities
    Decrease in accounts receivable                                   (2,695)     (2,420)
    Decrease (increase) in inventory                                   1,609      (6,591)
    Decrease (increase) in prepaid and other                           2,188      (4,398)
    Decrease in accounts payable and accrued other                    (1,622)        (48)
                                                                    --------    --------

                        Net cash used in operating activities         (3,682)    (20,701)
                                                                    --------    --------

  Cash flow from investing activities:

    Capital expenditures, net of proceeds                               (558)       (602)
                                                                    --------    --------

                        Net cash used in investing activities           (558)       (602)
                                                                    --------    --------

  Cash flow from financing activities:

    Borrowing under revolving credit agreements                       55,482      35,350
    Payments of revolving credit agreements                          (50,810)    (11,750)
    Principal payments of long-term debt                                --        (2,920)
    Payments of capital lease obligations                               (194)
    Advance to employees stock ownership trust                          (435)       (678)
    Proceeds from exercise of employee's options stock options          --            30
                                                                    --------    --------

                        Net cash provided by financing activities      4,043      20,032
                                                                    --------    --------

  Net decrease in cash and equivalents                                  (197)     (1,271)

  Cash and equivalents at beginning of period                          1,121       2,153
                                                                    --------    --------

  Cash and equivalents at end of period                             $    924    $    882
                                                                    --------    --------
</TABLE>
               The accompanying notes are an integral part of the
                  condensed consolidated financial statements.

                                       -5-

<PAGE>



         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
         ---------------------------------------------------------------

(1)The   unaudited   information   furnished  herein  reflects  all  adjustments
(consisting only of normal recurring  adjustments)  which are, in the opinion of
management, necessary to present a fair statement of the results for the periods
ended September 30, 1996 and 1995. The financial  information  contained  herein
represents  condensed  financial  data  and,  therefore,  does not  include  all
footnote disclosures required to be included in financial statements prepared in
conformity with generally accepted accounting  principles.  Footnote information
was  included in the  Company's  annual  report on Form 10-K for the fiscal year
ended December 31, 1995; the condensed  financial data included herein should be
read in conjunction with the information in the annual report.

(2) During the nine month period ended  September 30, 1996,  the Company has not
incurred any material changes in the commitments and contingencies as previously
referenced in Footnote I of the 1995 annual report.

(3)The Health Insurance and  Accountability  Act of 1996 (the "Act")  eliminates
the  deduction  of  interest  on policy  loans on a  significant  portion of the
Company's corporate owned life insurance by 1999 and,  therefore,  substantially
increases the after tax cost of maintaining these policies.  The Company and its
advisers are currently  assessing the  implications of the Act and analyzing the
Company's  options.  The  Company has not yet made a  determination  whether the
policies should remain in force. If a decision is made to terminate the policies
the  Company  will,  at that time,  recognize a deferred  income tax  liability,
currently estimated at up to $3,000,000, for the previously untaxed accumulation
in policy values.  However,  if such a decision is made during 1996, the Company
anticipates no change to its effective  1996 tax rate from the potential  impact
of the Act's provisions because the amount of estimated  additional deferred tax
liability does not exceed the valuation  allowance  previously  recorded against
the Company's  deferred tax assets.  In the event that the policies are actually
surrendered,  the  additional  taxable  income will be recognized for tax return
purposes ratably over a four year period beginning with the year of surrender.

(4) On May 24, 1996 the Company obtained new working capital  financing from IBJ
Schroder Bank & Trust  Company,  as agent for the lenders  thereunder  (the "New
Lenders"),  for up to  $25,000,000,  with a sublimit of $3,000,000 in letters of
credit (the "New  Agreement").  The proceeds of the New Agreement  were used, in
part, to repay all but $4 million of the outstanding  balance under the previous
facility.

         The New Agreement is available through April 1999 and is collateralized
by all of the Company's  assets.  The New Lenders have a senior lien position on
all assets other than real property, improvements and certain fixtures, in which
the  Company's  other  institutional  lenders  maintain  a  senior  position  to
collateralize a $4,000,000 term loan, as described  below,  and in which the New
Lenders have a subordinate lien. The New Agreement permits the Company to borrow
against a percentage of eligible accounts receivable and inventory and its loans
bear an interest rate of 1.5% over the New Lenders'  prime lending rate. The New
Agreement  also contains a facility fee of 1/2% per annum on the unused  portion
of the revolving credit facility.

