# UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q

_________________

# (Mark One)

| |  | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| |  | ---------------------------------------------------------------------------------------

# For the quarterly
period ended June 30, 2007

# 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
(State or other jurisdiction of incorporation or organization) 90 Park Avenue
New York, NY
(Address of principal executive offices) | 04-1886990
(IRS Employer Identification Number) 10016
(Zip code)
|--------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------

(212) 867-2600
(Registrants telephone number, including area code) NOT APPLICABLE
(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, and (2) has been subject to such filing requirements for
the past 90 days.

Yes          
       
       
       
No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, or a non-accelerated filer. See definition of accelerated filer and large
accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer 
        
        
        
        
Accelerated filer 
        
        
        
         Non-accelerated filer

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). 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
Common stock, $.10 par value | Shares Outstanding on July 31, 2007
6,074,699
|------------------------------------------- | ---------------------------------------------



---

# SWANK, INC.
INDEX

|                                 |                                                                                      
|-------------------------------- | -------------------------------------------------------------------------------------
|Part I.    Financial Information |                                                                                      
|Item 1.                          | Condensed Financial Statements and Related Notes                                     
|Item 2.                          | Management's Discussion and Analysis of Financial Condition and Results of Operations
|Item 3.                          | Quantitative and Qualitative Disclosures about Market Risk                           
|Item 4.                          | Controls and Procedures                                                              
|Part II.    Other Information    |                                                                                      
|Item 1A.                         | Risk Factors                                                                         
|Item 6.                          | Exhibits                                                                             
|Signatures                       |                                                                                      
|Exhibit Index                    |                                                                                      



---

# Part I. Financial
Information

# Item 1. Financial
Statements

# SWANK, INC.CONDENSED BALANCE SHEETS
(Dollars in thousands except share data)

|                                                   | (Unaudited)
June 30, 2007 |  | December 31, 2006 | 
|-------------------------------------------------- | ------------------------- |  | ----------------- | 
|
|Current:  Cash and cash equivalents                |                           |  |                   | 
|Accounts receivable, less allowances               |                           | 
|of $4,669 and $6,196, respectively                 |                           |  |                   | 
|Inventories, net:                                  |                           | 
|Work in process                                    |                           |  |                   | 
|Finished goods                                     |                           |  |                   | 
|                                                   |                           |  |                   | 
|                                                   |                           |  |                   | 
|Deferred taxes, current                            |                           |  |                   | 
|Prepaid and other current assets                   |                           |  |                   | 
|                                                   |                           |  |                   | 
|Total current assets                               |                           |  |                   | 
|Property, plant and equipment, net of              |                           | 
|accumulated depreciation                           |                           |  |                   | 
|Deferred taxes, noncurrent                         |                           |  |                   | 
|Other assets                                       |                           |  |                   | 
|                                                   |                           |  |                   | 
|Total assets                                       |                           |  |                   | 
|                                                   |                           |  |                   | 
|LIABILITIES                                        |                           | 
|Current:                                           |                           | 
|Note payable to bank                               |                           |  |                   | 
|Current portion of long-term obligations           |                           |  |                   | 
|Accounts payable                                   |                           |  |                   | 
|Accrued employee compensation                      |                           |  |                   | 
|Other current liabilities                          |                           |  |                   | 
|                                                   |                           |  |                   | 
|Total current liabilities                          |                           |  |                   | 
|Long-term obligations                              |                           |  |                   | 
|                                                   |                           |  |                   | 
|Total liabilities                                  |                           |  |                   | 
|                                                   |                           |  |                   | 
|STOCKHOLDERS' EQUITY                               |                           | 
|Preferred stock, par value $1.00:                  |                           | 
|Authorized - 1,000,000 shares                      |                           |  |                   | 
|Common stock, par value $.10:                      |                           | 
|Authorized - 43,000,000 shares:                    |                           | 
|Issued  6,380,379 shares                          |                           |  |                   | 
|Capital in excess of par value                     |                           |  |                   | 
|Retained earnings                                  |                           |  |                   | 
|Accumulated other comprehensive (loss), net of tax |                           |  |                   | 
|Treasury stock, at cost, 305,680 shares            |                           |  |                   | 
|                                                   |                           |  |                   | 
|Total stockholders' equity                         |                           |  |                   | 
|                                                   |                           |  |                   | 
|Total liabilities and stockholders' equity         |                           |  |                   | 
|                                                   |                           |  |                   | 

