UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

            (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 30, 1995

                                       OR

          ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                          Commission file number 1-6666

                               SALANT CORPORATION
             (Exact name of registrant as specified in its charter)
              1114 Avenue of the Americas, New York, New York 10036
                            Telephone: (212) 221-7500

Incorporated in the State of Delaware Employer Identification No. 13-3402444
                               Securities  registered  pursuant to Section
12(b) of the Act:
                      Common Stock, par value $1 per share,
                 registered on the New York Stock Exchange, and
          Series B Warrants, registered on the American Stock Exchange.

        Securities registered pursuant to Section 12(g) of the Act: None

         Indicate by check mark whether the registrant (l) 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 __

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K.

         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 X  No __

         As of March 19, 1996, there were outstanding  14,668,010  shares of the
Common Stock of the  registrant.  Based on the closing price of the Common Stock
on the New York Stock Exchange on such date,  the aggregate  market value of the
voting  stock  held  by  non-affiliates  of the  registrant  on  such  date  was
$37,222,078. For purposes of this computation,  shares held by affiliates and by
directors and executive  officers of the  registrant  have been  excluded.  Such
exclusion of shares held by directors  and  executive  officers is not intended,
nor shall it be deemed,  to be an admission  that such persons are affiliates of
the registrant.

Documents  incorporated by reference:  The definitive  Proxy Statement of Salant
Corporation  relating to the 1996 Annual Meeting of Stockholders is incorporated
by reference in Part III hereof.

<PAGE>





                                TABLE OF CONTENTS



PART I                                               

     Item  1.     Business
     Item  2.     Properties
     Item  3.     Legal Proceedings
     Item  4.     Submission of Matters to a Vote of Security Holders

PART II

     Item  5.     Market for Registrant's Common Equity and Related 
                  Shareholder Matters
     Item  6.     Selected Financial Data
     Item  7.     Management's Discussion and Analysis of Financial 
                  Condition and Results of Operations
     Item  8.     Financial Statements and Supplementary Data
     Item  9.     Disagreements on Accounting and Financial Disclosure

PART III

     Item 10.     Directors and Executive Officers of the Registrant
     Item 11.     Executive Compensation
     Item 12.     Security Ownership of Certain Beneficial Owners and Management
     Item 13.     Certain Relationships and Related Transactions

PART IV

     Item 14.     Exhibits, Financial Statement Schedule and Reports on Form 8-K

SIGNATURES


<PAGE>




                                     PART I

ITEM 1.  BUSINESS

Introduction.  Salant Corporation ("Salant"), which was incorporated in Delaware
in 1987, is the successor to a business  founded in 1893 and incorporated in New
York in 1919.  Salant  designs,  manufactures,  imports and markets to retailers
throughout  the United  States  brand name and private  label  apparel  products
primarily in three product categories:  (i) menswear;  (ii) children's sleepwear
and underwear;  and (iii) other products,  as described below.  Salant sells its
products to department and specialty stores,  national chains, major discounters
and mass volume  retailers  throughout the United States.  (As used herein,  the
"Company" includes Salant and its subsidiaries, but excludes Salant's Vera Scarf
division.)

Men's Apparel. The men's apparel business is comprised  principally of the Perry
Ellis, Texas Apparel, Thomson, Manhattan Apparel, Accessories, Fashion Shirt and
JJ.  Farmer  divisions.  The Perry  Ellis  division  markets  dress  shirts  and
sportswear  under the PERRY  ELLIS,  PORTFOLIO  BY PERRY  ELLIS and PERRY  ELLIS
AMERICA  trademarks.  The Texas Apparel  division  markets men's and boy's jeans
under Sears,  Roebuck & Co.'s ("Sears")  CANYON RIVER BLUES  trademark,  various
other private  labels and under the PERRY ELLIS AMERICA  trademark.  The Thomson
division  markets slacks  primarily under the THOMSON and PERRY ELLIS trademarks
and under various private labels.  The Manhattan  Apparel division markets dress
shirts and sportswear under the MANHATTAN  trademark as well as sportswear under
private label. The Accessories  division markets neckwear,  belts and suspenders
and the Fashion Shirt division  markets dress shirts under a number of different
trademarks,  primarily JOHN HENRY.  The JJ. Farmer division  markets  collection
sportswear under the JJ.
FARMER trademark.

Children's  Sleepwear  and  Underwear.  The  children's  sleepwear and underwear
business is conducted by the Company's Children's Apparel Group (the "Children's
Group").  The  Children's  Group markets  licensed  character  blanket  sleepers
primarily using a number of well-known, licensed cartoon characters, such as the
various DISNEY  characters.  The Children's Group also markets pajamas under the
OSHKOSH  B'GOSH  trademark,  and  sleepwear  and  underwear  under the JOE BOXER
trademark.

Other Businesses. The other businesses of the Company consist of (i) the women's
junior apparel  business,  conducted by the Company's Made in The Shade division
("Made In the Shade")  and (ii) a chain of factory  outlet  stores (the  "Stores
division"),  through which the Company sells its own products and those of other
apparel manufacturers.

Licensing Income.  The Company receives royalty income from the licensing
 of certain of its owned trademarks to other manufacturers.

Principal  Product Lines.  The following table sets forth, for fiscal years 1995
through 1993,  the  percentage of the Company's  total net sales  contributed by
each category of product:
<TABLE>
<CAPTION>

                                                                                            Fiscal Year
                                                                           1995            1994             1993

<S>                                                                         <C>             <C>              <C>
Men's Apparel                                                               85%             82%              80%
Children's Sleepwear and Underwear                                           8%              8%              10%
Other Businesses                                                             7%             10%              10%

</TABLE>

For more detailed  information  regarding the Company's  product  categories see
Note 10 to the Consolidated Financial Statements.

Approximately 12% of the Company's net sales in the year ended December 30, 1995
were made to Federated Department Stores, Inc. ("Federated"), which includes all
1995 net sales to Macy's  Department  Stores  ("Macy's"),  which was acquired by
Federated  in 1994,  and the  Broadway  Stores,  Inc.  ("Broadway"),  which  was
acquired  by  Federated  in  February  1996.  In 1994 and  1993,  net sales to a
combined  Federated/Macy's and Broadway would have represented approximately 15%
and 12% of the Company's net sales, respectively.  In 1995, approximately 11% of
the Company's net sales were made to TJX Corporation ("TJX"), which includes all
1995 net sales to Marshall's Corporation  ("Marshall's"),  which was acquired by
TJX in February 1996. In 1994 and 1993,  net sales to a combined  TJX/Marshall's
would have  represented  approximately  11% and 12% of the  Company's net sales,
respectively. No other customer accounted for more than 10% of the Company's net
sales during 1995, 1994 or 1993.

In 1995,  approximately  13% of the  Children's  Group's  net sales were made to
various divisions of the Dayton Hudson Corporation.  In addition,  approximately
16% of  the  Children's  Group  net  sales  were  equally  divided  between  two
customers: JC Penney Company and WalMart Stores, Inc. In 1995, approximately 19%
of the net sales of Other Businesses were made to JC Penney Company.

The markets in which the Company  operates are highly  competitive.  The Company
competes primarily on the basis of brand recognition,  quality,  fashion,  price
and customer service.

A significant  factor in the marketing of the Company's products is the consumer
perception  of the  trademark  or brand  name under  which  those  products  are
marketed. Approximately 73% of the Company's net sales for 1995 was attributable
to products sold under Company owned or licensed  designer  trademarks and other
internationally  recognized  brand  names and the balance  was  attributable  to
products sold under  retailers'  private  labels.  The following table lists the
principal owned or licensed  trademarks under which the Company's  products were
sold in 1995 and the product lines associated with those trademarks.  Trademarks
used under license are indicated with an asterisk;  all other listed  trademarks
are owned by the Company.

<TABLE>
<CAPTION>


<PAGE>


Trademark                                                           Product Lines

<S>                                                                 <C>
BATMAN *                                                            Children's sleepwear
DISNEY Characters *..............................................   Children's sleepwear and underwear
DR. DENTON.......................................................   Children's sleepwear and underwear
GANT *...........................................................   Men's dress shirts, neckwear, belts and suspenders
JJ. FARMER.......................................................   Men's and women's sportswear
JOE BOXER *......................................................   Children's sleepwear and underwear
JOHN HENRY.......................................................   Men's dress shirts, neckwear, belts and suspenders; men's jeans
LIBERTY OF LONDON *..............................................   Men's dress shirts, neckwear, belts and suspenders
MADE IN THE SHADE................................................   Women's junior sportswear
MANHATTAN........................................................   Men's dress shirts and sportswear
NINO CERRUTI *...................................................   Men's dress shirts and neckwear
OSH KOSH B'GOSH *................................................   Children's sleepwear
PEANUTS *........................................................   Men's dress shirts, neckwear and suspenders
PERRY ELLIS *....................................................   Men's sportswear, dress shirts, neckwear, belts and suspenders
PERRY ELLIS AMERICA *............................................   Men's casual sportswear and jeans
PORTFOLIO BY PERRY ELLIS *.......................................   Men's dress slacks, dress shirts, neckwear, belts and suspenders
POWER RANGERS *..................................................   Children's sleepwear and underwear
RON CHERESKIN *..................................................   Men's dress shirts
SALTY DOG *......................................................   Men's dress shirts, neckwear, belts and suspenders
SAVE THE CHILDREN *..............................................   Men's neckwear and suspenders
THOMSON..........................................................   Men's casual and dress slacks and dress shirts
UNICEF *.........................................................   Men's neckwear
WORLD WILDLIFE FUND *............................................   Men's t-shirts and neckwear
</TABLE>


During 1995,  approximately  31% of the Company's net sales was  attributable to
products  sold under the PERRY  ELLIS,  PORTFOLIO BY PERRY ELLIS and PERRY ELLIS
AMERICA  trademarks;  these  products are sold through  leading  department  and
specialty  stores.  Products  sold  under  the  MANHATTAN  label  accounted  for
approximately  10% of the  Company's net sales during 1995;  these  products are
marketed  primarily through mass volume retailers.  Products sold under the JOHN
HENRY label  accounted  for  approximately  8% of the Company's net sales during
1995;  these products are marketed  primarily  through  department and specialty
stores.  Products  sold to Sears under its  exclusive  brand  CANYON RIVER BLUES
accounted for 8% of the Company's net sales during 1995. Products sold under the
THOMSON label accounted for  approximately  5% of the Company's net sales during
1995; these products are sold primarily through department and specialty stores.
No other line of products  accounted for more than 5% of the Company's net sales
during 1995.

Trademarks  Owned by the Company and  Related  Licensing  Income.  The Company
  owns the DR.  DENTON,  JJ.  FARMER,  JOHN HENRY,  LADY MANHATTAN, 
 MADE IN THE SHADE,  MANHATTAN  and THOMSON  trademarks,  among  others.
  All of the  significant  brand names owned by the Company have been 
registered or are pending registration with the United States Patent
 and Trademark Office.

The Company has sought to capitalize on consumer  recognition of and interest in
its trademarks by licensing various of those trademarks to others. As of the end
of 1995, licenses were outstanding to approximately 63 licensees to make or sell
apparel  products and accessories in the United States and to 36 licensees in 28
other  countries  under  the  MANHATTAN,  LADY  MANHATTAN,  JOHN  HENRY and VERA
trademarks, which produced royalty income of approximately $6.6 million in 1995.
Products under license include men's  activewear,  dress shirts,  gloves,  hats,
leather  accessories,  neckwear,  optical  frames,  outerwear,  pajamas,  robes,
scarves, slacks, socks, sportcoats, sportshirts,  sunglasses, sweaters, swimwear
and  underwear,  and  women's  blouses  and tops,  handbags,  intimate  apparel,
lingerie, optical frames, pants, scarves, shirts and socks.

Trademarks Licensed to the Company.  The name Perry Ellis and related trademarks
are  licensed to the  Company  under a series of license  agreements  with Perry
Ellis  International,  Inc.  ("PEI").  The license  agreements  contain  renewal
options which,  subject to compliance with certain conditions contained therein,
permit the Company to extend the terms of such license agreements.  Assuming the
exercise by the Company of all available renewal options, the license agreements
covering  men's apparel and  accessories  will expire on December 31, 2015.  The
Company also has rights of first refusal  worldwide for any new licenses granted
by PEI for men's apparel and accessories.

The Company is also a licensee of various  trademarks,  including BATMAN,  GANT,
LIBERTY OF LONDON, NINO CERRUTI, OSH KOSH B'GOSH, PEANUTS, RON CHERESKIN,  SALTY
DOG, SAVE THE CHILDREN,  WORLD WILDLIFE FUND, certain DISNEY  characters,  POWER
RANGERS,  JOE BOXER and UNICEF, for various categories of products under license
agreements expiring between 1996 and 2003.

The agreements  under which the Company is licensed to use  trademarks  owned by
others typically provide for royalties at varying percentages of net sales under
the licensed trademark, subject to a minimum annual royalty payable irrespective
of the  level of net  sales.  The  Company  anticipates  that it will be able to
extend, if it so desires, the term of any material licenses when they expire.

Design and  Manufacturing.  Products sold by the Company's various divisions are
manufactured to the designs and specifications  (including fabric selections) of
designers employed by those divisions. In limited cases, the Company's designers
may receive input from one or more of the Company's  licensors on general themes
or color palettes.

During 1995, approximately 18% of the products produced by the Company (measured
in units) were manufactured in the United States, with the balance  manufactured
in  foreign  countries.   Facilities  operated  by  the  Company  accounted  for
approximately  78% of its  domestic-made  products  and 26% of its  foreign-made
products;  the balance in each case was  attributable to  unaffiliated  contract
manufacturers.  In 1995,  approximately 42% of the Company's foreign  production
was manufactured in Mexico,  approximately 12% was manufactured in the Dominican
Republic and approximately 11% was manufactured in Guatemala.

The Company's foreign sourcing  operations are subject to various risks of doing
business  abroad,  including  currency  fluctuations  (although the  predominant
currency used is the U. S.  dollar),  quotas and, in certain parts of the world,
political   instability.   Although  the  Company's  operations  have  not  been
materially  adversely  affected by any of such factors to date, any  substantial
disruption  of its  relationships  with its foreign  suppliers  could  adversely
affect its operations.  Some of the Company's imported merchandise is subject to
United States Customs  duties.  In addition,  bilateral  agreements  between the
major exporting  countries and the United States impose quotas,  which limit the
amounts of certain  categories  of  merchandise  that may be  imported  into the
United States. Any material increase in duty levels,  material decrease in quota
levels or material  decrease in  available  quota  allocations  could  adversely
affect the Company's operations.

As discussed in Item 2.  Properties,  the Company has  manufacturing  facilities
located in Mexico.  The  adoption  of the North  American  Free Trade  Agreement
(NAFTA) has  benefited  the Company by (i) reducing  and/or  eliminating  United
States  Customs  duties on  merchandise  manufactured  in the  Company's  leased
facilities in Mexico,  (ii) eliminating  quotas on this  merchandise,  and (iii)
eliminating restrictions on the export of merchandise from the United States for
sale in both Mexico and Canada.  Also,  the  devaluation  in 1995 of the Mexican
peso  against the U.S.  dollar  benefited  the Company as a result of  employees
being paid in Mexican  pesos  which the  Company  purchases  with U.S.  dollars.
However,  the benefit of the  devaluation  (gross  amount of $5.0  million)  was
offset  by  increased  expenses  relating  to the  devaluation  in  Mexico;  the
estimated net benefit was $2.5 million.

Raw Materials.  The raw materials used in the Company's manufacturing operations
consist principally of finished fabrics made from natural, synthetic and blended
fibers.  These  fabrics  and  other  materials,  such  as  leathers  used in the
manufacture of various accessories, are purchased from a variety of sources both
within and outside the United States. The Company believes that adequate sources
of supply at  acceptable  price  levels are  available  for all such  materials.
Substantially  all of the Company's  foreign  purchases are  denominated in U.S.
currency.  No  single  supplier  accounted  for more  than 10% of  Salant's  raw
material  purchases  during  1995.  The  Company  has not  engaged in  financial
activities  through the use of  derivatives  or  otherwise  to hedge or diminish
currency risks or fluctuations.

Seasonality of Business. Although the Company typically introduces and withdraws
various  individual  products  throughout  the  year,  the  Company's  principal
products are organized into seasonal lines for resale at the retail level during
the spring,  fall and Christmas seasons.  The Company's products are designed as
much as one year in advance and manufactured approximately one season in advance
of the related retail selling season.