         The terms of the New Agreement include covenants  requiring the Company
to maintain  certain  financial  ratios for the nine months ended  September 30,
1996.  These  include  a  maximum  leverage  ratio of 4.0 to 1 and an  inventory
turnover  of at least 2 times.  As of  September  30,  1996 the  Company  was in
compliance  with these  covenants.  The New Agreement  also  includes  covenants
pertaining  to  profitability,  limiting  capital  expenditures  and  additional
indebtedness.  The Company  believes the inventory  turnover  covenant to be the
most restrictive,  requiring a minimum inventory  turnover as high as 2.25 times
during the term of the New  Agreement.  The New  Agreement  also  prohibits  the
payment of dividends.  Management  believes  this credit  facility will meet its
working capital needs until May 1999.

                                       -6-

<PAGE>


   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued).
   ---------------------------------------------------------------------------

         In connection with the refinancing,  The Chase Manhattan Bank, N.A. and
Fleet  National  Bank (the  "Banks")  amended and restated  the existing  credit
facility to provide the Company with a $4,000,000 term loan (the "Term Loan") in
lieu of a like  amount  of  revolving  debt.  The Term  Loan  will be  repaid in
$200,000  quarterly  increments  starting  in June 1997 with a final  payment of
$2,600,000  due May 1999.  The Term Loan bears  interest at 2.5% over the Banks'
prime  lending rate and is  collaterialized  by a senior lien on real  property,
improvements and certain  fixtures,  and a subordinate lien on all other assets.
The Term Loan also contains an annual  facility fee of 2% of the term loan and a
maximum success fee of $450,000  payable as follows;  $225,000 on final maturity
with the balance  payable  subsequently  in six equal  monthly  installments  of
$37,500.  The annual  facility fee and success fee are being included in selling
and administrative expenses over the life of the loan.

         The financing agreements include provisions  specifying that a material
adverse  effect,  as  determined by the lenders,  in the  financial  position or
results of operations of the Company is an event of default.  As such,  the Term
Loan,  which would otherwise be classified as long-term,  has been classified as
current on the balance sheet at September 30, 1996.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
---------------------------------------------------------------------------
        RESULTS OF OPERATIONS
        ---------------------

Results of Operations
---------------------

         As is customary in the fashion accessories industry,  the Company makes
modifications  to its lines coinciding with the Spring (January - June) and Fall
(July - December)  seasons.  The Company believes that results of operations are
more  meaningful on a seasonal  basis (six months) than on a quarterly  basis as
the timing of sales  (deliveries)  and related  income  between  quarters can be
affected by the  availability  of  materials,  retail sales and fashion  trends.
These factors may affect the shift of volume  between  quarters  within a season
differently in one year than another.

Net Sales
---------

         Net sales for the quarter and for the nine months ended  September  30,
1996 were  $31,630,000 and  $91,587,000,  a decrease of $3,690,000,  or 10%, and
$1,952,000,  or 2%, from the quarter and nine months ended  September  30, 1995,
respectively.

         Men's and Women's Jewelry net sales decreased  $1,718,000,  or 12%, and
$2,168,000,  or 5%, for the quarter and for the nine months ended  September 30,
1996,  respectively.  Men's Leather Accessories' net sales decreased $1,316,000,
or 7%, for the quarter ended September 30, 1996, but remain ahead  $889,000,  or
2%, for the nine months ended September 30, 1996. Other Product Lines' net sales
decreased $656,000, or 41%, and $673,000, or 20% for the quarter and nine months
ended September 30, 1996.