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

3



---

SWANK, INC.
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE QUARTERS ENDED JUNE 30, 2007 AND 2006 
(Dollars in thousands except share and per share data)
_________________



|                                                                 | 2007 |           | 2006 |          
|---------------------------------------------------------------- | ---- | --------- | ---- | ---------
|Net sales                                                        |      | $ 29,256  |      | $ 26,447 
|                                                                 |     
|Cost of goods sold                                               |      | 20,049    |      | 17,652   
|                                                                 |      |           |      |          
|Gross profit                                                     |      | 9,207     |      | 8,795    
|                                                                 |     
|Selling and administrative expenses                              |      | 7,730     |      | 7,393    
|                                                                 |      |           |      |          
|Income from operations                                           |      | 1,477     |      | 1,402    
|                                                                 |     
|Interest expense                                                 |      | 453       |      | 401      
|                                                                 |      |           |      |          
|Income before income taxes                                       |      | 1,024     |      | 1,001    
|                                                                 |     
|Income taxes                                                     |      | 453       |      | 25       
|                                                                 |      |           |      |          
|Net income                                                       |      | $ 571     |      | $ 976    
|                                                                 |      |           |      |          
|                                                                 |     
|Share and per share information:                                 |     
|Basic net income per weighted average common share outstanding   |      | $ .09     |      | $ .17    
|Basic weighted average common shares outstanding                 |      | 6,074,699 |      | 5,774,067
|Diluted net income per weighted average common share outstanding |      | $ .09     |      | $ .16    
|Diluted weighted average common shares outstanding               |      | 6,082,440 |      | 6,115,863

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

4



---

# SWANK, INC.
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)  
FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006
(Dollars in thousands except share and per share data)
_________________

|                                                                 | 2007 |           | 2006 |          
|---------------------------------------------------------------- | ---- | --------- | ---- | ---------
|Net sales                                                        |      | $ 54,244  |      | $ 48,614 
|                                                                 |     
|Cost of goods sold                                               |      | 36,902    |      | 32,495   
|                                                                 |      |           |      |          
|Gross profit                                                     |      | 17,342    |      | 16,119   
|                                                                 |     
|Selling and administrative expenses                              |      | 15,378    |      | 14,364   
|                                                                 |      |           |      |          
|Income from operations                                           |      | 1,964     |      | 1,755    
|                                                                 |     
|Interest expense                                                 |      | 790       |      | 730      
|                                                                 |      |           |      |          
|Income before income taxes                                       |      | 1,174     |      | 1,025    
|                                                                 |     
|Income taxes                                                     |      | 510       |      | 25       
|                                                                 |      |           |      |          
|Net income                                                       |      | $ 664     |      | $ 1,000  
|                                                                 |      |           |      |          
|                                                                 |     
|Share and per share information:                                 |     
|Basic net income per weighted average common share outstanding   |      | $.11      |      | $.17     
|Basic weighted average common shares outstanding                 |      | 6,074,699 |      | 5,757,135
|Diluted net income per weighted average common share outstanding |      | $ .11     |      | $ .17    
|Diluted weighted average common shares outstanding               |      | 6,082,427 |      | 6,115,889

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

5



---

# SWANK, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)  
FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006 
(Dollars in thousands)
_________________

|                                                              | 2007 |         | 2006 |        
|------------------------------------------------------------- | ---- | ------- | ---- | -------
|Cash flows from operating activities:                         |      |         |      |        
|                                                              |     
|Net income                                                    |      | $ 664   |      | $ 1,000
|Adjustments to reconcile net income to                        |     
|net cash (used in) operations:                                |     
|Depreciation and amortization                                 |      | 98      |      | 107    
|Bad debt expense                                              |      | 144     |      | 162    
|                                                              |     
|Changes in assets and liabilities                             |     
|Decrease (increase) in accounts receivable                    |      | 374     |      | (1,817 
|(Increase) in inventory                                       |      | (4,202  | )    | (1,657 
|(Increase) in prepaid and other assets                        |      | (583    | )    | (246   
|(Decrease) in accounts payable, accrued and other liabilities |      | (3,806  | )    | (2,567 
|Increase in other long-term obligations and deferred credits  |      | 225     |      | 284    
|                                                              |      |         |      |        
|Net cash (used in) operations                                 |      | (7,086  | )    | (4,734 
|                                                              |      |         |      |        
|                                                              |     
|Cash flows from investing activities:                         |     
|Capital expenditures                                          |      | (441    | )    | (35    
|Premiums on life insurance                                    |      | (36     | )    | (37    
|                                                              |      |         |      |        
|Net cash (used in) investing activities                       |      | (477    | )    | (72    
|                                                              |      |         |      |        
|                                                              |     
|Cash flows from financing activities:                         |     
|Borrowing under revolving credit agreements                   |      | 35,336  |      | 25,175 
|Payments of revolving credit obligations                      |      | (28,568 | )    | (20,611
|Proceeds from stock option exercises                          |      | -       |      | 15     
|Treasury stock received                                       |      | -       |      | (148   
|                                                              |      |         |      |        
|Net cash provided by financing activities                     |      | 6,768   |      | 4,431  
|                                                              |      |         |      |        
|                                                              |     
|Net (decrease) in cash and cash equivalents                   |      | (795    | )    | (375   
|                                                              |     
|Cash and cash equivalents at beginning of period              |      | 899     |      | 505    
|                                                              |      |         |      |        
|                                                              |     
|Cash and cash equivalents at end of period                    |      | $ 104   |      | $ 130  
|                                                              |      |         |      |        
|                                                              |     
|Cash paid during the six months for:                          |     
|Interest                                                      |      | $ 790   |      | $ 730  
|Taxes                                                         |      | $ 1,408 |      | $ 79   
|Supplemental non-cash disclosure:                             |     
|Conversion of convertible note to common stock                |      | $  -    |      | $ 350  
|                                                              |      |         |      |        