Backlog of Orders.  The Company  does not  consider the amount of its backlog of
orders to be significant to an  understanding  of its business  primarily due to
increased  utilization  of EDI  technology,  which  provides for the  electronic
transmission of orders from customers' computers to the Company's computers.  As
a result,  orders are placed closer to the required  delivery date than had been
the case prior to EDI technology.  As of March 2, 1996, the Company's backlog of
orders was  approximately  $114 million,  17% less than the backlog of orders of
approximately  $137 million that existed as of March 4, 1995.  This  decrease is
primarily related to a planned shift in the focus of sales of men's slacks, away
from  branded  and private  label  sales and toward  sales under the PERRY ELLIS
trademark.

Employees.  As of the end of 1995,  the  Company  employed  approximately  4,200
persons, of whom 3,600 were engaged in manufacturing and distribution operations
and the  remainder  were employed in  executive,  marketing  and sales,  product
design,  engineering  and  purchasing  activities  and in the  operation  of the
Company's factory outlet stores. Certain manufacturing  employees are covered by
collective  bargaining  agreements  with various  unions,  which expire  between
August 31, 1996 and November 30, 1997.  The Company  believes that its relations
with its employees are satisfactory.

Competition. The apparel industry in the United States is highly competitive and
characterized by a relatively small number of multi-line  manufacturers (such as
the Company) and a larger number of specialty  manufacturers.  The Company faces
substantial  competition in its markets from  manufacturers  in both categories.
Many of the Company's  competitors  have greater  financial  resources  than the
Company.  The Company seeks to maintain its competitive  position in the markets
for its branded products on the basis of the strong brand recognition associated
with those  products and,  with respect to all of its products,  on the basis of
styling, quality, fashion, price and customer service.

Environmental  Regulations.  Current environmental regulations have not had, and
in the opinion of the Company,  assuming the continuation of present conditions,
will not have a material effect on the business, capital expenditures,  earnings
or competitive position of the Company.

Bankruptcy  Court Cases.  On June 27, 1990 (the "Filing  Date"),  Salant and its
wholly owned subsidiary,  Denton Mills,  Inc. ("Denton Mills"),  each filed with
the United States  Bankruptcy  Court for the Southern  District of New York (the
"Bankruptcy Court") a separate voluntary petition for relief under chapter 11 of
title 11 of the United States Code (the "Bankruptcy Code") (Case Nos. 90-B-12037
(CB) and 90-B-12038  (CB)) (the "Chapter 11 Cases").  The Company's other United
States  subsidiaries on the Filing Date did not seek relief under the Bankruptcy
Code. On July 30, 1993,  the  Bankruptcy  Court issued an order  confirming  the
Third  Amended  Joint Plan of  Reorganization  of Salant  and Denton  Mills (the
"Reorganization Plan"). The Reorganization Plan was consummated on September 20,
1993  (the  "Consummation   Date"),  as  further  described  in  Item  3.  Legal
Proceedings and in Note 18 to the financial statements.

Vera Scarf  Division -  Discontinued  Operation.  In February  1995, the Company
discontinued  its Vera Scarf  division,  which  imported  and  marketed  women's
scarves under (i) the  Company-owned  trademarks VERA and ACUTE, (ii) trademarks
licensed to the Company,  including PERRY ELLIS,  and (iii)  retailers'  private
labels.  The  Company  closed the Vera Scarf  division  in 1995.  The  financial
statements of the Company  included in this report treat the Vera Scarf division
as a discontinued operation.



<PAGE>


ITEM 2.  PROPERTIES

The  Company's  principal  executive  offices  are located at 1114 Avenue of the
Americas,  New York, New York 10036. The Company's principal  properties consist
of six domestic  manufacturing  facilities located in Alabama,  Georgia (2), New
York, Tennessee and Texas, four manufacturing  facilities located in Mexico, and
six  distribution  centers located in Georgia,  New York, South Carolina (2) and
Texas (2). The Company owns approximately 1,279,000 square feet of space devoted
to manufacturing and distribution and leases  approximately  570,000 square feet
of such space.  The Company owns  approximately  34,000  square feet of combined
office,  design and showroom space and leases approximately  172,000 square feet
of  such  space.  The  Children's  Group  has  exclusive  use of  the  Tennessee
manufacturing facility,  shares one of the Mexican manufacturing facilities with
the Texas  Apparel  division  and has its  distribution  center in a building in
Texas which it shares with the Texas  Apparel  division.  As of the end of 1995,
the Company's  Stores  division  operated 71 factory outlet  stores,  comprising
approximately  214,000  square feet of selling  space,  all of which are leased.
Except as noted above, substantially all of the owned and leased property of the
Company  is used in  connection  with its  men's  apparel  business  or  general
corporate administrative functions.

The Company believes that its plant and equipment are adequately maintained,  in
good operating condition, and are adequate for the Company's present needs.

ITEM 3.  LEGAL PROCEEDINGS

(a) Chapter 11 Cases. On June 27, 1990,  Salant and Denton Mills each filed with
the Bankruptcy Court a separate  voluntary  petition for relief under chapter 11
of the Bankruptcy  Code. On July 30, 1993, the Bankruptcy  Court issued an order
confirming the debtors' Reorganization Plan.

The  Reorganization  Plan was  consummated on September 20, 1993. From that date
through  December  30, 1995  (approximately  27 months),  the Company  made cash
payments of $8.8 million,  issued $111.9  million of new 10-1/2%  senior secured
notes,  and issued 10.9 million  shares of common stock in settlement of certain
undisputed and disputed claims in the chapter 11 proceedings. Salant anticipates
that an additional $4.8 million in cash and an additional 376 thousand shares of
common stock may ultimately be distributed in connection  with the resolution of
all remaining claims. Provisions for such distributions had previously been made
in the  consolidated  financial  statements  at the time of  emergence  from the
bankruptcy  during the year ended  January 1,  1994.  The  process of  resolving
claims is continuing and, pursuant to the Reorganization Plan, remains under the
jurisdiction of the Bankruptcy Court.

(b) Other.  The Company is a defendant in several  other legal  actions.  In the
opinion of the  Company's  management,  based upon the advice of the  respective
attorneys  handling  such cases,  such actions will not have a material  adverse
effect  on  the  Company's   consolidated   financial  position  or  results  of
operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter of 1995, no matter was submitted to a vote of security
holders of Salant by means of the solicitation of proxies or otherwise.



<PAGE>


                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

Salant's  Common  Stock is traded on the New York Stock  Exchange  (the  "NYSE")
under the trading symbol SLT.

The high and low sale  prices  per share of Common  Stock  (based  upon the NYSE
composite tape as reported in published  financial  sources) for each quarter of
1995 and 1994 are set  forth  below.  The  Company  did not  declare  or pay any
dividends during such years. Both (i) the indenture  governing  Salant's 10-1/2%
Senior  Secured Notes due December 31, 1998 (the "Senior  Notes"),  and (ii) the
revolving  credit,  factoring and security  agreement,  dated September 20, 1993
(the "Credit Agreement"),  with the CIT Group/Commercial  Services, Inc. require
the  satisfaction  of certain  net worth  tests prior to the payment of any cash
dividends by Salant.  As of December 30, 1995, Salant was prohibited from paying
cash dividends by the most restrictive of these provisions.
<TABLE>
<CAPTION>

             High and Low Sale Prices Per Share of the Common Stock

                  Quarter                                    High                                   Low

                  1995
<S>                                                      <C>                                    <C>
                  Fourth                                 $  5 7/8                                $  3 3/8
                  Third                                     6                                         3 1/4
                  Second                                    4 1/4                                   2 3/4
                  First                                     5 7/8                                   3 1/4

                  1994
                  Fourth                               $  6                                      $  4 3/8
                  Third                                   7                                       5
                  Second                                    8 3/8                                   6 1/8
                  First                                     9 3/8                                   6 3/4

</TABLE>

On March 19, 1996, there were 1,177 holders of record of shares of Common Stock,
and the closing market price was $4 5/8.

All of the outstanding voting securities of the Company's subsidiaries are owned
beneficially  and  (except  for shares of certain  foreign  subsidiaries  of the
Company  owned of  record  by others  to  satisfy  local  laws) of record by the
Company.


<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA
(Amounts in thousands except share, per share and ratio data)
<TABLE>
<CAPTION>

                                                       Dec. 30,      Dec. 31,      Jan. 1,      Jan. 2,     Dec. 28,
                                                          1995          1994         1994         1993         1991
                                                     (52 Weeks)    (52 Weeks)   (52 Weeks)   (53 Weeks)   (52 Weeks)

For The Year Ended:
  Continuing Operations:
<S>                                                   <C>           <C>         <C>           <C>           <C>
    Net sales                                         $ 501,522     $ 419,285   $  402,098    $ 411,021     $392,804
    Income/(loss) from continuing operations              (498)         3,507        7,816      (4,687)     (17,731)
    Discontinued Operations:
      Loss from operations, net of income taxes            -          (9,639)        (589)      (1,299)      (1,378)
      Estimated loss on disposal, net of income taxes      -          (1,796)         -        (11,772)        -
      Reversal of estimated loss on disposal,
       net of income taxes                                 -              -         11,772         -           -
    Extraordinary gain (a)                                1,000            63       24,707         -           -
    Net income/(loss)(b)                                    502       (7,865)       43,706     (17,758)     (19,109)
    Income/(loss) per share from continuing
     operations before extraordinary gain             $  (0.03)     $    0.23      $  1.10     $ (1.35)     $ (5.12)
    Income/(loss) per share from discontinued
     operations                                            -           (0.76)         1.57       (3.78)       (0.40)
    Income per share from extraordinary gain               0.06           -           3.48         -           -
    Net income/(loss) per share (b)                        0.03        (0.53)         6.15       (5.13)       (5.52)
    Cash dividends per share                               -              -           -            -           -


At Year End:
  Current assets                                      $ 160,826     $ 168,411     $157,622    $ 160,146     $159,864
  Total assets                                          255,720       267,216      253,232      259,466      270,651
  Current liabilities                                    63,454        72,163       45,713       55,093       38,091
  Long-term debt                                        110,040       109,908      111,851        -            -
  Deferred liabilities                                   11,373        13,479       16,766        2,462        5,833
  Liabilities deferred pursuant to chapter 11 cases        -              -           -         266,420      272,977
  Working capital                                        97,372        96,248      111,909      105,053      121,773
  Current ratio                                           2.5:1         2.3:1        3.4:1        2.9:1        4.2:1
  Shareholders' equity/(deficiency)                  $   70,853     $  71,666     $ 78,902    $(64,509)    $(46,250)
  Book value per share                             $       4.71     $    4.78     $   5.34    $ (18.62)    $ (13.37)
  Number of shares outstanding                           15,041        15,008       14,781        3,463        3,463

</TABLE>


(a)  Includes,  for the year ended December  30,1995,  a gain of $1,000 (6 cents
     per  share)  related  to the  reversal  of  excess  liabilities  previously
     provided for the anticipated  settlement of claims arising from the Chapter
     11 proceeding;  for the year ended December 31, 1994, a gain of $63 (no per
     share  effect)  related to the purchase and  retirement of a portion of the
     Company's  10 1/2%  Senior  Secured  Notes at a price  below the  principal
     amount  thereof;  and for the year ended January 1, 1994, a gain of $24,707
     ($3.48 per share) related to the settlement and  anticipated  settlement of
     claims arising from the Chapter 11 proceeding.

(b)  Includes,  for the year ended  December 30, 1995, a provision of $3,550 (24
cents per share; tax benefit not available) for restructuring  costs principally
related  to (i) fixed  asset  write-downs  at  locations  to be closed  and (ii)
inventory  markdowns for discontinued  product lines; for the year ended January
1, 1994, a provision of $5,500 (77 cents per share;  tax benefit not  available)
for restructuring  costs principally related to the costs incurred in connection
with the closure of certain  unprofitable  operations,  including  (i) inventory
markdowns  associated with those product lines and (ii) fixed asset  write-downs
at closed  locations;  for the year ended  January 2, 1993,  (a) a provision  of
$4,824 ($1.39 per share;  tax benefit not  available)  for  restructuring  costs
principally related to (i) the estimated costs to be incurred in connection with
the closure of certain unprofitable operations, (ii) the rejection,  pursuant to
the Bankruptcy  Code, of certain lease  obligations,  and (iii) the write-off of
leasehold improvements, and buildings and equipment at closed locations, and (b)
the  write-off  of certain  intangible  assets of $6,759  ($1.95 per share;  tax
benefit  not  available);  and for the  year  ended  December  28,  1991,  (a) a
provision  of  $12,984  ($3.75  per  share;   tax  benefit  not  available)  for
restructuring  costs  principally  related to (i) the closure of certain women's
wear operations,  (ii) the closure of certain unprofitable retail factory outlet
stores,  (iii) the rejection,  pursuant to the Bankruptcy Code, of certain lease
obligations  and (iv) an accrual for payment  pursuant to a severance  agreement
with the  previous  chief  executive  officer of Salant,  (b) the  write-off  of
certain  intangible and other assets of $6,587 ($1.90 per share; tax benefit not
available) and (c) management fee income of $1,962 ($0.57 per share) as a result
of a settlement of certain litigation.


<PAGE>




ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS

The following  discussion and analysis of the consolidated results of operations
and financial  condition  should be read in  conjunction  with the  accompanying
Consolidated  Financial  Statements  and  related  Notes to  provide  additional
information   concerning  the  financial  activities  and  condition  of  Salant
Corporation   ("Salant")  and  its  subsidiary  companies   (collectively,   the
"Company").

Results of Operations

The following  discussion  compares the operating results of the Company for the
year ended  December  30,  1995 with the  operating  results for the years ended
December  31,  1994  and  January  1,  1994.  In  February   1995,  the  Company
discontinued its Vera Scarf division.  The financial statements included in this
Annual  Report,  consistent  with the 1994 Annual  Report,  treat the Vera Scarf
division  as a  discontinued  operation,  the effect of which is to exclude  the
results of operations of the Vera Scarf division from the Company's results from
continuing  operations for each year presented.  See Note 17 of the Notes to the
Consolidated  Financial  Statements.  As  announced  in March 1994,  the Company
determined  to retain and  continue to operate  its  Children's  Apparel  Group.
Consequently,  the  Company's  financial  statements  for all periods  presented
include the results of operations of that division.
<TABLE>
<CAPTION>

                                                                (dollars in millions)
                                                                   For the year ended
                                                  December 30,          December 31,       January 1,
                                                          1995                  1994             1994

<S>                                                    <C>                    <C>              <C>
Net sales                                              $501.5                 $419.3           $402.1
Gross profit                                           $103.9                $  93.2           $ 98.1
Gross margin                                              20.7%                  22.2%             24.4%
Income from continuing operations
 before interest, income taxes and
 extraordinary gain                                     $19.2                  $19.5            $15.6
</TABLE>

Fiscal 1995 Compared with Fiscal 1994

For the 1995 fiscal year, net sales amounted to $501.5 million, a 19.6% increase
over net sales of $419.3 million in fiscal year 1994. The increase was primarily
attributable to significant sales increases in the men's apparel business.



<PAGE>


<TABLE>
<CAPTION>

                                                   (dollars in millions)
                                               Net sales and percentage of total                    Percentage
                                           for the year ended                                        Increase/
                                           December 30, 1995          December 31, 1994          (Decrease)

<S>                                            <C>             <C>       <C>               <C>        <C>
Men's Apparel                                  $423.9          85%       $343.5            82%        23.4%
Children's Sleepwear and Underwear               39.9           8%         35.5             8%        12.5%
Other Businesses (a)                             37.7           7%         40.3            10%        (6.5%)

        Total                                $501.5          100%        $419.3        100%           19.6%

</TABLE>

(a)  Includes  the Made in the  Shade  division  (a  women's  junior  sportswear
business) and the Stores division.

Net sales of men's apparel increased $80.4 million,  or 23.4%. This increase was
primarily  attributable  to (a) the  introduction  of  Canyon  River  Blues,  an
exclusive  brand  program for Sears,  Roebuck & Co.,  which  accounted for $41.7
million of the increase,  (b) the growth of the Company's Perry Ellis sportswear
business,  which increased $18.2 million,  or 30.1%, in 1995, (c) an increase in
the Company's  dress shirt sales of $11.2 million,  or 8.8%, in 1995, and (d) an
increase  in  sportswear  sales by the  Manhattan  Sportswear  division  of $6.0
million,  or 39.3%,  in 1995.  Excluding  dress  shirt net sales  under the GANT
label,  which was  licensed in June 1994,  the  Company's  dress shirt net sales
increased 7.4% in 1995.