                                       -7-

<PAGE>



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
---------------------------------------------------------------------------
        RESULTS OF OPERATIONS (CONTINUED)
        ---------------------------------

         Included in net sales are adjustments relating to customer returns. Net
sales for the nine months ended September 30, 1996 were favorably  impacted as a
result of actual customer return activity in 1996 being lower than  anticipated,
primarily due to the  Company's  efforts,  initiated  during 1995, to adjust its
women's jewelry stock at the store level to more  competitively  priced,  career
oriented products. During the comparable period in 1995, actual returns exceeded
anticipated  returns.  The following table quantifies these adjustments,  all of
which were  recorded  through June 30, for the nine months ended  September  30,
1996 and for the comparable period in fiscal 1995:

(in thousands)

                                                 1996        1995       Variance
                                                ------      -------     --------

Men's & Women's Jewelry                         $1,059      ($1,642)      $2,701
Men's Leather Accessories                          188          (37)         225
Other Product Lines                                138         (312)         450
                                                ------      -------       ------
Increase (decrease) in Net Sales                $1,385      ($1,991)      $3,376
                                                ======      =======       ======


         The decline in net sales for the quarter in each of the Company's lines
reflects a continuing  lackluster  retail  environment for fashion  accessories.
Also,  improved  management of  inventories  by retailers has impacted,  to some
degree,  the  timing of both the  receipt of orders  and  subsequent  shipments.
However,  the Company  does not expect that  orders  received  during the fourth
quarter  will be  sufficient  to fully  offset the  effects of the lower rate of
sales which it is currently experiencing.

         Net sales at the Company's  factory outlets,  which are included in the
net sales figures above,  decreased 36% and 24% for the quarter and for the nine
months ended September 30, 1996, respectively.  Sales decreased principally as a
result of the closure of thirteen  unprofitable store locations in 1996 (four in
the first  quarter and nine in the second  quarter).  The Company  believes  the
factory outlets are still a valuable distribution channel for the disposition of
excess  inventory  and  continues to assess each store  location in an effort to
maintain a smaller, more profitable presence in this market.

Gross Profit
------------

         Gross  profit for the quarter and for the nine months  ended  September
30, 1996 increased $94,000, or 1%, and $1,626,000,  or 5%,  respectively.  Gross
profit  expressed as a percentage of net sales increased to 41% from 36% and 41%
from 38% for the quarter and nine months ended September 30,1996,  respectively.
For the quarter,  these  increased  margins are  attributable  to  reductions in
product  costs.  As part of an effort to reduce  overhead,  enhance  margins and
respond to the competitive  price  pressures in the fashion goods industry,  the
Company has increased its  utilization  of off shore and domestic  manufacturing
suppliers for sourcing its products. For the year to date, increased margins are
attributable  to reductions in product costs and lower costs  associated  with a
reduced level of customer returns.

         Men's and Women's Jewelry gross profit decreased $791,000,  or 13%, and
$1,155,000,  or 6%, for the quarter and nine months  ended  September  30, 1996,
respectively,   primarily  as  a  result  of  decreased  sales.   Men's  Leather
Accessories gross profit increased $901,000, or 14%, and $2,178,000, or 13%, for
the quarter and nine months ended  September 30, 1996,  respectively,  primarily
due to reductions in product  costs.  Other Product  Lines' gross profit,  which
includes  residual  sales of items in the  Company's  discontinued  gift  lines,
decreased  $16,000,  or 3%,  for the  quarter  ended  September  30,  1996,  but
increased $603,000, or 78%, for the nine months ended September 30, 1996.


                                       -8-

<PAGE>



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
---------------------------------------------------------------------------
        RESULTS OF OPERATIONS (CONTINUED)
        ---------------------------------

         Included in gross profit are adjustments  relating to customer  returns
which, as noted above, reflect the difference in anticipated and actual returns.
The following table  quantifies  these  adjustments,  all of which were recorded
through  June 30, for the period  ended  September  30, 1996 and the  comparable
period in fiscal 1995:

 (in thousands)

                                                 1996         1995      Variance
                                                ------      -------     --------

Men's & Women's Jewelry                         $  674      ($  990)      $1,664
Men's Leather Accessories                           72            2           70
Other Product Lines                                310         (172)         482
                                                ------      -------       ------
Increase (decrease) in Gross Profit             $1,056      ($1,160)      $2,216
                                                ======      =======       ======



Selling and Administrative Expenses
-----------------------------------

         Selling and administrative  expenses decreased $1,477,000,  or 10%, and
$4,607,000,  or 11%, for the quarter and for the nine months ended September 30,
1996,   respectively.   The  decreased  costs  were  primarily  attributable  to
reductions  in  compensation  costs  and  related  fringe  benefits,   including
personnel  reductions  and  lower  commission  rates,  and  the  effects  of the
Company's cost reduction programs.