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

6



---

SWANK, INC.Notes to Condensed Financial Statements (Unaudited)

|(1) |  | Basis
of Presentation. 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 June 30, 2007 and 2006. 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
financial statements included in the Companys 2006                Annual Report on
Form 10-K. The condensed financial data included herein should                be read in
conjunction with the information in the Annual Report. The results of
               operations for the six months ended June 30, 2007 may not be indicative of
the                results that may be expected for the year ended December 31, 2007 or
any other                period.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | The
following table sets forth the computation of the net income per share for
               the periods ended June 30, 2007 and June 30, 2006 (in thousands, except
for                share and per share data):
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                      |     
|----------------------------------------------------------------------------------------------------- | ----
|                                                                                                      | 2007
|Numerator:                                                                                            |     
|Net income as reported                                                                                |     
|Add back interest expense on convertible note due to affiliate, net of income taxes                   |     
|                                                                                                      |     
|Net income used for diluted earnings per share calculation                                            |     
|                                                                                                      |     
|Denominators:                                                                                         |     
|Shares used in computing basic net income per weighted average common share outstanding               |     
|Effect of dilutive securities                                                                         |     
|                                                                                                      |     
|??Shares used in computing net income per weighted average common share outstanding assuming dilution |     
|                                                                                                      |     
|                                                                                                      |     
|Basic net income per weighted average common share outstanding                                        |     
|Diluted net income per weighted average common share outstanding                                      |     

| | There
were no anti-dilutive securities not included in the computation of diluted earnings per
weighted average common share.
| | -----------------------------------------------------------------------------------------------------------------------------

|(3) |  | Segment
Information. We presently have one reportable segment, mens
               accessories, consisting of mens costume jewelry, belts and
suspenders and                personal leather goods.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Conversion
of Convertible Note. During the three-month period ended June 30,                2006,
the Estate of Marshall Tulin (the Estate) converted the
               Amended and Restated Convertible Promissory Note of the Company dated
April 1,                2004, as amended and restated as of June 30, 2004, and payable to
the order of                the Estate (the Note) in the amount of $350,000,
into 116,666 shares                of the Companys common stock, $.10 par value per
share (Common                Stock) pursuant to a formula set forth in the
Note.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) |  | Share-Based
Compensation. In December 2004, the Financial Accounting Standards                Board (FASB)
issued Statement of Financial Accounting Standards No.                123 (revised 2004,
SFAS 123R), Share-Based                Payment. SFAS 123R
addresses the accounting for share-based payments                to employees, including
grants of employee stock options. Under the new                standard, companies are no
longer permitted to account for share-based                compensation transactions
using the intrinsic value method in accordance with                APB Opinion No. 25,
Accounting For Stock Issued To Employees               (APB 25).
Prior to the adoption of SFAS 123R, we accounted for                share-based
compensation using the intrinsic value method prescribed in APB 25                and
related interpretations. Instead, companies are now required to account for
               such transactions using a fair-value method and recognize the expense in
the                statement of income. We adopted SFAS 123R under the modified
prospective method                effective January 1, 2006. Under that method,
compensation cost is                recognized for share-based payments granted prior to
January 1, 2006, but not                yet vested, based on the grant date fair value
estimated in accordance with the                provisions of SFAS 123. The results for
prior periods are not restated. Stock                options issued by us previously to
certain executives and non-employee directors                under either our
1998
Equity Incentive Compensation Plan (the 1998                Plan) or
1994 Non-Employee Director Plan (the 1994 Director                Plan)
respectively, vested immediately. We did not grant any stock options
               during either of the quarters ended June 30, 2007 or June 30, 2006.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7



---

|(6) |  | Stock
Options. In 1994, we established the 1994 Director Plan pursuant to which
               options could be granted to non-employee directors to purchase up to
50,000                shares of common stock at market value on the date of grant.
Options granted                under the 1994 Director Plan were for a period of five
years and were                immediately exercisable. All of the shares available for
grant under the 1994                Director Plan have been granted. In April 1998, our
stockholders approved the                1998 Equity Incentive Compensation Plan (the
1998 Plan), which                replaced our prior incentive stock plans,
all of which had expired by their                terms. The 1998 Plan permits our Board
of Directors to grant a maximum of                1,000,000 shares to key employees
through stock options, stock appreciation                rights, restricted stock units,
performance awards and other stock-based awards.                We granted options for
625,000 shares under the 1998 Plan in 2001. These shares                vested
immediately. Under the 1998 Plan, 375,000 shares remain available for
               future grants.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | A
summary of option activity under the stock-based compensation plans as of June 30, 2007
and changes during the six-month period then ended, is detailed below:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                            | Number of Shares | Weighted Average
Exercise Price | Weighted Average
Remaining
Contractual Term
(years) | Aggregate
Intrinsic
Value
(in thousands)
|------------------------------------------- | ---------------- | ------------------------------- | --------------------------------------------------- | ----------------------------------------
|Outstanding at December 31, 2006            |                  | 8,333                           |                                                     | $.79                                    
|Granted                                     |                  | -                               |                                                     | -                                       
|Exercised                                   |                  | -                               |                                                     | -                                       
|Forfeited/ Expired                          |                  | -                               |                                                     | -                                       
|                                            |                  |                                
|Outstanding at June 30, 2007                |                  | 8,333                           |                                                     | $.79                                    
|                                            |                  |                                
|                                            |                 
|Vested or expected to vest at June 30, 2007 |                  | 8,333                           |                                                     | $.79                                    
|                                            |                 
|Exercisable at June 30, 2007                |                  | 8,333                           |                                                     | $.79                                    