Net sales of  Children's  sleepwear  and underwear  increased  $4.4 million,  or
12.5%, in 1995. This increase was primarily a result of the expansion of the JOE
BOXER product line, which began shipping in 1994.

Net sales of the other  businesses  decreased  $2.6  million,  or 6.5%, in 1995,
primarily as a result of lower  shipments by the Made in the Shade  division due
to the lack of orders at acceptable margins.

Gross profit as a percentage of net sales  decreased to 20.7% in 1995 from 22.2%
in 1994.  The  reduction  in gross  profit  as a  percentage  of net  sales  was
primarily  a result of  continuing  pressure  on selling  prices in all  product
categories and at all levels of distribution  which are, in large part, a result
of the slow retail economy.  In addition,  certain  businesses  entered into and
expanded in 1995 (Canyon  River Blues and  Manhattan  Sportswear)  yield a lower
gross margin than traditionally earned by the Company's merchandise.

The Company's gross margin was also negatively  affected by higher than expected
costs  associated  with the start-up of the Canyon River Blues program which are
not anticipated to continue in 1996.




<PAGE>


<TABLE>
<CAPTION>

                                                       (dollars in millions)
                                                 Gross profit and gross margin
                                                         for the year ended
                                           December 30, 1995          December 31, 1994

<S>                                             <C>        <C>            <C>         <C>
Men's Apparel                                   $79.1      18.7%          $70.9       20.6%
Children's Sleepwear and Underwear               10.8      26.9%            7.9       22.2%
Other    Businesses (a)                          14.0      37.1%           14.4       35.7%

        Total                                $103.9         20.7%        $ 93.2        22.2%

</TABLE>

(a)  Includes  the Made in the  Shade  division  (a  women's  junior  sportswear
business) and the Stores division.

Selling,  general and  administrative  ("S,G&A")  expenses for 1995  amounted to
$85.4 million,  or 17.0% of net sales, as compared to $79.3 million, or 18.9% of
net sales,  for 1994.  The reduced  S,G&A  expenses as a percentage of net sales
relates,  in part, to certain  businesses  entered into and expanded in 1995 (as
indicated above) which required minimal incremental expenses.

The provision for restructuring of $3.6 million related primarily to the planned
closing in 1996 of a  manufacturing  facility  in Thomson,  Georgia,  as well as
certain  expenses related to the  discontinuation  of several dress shirt lines,
including Liberty of London,  Nino Cerruti and Ron Chereskin.  It is anticipated
that additional charges totalling approximately $1.5 to $2.0 million relating to
the closure in Thomson, Georgia will be incurred in 1996.

Income  from   continuing   operations   before   interest,   income  taxes  and
extraordinary  gain as a percentage of net sales  decreased to 3.8% in 1995 from
4.6% in 1994.  This  percentage  reduction  was  primarily a result of the gross
margin  decrease,  S,G&A expense changes and the provision for  restructuring as
discussed above.

<TABLE>
<CAPTION>

                              (dollars in millions)
                    Income from continuing operations before
                  interest, income taxes and extraordinary gain
                                and percentage of
                          net sales for the year ended
                                            December 30, 1995         December 31, 1994

<S>                                          <C>             <C>        <C>            <C>
Men's Apparel                                $   19.8        4.7%       $  17.4        5.1%
Children's Sleepwear and Underwear                5.2       13.0%           3.1        8.8%
Other Businesses (a)                             (2.2)      (5.9%)         (0.5)      (1.3%)
                                                 22.8        4.5%          20.0        4.8%
Corporate expenses                               (9.2)                     (6.2)
Licensing division income                         5.6                       5.7
Income from continuing
 operations before interest, income
 taxes and extraordinary gain                $   19.2        3.8%       $  19.5        4.6%

</TABLE>

(a)  Includes  the Made in the  Shade  division  (a  women's  junior  sportswear
business) and the Stores division.

Net  interest  expense for 1995  amounted to $19.4  million as compared to $15.6
million in the prior year,  an increase of $3.8  million.  Of this amount,  $2.7
million was  attributable to a higher average  outstanding loan balance in 1995.
$1.1 million of this  increase  related to an increase in the  weighted  average
interest  rate on  borrowings  from  7.8% in 1994 to 9.9% in 1995,  of which the
majority related to an increase in the average prime rate.

The loss from continuing  operations before extraordinary gain was $0.5 million,
or  $0.03  per  share,   versus  income  from   continuing   operations   before
extraordinary gain of $3.5 million,  or $0.23 per share, a year earlier.  At the
end of 1995,  the  Company had  15,102,000  weighted  average  common and common
equivalent shares outstanding  versus 14,954,000  weighted average common shares
outstanding at the end of the prior year.

For 1994, the Company  recognized a charge of $11.4 million,  or $0.76 per share
for the  discontinuance  of the Vera Scarf division  (inclusive of approximately
$300 thousand of losses  incurred by the division in the first three quarters of
1994). The Vera Scarf division had net sales of $5.1 million in 1994.

In the fourth quarter of 1995, the Company recorded an extraordinary  gain of $1
million related to the reversal of excess  liabilities  previously  provided for
the anticipated settlement of claims arising from the chapter 11 proceeding.

As a result of the above,  net income for 1995 was $0.5 million,  or $0.03 per
 share,  compared  with a net loss of $7.9  million,  or
$0.53 per share in 1994.

As of December 30, 1995,  there were 15,042,000  shares of the Company's  common
stock  outstanding.  The weighted average number of common and common equivalent
shares  outstanding for the 1995 fiscal year was 15,102,000,  including  376,000
shares that the Company anticipates will be issued to creditors.

Earnings  before  interest,  taxes,  depreciation,  amortization,  restructuring
charges,  discontinued  operations and  extraordinary  gain was $30.5 million in
1995,  compared to $27.0 million in 1994, an increase of $3.5 million, or 13.1%.
The Company believes this information is helpful in understanding cash flow from
operations that is available for debt service,  taxes and capital  expenditures.
This measure is not contained in Generally Accepted Accounting Principles and is
not a  substitute  for  operating  income,  net  income or net cash  flows  from
operating activities.

Inflation and Recent Legislation

Management believes that the rate of inflation over the past three years has not
had a material impact on Salant's operating results.

The adoption of the North  American  Free Trade  Agreement  (NAFTA),  enacted in
1993, has benefited the Company's  business by (i) reducing  and/or  eliminating
United States Customs duties on merchandise manufactured in the Company's leased
facilities in Mexico,  (ii) eliminating  quotas on this  merchandise,  and (iii)
eliminating restrictions on the export of merchandise from the United States for
sale in both Mexico and  Canada.  Also,  the  devaluation  of the  Mexican  peso
against the U.S.  dollar  throughout  1995  benefited the Company as a result of
employees  being paid in Mexican  pesos  which the Company  purchases  with U.S.
dollars.  However, the benefit of the devaluation (gross amount of $5.0 million)
was offset by increased  expenses  relating to the  devaluation  in Mexico;  the
estimated net benefit was $2.5 million.

Fiscal 1994 Compared with Fiscal 1993

For the 1994 fiscal year, net sales amounted to $419.3 million,  a 4.3% increase
over net  sales of  $402.1  million  in  fiscal  year  1993.  The  increase  was
attributable  to  significant  sales  increases  in the men's  apparel  business
achieved by the Company's Perry Ellis, Thomson, Manhattan Apparel and JJ. Farmer
divisions.  Manhattan Apparel  commenced  shipping men's sportswear in September
1993, and JJ. Farmer is a label which was acquired in June 1994. These increases
were  partially  offset by reductions in net sales of  denim-based  products and
men's  accessories.  Notwithstanding  the popularity of the casualwear  trend in
offices  which  contributed  to a slight  decrease  in the  overall  dress shirt
market,  the  Company's  dress  shirt net sales  increased  slightly  in 1994 as
compared to 1993. In 1994, the Company signed a new license  agreement for dress
shirts to be produced and sold under the GANT label.  This label  accounted  for
net sales of $2.8 million in 1994.
<TABLE>
<CAPTION>

                                                      (dollars in millions)
                                        Net sales and percentage of total Percentage

                                            for the year ended                       Increase/
                                           December 31, 1994              January 1, 1994        (Decrease)

<S>                                            <C>            <C>        <C>             <C>           <C>
Men's Apparel                                  $343.5         82%        $323.7          80%           6.1%
Children's Sleepwear and Underwear               35.5          8%          39.5          10%         (10.1%)
Other Businesses (a)                             40.3         10%          38.9          10%           3.7%

        Total                                  $419.3        100%        $402.1        100%            4.3%

</TABLE>

(a)  Includes  the Made in the  Shade  division  (a  women's  junior  sportswear
business) and the Stores division.

Gross profit as a percentage of net sales  decreased to 22.2% ($93.2 million) in
1994 from 24.4%  ($98.1  million) in 1993.  The  reduction  in gross profit as a
percentage of net sales was incurred  primarily in men's  apparel.  The cause of
the reduction was (a) continuing pressure on selling prices, (b) a change in the
Company's  mix to lower priced  sportswear,  which  carries a lower gross profit
margin,  as a result of the  introduction of Manhattan label  sportswear late in
the third  quarter  of 1993,  and (c)  certain  cost  increases  related  to the
introduction of wrinkle-free dress shirts.



<PAGE>


<TABLE>
<CAPTION>

                              (dollars in millions)
                          Gross profit and gross margin
                               for the year ended
                                           December 31, 1994              January 1, 1994

<S>                                             <C>         <C>           <C>         <C>
Men's Apparel                                   $70.9       20.6%         $79.1       24.4%
Children's Sleepwear and Underwear                7.9       22.2%           5.8       14.7%
Other Businesses (a)                             14.4       35.7%          13.2       34.0%

        Total                                $ 93.2         22.2%        $ 98.1       24.4%

</TABLE>

(a)  Includes  the Made in the  Shade  division  (a  women's  junior  sportswear
business) and the Stores division.

S,G&A  expenses for 1994 amounted to $79.2  million,  or 18.9% of net sales,  as
compared to $73.9  million,  or 18.4% of net sales,  for 1993.  The  increase in
S,G&A  expenses  was  primarily  attributable  to  (a)  costs  of  $2.2  million
associated  with new product  lines (JJ.  Farmer which was acquired in June 1994
and  Manhattan  sportswear,  which  began  shipping in  September  1993) and (b)
payroll and occupancy costs of $1.3 million related to an increase in the number
of factory outlet stores in operation in 1994.

Royalty  income in 1994 was $6.7 million.  During 1993,  royalty income was $8.0
million.  The  decrease  in  royalty  income  was  primarily  the  result of the
termination of a significant  license  agreement in 1993, and the absence of the
related  licensing  revenue in 1994. The product for which royalties  previously
were received became the basis of the Company's Manhattan  Sportswear  division,
which  commenced  shipping  in the third  quarter of 1993.  The license for this
product had contributed income of $580 thousand in 1993.

In 1993, the Company recorded a $5.5 million provision for restructuring,  which
included $5.0 million  related to the  restructuring  of the Children's  Apparel
Group.

Income  from   continuing   operations   before   interest,   income  taxes  and
extraordinary  gain  increased as a percentage of net sales from 3.9% in 1993 to
4.6% in 1994. This percentage  increase was primarily as a result of the absence
of  the  provision  for   restructuring  of  $5.5  million  and  the  bankruptcy
administration  expenses of $8.9 million  which were recorded in 1993, as offset
by the lower gross margins achieved in 1994, as discussed above.



<PAGE>



<TABLE>
<CAPTION>
                              (dollars in millions)
                    Income from continuing operations before
                  interest, income taxes and extraordinary gain
                                and percentage of
                          net sales for the year ended
                        December 31, 1994 January 1, 1994

<S>                                           <C>            <C>        <C>            <C>
Men's Apparel                                 $  17.4        5.1%       $  29.1        9.0%
Children's Sleepwear and Underwear                3.1        8.8%          (3.1)      (8.1)%
Other Businesses (a)                             (0.5)      (1.3%)         (0.4)      (1.0)%

                                                 20.0        4.8%          25.6        6.4%
Corporate expenses                               (6.2)                     (7.5)
Licensing division income                         5.7                       6.4
Bankruptcy administration expenses              --                         (8.9)
Income from continuing
 operations before interest, income
 taxes and extraordinary gain                 $  19.5        4.6%       $  15.6        3.9%

</TABLE>

(a)  Includes  the Made in the  Shade  division  (a  women's  junior  sportswear
business) and the Stores division.

Net interest expense for 1994 amounted to $15.6 million compared to $7.5 million
in the prior year. Until September 20, 1993,  Salant was operating under chapter
11 of the Bankruptcy  Code and,  accordingly,  was not accruing  interest on its
prepetition debt.

Income from continuing operations before extraordinary gain was $3.5 million, or
$0.23 per share,  compared to $7.8 million,  or $1.10 per share, a year earlier.
At  the  end of  1994,  the  Company  had  14,954,000  weighted  average  shares
outstanding  versus  7,104,000  weighted  average  shares and share  equivalents
outstanding  at the end of the prior year.  The increase in the number of shares
outstanding was related to the Company's  emergence from bankruptcy in September
1993.

For 1994, the Company recognized a charge of $11.4 million,  or $0.76 per share,
reflecting  the  discontinuance  of  the  Vera  Scarf  division   (inclusive  of
approximately  $300  thousand of losses  incurred  by the  division in the first
three  quarters of 1994).  The Vera Scarf division had net sales of $5.1 million
in 1994.

For 1993, the Company  recognized an  extraordinary  gain of $24.7  million,  or
$3.48 per share, related to the Company's emergence from bankruptcy, a loss from
discontinued  operations  of  $589,000,  or $0.08 per share,  and a reversal  of
estimated loss on disposal of discontinued operations of $11.8 million, or $1.65
per share.

As a result of the above, the net loss for 1994 was $7.9 million,  
 or $0.53 per share,  compared with net income of $43.7 million,  or
$6.15 per share in 1993.

As of December 31, 1994,  there were 14,218,000  shares of the Company's  common
stock outstanding, including 10,504,000 shares issued to creditors in connection
with the  Company's  reorganization,  consummated  on September  20,  1993.  The
weighted  average number of shares  outstanding for 1994 was 14,954,000  shares,
including  789,000  shares  that the  Company  anticipated  would be  issued  to
creditors.

Earnings  before  interest,  taxes,   depreciation,   amortization,   bankruptcy
administration  expenses,  restructuring  charges,  discontinued  operations and
extraordinary gain was $27.0 million in 1994, compared to $37.8 million in 1993,
a decrease of $10.8 million,  as described above. The Company believes that this
information  is  helpful  in  understanding  cash flow from  operations  that is
available for debt service, taxes and capital expenditures.  This measure is not
contained in Generally  Accepted  Accounting  Principles and is not a substitute
for operating income, net income or net cash flows from operating activities.

Liquidity and Capital Resources

The Company entered into a revolving credit,  factoring and security  agreement,
as amended (the "Credit  Agreement"),  with The CIT  Group/Commercial  Services,
Inc.  ("CIT"),  to provide  seasonal working capital  financing,  in the form of
direct  borrowings  and letters of credit,  up to an aggregate of $135  million,
subject to an asset based borrowing formula (the "Maximum Credit"). On March 27,
1996, the Company and CIT executed the Seventh Amendment to the Credit Agreement
(the  "Amendment").  The Amendment  extends the term of the Credit  Agreement to
March 31, 1997 and provides  the Company with the ability to cease  factoring at
September 20, 1996.  The  Amendment  also  increased the Maximum  Credit to $135
million during certain  periods of 1996,  which was consistent  with the Maximum
Credit  provided in 1995.  In addition,  the  Amendment  also  modified  certain
financial covenants relating to working capital and stockholders' equity. In the
absence  of the  Amendment,  Salant  would  not have been  able to  satisfy  the
stockholders'  equity  covenant  for its 1995  fiscal  year.  Interest on direct
borrowings is charged  monthly at an annual rate of one percent in excess of the
base rate of Chemical  Bank (the  "Prime  Rate")  (which  Prime Rate was 8.5% at
December 30, 1995).  As collateral  for borrowings  under the Credit  Agreement,
Salant has granted to CIT a security interest in substantially all of the assets
of the  Company.  At the end of 1995,  direct  borrowings  and letters of credit
outstanding  under the Credit  Agreement  were $14.4 million and $31.4  million,
respectively,  and the Company had unused  availability of $27.5 million. At the
end of 1994,  direct  borrowings  and  letters of credit  outstanding  under the
Credit  Agreement  were $23.9 million and $50.5 million,  respectively,  and the
Company had unused availability of $4.1 million.