Interest Expense
----------------

         Interest  expense  decreased  $218,000,  or 32%, for the quarter  ended
September 30, 1996, reflecting lower third quarter borrowing levels in 1996. The
higher  borrowings and interest  rates  experienced in the first quarter of 1996
relative to last year  substantially  offset this  improvement  so that interest
expense  increased  $5,000 for the nine months ended September 30, 1996,  versus
last year.

Provision for Income Taxes
--------------------------

         The Company  recognized a tax benefit at an  effective  tax rate of 25%
for the quarter and nine months ended  September  30,  1996,  which is below the
federal statutory rate of 34%, to reflect an anticipated alternative minimum tax
for the year.  The  Company  established  a  valuation  allowance  in the fourth
quarter of 1995 to reduce  deferred  tax assets to a level  management  believes
more likely than not will be realized.  The current year rate reflects no change
in the valuation allowance since year end.

         The  Health  Insurance  and  Accountability  Act of  1996  (the  "Act")
eliminates the deduction of interest on policy loans on a significant portion of
the  Company's   corporate   owned  life  insurance  by  1999  and,   therefore,
substantially  increases the after tax cost of maintaining  these policies.  The
Company and its advisers are currently assessing the implications of the Act and
analyzing the Company's  options.  The Company has not yet made a  determination
whether the policies  should remain in force. If a decision is made to terminate
the policies the Company  will,  at that time,  recognize a deferred  income tax
liability,  currently estimated at up to $3,000,000,  for the previously untaxed
accumulation in policy values.  However, if such a decision is made during 1996,
the  Company  anticipates  no  change  to its  effective  1996 tax rate from the
potential  impact of the  Act's  provisions  because  the  amount  of  estimated
additional  deferred  tax  liability  does not  exceed the  valuation  allowance
previously recorded against the Company's deferred tax assets. In the event that
the policies are actually  surrendered,  the  additional  taxable income will be
recognized  for tax return  purposes  ratably over a four year period  beginning
with the year of surrender.


                                       -9-

<PAGE>



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
---------------------------------------------------------------------------
        RESULTS OF OPERATIONS (CONTINUED)
        ---------------------------------

Earning (Loss) Per Share
------------------------

         Average shares  outstanding  used to compute  earnings (loss) per share
are adjusted to include shares held by the Company's  employee  stock  ownership
plan deemed to be allocated to  participants  in  accordance  with  Statement of
Position 93-6 "Accounting for Employee Stock Ownership Plans".

Liquidity and Capital Resources
-------------------------------

         The Company's  working  capital  decreased  $1,302,000  during the nine
months ended September 30, 1996.

         As is  customary  in  the  fashion  accessories  industry,  substantial
percentages  of  the  Company's  sales  and  earnings  occur  in the  months  of
September,  October and  November,  during which the Company  makes  significant
shipments of its products to retailers for sale during the holiday season.  As a
result, receivables increase during the year and peak in the fourth quarter. The
Company  generally  builds its inventory  during the first three quarters of the
year to meet the demand for the holiday  season.  Cash required is provided by a
revolving credit facility.

         The  Company  has  implemented  a plan  designed to enhance the overall
competitiveness, productivity and efficiency through reduction in overhead costs
and better inventory management.  Inventory levels decreased $1,609,000,  or 6%,
from  December 31, 1995,  primarily as a result of improved  management  to more
closely  align  inventories  with sales,  increased  sales of excess  inventory,
discontinuing the sale and distribution of the men's  accessories  product line,
and the  reduction in the number of retail  outlets.  The 1996  results  through
September  reflect  a  significant  ($17  million)  reduction  in  cash  used in
operations versus the prior year and reduced borrowings.