| | All
options granted under the 1994 Director Plan are vested as of June 30, 2007.
| | --------------------------------------------------------------------------------

| | The
table above reflects 8,333 option shares issued, outstanding, and exercisable at prices
ranging from $.18 to $1.60 per share under the 1994 Director Plan. All options issued
under the 1998 Plan have been either exercised or forfeited and no shares are
outstanding.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) |  | Income
Taxes. We adopted the provisions of FASB Interpretation No. 48                Accounting
for Uncertainty in Income Taxes  aninterpretation of FASB Statement No. 109 (FIN
48), on                January 1, 2007. FIN 48 prescribes the recognition and
measurement of a tax                position taken or expected to be taken in a tax
return. It also provides                guidance on derecognition, classification,
interest and penalties, accounting in                interim periods, disclosure and
transition. We performed a comprehensive review                of our tax positions in
accordance with recognition standards established by FIN                48. In this
regard, an uncertain tax position represents the companys                expected
treatment of a tax position taken in a filed tax return, or planned to                be
taken in a future tax return, that has not been reflected in measuring income
               tax expense for financial reporting purposes. As a result of this review,
we do                not believe that we have included any uncertain tax positions in
our                federal income tax return or any of the state income tax returns we
are                currently filing. With few exceptions, we are no longer subject to
federal                income tax examinations for years before 2002.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) |  | Recent
Accounting Pronouncements. In February 2007, the FASB issued
               Statement of Financial Accounting Standards No. 159, The
Fair                Value Option for Financial Assets and Financial Liabilities               (SFAS
159) including an amendment of FASB Statement No. 115. SFAS                159
permits companies to choose to measure certain financial instruments and
               certain other items at fair value. The standard requires that unrealized
gains                and losses on items for which the fair value option has been
elected, be                reported in earnings. SFAS 159 is effective for us beginning
in the first                quarter of fiscal year 2008, although earlier adoption is
permitted. We are                currently assessing the impact of SFAS 159, but do not
presently anticipate it                will have a material effect on our financial
condition, results of operations,                or cash flows.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
 September 2006, the FASB issued SFAS No. 157, Fair Value Measurements(SFAS
157). SFAS 157 establishes a common definition for fair value to be applied to US
GAAP guidance requiring use of fair value, establishes a framework for measuring fair
value, and expands disclosure about such fair value measurements. SFAS 157 is effective
for fiscal years beginning after November 15, 2007. We are currently assessing the impact
of the adoption of SFAS 157 but do not presently anticipate it will have a material
effect on our financial condition, results of operations, or cash flows.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8



---

| | In
June 2006, the FASB issued FIN 48 which clarifies the accounting for uncertainty in
income taxes recognized in a companys financial statements in accordance with FASB
Statement No. 109, Accounting for Income Taxes. See Footnote 7 above.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) |  | Statement
of Stockholders Equity and Comprehensive Income. Our statement                of
changes in stockholders equity and comprehensive income for the year
               ended December 31, 2006 reflected the adoption of FASB Statement of
Financial                Accounting Standards No. 158, Employers Accounting
for Defined                Benefit Pension and Other Postretirement Plans  An
Amendment of FASBStatements No. 87, 88, 106 and 132(R) (SFAS 158).
Our                presentation included a $595,000 after-tax charge for the impact of
the adoption                which was incorrectly included as a component of
current-period other                comprehensive income instead of as an adjustment to
accumulated other                comprehensive income as required by SFAS 158.
Accordingly, we will revise the                statement of changes in stockholders equity
and comprehensive income for                the year ended December 31, 2006 in our
Annual Report on Form 10-K for the year                ending December 31, 2007. This
revision will have no impact on net income, total                accumulated other
comprehensive income, total assets or cash flows for the year                ended
December 31, 2006.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

Overview

We
are currently engaged in the importation, sale and distribution of mens belts,
leather accessories, suspenders, and mens jewelry. Our products are sold both
domestically and internationally under a broad assortment of brands including both
licensed tradenames and private labels. We distribute our merchandise principally through
department stores and through a wide variety of specialty stores and mass merchandisers.
We also operate a number of factory outlet stores primarily to distribute excess and out
of line merchandise.

Our
net sales during the quarter ended June 30, 2007 increased 10.6% to $29,256,000 compared
to $26,447,000 for the corresponding period in 2006 and, for the six-month period,
increased 11.6% to $54,244,000 compared to $48,614,000. The increases during both periods
were mainly due to higher shipments of our mens belt and personal leather goods
merchandise offset in part by a less favorable returns adjustment recorded during the
quarter. Gross profit dollars for the quarter and six-month periods increased 4.7% and
7.6%, respectively, compared to the same periods last year. Gross profit expressed as a
percentage of net sales for the quarter declined to 31.5% from 33.3% and, for the
six-month period, fell to 32.0% from 33.2%, in each case as compared to the prior year.
The increase in gross profit dollars was mainly due to higher net sales and reductions in
inventory-related expenses, offset partially by increases in certain product costs.
Selling and administrative expenses for the quarter and six-month period ended June 30,
2007 increased $337,000, or 4.6%, and $1,014,000, or 7.1%, respectively, compared to the
same periods last year. The increase was primarily due to variable sales-related expenses
associated with higher net sales and increases in product development costs, as well as a
one-time reduction in an accrual associated with certain environmental matters that was
recorded during last years second quarter.