In September 1993, the Company issued $111.9 million principal amount of 10 1/2%
Senior  Secured Notes due December 31, 1998 (the "Secured  Notes") in connection
with the  consummation of its plan of  reorganization,  as referenced in Exhibit
4.3. In May 1994, the Company  purchased and retired $3.6 million of the Secured
Notes in an open  market  transaction  at a price  below  the  principal  amount
thereof.

The Credit  Agreement  and the  indenture  governing  the Secured  Notes contain
numerous financial and operating covenants,  including restrictions on incurring
indebtedness and liens,  making investments in or purchasing the stock of all or
a substantial  part of the assets of another person,  selling  property,  making
capital expenditures,  and paying cash dividends. In addition,  under the Credit
Agreement, the Company is required to maintain minimum levels of working capital
and  stockholders'  equity  and to  satisfy  a ratio  of  total  liabilities  to
stockholders'  equity, a fixed charge coverage ratio,  and a maximum  cumulative
net loss test.  At December 30,  1995,  the Company was in  compliance  with all
financial covenants as indicated below:
 <TABLE>
 <CAPTION>

                                                  Covenant                      December 30, 1995
Credit Agreement Covenants                        Level (a)                      Actual Level

<S>                                               <C>                           <C>
Working Capital                                   $ 85.0 million                $ 97.4 million
Stockholders' Equity                              $ 60.0 million                $ 70.9 million
Liabilities/Equity                               less than  3.0                      2.6
Fixed Charge Ratio                               greater than 1.5                    1.6
Maximum Loss                                      $(10.0) million               positive income

</TABLE>

(a) The covenant levels reflect all  modifications  in the Credit Agreement made
pursuant to the Amendment.

The Company is also required to reduce its indebtedness  (excluding  outstanding
letters of credit) to $20  million or less for fifteen  consecutive  days during
each twelve month period  commencing  February 1, 1994. The Company has complied
with this covenant for all periods through January 31, 1997.

At the end of 1995, the Company's  short term borrowings were $9.5 million lower
than such borrowings at the end of 1994.

The Company's cash flow from operating  activities (the Company's primary source
of cash) was $13.5 million.  This  represented a $36.5 million  improvement over
1994 and was  primarily  a result  of asset  management  improvements  primarily
relating to inventory  and accounts  receivable.  The lower  inventory  balances
resulted from supply and demand process improvements made during the year.

Cash used in 1995 for investing  activities was $4.2 million,  primarily related
to capital expenditures.

Cash used in financing  activities in 1995 was $9.4 million,  which  represented
repayments  of  short-term  borrowings  under the  Credit  Agreement.  Cash flow
generated from operations was used to make these repayments.

Capital  expenditures  in 1995  amounted  to $4.3  million as  compared  to $4.9
million  in  1994.   Capital   expenditures  for  1996  are  anticipated  to  be
approximately $7.7 million.

The  Company's  business is seasonal in nature.  As a result,  Salant's  working
capital requirements  increase  significantly during the first three quarters of
each year.

Salant's  principal  sources of liquidity,  both on a short-term and a long-term
basis, are provided by operations and borrowings under the Credit Agreement.

Based upon its analysis of its consolidated  financial  position,  its cash flow
during  the past  twelve  months,  and its cash  flow  anticipated  from  future
operations,  Salant  believes that its future cash flow and the funds  available
under the Credit  Agreement will be adequate to meet the financing  requirements
it anticipates in the next twelve  months.  There can be no assurance,  however,
that future  developments  and general economic trends will not adversely affect
the Company's operations and, hence, its anticipated cash flow.

Effective  in 1995,  the  Company  adopted  Statement  of  Financial  Accounting
Standards ("SFAS") No. 112, "Employers' Accounting for Postemployment Benefits",
which requires the accrual  method of accounting for certain of these  benefits.
SFAS No. 112 was  adopted as a result of the  implementation  of a formal  short
term disability policy for employees.  Prior to 1995, the Company recognized the
cost of providing these benefits on a cash basis.

SFAS  No.  121  requires  that  long-lived   assets  and  certain   identifiable
intangibles   be  reviewed  for  impairment   whenever   events  or  changes  in
circumstances  indicate  that the  carrying  amount of an asset may no longer be
recoverable.  Adoption of SFAS No. 121,  which is effective for years  beginning
after  December  15,  1995,  is not  expected  to have a material  impact on the
Company.

In October 1995, the Financial  Accounting  Standards Board issued SFAS No. 123,
"Accounting for Stock-Based Compensation". The standard encourages, but does not
require,  companies to recognize compensation expense of grants for stock, stock
options and other equity instruments to employees based on fair value accounting
rules.  SFAS No. 123  requires  companies  that choose not to adopt the new fair
value  accounting  rules to disclose pro forma net income and earnings per share
under the new method. The standard is effective for fiscal years beginning after
December  15,  1995.  The  Company has not yet  determined  if it will adopt the
accounting provisions of SFAS No. 123 or only the disclosure provision. However,
the  Company  does  not  believe  that  adoption  of SFAS No.  123  will  have a
significant effect on its results of operations.

Factors that May Affect Future Results and Financial Condition.

The Company's future operating results and financial  condition are dependent on
the Company's  ability to successfully  design,  manufacture,  import and market
apparel.  Inherent  in this  process  are many  factors  that the  Company  must
successfully  manage  in  order  to  achieve  favorable  operating  results  and
financial condition including, without limitation, the following:

Competition. The apparel industry in the United States is highly competitive and
characterized by a relatively small number of multi-line  manufacturers (such as
the Company) and a large number of specialty  manufacturers.  The Company  faces
substantial  competition in its markets from  manufacturers  in both categories.
Many of the Company's  competitors  have greater  financial  resources  than the
Company.

Apparel  Industry  Cycles  and other  Economic  Factors.  The  apparel  industry
historically has been subject to substantial  cyclical variation,  with consumer
spending on apparel tending to decline during recessionary periods. A decline in
the general economy or  uncertainties  regarding  future economic  prospects may
affect consumer  spending habits,  which, in turn, could have a material adverse
effect on the Company's results of operations and its financial condition.

Retail  Environment.   Various  retailers,   including  some  of  the  Company's
customers,  have  experienced  declines in revenue and profits in recent periods
and some have been forced to file for protection  under the Bankruptcy  Code. To
the extent that these financial difficulties continue, there can be no assurance
that the Company's  financial  condition and results of operations  would not be
adversely affected.

Seasonality of Business and Fashion Risk. The Company's  principal  products are
organized  into seasonal lines for resale at the retail level during the Spring,
Fall and Christmas  Seasons.  Typically,  the Company's products are designed as
much as one year in advance and manufactured approximately one season in advance
of the related retail selling season. Accordingly,  the success of the Company's
products  is often  dependent  on the  ability of the  Company  to  successfully
anticipate  the needs of the  Company's  retail  customers and the tastes of the
ultimate consumer up to a year prior to the relevant selling season.

Substantial  Level of  Indebtedness.  The  Company  had  indebtedness  of $124.5
million as of December  30, 1995.  This level of  indebtedness  could  adversely
affect the Company's  operations because a substantial  portion of the Company's
cash flow from  operations  must be  dedicated  to the payment of  interest  and
would,  therefore,  not be available for other purposes.  Further, this level of
indebtedness  might  inhibit the  Company's  ability to obtain  financing in the
future  for  working   capital  needs,   capital   expenditures,   acquisitions,
investments, general corporate purposes or other purposes.

Foreign  Operations.  The Company's  foreign sourcing  operations are subject to
various  risks  of  doing  business  abroad,   including  currency  fluctuations
(although  the  predominant  currency used is the U.S.  dollar),  quotas and, in
certain parts of the world, political instability. Any substantial disruption of
its relationship with its foreign suppliers could adversely affect the Company's
operations.  Some of the  Company's  imported  merchandise  is subject to United
States  Customs  duties.  In addition,  bilateral  agreements  between the major
exporting  countries  and the United States impose quotas which limit the amount
of  certain  categories  of  merchandise  that may be  imported  into the United
States. Any material increase in duty levels,  material decrease in quota levels
or material  decrease in available quota  allocation  could adversely affect the
Company's operations.

Dependence on Contract Manufacturing.  The Company currently produces 64% of all
of its  products  (in units)  through  arrangements  with  independent  contract
manufacturers.  The use of such  contractors  and the  resulting  lack of direct
control could subject the Company to difficulty in obtaining  timely delivery of
products of acceptable  quality.  In addition,  as is customary in the industry,
the Company does not have any long-term  contracts with its fabric  suppliers or
product  manufacturers.  While the Company is not  dependent  on one  particular
product  manufacturer  or fabric  supplier,  the loss of  several  such  product
manufacturers  and/or  fabric  suppliers in a given season could have a material
adverse effect on the Company's performance.

Because  of the  foregoing  factors,  as well as  other  factors  affecting  the
Company's operating results and financial condition,  past financial performance
should not be considered to be a reliable indicator of future  performance,  and
investors are cautioned not to use  historical  trends to anticipate  results or
trends in the future.  In addition,  the Company's  participation  in the highly
competitive  apparel  industry  often results in  significant  volatility of the
Company's common stock price.



<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Independent Auditors' Report

To the Board of Directors and Stockholders of Salant Corporation:

We  have  audited  the  accompanying   consolidated  balance  sheets  of  Salant
Corporation and  subsidiaries as of December 30, 1995 and December 31, 1994, and
the   related    consolidated    statements   of    operations,    shareholders'
equity/deficiency and cash flows for the years ended December 30, 1995, December
31, 1994 and January 1, 1994.  Our audits also included the financial  statement
schedule listed in the index at Item 14(a)(2).  These  financial  statements and
financial statement schedule are the responsibility of the Company's management.
Our  responsibility  is to express an opinion on these financial  statements and
financial statement schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects,  the financial  position of Salant  Corporation and subsidiaries as of
December 30, 1995 and December 31, 1994, and the results of their operations and
their cash flows for the years ended  December 30,  1995,  December 31, 1994 and
January 1, 1994 in conformity  with generally  accepted  accounting  principles.
Also,  in our opinion,  the financial  statement  schedule,  when  considered in
relation  to the  basic  consolidated  financial  statements  taken  as a whole,
presents fairly in all material respects the information set forth therein.


/s/ Deloitte & Touche LLP
March 20, 1996
(March 27, 1996 as to Note 8)
New York, New York


<PAGE>


<TABLE>
<CAPTION>


                       SALANT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Amounts in thousands, except per share data)

                                                                    Year Ended
                                                           December 30,          December 31,            January 1,
                                                                   1995                  1994                  1994

<S>                                                       <C>                    <C>                     <C>
Net sales                                                 $     501,522          $    419,285            $  402,098

Cost of goods sold                                              397,630               326,059               303,989

Gross profit                                                    103,892                93,226                98,109

Selling, general and administrative expenses                    (85,372)              (79,273)              (73,944)
Royalty income                                                    6,606                 6,699                 8,040
Goodwill amortization                                            (2,575)               (2,376)               (2,194)
Other income/(expense)                                              244                 1,196                   (70)
Division restructuring costs (Note 2)                            (3,550)                 --                  (5,500)
Bankruptcy administration expenses                                 --                    --                  (8,861)

Income from continuing operations before interest,
  income taxes and extraordinary gain                            19,245                19,472                15,580
Interest expense, net (Notes 8 and 9)                            19,425                15,617                 7,523

Income/(loss) from continuing operations
  before income taxes and extraordinary gain                       (180)                3,855                 8,057

Income taxes (Note 11)                                              318                   348                   241

Income/(loss) from continuing operations
  before extraordinary gain                                        (498)                3,507                 7,816

Discontinued operations (Notes 17 and 19):
  Loss from operations                                             --                  (9,639)                 (589)
  Estimated loss on disposal                                       --                  (1,796)                 --
  Reversal of estimated loss on disposal                           --                    --                  11,772
Extraordinary gain (Notes 3 and 9)                                1,000                    63                24,707

Net income/(loss)                                        $          502          $     (7,865)           $   43,706

Earnings/(loss) per share:
  Income/(loss) per share from continuing
    operations before extraordinary gain                $        (0.03)         $      0.23            $      1.10
  Income from reversal of estimated loss on disposal of
    discontinued operations                                         --                  --                    1.65
  Loss per share from discontinued operations                       --                (0.76)                 (0.08)
  Extraordinary gain                                              0.06                  --                    3.48

Net income/(loss) per share                             $         0.03          $     (0.53)           $      6.15

Weighted average common stock outstanding                        15,102                14,954                 7,104

</TABLE>

                 See Notes to Consolidated Financial Statements

<PAGE>



<TABLE>
<CAPTION>

                       SALANT CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                  (Amounts in thousands, except per share data)

                                                                            December 30,               December 31,
                                                                                    1995                       1994
ASSETS
Current assets:
<S>                                                                      <C>                         <C>
Cash and cash equivalents                                                $         1,400             $        1,965
Accounts receivable - net of allowance for doubtful accounts
  of $3,007  in 1995 and $2,565 in 1994 (Notes 8 and 9)                           35,290                     36,583
Inventories (Notes 4 and 8)                                                      119,120                    124,599
Prepaid expenses and other current assets                                          5,016                      5,264

  Total current assets                                                           160,826                    168,411

Property, plant and equipment, net (Notes 5 and 8)                                24,526                     27,460
Other assets (Notes 6, 9 and 11)                                                  70,368                     71,345

                                                                           $     255,720               $    267,216

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Loans payable                                                                   14,422              $      23,906
  Accounts payable                                                                26,755                     28,593
  Reserve for business restructuring (Note 2)                                      1,569                       --
  Accrued salaries, wages and other liabilities (Note 7)                          20,397                     18,848
  Net liabilities of discontinued operations (Note 17)                               311                        816

    Total current liabilities                                                     63,454                     72,163

Long term debt (Notes 9 and 16)                                                  110,040                    109,908
Deferred liabilities (Note 14)                                                    11,373                     13,479
Commitments and contingencies (Notes 6, 8, 9, 11, 12, 13 and 15)

Shareholders' equity (Note 13): Preferred stock, par value $2 per share:
    Authorized 5,000 shares; none issued                                            --                         --
  Common stock, par value $1 per share:
     Authorized 30,000 shares;                                                    15,275                     15,242
     issued and issuable - 15,275 shares in 1995;
     issued and issuable - 15,242 shares in 1994
  Additional paid-in capital                                                     107,071                    107,017
  Deficit                                                                        (47,824)                   (48,326)
  Excess of additional pension liability over
    unrecognized prior service cost adjustment (Note 12)                          (2,185)                      (773)
  Accumulated foreign currency translation adjustment                                130                        120
  Less - treasury stock, at cost - 234 shares                                     (1,614)                    (1,614)

Total shareholders' equity                                                        70,853                     71,666

                                                                           $     255,720               $    267,216
</TABLE>


                 See Notes to Consolidated Financial Statements

<PAGE>


<TABLE>
<CAPTION>

                       SALANT CORPORATION AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY/(DEFICIENCY)
                             (Amounts in thousands)

                                                                   Excess of
                                                                   Additional
                                                                    Pension
                                                                   Liability
                                                                     Over
                                                                    Unrecog-   Cumulative                     Total
                                                                     nized     Foreign                         Share-
                                    Common Stock    Add'l            Prior     Currency            Treasury Stock      holders'
                                Number            Paid-In           Service  Translation     Number of         Equity/
                              of Shares  Amount   Capital     Deficit        Cost     Adjustment    Shares       Amount (Deficiency)

<S>                               <C>     <C>       <C>     <C>          <C>          <C>        <C>   <C>       <C>
Balance at January 2, 1993        3,698   $3,698    $17,702 $(84,167)    $(353)       $225       234   $(1,614)  $(64,509)

Stock options exercised              24       24         90                                                          114
Shares issued and issuable
 in settlement of claims         11,294   11,294     88,934                                                      100,228
Net income                                                   43,706                                               43,706
Excess of additional pension
 liability over unrecognized
 prior service cost adjustment                                           (633)                                      (633)
Foreign currency translation
 adjustments                                                                           (4)                            (4)