         Cash  used  in  operations  for the  nine  months  totaled  $3,682,000,
consisting  primarily  of the net loss,  decreased  accounts  payable  and other
accrued items, collections of accounts receivable,  offset, in part, by improved
inventory  management and state and federal tax refunds  generated from the 1995
net  operating  loss.  Cash  used  in  investing  activities  was  $558,000  for
replacement  of  used  machinery  and  equipment.  Cash  provided  by  financing
activities totaled $4,043,000 consisting primarily of borrowings under revolving
credit  agreements,  offset by repayments under the revolving credit  agreements
and advances to the employees' stock ownership plan.

         The  reductions  of the  accounts  receivable  reserves  since year end
result from the net effect of reductions for actual  charges  processed for cash
discounts,  doubtful accounts,  in-store markdowns,  cooperative advertising and
gross profit on returns and accruals associated with current period activity.

         On May 24, 1996 the Company obtained new working capital financing from
IBJ Schroder Bank & Trust Company, as agent for the lenders thereunder (the "New
Lenders"),  for up to  $25,000,000,  with a sublimit of $3,000,000 in letters of
credit (the "New  Agreement").  The proceeds of the New Agreement  were used, in
part, to repay all but $4 million of the outstanding  balance under the previous
facility.

         The New Agreement is available through April 1999 and is collateralized
by all of the Company's  assets.  The New Lenders have a senior lien position on
all assets other than real property, improvements and certain fixtures, in which
the  Company's  other  institutional  lenders  maintain  a  senior  position  to
collateralize a $4,000,000 term loan, as described  below,  and in which the New
Lenders have a subordinate lien. The New Agreement permits the Company to borrow
against a percentage of eligible accounts receivable and inventory and its loans
bear an interest rate of 1.5% over the New Lenders'  prime lending rate. The New
Agreement  also contains a facility fee of 1/2% per annum on the unused  portion
of the revolving credit facility.

                                      -10-

<PAGE>



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
---------------------------------------------------------------------------
        RESULTS OF OPERATIONS (CONTINUED)
        ---------------------------------

         The terms of the New Agreement include covenants  requiring the Company
to maintain  certain  financial  ratios for the nine months ended  September 30,
1996.  These include a leverage ratio and inventory  turnovers of 4.0 to 1 and 2
times, respectively. As of September 30, 1996 the Company was in compliance with
these  covenants.  The New  Agreement  also  includes  covenants  pertaining  to
profitability,  limiting capital expenditures and additional  indebtedness.  The
Company  believes the inventory  turnover  covenant to be the most  restrictive,
requiring  minimum inventory  turnovers as high as 2.25 times annually.  The New
Agreement  also  prohibits  the payment of dividends.  Management  believes this
credit facility will meet its working capital needs until May 1999.

         In connection with the refinancing,  The Chase Manhattan Bank, N.A. and
Fleet  National  Bank (the  "Banks")  amended and restated  the existing  credit
facility to provide the Company with a $4,000,000 term loan (the "Term Loan") in
lieu of a like  amount  of  revolving  debt.  The Term  Loan  will be  repaid in
$200,000  quarterly  increments  starting  in June 1997 with a final  payment of
$2,600,000  due May 1999.  The Term Loan bears  interest at 2.5% over the Banks'
prime  lending rate and is  collaterialized  by a senior lien on real  property,
improvements and certain  fixtures,  and a subordinate lien on all other assets.
The Term Loan also contains an annual  facility fee of 2% of the term loan and a
maximum success fee of $450,000  payable as follows;  $225,000 on final maturity
with the balance  payable  subsequently  in six equal  monthly  installments  of
$37,500 and are being included in selling and  administrative  expenses over the
life of the loan.

         The financing agreements include provisions  specifying that a material
adverse  effect,  as  determined by the lenders,  in the  financial  position or
results of operations of the Company is an event of default.  As such,  the Term
Loan,  which would otherwise be classified as long-term,  has been classified as
current on the balance sheet at September 30, 1996.


                                      -11-

<PAGE>


                           PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------

(a)  Exhibits

         27.0     Financial data schedule.


(b)  Reports on Form 8-K - none



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


                                   SIGNATURES


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



                                             SWANK, INC.
                                             Registrant


                                             /s/  Christopher F. Wolf
                                             --------------------------------
                                             Christopher F. Wolf
                                             Senior Vice President, Treasurer
                                               and Chief Financial Officer


Dated:  November 12, 1996
        ------------------



                                      -12-