Critical Accounting
Policies and Estimates

We
believe that the accounting policies discussed below are important to an understanding of
our financial statements because they require management to exercise judgment and
estimate the effects of uncertain matters in the preparation and reporting of financial
results. Accordingly, management cautions that these policies and the judgments and
estimates they involve are subject to revision and adjustment in the future.

Net
sales are generally recorded upon shipment, provided there exists persuasive evidence of
an arrangement, the fee is fixed or determinable and collectability of the related
receivable is reasonably assured. We record revenues net of sales allowances, including
cash discounts, in-store customer allowances, cooperative advertising, and customer
returns, which are all accounted for in accordance with Statement of Financial Accounting
Standards No. 48, Revenue Recognition When Right of Return Exists, and
Emerging Issues Task Force Issue No. 01-09, Accounting for Consideration Given by a
Vendor to a Customer or Reseller of the Vendors Products. Sales allowances
are estimated using a number of factors including historical experience, current trends
in the retail industry and individual customer and product experience. We reduce net
sales and cost of sales by the
estimated effect of future returns of current period shipments. Each spring upon the
completion of processing returns from the preceding fall season, we record adjustments to
net sales in the second quarter to reflect the difference between customer returns of
prior year shipments actually received in the current year and the estimate used to
establish the allowance for customer returns at the end of the preceding fiscal year.

9



---

We
determine our allowance for doubtful accounts using a number of factors including
historical collection experience, general economic conditions and the amount of time an
account receivable is past its payment due date. In certain circumstances where it is
believed a customer is unable to meet its financial obligations, a specific allowance for
doubtful accounts is recorded to reduce the account receivable to the amount believed to
be collectable.

In
accordance with AICPA Statement of Position 96-1, Environmental Remediation
Liabilities, environmental expenditures that relate to current operations are
expensed or capitalized, as appropriate. Expenditures that relate to an existing
condition caused by past operations, and which do not contribute to current or future
revenue generation, are expensed. Liabilities are recorded when environmental assessments
and/or remedial efforts are probable and the costs can be reasonably estimated.
Generally, adjustments to these accruals coincide with the completion of a feasibility
study or a commitment made by us to a formal plan of action or other appropriate
benchmark.

Inventories
are stated at the lower of cost (principally average cost which approximates FIFO) or
market. Our inventory is somewhat fashion oriented and, as a result, is subject to risk
of rapid obsolescence. We believe that our inventory has been adequately adjusted, where
appropriate, and that we have adequate channels to dispose of excess and obsolete
inventory.

We
determine the valuation allowance for deferred tax assets based upon projections of
taxable income or loss for future tax years in which the temporary differences that
created the deferred tax asset are anticipated to reverse, and the likelihood that the
Companys deferred tax assets will be recovered.

Results of
Operations

As
is customary in the fashion accessories industry, we make modifications to our
merchandise lines coinciding with our Spring (January - June) and Fall (July - December)
selling seasons. We believe that the results of operations are more meaningful on a
seasonal basis than on a quarterly basis. The timing of shipments can be affected by the
availability of materials, retail sales, and fashion trends. These factors may shift
volume between quarters within a season differently in one year than in another. Due to
seasonality and other factors, the results for the quarter are not necessarily indicative
of the results to be expected for the full year.

Net Sales

Net
sales for the quarter ended June 30, 2007 totaled $29,256,000, an increase of $2,809,000
or 10.6% compared to the quarter ended June 30, 2006. For the six-month period ended June
30, 2007, net sales totaled $54,244,000, an increase of $5,630,000 or 11.6% compared to
the corresponding period last year. The increase during both the quarter and six-month
periods was principally due to increased shipments of belt merchandise and personal
leather goods merchandise and lower in-store markdown accruals, offset in part by a less
favorable adjustment for customer returns (see discussion below). Net sales of our mens
belt merchandise increased 11.7% and 13.3% during the quarter and six-month periods ended
June 30, 2007, respectively, while net sales of our personal leather goods increased 5.7%
and 17.9%, for the quarter and six month periods, respectively. In belts, the increases
reflect higher shipments of our Nautica and Concepts by Claiborne collections as well as
increases in a number of our private label programs, including, among others, for Macys
and Kohls. Certain of these programs were launched or expanded during the fall 2006
or spring 2007 seasons. The increase in our personal leather goods business was mainly
due to our Nautica line as well as higher shipments for several of our private label
programs. Net sales for our mens jewelry category increased 16.9% for the quarter
and 4.0% for the six-months ended June 30, 2007, in each case as compared to last year.
The growth in our jewelry business during the quarter and year has been driven mainly by
higher shipments in a variety of private label programs as well as a more favorable
returns adjustment compared to the adjustment recorded during the second quarter of 2006.