Balance at January 1, 1994       15,016   15,016    106,726 (40,461)     (986)        221       234    (1,614)    78,902

Stock options exercised             226      226        291                                                          517
Net loss                                                     (7,865)                                              (7,865)
Excess of additional pension
 liability over unrecognized
 prior service cost adjustment                                            213                                        213
Foreign currency translation
 adjustments                                                                         (101)                          (101)

Balance at December 31, 1994     15,242   15,242    107,017 (48,326)     (773)        120       234    (1,614)    71,666

Stock options exercised              33       33         54                                                           87
Net income                                                      502                                                  502
Excess of additional pension
 liability over unrecognized
 prior service cost adjustment                                         (1,412)                                    (1,412)
Foreign currency translation
 adjustments                                                                           10                             10

Balance at December 30, 1995     15,275  $15,275   $107,071$(47,824) $ (2,185)   $    130       234   $(1,614)   $70,853



</TABLE>



                                See Notes to Consolidated Financial Statements



<PAGE>


<TABLE>
<CAPTION>

                       SALANT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in thousands)

                                                                  Year Ended
                                                           December 30,          December 31,            January 1,
                                                                   1995                  1994                  1994
Cash Flows from Operating Activities
<S>                                                         <C>                    <C>                   <C>
Income/(loss) from continuing operations                    $      (498)           $    3,507            $    7,816
Adjustments to reconcile income from continuing  operations to net cash provided
  by/(used in) operating activities:
    Depreciation                                                  5,116                 5,113                 5,619
    Amortization of intangibles                                   2,575                 2,376                 2,194
    Write-down of fixed assets                                    1,850                  --                   2,095
    Loss on sale of fixed assets                                    132                  --                    --
    Changes in operating assets and liabilities:
      Accounts receivable                                         1,293               (11,965)               (1,987)
      Inventories                                                 5,479               (19,262)                  844
      Prepaid expenses and other current assets                     248                  (947)                 (378)
      Other assets                                               (1,646)               (1,302)                   48
      Accounts payable                                           (1,838)                6,869                   266
      Accrued salaries, wages and other liabilities                (191)               (5,786)                5,941
      Reserve for business restructuring                          1,569                (2,038)               (3,042)
      Deferred liabilities                                         (598)                  330                   398
    Net cash provided by/(used in) operating activities          13,491               (23,105)               19,814

Cash Flows from Investing Activities
Capital expenditures, net                                        (4,286)               (4,926)               (8,153)
Acquisition                                                        --                  (5,720)                 --
Proceeds from sale of assets                                        122                   294                   795
Net cash used in investing activities                            (4,164)              (10,352)               (7,358)

Cash Flows from Financing Activities
Net short-term borrowings/(repayments)                           (9,484)               36,516                  --
Repayment of pre-petition secured debt                             --                    --                 (15,940)
Retirement of long-term debt                                       --                  (3,537)                 --
Exercise of stock options                                            87                   517                    65
Other, net                                                           10                  (101)                 (254)
Net cash (used in)/provided by financing activities              (9,387)               33,395               (16,129)

  Net cash used in continuing operations                            (60)                  (62)               (3,673)
  Cash used in discontinued operations                             (505)                 (119)                 (304)
Net decrease in cash and cash equivalents                          (565)                 (181)               (3,977)
Cash and cash equivalents - beginning of year                     1,965                 2,146                 6,123
Cash and cash equivalents - end of year                       $   1,400            $    1,965           $     2,146
</TABLE>
<TABLE>
<CAPTION>

Supplemental  disclosures  of cash flow  information:  Cash paid during the year
for:
<S>                                                            <C>                 <C>                  <C>
    Interest                                                   $ 20,280            $   16,150           $     3,847
    Income taxes                                             $      331          $        674          $        206
</TABLE>

Conversion of accounts payable, accrued expenses,
  long-term debt and deferred liabilities to liabilities
  deferred pursuant to chapter 11 cases                      $      1,515
Conversion of liabilities deferred pursuant to chapter 11
  cases to accounts payable and deferred liabilities          $    10,249
Issuance of long-term debt                                    $  111,851
Issuance of common stock                                      $  100,228

                 See Notes to Consolidated Financial Statements

<PAGE>



                       SALANT CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
       (Amounts in Thousands of Dollars, Except Share and Per Share Data)


Note 1.  Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The Consolidated Financial Statements include the accounts of Salant Corporation
("Salant") and subsidiaries.  (As used herein, the "Company" includes Salant and
its subsidiaries  but excludes  Salant's Vera Scarf division.) In February 1995,
Salant  discontinued its Vera Scarf division.  As further  described in Note 17,
the  Consolidated  Financial  Statements and the Notes thereto  reflect the Vera
Scarf division as a  discontinued  operation,  and the financial  results of the
Vera Scarf division are not included in the presentation of  income/(loss)  from
continuing operations. In addition, the net liabilities of the discontinued Vera
Scarf division  operations have been separately  classified in the  Consolidated
Balance  Sheets.   Significant   intercompany   balances  and  transactions  are
eliminated in consolidation.

The Company's principal business is the designing, manufacturing,  importing and
marketing of apparel.  The Company  sells its products to  retailers,  including
department and specialty  stores,  national chains,  major  discounters and mass
volume retailers, throughout the United States.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

On June 27, 1990 (the "Filing Date"), Salant and one of its subsidiaries, Denton
Mills,  Inc.  ("Denton Mills"),  filed separate  voluntary  petitions for relief
under chapter 11 of title 11 of the United States Code (the  "Bankruptcy  Code")
with the United States  Bankruptcy  Court for the Southern  District of New York
(the "Bankruptcy Court"). On July 30, 1993, the Bankruptcy Court issued an order
confirming the Third Amended Joint Plan of  Reorganization  of Salant and Denton
Mills, Inc. (the "Reorganization Plan"). The Reorganization Plan was consummated
on September 20, 1993 (the  "Consummation  Date"),  as further described in Note
18.

Fiscal Year

The Company's fiscal year ends on the Saturday closest to December 31. The 1995,
1994 and 1993 fiscal years were each comprised of 52 weeks.



<PAGE>


Reclassifications

Certain  reclassifications were made to the 1994 and 1993 Consolidated Financial
Statements to conform with the 1995 presentation.

Cash and Cash Equivalents

The  Company  considers  cash on hand  and  deposits  in  banks as cash and cash
equivalents for the purposes of the statements of cash flows.

Accounts Receivable

The Company has entered into an agreement with a factor, as further described in
Note  8,  whereby  it  sells,   without  recourse,   certain  eligible  accounts
receivable.  The credit  risk for such  accounts is thereby  transferred  to the
factor.  The amounts due from the factor have been offset against  advances from
the factor in the  accompanying  balance  sheets.  The  amounts  which have been
offset were $33,792 at December  30, 1995 and $9,324 at December 31, 1994.  This
increase in the  amounts  which have been  offset  results  from a change in the
agreement with the factor.

Inventories

Inventories  are  stated  at the  lower  of cost  (principally  determined  on a
first-in, first-out basis for apparel operations and the retail inventory method
on a first-in, first-out basis for outlet store operations) or market.

Property, Plant and Equipment

Property,  plant  and  equipment  are  stated  at cost  and are  depreciated  or
amortized over their estimated useful lives, or for leasehold improvements,  the
lease term, if shorter.  Depreciation and amortization are computed  principally
by the straight-line  method for financial reporting purposes and by accelerated
methods for income tax purposes.
 
<TABLE> 
<CAPTION>

The annual depreciation rates used are as follows:

<S>                                                               <C>            <C>
Buildings and improvements                                        2.5%      -    10.0%
Machinery, equipment and autos                                    6.7%      -    33.3%
Furniture and fixtures                                           10.0%      -    50.0%
Leasehold improvements                                           Over the life of the asset or the term of the lease, whichever is
                                     shorter

</TABLE>


<PAGE>


Other Assets

Intangible  assets  are being  amortized  on a  straight-line  basis  over their
respective  useful lives.  Costs in excess of fair value of net assets acquired,
which relate to the acquisition of the net assets of Manhattan Industries,  Inc.
("Manhattan") and JJ. Farmer Clothing,  Inc. are assessed for  recoverability on
an annual basis. In evaluating the value and future benefits of these intangible
assets,  their  carrying  value would be reduced by the  excess,  if any, of the
intangibles  over  management's  best estimate of undiscounted  future operating
income of the acquired  businesses before amortization of the related intangible
assets  over the  remaining  amortization  period.  Intangible  assets are being
amortized over periods ranging from 7 1/2 to 40 years.

Fair Value of Financial Instruments

For  financial  instruments,  including  cash  and  cash  equivalents,  accounts
receivable and payable,  and accruals,  it was assumed that the carrying  amount
approximated  fair value because of their short maturity.  Long-term debt, which
was issued at the market rate of interest, currently trades at approximately 85%
of the principal amount.

Income/(Loss) Per Share

Income/(loss) per share is based on the weighted average number of common shares
(including,  as of December 30, 1995,  375,889  shares  anticipated to be issued
pursuant to the Reorganization  Plan) and common stock equivalents  outstanding,
if applicable. Loss per share for 1994 did not include common stock equivalents,
inasmuch as their effect would have been anti-dilutive.

Revenue Recognition

Revenue is recognized at the time the  merchandise  is shipped.  Retail  factory
outlet store revenues are recognized at the time of sale.

Accounting Changes

Effective  in 1995,  the  Company  adopted  Statement  of  Financial  Accounting
Standards ("SFAS") No. 112, "Employers' Accounting for Postemployment Benefits,"
which requires the accrual  method of accounting for certain of these  benefits.
SFAS No. 112 was  adopted as a result of the  implementation  of a formal  short
term disability policy for employees.  Prior to 1995, the Company recognized the
cost of providing these benefits on a cash basis.

SFAS  No.  121  requires  that  long-lived   assets  and  certain   identifiable
intangibles   be  reviewed  for  impairment   whenever   events  or  changes  in
circumstances  indicate  that the  carrying  amount of an asset may no longer be
recoverable.  Adoption of SFAS No. 121,  which is effective for years  beginning
after  December  15,  1995,  is not  expected  to have a material  impact on the
Company.

In October 1995, the Financial  Accounting  Standards Board issued SFAS No. 123,
"Accounting for Stock-Based Compensation". The standard encourages, but does not
require,  companies to recognize compensation expense of grants for stock, stock
options and other equity instruments to employees based on fair value accounting
rules.  SFAS No. 123  requires  companies  that choose not to adopt the new fair
value  accounting  rules to disclose pro forma net income and earnings per share
under the new method. The standard is effective for fiscal years beginning after
December  15,  1995.  The  Company has not yet  determined  if it will adopt the
accounting provisions of SFAS No. 123 or only the disclosure provision. However,
the  Company  does  not  believe  that  adoption  of SFAS No.  123  will  have a
significant effect on its results of operations.

Note 2. Restructuring Costs

In the  fourth  quarter of 1995,  the  Company  recorded a $3,550  restructuring
provision,  which included (i) fixed asset write-downs at locations to be closed
and (ii) inventory markdowns for discontinued product lines.

In the  fourth  quarter of 1993,  the  Company  recorded a $5,500  restructuring
provision,  of which  $5,000  related  to the  restructuring  of the  Children's
Apparel Group, as more fully described in Note 19.

Note 3. Extraordinary Gain

In the fourth quarter of 1995,  the Company  recorded an  extraordinary  gain of
$1,000 related to the reversal of excess liabilities previously provided for the
anticipated settlement of claims arising from the chapter 11 proceeding.

In  September  1993,  the  Company  recorded  an  extraordinary  gain of $24,707
consisting  of (i) an  extraordinary  gain of $45,974  from the  settlement  and
anticipated settlement of claims arising from the chapter 11 proceeding for less
than their full amount and (ii) an  extraordinary  loss of $21,267  arising from
the settlement of accrued interest and fees in respect of the Company's  secured
bank debt  during  the  pendency  of the  Company's  chapter  11 cases.
<TABLE>
<CAPTION>

Note 4.  Inventories
                                                                        December 30,          December 31,
                                                                                1995                  1994

<S>                                                                        <C>                    <C>
Finished goods                                                             $  72,850              $ 70,882
Work-in-process                                                               15,829                28,298
Raw materials and supplies                                                    30,441                25,419
                                                                            $119,120              $124,599
</TABLE>

Finished goods inventory  includes in transit  merchandise of $6,500 at December
30, 1995 and December 31, 1994.



<PAGE>


<TABLE>
<CAPTION>

Note 5.  Property, Plant and Equipment
                                                                        December 30,          December 31,
                                                                                1995                  1994

<S>                                                                        <C>                    <C>
Land and buildings                                                         $  14,779              $ 16,808
Machinery, equipment, furniture
  and fixtures                                                                40,347                40,794
Leasehold improvements                                                         8,315                 5,958
Property held under capital leases                                             1,345                 1,345
                                                                              64,786                64,905
Less accumulated depreciation and amortization                                40,260                37,445
                                                                            $ 24,526              $ 27,460
</TABLE>

<TABLE>
<CAPTION>

Note 6.  Other Assets
                                                                        December 30,          December 31,
                                                                                1995                  1994
Excess of cost over net assets acquired,
 net of accumulated amortization of
<S>                                                                          <C>                   <C>
 $12,014 in 1995 and $10,059 in 1994                                         $50,641               $52,542
Trademarks and license agreements,
 net of accumulated amortization of
 $3,274 in 1995 and $2,795 in 1994                                            14,588                15,067
Leasehold interests, net of accumulated
  amortization of $965 in 1995 and $823
  in 1994                                                                      1,478                 1,620
Other                                                                          3,661                 2,116
                                                                             $70,368               $71,345
</TABLE>

In June 1994, the Company  entered into various  licensing  agreements for dress
shirts and men's accessories using the trademarks GANT and SALTY DOG. As part of
these  agreements,  the Company  purchased  inventory  from the  licensor,  made
advance royalty payments to the licensor, and is required to make future minimum
royalty payments. 
<TABLE>
<CAPTION>

Note 7.  Accrued Salaries, Wages and Other Liabilities
                                                                        December 30,          December 31,
                                                                                1995                  1994

<S>                                                                        <C>                    <C>
Accrued salaries and wages                                                 $   3,268              $  3,721
Accrued pension and retirement benefits                                        3,737                 1,791
Accrued royalties                                                              1,716                 1,852
Accrued interest                                                               3,716                 3,716
Other accrued liabilities                                                      7,960                 7,768
                                                                            $ 20,397              $ 18,848
</TABLE>



<PAGE>


Note 8.  Financing and Factoring Agreements

The Company entered into a revolving credit,  factoring and security  agreement,
as amended (the "Credit  Agreement"),  with The CIT  Group/Commercial  Services,
Inc.  ("CIT") to provide seasonal  working capital  financing,  including direct
borrowings and letters of credit,  of up to $135,000,  subject to an asset based
borrowing formula (the "Maximum Credit"). On March 27, 1996, the Company and CIT
executed the Seventh  Amendment to the Credit Agreement (the  "Amendment").  The
Amendment  extends  the  term of the  Credit  Agreement  to March  31,  1997 and
provides the Company with the ability to cease  factoring at September 20, 1996.
The Amendment  also  increased  the Maximum  Credit to $135,000  during  certain
periods of 1996,  which was consistent with the Maximum Credit provided in 1995.
In addition, the Amendment also modified certain financial covenants relating to
working  capital and  stockholders'  equity.  In the  absence of the  Amendment,
Salant would not have been able to satisfy the stockholders' equity covenant for
its 1995 fiscal year. As of December 30, 1995 and December 31, 1994, $27,500 and
$4,085,  respectively,  was available  under this  facility.  Interest on direct
borrowings is charged  monthly at an annual rate of one percent in excess of the
base rate of Chemical Bank (the "Prime  Rate") (8.5% at December 30,  1995).  As
collateral for borrowings under the Credit Agreement, the Company granted to CIT
a security  interest in  substantially  all of the assets of the Company.  As of
December  30, 1995 and December 31,  1994,  direct  borrowings  were $14,422 and
$23,906, respectively. As of December 30, 1995 and December 31, 1994, letters of
credit  outstanding  under  the  Credit  Agreement  were  $31,415  and  $50,515,
respectively.  The weighted average interest rate on borrowings under the Credit
Agreement  for the years ended  December 30, 1995 and December 31, 1994 was 9.9%
and 7.8%, respectively.