Net
sales to international customers (including certain military accounts) increased $545,000
or 22.7% during the quarter and $1,389,000 or 35.3% for the six-month period ended June
30, 2007 compared to the same periods last year. The increases were due primarily to
higher shipments of branded belts and personal leather goods made to certain foreign
licensor distributors.

10



---

Included
in net sales for the quarter and six months ended June 30, 2007 and 2006, are annual
second quarter adjustments to record the variance between customer returns of prior year
shipments actually received in the current year and the allowance for customer returns
which was established at the end of the preceding fiscal year. This adjustment increased
net sales by $637,000 for the three-month and six-month periods ended June 30, 2007,
compared to an increase of $1,248,000 for the comparable periods in 2006. The favorable
adjustments result from actual returns experience during both the spring 2007 and spring
2006 seasons being better than anticipated compared to the reserves established at
December 31, 2006 and December 31, 2005. The reserve at December 31, 2006 was established
in consideration of shipments made during the fall 2006 season associated with a variety
of new merchandise programs. During the spring 2007 season, customer returns of mens
jewelry were lower than anticipated, while during the spring 2006 season, returns were
lower than expected mainly for belts and personal leather goods. The Company established
its reserve for returns as of December 31, 2006 based on its estimate of merchandise to
be received during the spring 2007 season which was generally shipped to retailers for
the 2006 fall and holiday selling seasons. During the past few seasons, the Company has
reduced its level of customer returns by assisting retailers in promoting excess and
discontinued merchandise following the holiday season to accelerate retail sales of these
goods.

Gross profit

Gross
profit for the quarter ended June 30, 2007 increased $412,000 or 4.7% and for the
six-month period, increased $1,223,000 or 7.6%, in each case as compared to the
corresponding period last year. Gross profit, expressed as a percentage of net sales for
the quarter, was 31.5% compared to 33.3% last year and, for the six-month period was
32.0% compared to 33.2% last year.

The
increase in gross profit during both the quarter and six-months ended June 30, 2007 was
primarily due to increases in net sales and reductions in certain inventory-related
expenses, offset in part by an increase in product costs and a lower returns adjustment
relative to last year. However, gross profit expressed as a percentage of net sales
declined during 2007 due to a sales mix that favored certain merchandise collections,
including a number of private label programs, that generally ship at a somewhat lower
markup. The decrease in inventory-related expenses is associated, among other things,
with reduced markdowns on sales of discontinued and excess merchandise.

Included
in gross profit for the quarter and six months ended June 30, 2007 and 2006, are annual
second quarter adjustments to record the variance between customer returns of prior year
shipments actually received in the current year and the allowance for customer returns
which was established at the end of the preceding fiscal year. The adjustment to net
sales recorded in the second quarter described above resulted in a favorable adjustment
to gross profit of $783,000 and $943,000 for the quarter and six-month periods ended June
30, 2007 and June 30, 2006, respectively. As discussed above, customer returns were lower
than anticipated during both the spring 2007 and spring 2006 seasons due mainly to our
efforts to more aggressively promote excess and discontinued merchandise to stimulate
retail sales and minimize returns.

Selling and
Administrative Expenses

Selling
and administrative expenses for the quarter ended June 30, 2007 increased $337,000 or
4.6% and, for the six-month period, increased $1,014,000 or 7.1%, both as compared to the
same periods last year. Selling and administrative expenses expressed as a percentage of
net sales were 26.4% and 28.0% for the quarters ended June 30, 2007 and 2006
respectively, and 28.4% and 29.6% for the six months ended June 30, 2007 and 2006,
respectively.

Selling
expenses for the quarter fell $33,000 or less than 1% compared to last year and, as a
percentage of net sales, decreased to 20.1% from 22.4%. For the six-month period ended
June 30, 2007, selling expenses increased $865,000 or 8.0% and as a percentage of net
sales fell to 21.5% compared to 22.2% for the same period last year. During the quarter,
increases in a number of variable-sales related expenses in our domestic sales and
product development organizations were offset by reductions in certain fringe-benefit
related costs. The increase for the year is due to increases in variable-selling related
costs including compensation, merchandising and product development, in-store servicing
and trade show expenses offset by a reduction in certain fringe-benefit costs.

We
routinely make expenditures for advertising and promotion as necessary to maintain and
enhance our business. Certain of our license agreements also require specified levels of
spending. These expenditures, which consist primarily of media and print advertising,
image fund contributions and other promotional costs, are included in selling and
administrative expenses as incurred. In addition, we frequently make expenditures in
connection with cooperative advertising programs to support various marketing initiatives
sponsored by our customers. Accruals associated with cooperative advertising
expenditures are recorded as a
reduction to net sales. Expenditures for advertising and promotion, including cooperative
advertising, totaled $959,000 or 3.3% percent of net sales compared to $838,000 or 3.2% of
net sales for the quarters ended June 30, 2007 and 2006, respectively. Advertising and
promotion expenses, including cooperative advertising, for the six months ended June 30,
2007 were $1,721,000 or 3.2% of net sales compared to $1,560,000 or 3.3% of net sales for
the corresponding period last year. The increase during both periods is due to
additional expenditures generally based on a percentage of net sales made in support of
certain of our licensed tradenames.