The Credit  Agreement  contains  numerous  financial  and  operating  covenants,
including  restrictions on incurring  indebtedness and liens, making investments
in or purchasing the stock of all or a substantial part of the assets of another
person,  selling  property,  incurring  capital  expenditures,  and paying  cash
dividends.  In addition,  the Company is required to maintain  minimum levels of
working  capital  and  stockholders'  equity  and to  satisfy  a ratio  of total
liabilities to stockholders' equity, a fixed charge coverage ratio and a maximum
cumulative  net loss test. At December 30, 1995,  Salant was in compliance  with
all financial covenants, as contained in the Credit Agreement.

Note 9.  Long-Term Debt

On September 20, 1993, Salant issued $111,851 principal amount of 10 1/2% Senior
Secured Notes (the "Secured Notes") due December 31, 1998. The Secured Notes may
be redeemed at any time prior to maturity, in whole or in part, at the option of
the Company, at a premium to the principal amount thereof plus accrued interest.
The premium on  redemption  declines  annually from 4.2% in 1996 to 2.1% in 1997
and to 0% in 1998.  The Secured Notes are secured by a first lien  (subordinated
to the lien  securing  borrowings  under the Credit  Agreement  to the extent of
$15,000) on certain accounts receivable,  certain intangible assets, the capital
stock of Salant's  subsidiaries and certain real property of the Company, and by
a second lien on substantially all of the other assets of the Company.



<PAGE>


The Secured Notes contain various  restrictions  pertaining to the incurrence of
indebtedness,  the purchase of capital stock and the payment of dividends. Under
the most restrictive of these provisions, the Company currently may not purchase
or redeem any shares of its capital stock, or declare or pay cash dividends.

In May 1994, the Company purchased and retired $3,600 of the Secured Notes in an
open market  transaction  at a price below the principal  amount  thereof.  As a
result of this transaction, the Company recorded an extraordinary gain of $63 in
1994.

Note 10.  Segment Information and Significant Customers

The Company's principal business is the designing, manufacturing,  importing and
marketing of apparel.  The Company  sells its products to  retailers,  including
department and specialty  stores,  national chains,  major  discounters and mass
volume  retailers,  throughout the United  States.  As an adjunct to its apparel
manufacturing  operations,  the  Company  operates 71 factory  outlet  stores in
various parts of the United  States.  Foreign  operations  are not  significant.
These  products have been  classified in the following  industry  segments:  (i)
men's apparel, (ii) children's sleepwear and underwear and (iii) other products,
consisting of women's junior apparel and retail factory outlet store operations.
Information concerning the Company's business segments in 1995, 1994 and 1993 is
as follows: 
<TABLE> 
<CAPTION>

                                                          1995                   1994                 1993

NET SALES
<S>                                                   <C>                    <C>                  <C>
  Men's Apparel                                       $423,894               $343,455             $323,742
  Children's Sleepwear and Underwear                    39,936                 35,513               39,493
  Other Businesses                                      37,692                 40,317               38,863
    Total net sales                                   $501,522               $419,285             $402,098

OPERATING INCOME
  Men's Apparel                                      $  19,819              $  17,366            $  29,134
  Children's Sleepwear and Underwear                     5,184                  3,119               (3,189)
  Other Businesses                                      (2,205)                  (522)                (395)
                                                        22,798                 19,963               25,550
Corporate expenses                                      (9,176)                (6,171)              (7,487)
Licensing division income                                5,623                  5,680                6,378
Bankruptcy administration expenses                        --                     --                 (8,861)
Interest expense, net                                  (19,425)               (15,617)              (7,523)
Income/(loss) from continuing
 operations before income taxes
 and extraordinary gain                              $    (180)            $    3,855           $    8,057



<PAGE>


IDENTIFIABLE ASSETS
  Men's Apparel                                       $170,203               $161,751             $120,353
  Children's Sleepwear and Underwear                    16,349                 14,273               16,656
  Other Businesses                                      20,179                 18,092               17,032
  Corporate                                             48,989                 73,100               86,680
Total identifiable assets                             $255,720               $267,216             $240,721

CAPITAL EXPENDITURES
  Men's Apparel                                         1,389             $    2,629           $    6,072
  Children's Sleepwear and Underwear                       492                    435                  212
  Other Businesses                                         584                  1,140                1,109
  Corporate                                              1,821                    722                  760
Total capital expenditures                          $    4,286             $    4,926           $    8,153

DEPRECIATION AND AMORTIZATION
  Men's Apparel                                     $    2,534             $    2,549           $    1,876
  Children's Sleepwear and Underwear                       345                    311                  662
  Other Businesses                                         514                    473                  481
  Corporate                                              4,298                  4,156                4,794
Total depreciation and amortization                 $    7,691             $    7,489           $    7,813
</TABLE>

Approximately 12% of the Company's net sales in the year ended December 30, 1995
were made to Federated Department Stores, Inc.  ("Federated") which includes all
1995 net sales to The Broadway Stores, Inc.,  ("Broadway") which was acquired by
Federated in February 1996. In 1994 and 1993, net sales to Federated,  including
all net sales to Broadway and to Macy's Department Stores ("Macy's"),  which was
acquired by  Federated  in 1994,  represented  approximately  15% and 12% of the
Company's net sales,  respectively.  In 1995, approximately 11% of the Company's
net sales were made to TJX  Corporation  ("TJX"),  which  includes  all 1995 net
sales to  Marshall's  Corporation  ("Marshall's"),  which was acquired by TJX in
February  1996. In 1994 and 1993,  net sales to TJX,  including all net sales to
Marshall's,  represented  approximately  11% and 12% of the Company's net sales,
respectively.  In 1995,  approximately  13% of the Children's  Group's net sales
were made to various divisions of the Dayton Hudson Corporation. In addition, in
1995  approximately  16% of the Children's  Group net sales were equally divided
between two  customers:  JC Penney  Company and  WalMart  Stores,  Inc. In 1995,
approximately  19% of the net sales of Other  Businesses  were made to JC Penney
Company.  No other  customer  accounted  for more than 10% of the  Company's net
sales during 1995, 1994 or 1993.



<PAGE>


Note 11. Income Taxes

The provision for income taxes consists of the following:
<TABLE>
<CAPTION>

                                                  December 30,           December 31,           January 1,
                                                          1995                   1994                 1994
Current:
<S>                                                  <C>                    <C>               <C>
 Federal                                             $     100              $     100         $        --
 State                                                      --                     20                   32
 Foreign                                                   218                    228                  209
                                                     $     318              $     348           $      241
</TABLE>

The  following  is a  reconciliation  of  the  tax  provision/(benefit)  at  the
statutory Federal income tax rate to the actual income tax provision:
<TABLE>
<CAPTION>

                                                          1995                   1994                 1993

<S>                                                    <C>                   <C>                   <C>
Income tax provision/(benefit), at 34%                 $   (61)              $  1,097              $ 2,543

Loss producing no current tax benefit                       61
Utilization of net operating loss
  carryforward                                                                 (1,097)              (2,543)
Alternative minimum tax                                    100                    100
State, local and foreign taxes                             218                    248                  241

Income tax provision                                  $    318               $    348             $    241
</TABLE>

The adoption of SFAS No. 109, as of January 3, 1993, had no cumulative effect on
earnings or effect on income tax expense for the year ended  January 1, 1994, as
the Company recognized a net deferred tax asset of $64,364,  offset in full by a
valuation allowance as of the date of adoption.



<PAGE>


The tax effects of significant items comprising the Company's net deferred
 tax asset consists of the following:
<TABLE>
<CAPTION>

                                                                        December 30,          December 31,
                                                                                1995                  1994
Deferred tax liabilities:
<S>                                                                         <C>                  <C>
 Differences between book and tax basis of property                         $ (6,253)            $  (6,090)

Deferred tax assets:
 Reserves not currently deductible                                            17,155                16,862
 Operating loss carryforwards                                                 43,182                43,873
 Tax credit carryforwards                                                      3,055                 2,992
 Expenses capitalized into inventory                                           4,959                 5,857
                                                                              68,351                69,584
Net deferred asset                                                            62,098                63,494
Valuation allowance                                                          (62,098)              (63,494)
Net deferred tax asset                                                  $      --             $      --
</TABLE>

At December 30, 1995, the Company had net operating loss carryforwards  ("NOLs")
for income tax purposes of approximately  $105,000,  which can be used to offset
future  taxable  income,  expiring  from  1999 to the year  2008.  Approximately
$51,000,  which arose from the  acquisition  of  Manhattan  in April 1988,  will
offset goodwill when utilized. The implementation of the Reorganization Plan and
transactions  that have  occurred  within the  three-year  period  preceding the
consummation of the  Reorganization  Plan have caused an "ownership  change" for
federal  income  tax  purposes  as of  the  date  the  Reorganization  Plan  was
consummated. As a result of such ownership change, the use of the NOLs to offset
future taxable income has been limited by the requirements of section 382 of the
Internal Revenue Code of 1986, as amended. The annual limit under section 382 is
approximately  $7,200 over a fifteen year carryover period. Upon consummation of
the  Reorganization  Plan, the Company  realized  cancellation  of  indebtedness
income  of  approximately  $917  and the  NOLs  have  been  reduced  or  limited
accordingly.

In addition,  at December 30, 1995, the Company had available investment tax and
other credits of $3,092 which expire between 1996 and 1999, of which $1,986 will
reduce  goodwill and the balance will reduce  income tax expense when  utilized.
Utilization  of these  credits may be limited in the same manner as the NOLs, as
described above.

On the Filing Date, the Internal Revenue Service of the United States of America
(the "IRS") was in the process of examining the tax returns of Manhattan for the
years ended  January 31, 1982 through  January 31, 1986 and January 31, 1988. By
proof of claim,  as  amended,  the IRS had  asserted a claim  (the "IRS  Claim")
against Salant of  approximately  $5,200.  The IRS Claim included  approximately
$3,200 of Excise  Taxes.  Pursuant to an interim  agreement  and formal  written
agreement,  which was approved by the Bankruptcy  Court on May 26, 1995,  Salant
will pay $100 to the IRS in full  settlement  of such  Excise  Tax  claims.  The
balance  of the IRS Claim  sought  the  payment  of (i)  income  taxes that were
claimed to be owing for prior tax periods;  (ii)  withholding and FICA taxes for
the tax period ended March 31, 1990;  (iii)  interest and penalties with respect
to those  taxes;  and (iv) FUTA taxes for the period from January 1 through June
27, 1990. On September 25, 1995,  Salant and the IRS executed a final  agreement
relating to such non-Excise Taxes. Pursuant to this agreement, the IRS Claim was
withdrawn,  and the IRS will pay Salant a net refund of approximately $875, plus
net interest from June 1, 1995.

Note 12.  Employee Benefit Plans

Pension and Retirement Plans

The  Company has several  defined  benefit  plans for  virtually  all  full-time
salaried employees and certain nonunion hourly employees.  The Company's funding
policy for its plans is to fund the  minimum  annual  contribution  required  by
applicable regulations.

The Company also has a  nonqualified  supplemental  retirement and death benefit
plan covering certain  employees.  The funding for this plan is based on premium
costs of related insurance contracts.

Pension expense includes the following components:
<TABLE>
<CAPTION>
                                                        1995        1994 1993
Service cost-benefit earned
<S>                                                    <C>                   <C>                   <C>
  during the period                                    $ 1,029               $ 1,125               $ 1,183
Interest cost on projected benefit obligation            2,714                 2,626                 2,555
Loss/(return) on assets                                 (4,697)                1,331                (2,008)
Net amortization                                         2,286                (3,437)                  169
Net periodic pension cost                              $ 1,332               $ 1,645               $ 1,899

</TABLE>


<PAGE>


The reconciliation of the funded status of the plans at December 30, 1995
 and December 31, 1994 is as follows:

<TABLE>
<CAPTION>

                                                                        December 30,          December 31,
                                                                                1995                  1994
                                                                         Accumulated           Accumulated
                                                                                Plan                  Plan
                                                                            Benefits              Benefits
                                                                              Exceed                Exceed
                                                                         Plan Assets           Plan Assets

Actuarial present value of benefit obligation
<S>                                                                        <C>                   <C>
  Vested benefit obligation                                                $ (36,211)            $ (28,645)
  Nonvested benefit obligation                                                  (597)                 (838)
Accumulated benefit obligation                                             $ (36,808)            $ (29,483)

Projected benefit obligation                                               $ (40,833)            $ (33,579)
Plan assets at fair value                                                     30,900                25,947
Projected benefit obligation in
  excess of plan assets                                                       (9,933)               (7,632)
Unrecognized net obligation at date of
  initial application, amortized over 15 years                                   810                   897
Unrecognized net loss                                                          4,616                   784
Unrecognized prior service cost                                               (1,176)                 (739)
Recognition of minimum liability
  under SFAS No. 87                                                           (2,524)               (1,160)
Accrued pension cost                                                      $   (8,207)           $   (7,850)
</TABLE>

Assumptions used in accounting for defined benefit pension plans are as follows:

<TABLE>
<CAPTION>
                                         1995       1995       1994       1994       1993       1993
                                         Non-  Qualified       Non-  Qualified       Non-  Qualified
                                         Qualified Plans  Qualified      Plans  Qualified      Plans
                                         Plan                  Plan                  Plan

<S>                                                 <C>        <C>        <C>        <C>        <C>        <C>
Discount rate                                       7.0%       7.0%       8.5%       8.5%       7.5%       7.5%
Rate of increase in compensation levels             N/A        5.0%       N/A        5.5%       N/A        5.5%
Expected long-term rate of return on assets         8.0%       8.5%       8.0%       8.0%      12.0%       8.0%
</TABLE>

Assets of the Company's qualified plans are invested in directed trusts.  Assets
in the directed  trusts are invested in common and preferred  stocks,  corporate
bonds,  money market funds and U.S.  government  obligations.  The  nonqualified
supplemental  plan  assets  consist  of the  cash  surrender  value  of  certain
insurance contracts.

The Company also  contributes to certain union  retirement  and insurance  funds
established to provide  retirement  benefits and group life, health and accident
insurance  for eligible  employees.  The total cost of these  contributions  was
$4,263, $4,693, and $5,060 in 1995, 1994 and 1993,  respectively.  The actuarial
present value of accumulated plan benefits and net assets available for benefits
for  employees  in the  union  administered  plans  are  not  determinable  from
information available to the Company.

Long Term Savings and Investment Plan

Salant sponsors the Long Term Savings and Investment  Plan, under which eligible
salaried  employees  may  contribute  up to 15% of  their  annual  compensation,
subject to certain  limitations,  to a money  market  fund,  a fixed income fund
and/or an equity fund.  Salant  contributes a minimum  matching amount of 20% of
the  first 6% of a  participant's  annual  compensation  and may  contribute  an
additional  discretionary  amount in cash or in the Company's  common stock.  In
1995, 1994 and 1993 Salant's  aggregate  contributions  to the Long Term Savings
and Investment Plan amounted to $239, $239 and $208, respectively.

Note 13.  Stock Options, Warrants and Shareholder Rights

On September 20, 1993, pursuant to the Reorganization  Plan, the Company adopted
the 1993 Stock Plan under which  directors  receive an automatic  grant of stock
options  pursuant to a formula  contained in such plan and options or awards may
be granted to key  employees  of the Company for the purchase of an aggregate of
600,000 shares of the Company's common stock.

The 1988 and 1987 Stock Plans  authorized  the Company to grant stock options or
stock awards  aggregating  1,200,000  shares of Salant common stock to officers,
key employees and, in the case of the 1988 Stock Plan, directors.

The 1993,  1988 and 1987 Stock Plans  authorized such grants (subject to certain
restrictions  applicable to 1993 Stock Plan stock options  granted to directors)
at such prices and pursuant to such other terms and conditions as the Stock Plan
Committee may determine.  Options may be nonqualified stock options or incentive
stock  options and may include stock  appreciation  rights.  Exercise  prices of
options are  ordinarily  equal to 100% of the fair market value of the Company's
shares on the date of grant of the  options.  Options  expire no later  than ten
years from the date of grant and become  exercisable  in  varying  amounts  over
periods ranging from the date of grant to five years from the date of grant.



<PAGE>


The following table summarizes stock option transactions during
 1993, 1994 and 1995:

<TABLE>
<CAPTION>

                                                               Shares                          Price Range

<S>                                                           <C>                             <C>   
Options outstanding at January 2, 1993                        1,050,240                       $1.00-15.125
Options granted during 1993                                     392,000                        $6.69-10.69
Options exercised during 1993                                   (24,095)                       $1.00-5.875
Options surrendered or canceled during 1993                     (55,371)                      $2.25-12.875
Options outstanding at January 1, 1994                        1,362,774                       $1.00-15.125
Options granted during 1994                                      61,050                         $4.94-6.69
Options exercised during 1994                                  (226,666)                        $2.00-2.63
Options surrendered or canceled during 1994                     (39,950)                      $5.125-12.00
Options outstanding at December 31, 1994                      1,157,208                       $1.00-15.125
Options granted during 1995                                     205,300                     $3.3125-5.1875
Options exercised during 1995                                   (33,334)                            $2.625
Options surrendered or canceled during 1995                     (65,601)                       $3.00-12.00
Options outstanding at December 30, 1995                      1,263,573                       $1.00-15.125

Options exercisable at December 30, 1995                        904,209                       $1.00-15.125

Options exercisable at December 31, 1994                        809,672                       $1.00-15.125
</TABLE>

At December 30, 1995,  there were 176,342 shares of Salant common stock reserved
for future grants of stock options or stock awards.

Pursuant to the  Reorganization  Plan,  the Company  issued  2,371,182  Salant B
Warrants (the "Warrants") to holders of the Company's  common stock  immediately
prior to the  consummation  date. Each Warrant expires three years from the date
of issuance and entitles the registered  holder thereof to purchase one share of
common  stock of the  Company  at prices of $16  during  the  first  year  after
issuance,  $18 during the second  year after  issuance  and $20  thereafter.  No
Warrants were exercised in 1993, 1994, or 1995.

The Company has a shareholder  rights plan (the "Rights  Plan"),  which provides
for a dividend  distribution  of one right for each share of Salant common stock
to holders of record at the close of business on December 23,  1987.  The rights
will expire on December  23,  1997.  With  certain  exceptions,  the rights will
become  exercisable  only in the event that an acquiring  party  accumulates  20
percent or more of the Company's  voting stock, or if a party announces an offer
to  acquire  30  percent  or  more  of  such  voting  stock.  Each  right,  when
exercisable,  will entitle the holder to buy one  one-hundredth  of a share of a
new series of cumulative preferred stock at a price of $30 per right or upon the
occurrence of certain  events,  to purchase either Salant common stock or shares
in an  "acquiring  entity" at half the market  value  thereof.  The Company will
generally  be entitled to redeem the rights at three cents per right at any time
until the 10th day following  the  acquisition  of a 20 percent  position in its
voting  stock.  In July 1993,  the Rights  Plan was  amended to provide  that an
acquisition  or  offer  by  Apollo  Apparel  Partners,   L.P.,  or  any  of  its
subsidiaries, will not cause the rights to become exercisable.

In summary, as of December 30, 1995, there were 1,263,573 shares of Common Stock
reserved  for the  exercise of stock  options,  176,342  shares of Common  Stock
reserved for future grants of stock  options or awards and  2,371,182  shares of
Common Stock  reserved  for the  Warrants,  for a total of  3,811,097  shares of
Common Stock reserved for the future issuance of stock options, stock awards and
warrants.

Note 14.  Deferred Liabilities
<TABLE>
<CAPTION>
                                                                        December 30,          December 31,
                                                                                1995                  1994

<S>                                                                       <C>                     <C>
Lease obligations                                                         $    1,206              $  1,225
Deferred pension obligations                                                   5,087                 6,253
Liability for chapter 11 claims settlements                                    4,600                 6,001
Other                                                                            480                   --
                                                                           $  11,373              $ 13,479
</TABLE>

Note 15.  Commitments and Contingencies

(a)      Lease Commitments

The Company  conducts a portion of its  operations  in premises  occupied  under
leases  expiring at various dates through  2012.  Certain of the leases  contain
renewal  options.  Rental  payments  under  certain  leases may be adjusted  for
increases in taxes and operating expenses above specified amounts.  In addition,
certain of the leases for outlet stores contain  provisions for additional  rent
based upon sales.

In  1995,  1994  and  1993,  rental  expense  was  $7,265,  $5,914  and  $5,478,
respectively.  As of December 30, 1995,  future  minimum  rental  payments under
noncancelable  operating  leases  (exclusive  of  renewal  options,   percentage
rentals,  and  adjustments  for property  taxes and operating  expenses) were as
follows:

<TABLE>
<CAPTION>

                           Fiscal Year

<S>                        <C>                                                    <C>
                           1996                                                   $6,759
                           1997                                                    5,584
                           1998                                                    5,113
                           1999                                                    3,989
                           2000                                                    2,328
                           Thereafter                                             11,001
                              Total                                               $34,774
</TABLE>

(b)      Employment Agreements

The Company has employment agreements with certain executives, which provide for
the payment of compensation aggregating  approximately $4,742 in 1996, $1,070 in
1997 and $250 in 1998.  In  addition,  such  employment  agreements  provide for
incentive compensation based on various performance criteria.

Note 16.  Acquisition

On June 10,  1994,  the Company  acquired  all the capital  stock of JJ.  Farmer
Clothing   Inc.  (a  Canadian   corporation)   and  the  assets  of  JJ.  Farmer
International Limited (a Hong Kong corporation)  (collectively "JJ. Farmer") for
approximately  $5,311 in cash. The purchase price is subject to adjustment based
on a number of items,  including the future profitability of JJ. Farmer. Through
December 30, 1995, the Company made additional payments of $463. The acquisition
has been accounted for as a purchase,  and accordingly,  JJ. Farmer's  operating
results have been included in the Company's  consolidated  results of operations
commencing  June  11,  1994.  Pro  forma  results  of  operations  have not been
presented as the effect would not be significant. JJ. Farmer's net sales for the
five months  ended May 31, 1994 and the twelve  months  ended  December 31, 1993
were $3,392 and $13,104, respectively. The excess of cost over the book value of
net assets  acquired  ($4,589  subject to adjustment) is being  amortized over a
period of not more than 15 years on a straight-line basis.

As part of the  acquisition,  the  Company  agreed to pay to the  sellers of JJ.
Farmer,  certain  minimum  amounts in the years 1996 through  1999.  The present
value of such future payments is $1,789, and is included in long-term debt.

Note 17. Discontinued Operations

In February  1995,  the Company  discontinued  the  operations of the Vera Scarf
division,  which imported and marketed women's scarves. The loss from operations
of the division in 1994 was $9,639,  which  included a fourth  quarter charge of
$9,004 for the write-off of goodwill and other intangible  assets. The loss from
operations of the division in 1993 was $589.

Additionally,  in 1994 the Company recorded a fourth quarter charge of $1,796 to
accrue for expected  operating  losses during the phase-out  period through June
1995. No income tax benefits have been allocated to the division's  1994 or 1993
losses.   Such  losses  are  included  in  the  Company's  net  operating   loss
carryforward disclosed in Note 11.

Net sales of the division were $1,673,  $5,087,  and $5,138 in 1995,  1994,  and
1993  respectively.  The net assets and/or net  liabilities of the  discontinued
operations  have been  reclassified  on the balance  sheets as net assets or net
liabilities  of  discontinued  operations,  and consist  principally of accounts
receivable, inventory and accrued losses for the phase-out period.

Note 18.  Consummation of the Plan of Reorganization

From  the  Consummation  Date  through  December  30,  1995,   pursuant  to  the
Reorganization  Plan, the Company made cash payments of $8,800,  issued $111,851
of new 10-1/2%  senior  secured  notes and issued 10.9 million  shares of common
stock  to  creditors  in  settlement  of  certain   claims  in  the  chapter  11
proceedings.  Salant  anticipates  that an  additional  $4,761  in  cash  and an
additional  376  thousand  shares  of  common  stock  ultimately  will have been
distributed  to creditors by the time all remaining  claims have been  resolved.
Provisions for such  distributions  had previously been made in the consolidated
financial  statements.  As further described in Note 3, upon consummation of the
Reorganization  Plan,  the  Company  recorded an  extraordinary  gain of $24,707
relating to the settlement of indebtedness pursuant to the Reorganization Plan.

Note 19.  Discontinued Operations Subsequently Retained

In March 1993,  the Company  adopted a formal plan to  restructure  and sell its
Children's  Apparel  Group.  Consequently,  the division was  accounted for as a
discontinued  operation for 1992 and the first three  quarters of 1993. In March
1994, the Company concluded that the value of the division would be maximized by
retaining the Children's Apparel Group as part of its continuing operations.  As
a result,  the assets,  liabilities  and results of  operations  for all periods
presented  have been presented as part of continuing  operations.  In the fourth
quarter of 1993, a previous  estimated  loss on disposal  charge was reversed in
its  entirety and the Company  recorded a provision of $5,000 for  restructuring
costs, including (i) the costs of closure of certain unprofitable product lines,
(ii) inventory  markdowns  associated with those product lines,  and (iii) fixed
asset write-downs at closed locations.



<PAGE>


Note 20.  Quarterly Financial Information (Unaudited)
<TABLE>
<CAPTION>

                       Fiscal year ended December 30, 1995

                                                Total            4th Qtr.     3rd Qtr.      2nd Qtr.     1st Qtr.

<S>                                          <C>          <C>          <C>           <C>          <C>
Net sales                                    $501,522     $127,347     $148,313      $122,061     $103,801
Gross profit                                  103,892       23,152       33,752        24,521       22,467
Income/(loss) from continuing operations         (498)      (5,509)       6,318           392       (1,699)
Extraordinary gain (See note 3)                 1,000        1,000         --            --           --
Net income/(loss)                                 502       (4,509)       6,318           392       (1,699)
Income/(loss) per share from
 continuing operations (a)                  $   (0.03)  $    (0.36)  $     0.42    $    0.03     $   (0.11)
Income per share from extraordinary gain         0.06         0.06          --           --           --
Net income/(loss) per share (a)                  0.03        (0.30)        0.42         0.03         (0.11)
</TABLE>

                       Fiscal year ended December 31, 1994
<TABLE>
<CAPTION>
                                                Total     4th Qtr.3rd Qtr.    2nd Qtr.      1st Qtr.

<S>                                          <C>          <C>          <C>           <C>          <C>
Net sales                                    $419,285     $115,840     $125,403      $ 88,184     $ 89,858
Gross profit                                   93,226       22,662       29,591        18,867       22,106
Income/(loss) from continuing operations        3,507       (1,251)       6,119        (2,521)       1,160
Discontinued operations:
  Income/(loss) from discontinued operations   (9,639)      (9,325)         (21)         (219)         (74)
  Estimated loss on disposal                   (1,796)      (1,796)          --            --           --
Extraordinary gain                                 63           --           --            63           --
Net income/(loss)                              (7,865)     (12,372)       6,098        (2,677)       1,086
Income/(loss) per share from
 continuing operations (a)                 $     0.23    $   (0.08)  $     0.40     $  (0.17)    $    0.07
Loss per share from discontinued operations (a) (0.76)       (0.74)         --         (0.01)          --
Net income/(loss) per share (a)                 (0.53)       (0.82)        0.40        (0.18)         0.07
</TABLE>

Reference is made to Notes 2, 3 and 17  concerning  fourth  quarter  adjustments
during the years ended December 30, 1995 and December 31, 1994.

(a)     Income/(loss) per share of common stock is computed  separately for each
        period.  The sum of the amounts of  income/(loss)  per share reported in
        each period  differs  from the total for the year due to the issuance of
        shares and, when appropriate, the inclusion of common stock equivalents.

<PAGE>




ITEM 9.           DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

                                    PART III

ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information  required by Item 10 is incorporated by reference from the Proxy
Statement of Salant Corporation.

ITEM 11.          EXECUTIVE COMPENSATION

The information  required by Item 11 is incorporated by reference from the Proxy
Statement of Salant Corporation.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information  required by Item 12 is incorporated by reference from the Proxy
Statement of Salant Corporation.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information  required by Item 13 is incorporated by reference from the Proxy
Statement of Salant Corporation.



<PAGE>




                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM  8-K

Financial Statements

The following financial statements are included in Item 8 of this Annual Report:

Independent Auditors' Report                                                 

Consolidated Statements of Operations                                    

Consolidated Balance Sheets                                              

Consolidated Statements of Shareholders' Equity/(Deficiency)               

Consolidated Statements of Cash Flows                                     

Notes to Consolidated Financial Statements                               

Financial Statement Schedule

The  following  Financial  Statement  Schedule for the years ended  December 30,
1995,  December  31,  1994,  and January 1, 1994 is filed as part of this Annual
Report:

Schedule II - Valuation and Qualifying Accounts and Reserves           

All other  schedules  have been  omitted  because they are  inapplicable  or not
required,  or the information is included elsewhere in the financial  statements
or notes thereto.



<PAGE>




                       SALANT CORPORATION AND SUBSIDIARIES

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>

COLUMN A                               COLUMN B                  COLUMN C                                       COLUMN D   COLUMN E

                                                        (1)             (2)
                                     Balance at     Charged to         Charged to                               Balance
                                      Beginning     Costs and      Other Accounts      Deductions               at End
Description                          of Period       Expenses     -- Describe         -- Describe              of Period

YEAR ENDED DECEMBER 30, 1995:

Accounts receivable - allowance
<S>                                      <C>            <C>               <C>          <C>                        <C>
  for doubtful accounts                  $2,565         $1,510            $  --        $1,068 (A)                 $3,007

Reserve for business restructuring    $    --           $3,550            $  --        $1,981 (B)                 $1,569

YEAR ENDED DECEMBER 31, 1994:

Accounts receivable - allowance
  for doubtful accounts                  $2,261         $1,068            $  --       $   764 (A)                 $2,565

Reserve for business restructuring       $2,038         $2,038            $  --   $       --                   $   --

YEAR ENDED JANUARY 1, 1994:
Accounts receivable allowance
  for doubtful accounts                  $3,776       $     63          $    --        $1,578 (A)                 $2,261

Reserve for business restructuring       $5,931         $5,500          $    --        $9,393 (B)                 $2,038

Reserve for loss on disposal of
  discontinued operations               $11,772      $   --             $    --       $11,722 (C)            $      --

</TABLE>

NOTES:

(A) Uncollectible  accounts written off, less recoveries.  (B) Costs incurred in
plant  closings and business  restructuring.  (C) Reversal of estimated  loss on
disposal of discontinued operation.



<PAGE>


Reports on Form 8-K

The  Company  did not file any  reports  on Form 8-K during  the  quarter  ended
December 30, 1995.


<PAGE>






Exhibits

                                                                 Incorporation
Number         Description                                       By Reference To


<PAGE>
<TABLE>
<CAPTION>



                                                                 Incorporation
Number         Description                                       By Reference To

<S>            <C>                                               <C>
2.1            Third Amended Disclosure                          Exhibit 1 to
               Statement of Salant                               Form 8-A dated
               Corporation, and Denton                           July 28, 1993.
               Mills, Inc., dated
               May 12,1993.

2.2            Third Amended Joint                               Included as
               Chapter 11 Plan of                                Exhibit D-1
               Reorganization of                                 to Exhibit 1
               Salant Corporation                                to Form 8-A
               and Denton Mills, Inc.                            dated July 28, 1993.

3.1            Form of Amended and                               Included as Exhibit
               Restated Certificate of                           D-1 to Exhibit 2
               Incorporation of Salant                           to Form 8-A dated
               Corporation.                                      July 28, 1993.

3.2            Form of Bylaws, as amended, of
               Salant Corporation, effective September 21, 1994.

4.1            Rights Agreement dated as of                      Exhibit 1 to Current Report
               December 8, 1987 between Salant                   on Form 8-K dated December 8, 1987.
               Corporation and The Chase
               Manhattan Bank, N.A.,
               as Rights Agent.  The Rights
               Agreement includes as Exhibit B the
               form of Right Certificate.

4.2            Form of First Amendment                           Exhibit 3 to
               to the Rights Agreement                           Amendment No. 1 to
               between Salant Corporation                        Form 8-A dated
               and Mellon Securities.                            July 29, 1993.

4.3            Indenture, dated as of                            Exhibit 10.34 to
               September 20, 1993, between Salant                Quarterly Report
               Corporation and Bankers                           on Form 10-Q for
               Trust Company, as trustee,                        the quarter ended
               for the 10-1/2% Senior                            October 2, 1993.
               Secured Notes due
               December 31, 1998.

4.4            Warrant Agreement, dated                          Exhibit 10.35 to
               as of September 20, 1993,                         Quarterly Report on
               between Salant Corporation                        Form 10-Q for the
               and Bankers Trust Company,                        quarter ended October 2, 1993.
               as Warrant Agent.