11



---



For
the quarter and six-months ended June 30, 2007, administrative expenses increased
$370,000 or 25.1% and $149,000 or 4.1%, respectively, compared to the same periods last
year. Administrative expenses expressed as a percentage of net sales were 6.3% and 5.6%
for the quarters ended June 30, 2007 and 2006, respectively, and 6.9% and 7.4% for the
six months ended June 30, 2007 and 2006, respectively. The increase in administrative
expenses for both the quarter and six-month periods was mainly due to a one-time
reduction of an accrual related to certain environmental matters which was recorded
during last years second quarter (see Liquidity and Capital Resources).

Interest Expense

Net
interest expense for the quarter and six-month periods ended June 30, 2007 increased by
$52,000 and $60,000 respectively, compared to the same periods in 2006. The increases
were mainly due to both higher average borrowings and interest rates during the periods
ended June 30, 2007. Average outstanding borrowings increased by approximately 10% and 3%
during the quarter and six-month periods, respectively, due to increases in average
inventory and accounts receivable investment associated with higher net sales during the
periods. Our average borrowing cost increased approximately 35 and 59 basis points for
the quarter and six-months ended June 30, 2007, respectively, compared to the same
periods last year due to increases generally in short-term interest rates.

Income Taxes

We
recorded an income tax provision for the quarter and six months ended June 30, 2007 of
$453,000 and $510,000, respectively, reflecting an effective tax rate of approximately
44%. We recorded a $25,000 income tax provision on our net income during the quarter
ended June 30, 2006. During fiscal 2001, we began recording a valuation reserve against
all of our deferred tax assets. In accordance with the criteria established in Statement
of Financial Accounting Standards No. 109, Accounting for Income Taxes(SFAS
109), we regularly assess the status of the valuation allowance based upon a number
of factors including future reversals of existing taxable temporary differences which
would enable us to offset gross deferred tax assets against gross deferred tax
liabilities; the availability of taxable income in carry-back prior years (if carry-back
is permitted under the tax law); tax planning strategies; and projections of future
taxable income exclusive of reversing temporary differences and carry-forwards. Based
upon the results of that evaluation, we determined at December 31, 2006 that it was more
likely than not that our existing deferred tax assets will be fully utilized in the
normal course of operations and accordingly, reversed the remaining valuation allowance.
Beginning in 2007, we began recording a tax provision on our net income at rates that
approximate statutory federal and state income tax rates.

Liquidity and
Capital Resources

As
is customary in the fashion accessories industry, substantial percentages of our sales
and earnings occur in the months of September, October and November, when we make
significant shipments of our products to retailers for sale during the holiday season. As
a result, accounts receivable peak in the fourth quarter. We build inventory during the
year to meet the demand for the holiday season. The required cash is provided by a
revolving credit facility.

The
Companys working capital increased by $572,000 during the six-month period ended
June 30, 2007 compared to an increase of $1,616,000 for the six months ended June 30,
2006. The increase during the six-month period ended June 30, 2007 was mainly due to an
increase in net inventory and decreases in accounts payable and accrued and other
liabilities, all partially offset by a decrease in net accounts receivable and higher
bank borrowings under our revolving credit agreement during the period. The increase
during the six-month period ended June 30, 2006 was due to higher net inventory and
accounts receivable investment and decreases in accounts payable and other accrued
liabilities. The increases in working capital in both periods were net of higher bank
borrowings under our revolving credit agreement. As discussed above, our bank borrowings
typically increase in advance of and during periods of rising sales as we finance
inventory and other working capital requirements associated with those sales.

12



---

Cash
used in operations during the six months ended June 30, 2007 totaled $7,086,000 compared
to cash used in operations of $4,734,000 for the corresponding period last year. Cash was
used in operations this year mainly to fund additional inventory investment and for
payments of accounts payable and other accrued liabilities, offset in part by a reduction
in accounts receivable, net income, depreciation and amortization. Cash was used in
operations during the first six months of last year also to fund increases in inventory
and accounts receivable as well as decreases in accounts payable and other accrued
liabilities, all offset partially by net income, depreciation and amortization. We
generally use cash during the first six months of the year to build inventories for the
upcoming holiday selling season and to fund payments of accounts payable and certain
other short-term liabilities that may be seasonal in nature.

Cash
used in investing activities was $477,000 for the six-month period ended June 30, 2007
compared to cash used of $72,000 for the six-month period ended June 30, 2006. In both
periods, cash was used for capital expenditures and premiums on certain life insurance
contracts owned by us. Our capital expenditures increased during the first six months of
2007 relative to the prior year due to higher plant and equipment purchases associated
with our warehouse and distribution facilities and leasehold improvements for our New
York showrooms.

Cash
provided by financing activities for the six months ended June 30, 2007 and June 30, 2006
was $6,768,000 and $4,431,000, respectively, reflecting in both years net borrowings
under our revolving credit agreement. The proceeds were used to fund our net working
capital requirements.

In
the ordinary course of business, we are contingently liable for performance under letters
of credit. At June 30, 2007, outstanding letters of credit totaled $90,000. We presently
are required to pay a fee quarterly equal to 2.00% per annum on outstanding letters of
credit.

On
July 2, 2007, we entered into a Sixth Amendment (the Sixth Amendment) to the
Loan and Security Agreement dated as of June 30, 2004, as amended (the Agreement)
by and between us and Wells Fargo Foothill, Inc. (the Lender). Among other
things, the Sixth Amendment extends the maturity date of the Agreement to June 29, 2012,
sets the maximum amount of extensions of credit that may be made by the Lender to us
under the Agreement at $32,000,000, reduces the interest rates payable on outstanding
amounts under the Agreement, revises financial covenant levels and certain reporting
requirements, and releases certain collateral security for our obligations to the Lender.

The
following chart summarizes our contractual obligations as of December 31, 2006 (in
thousands):

|                                                                          
|--------------------------------------------------------------------------
|
|                                                                          
|                                                                          
|                                                                          
|Operating leases                                                          
|                                                                          
|Minimum royalty and advertising payments required under License Agreements
|                                                                          
|Postretirement benefits                                                   
|                                                                          
|Deferred compensation                                                     
|                                                                          
|Total                                                                     
|                                                                          

We
are also a party to employment agreements with certain of our executive officers that
provide for the payment of compensation and other benefits during the term of each
executives employment and, under certain circumstances, for a period of time
following their termination.

During
the quarter ended June 30, 2007, there were no material changes outside the ordinary
course of business in the contractual obligations set forth in the above chart.

The
Company is subject to legal proceedings and claims which arise in the ordinary course of
its business. Although there can be no assurance as to the disposition of these
proceedings, we do not anticipate that these matters will have a material impact on our
results of operations or financial condition.

13



---

Forward
Looking Statements

Certain
of the preceding paragraphs contain forward looking statements which are
based upon current expectations and involve certain risks and uncertainties. Under the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995, readers
should note that these statements may be impacted by, and the Companys actual
performance may vary as a result of, a number of known and unknown risks and
uncertainties that could cause actual results, performance or achievements to differ
materially from those described or implied in the forward-looking statements, including,
but not limited to, general economic and business conditions, competition in the
accessories markets; potential changes in customer spending; acceptance of our product
offerings and designs; the level of inventories maintained by our customers; the
variability of consumer spending resulting from changes in domestic economic activity; a
highly promotional retail environment; any significant variations between actual amounts
and the amounts estimated for those matters identified as our critical accounting
estimates as well as other significant accounting estimates made in the preparation of
our financial statements; and the impact of the hostilities in the Middle East and the
possibility of hostilities in other geographic areas as well as other geopolitical
concerns. Accordingly, actual results may differ materially from such forward-looking
statements.

You
are urged to consider all such factors. In light of the uncertainty inherent in such
forward-looking statements, you should not consider their inclusion to be a
representation that such forward-looking matters will be achieved. We assume no
obligation for updating any such forward-looking statements to reflect actual results,
changes in assumptions or changes in other factors affecting such forward-looking
statements.

|Item 3. |  | Quantitative
and Qualitative Disclosures about Market Risk
|------- |  | ----------------------------------------------------------

During
the quarter and six-months ended June 30, 2007, there were no material changes in the
information called for by this item from the information contained in Item 7A of our
Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

|Item 4. |  | Controls and Procedures
|------- |  | -----------------------

At
the end of the period covered by this report, we carried out an evaluation, with the
participation of our management including our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of our disclosure controls and procedures. Based on our
evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were effective. There was no change in our internal
control over financial reporting during the quarter ended June 30, 2007 that has
materially affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

14



---

PART II - OTHER
INFORMATION

|Item 1A. |  | Risk Factors
|-------- |  | ------------

There
were no material changes from the risk factors previously disclosed in Item 1A to Part I
of our Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

|Item 6. |  | Exhibits
|------- |  | --------

|ExhibitNumber |  | Description
|------------- |  | -----------

|31.01 |  | Rule
13a-14(a) Certification of John Tulin, Chief Executive Officer of the Company.
|----- |  | -----------------------------------------------------------------------------------

|31.02 |  | Rule
13a-14(a) Certification of Jerold R. Kassner, Executive Vice President and Chief
Financial Officer of the Company.
|----- |  | -----------------------------------------------------------------------------------------------------------------------

|32.01 |  | Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|----- |  | -----------------------------------------------------------------------------------------------------------------------

15



---

# 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/ Jerold R. Kassner
Jerold R. Kassner,
Executive Vice President,
Chief Financial Officer and Treasurer
| |                                                                                                                                
| |                                                                                                                                

Date:   August
14, 2007

16



---

# EXHIBIT INDEX

|ExhibitNumber |  | Description
|------------- |  | -----------

|31.01 |  | Rule
13a-14(a) Certification of John Tulin, Chief Executive Officer of the Company.
|----- |  | -----------------------------------------------------------------------------------

|31.02 |  | Rule
13a-14(a) Certification of Jerold R. Kassner, Executive Vice President and Chief
Financial Officer of the Company.
|----- |  | -----------------------------------------------------------------------------------------------------------------------

|32.01 |  | Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|----- |  | -----------------------------------------------------------------------------------------------------------------------

17