10.1           Revolving Credit,                                 Exhibit 10.33 to
               Factoring and Security                            Quarterly Report
               Agreement dated September 29, 1993,               on Form 10-Q for
               between Salant Corporation                        the quarter ended
               and The CIT Group/Commercial                      October 2, 1993.
               Services, Inc.

10.2           Salant Corporation 1987 Stock Plan.               Exhibit 19.2 to Annual Report on Form 10-K for fiscal year 1987.

10.3           Salant Corporation 1987 Stock Plan                Exhibit 10.12 to Form S-2
               Agreement, dated as of June 13,                   Registration Statement filed
               1988, between Nicholas P. DiPaolo                 June 17, 1988.
               and Salant Corporation.

10.4           Salant Corporation 1988 Stock Plan.               Exhibit 19.3 to Annual Report on
                                                                 Form 10-K for fiscal year 1988.

10.5           First Amendment, effective                        Exhibit 19.1 to Quarterly Report
               as of July 25, 1989, to the Salant                on Form 10-Q for the quarter
               Corporation 1988 Stock Plan.                      ended September 30, 1989.

10.6           Form of Salant Corporation 1988                   Exhibit 19.7 to Annual Report on
               Stock Plan Employee Agreement.                    Form 10-K for fiscal year 1988.

10.7           Form of Salant Corporation                        Exhibit 19.8 to
               1988 Stock Plan Director                          Annual Report on
               Agreement.                                        Form 10-K for fiscal
                                                                 year 1988.

10.8           Employment Agreement, dated as of                 Exhibit 19.4 to
               December 31, 1990, between Herbert                Annual Report on
               R. Aronson and Salant Corporation. *              Form 10-K for fiscal
                                                                 year 1990.

10.9           Letter Agreement, dated                           Exhibit 19.1 to Quarterly
               June 20, 1992, amending the                       Report on Form 10-Q for
               Employment Agreement, dated as of                 the quarter ended October 3, 1992.
               December 31, 1990, between Herbert
               R. Aronson and Salant Corporation. *

10.10          License Agreement, dated                          Exhibit 19.1 to Annual Report
               January 1, 1991, by and between                   on Form 10-K for fiscal year 1992.
               Perry Ellis International Inc.
               and Salant Corporation regarding
               men's sportswear.

10.11          License Agreement, dated                          Exhibit 19.2 to Annual Report
               January 1, 1991, by and between                   on Form 10-K for
               Perry Ellis International Inc.                    fiscal year 1992.
               and Salant Corporation regarding
                                                                 men's dress shirts.

10.12          Employment Agreement,                             Exhibit 10.32 to
               dated as of June 1, 1993,                         Quarterly Report on
               between Todd Kahn                                 Form 10-Q for the
               and Salant Corporation. *                         quarter ended July 8, 1993.

10.13          Employment Agreement, dated                       Exhibit 10.36 to
               as of September 20, 1993, between                 Quarterly Report on
               Nicholas P. DiPaolo and                           Form 10-Q for the
               Salant Corporation. *                             quarter ended October 2, 1993.

10.14          Employment Agreement, dated                       Exhibit 10.38 to
               as of July 30, 1993, between                      Quarterly Report on
               Richard P. Randall and                            Form 10-Q for the
               Salant Corporation. *                             quarter ended October 2, 1993.

10.15          Employment Agreement, dated                       Exhibit 10.32 to Annual Report on
               as of December 21, 1993, between                  Form 10-K for Fiscal Year 1993.
               Elliot M. Lavigne and Salant
               Corporation. *

10.16          Agreement, dated as of                            Exhibit 10.33 to Annual Report on
               September 22, 1993, between Nicholas              Form 10-K for Fiscal Year 1993.
               P. DiPaolo and Salant Corporation. *

<PAGE>





10.17          Forms of Salant Corporation 1993                  Exhibit 10.34 to Annual
               Stock Plan Directors' Option                      Report on Form
               Agreement. *                                      10-K for Fiscal Year 1993.

10.18          Letter Agreement, dated as of                     Exhibit 10.45 to
               August 24, 1994, amending the                     Quarterly Report on
               Revolving Credit, Factoring and                   Form 10-Q for the
               Security Agreement, dated                         quarter ended October 1, 1994.
               September 20, 1993,
               between The CIT Group/Commercial
               Services, Inc. and Salant Corporation.

10.19          Letter Agreement, dated                           Exhibit 10.46 to
               October 18, 1994, amending the                    Quarterly Report on
               Employment Agreement, dated                       Form 10-Q for the
               December 31, 1990, between Herbert                quarter ended October 1, 1994.
               R. Aronson and Salant Corporation. *

10.20          Letter Agreement, dated                           Exhibit 10.47 to
               October 25, 1994, amending the                    Quarterly Report on
               Employment Agreement, dated                       Form 10-Q for the
               July 30, 1993, between Richard                    quarter ended October 1, 1994.
               Randall and Salant Corporation. *

10.21          Third Amendment to Credit Agreement,              Exhibit 10.48 to Current Report on
               dated February 28, 1995, to the                   Form 8-K, dated March 2, 1995.
               Revolving Credit, Factoring and
               Security Agreement, dated
               September 20, 1993, as amended,
               between The CIT Group/Commercial
               Services, Inc. and Salant Corporation.

10.22          Salant Corporation Retirement Plan,               Exhibit 10.23 to Annual Report on
               as amended and restated. *                        Form 10-K for Fiscal Year 1994.

10.23          Salant Corporation Pension Plan,                  Exhibit 10.24 to Annual Report on
               as amended and restated. *                        Form 10-K for Fiscal Year 1994.

10.24          Salant Corporation Long Term Savings              Exhibit 10.25 to Annual Report on
               and Investment Plan as amended                    Form 10-K for Fiscal Year 1994.
               and restated. *

10.25          Letter Agreement, dated                           Exhibit 10.26 to Annual Report on
               February 15, 1995, amending the                   Form 10-K for Fiscal Year 1994.
               Employment Agreement, dated
               July 30, 1993, between Richard
               Randall and Salant Corporation. *

10.26          Fourth Amendment to Credit                        Exhibit 10.27 to
               Agreement, dated as of March 1,                   Quarterly Report
               1995, to the Revolving Credit,                    on Form 10-Q for
               Factoring and Security Agreement,                 the quarter
               dated as of September 20, 1993,                   ended April 1,
               as amended, between Salant                        1995.
               Corporation and The CIT Group/
               Commercial Services, Inc.

10.27          Letter Agreement, dated April 12,                 Exhibit 10.28 to
               1995, amending the Employment                     Quarterly Report
               Agreement, dated June 1, 1993,                    on Form l0-Q for
               between Todd Kahn and Salant                      the quarter
               Corporation. *                                    ended April 1,
                                                                 1995.

10.28          Fifth Amendment to Credit                         Exhibit 10.29
               Agreement, dated as of                            to Quarterly
               June 28, 1995, to the                             Report on
               Revolving Credit, Factoring                       Form l0-Q for
               and Security Agreement,                           the quarter
               dated as of September 20,                         ended July 1,
               1993, as amended, between                         1995.
               Salant Corporation and The
               CIT Group/Commercial Services, Inc.

10.29          Sixth Amendment to Credit                         Exhibit 10.30
               Agreement, dated as of                            to Quarterly
               August 15, 1995, to the                           Report on
               Revolving Credit, Factoring                       Form l0-Q for
               and Security Agreement,                           the quarter
               dated as of September 20,                         ended July 1,
               1993, as amended, between                         1995.
               Salant Corporation and The
               CIT Group/Commercial Services, Inc.

10.30          Letter from The CIT Group/                        Exhibit 10.31
               Commercial Services, Inc.,                        to Quarterly
               dated as of July 11, 1995,                        Report on
               regarding the waiver of a                         Form l0-Q for
               default.                                          the quarter
                                                                 ended July 1,
                                                                 1995.

10.31          Letter Agreement between                          Exhibit 10.31
               Salant Corporation and The                        to Quarterly
               CIT Group/Commercial Services,                    Report on
               Inc. dated as of July 11, 1995,                   Form l0-Q for
               regarding the Seasonal Overadvance                the quarter
               Subfacility.                                      ended July 1,
                                                                 1995.

10.32          Letter Agreement, dated as of                     Exhibit 10.33 to
               August 31, 1995, amending the                     Quarterly Report
               Employment Agreement, dated                       on Form l0-Q for
               September 20, 1993, between                       the quarter
               Nicholas P. DiPaolo and                           ended September
               Salant Corporation. *                             30, 1995.

10.33          Letter Agreement, dated
               December 1, 1995, between
               Lubin, Delano & Company and
               Salant Corporation.

10.34          Seventh Amendment to Credit
               Agreement, dated as of
               March 27, 1996, to the
               Revolving Credit, Factoring
               and Security Agreement,
               dated as of September 20,
               1993, as amended, between
               Salant Corporation and The
               CIT Group/Commercial Services,
               Inc.

21             List of Subsidiaries of the Company

27             Financial Data Schedule
</TABLE>
* constitutes a management contract or compensatory plan or arrangement.



<PAGE>






                  Incorporation
Number         Description                                       By Reference To



<PAGE>



SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                                       SALANT CORPORATION

Date:   March 28, 1996                            By:  /s/ Richard P. Randall
                                                       Senior Vice President and
                                                       Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities indicated and on March 22, 1996.

<TABLE>
<CAPTION>

         Signature                                        Title
<S>                                                      <C>
         /s/ Nicholas P. DiPaolo                         Chairman of the Board,
         Nicholas P. DiPaolo                             President and Chief Executive Officer
                                                         (Principal Executive Officer); Director

         /s/ Michael A. Lubin                            Executive Vice President and
         Michael A. Lubin                                Chief Operating Officer

         /s/ Richard P. Randall                          Senior Vice President
         Richard P. Randall                              and Chief Financial Officer
                                                         (Principal Financial and Accounting Officer)
         /s/ Craig M. Cogut
         Craig M. Cogut                                  Director

         /s/ Ann Dibble Jordan
         Ann Dibble Jordan                               Director

         /s/ Robert Katz
         Robert Katz                                     Director

         /s/ Harold Leppo
         Harold Leppo                                    Director

         /s/ Bruce F. Roberts
         Bruce F. Roberts                                Director

         /s/ John S. Rodgers
         John S. Rodgers                                 Director

         /s/ Marvin Schiller
         Marvin Schiller                                 Director

         /s/ Edward M. Yorke
         Edward M. Yorke                                 Director
</TABLE>

<PAGE>




                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549






                                    EXHIBITS


                                       to


                                    FORM 10-K


                   FOR THE FISCAL YEAR ENDED DECEMBER 30, 1995



<PAGE>


SALANT CORPORATION
                                  EXHIBIT INDEX

                                                                 Incorporation
Number         Description                                       By Reference To


<PAGE>

<TABLE>
<CAPTION>



                                                                 Incorporation
Number         Description                                       By Reference To


<S>            <C>                                               <C> 
2.1            Third Amended Disclosure                          Exhibit 1 to
               Statement of Salant                               Form 8-A dated
               Corporation, and Denton                           July 28, 1993.
               Mills, Inc., dated
               May 12,1993.

2.2            Third Amended Joint                               Included as
               Chapter 11 Plan of                                Exhibit D-1
               Reorganization of                                 to Exhibit 1
               Salant Corporation                                to Form 8-A
               and Denton Mills, Inc.                            dated July 28, 1993.

3.1            Form of Amended and                               Included as Exhibit
               Restated Certificate of                           D-1 to Exhibit 2
               Incorporation of Salant                           to Form 8-A dated
               Corporation.                                      July 28, 1993.

3.2            Form of Bylaws, as amended, of
               Salant Corporation, effective September 21, 1994.

4.1            Rights Agreement dated as of                      Exhibit 1 to Current Report
               December 8, 1987 between Salant                   on Form 8-K dated December 8, 1987
               Corporation and The Chase
               Manhattan Bank, N.A.,
               as Rights Agent.  The Rights
               Agreement includes as Exhibit B the
               form of Right Certificate.

4.2            Form of First Amendment                           Exhibit 3 to
               to the Rights Agreement                           Amendment No. 1 to
               between Salant Corporation                        Form 8-A dated
               and Mellon Securities.                            July 29, 1993.

4.3            Indenture, dated as of                            Exhibit 10.34 to
               September 20, 1993, between Salant                Quarterly Report
               Corporation and Bankers                           on Form 10-Q for
               Trust Company, as trustee,                        the quarter ended
               for the 10-1/2% Senior                            October 2, 1993.
               Secured Notes due
               December 31, 1998.

4.4            Warrant Agreement, dated                          Exhibit 10.35 to
               as of September 20, 1993,                         Quarterly Report on
               between Salant Corporation                        Form 10-Q for the
               and Bankers Trust Company,                        quarter ended October 2, 1993.
               as Warrant Agent.

10.1           Revolving Credit,                                 Exhibit 10.33 to
               Factoring and Security                            Quarterly Report
               Agreement dated September 29, 1993,               on Form 10-Q for
               between Salant Corporation                        the quarter ended
               and The CIT Group/Commercial                      October 2, 1993.
               Services, Inc.

10.2           Salant Corporation 1987 Stock Plan.               Exhibit 19.2 to Annual Report on Form 10-K for fiscal year 1987.

10.3           Salant Corporation 1987 Stock Plan                Exhibit 10.12 to Form S-2
               Agreement, dated as of June 13, 1988,             Registration Statement filed
               between Nicholas P. DiPaolo and                   June 17, 1988.
               Salant Corporation.

10.4           Salant Corporation 1988 Stock Plan.               Exhibit 19.3 to Annual Report on
                                                                 Form 10-K for fiscal year 1988.

10.5           First Amendment, effective                        Exhibit 19.1 to Quarterly Report
               as of July 25, 1989, to the Salant                on Form 10-Q for the quarter
               Corporation 1988 Stock Plan.                      ended September 30, 1989.

10.6           Form of Salant Corporation 1988                   Exhibit 19.7 to Annual Report on
               Stock Plan Employee Agreement.                    Form 10-K for fiscal year 1988.

10.7           Form of Salant Corporation                        Exhibit 19.8 to
               1988 Stock Plan Director                          Annual Report on
               Agreement.                                        Form 10-K for fiscal
                                                                 year 1988.

10.8           Employment Agreement, dated as of                 Exhibit 19.4 to
               December 31, 1990, between Herbert                Annual Report on
               R. Aronson and Salant Corporation. *              Form 10-K for fiscal
                                                                 year 1990.

10.9           Letter Agreement, dated                           Exhibit 19.1 to Quarterly
               June 20, 1992, amending the                       Report on Form 10-Q for
               Employment Agreement, dated as of                 the quarter ended October 3, 1992.
               December 31, 1990, between Herbert
               R. Aronson and Salant Corporation. *

10.10          License Agreement, dated                          Exhibit 19.1 to Annual Report
               January 1, 1991, by and between                   on Form 10-K for fiscal year 1992.
               Perry Ellis International Inc.
               and Salant Corporation regarding
               men's sportswear.

10.11          License Agreement, dated                          Exhibit 19.2 to Annual Report
               January 1, 1991, by and between                   on Form 10-K for
               Perry Ellis International Inc.                    fiscal year 1992.
               and Salant Corporation regarding
                                                                 men's dress shirts.

10.12          Employment Agreement,                             Exhibit 10.32 to
               dated as of June 1, 1993,                         Quarterly Report on
               between Todd Kahn and                             Form 10-Q for the
               Salant Corporation. *                             quarter ended July 8, 1993.

10.13          Employment Agreement, dated                       Exhibit 10.36 to
               as of September 20, 1993, between                 Quarterly Report on
               Nicholas P. DiPaolo and                           Form 10-Q for the
               Salant Corporation. *                             quarter ended October 2, 1993.

10.14          Employment Agreement, dated                       Exhibit 10.38 to
               as of July 30, 1993, between                      Quarterly Report on
               Richard P. Randall and                            Form 10-Q for the
               Salant Corporation. *                             quarter ended October 2, 1993.

10.15          Employment Agreement, dated                       Exhibit 10.32 to Annual Report on
               as of December 21, 1993, between                  Form 10-K for Fiscal Year 1993.
               Elliot M. Lavigne and Salant
               Corporation. *

10.16          Agreement, dated as of                            Exhibit 10.33 to Annual Report on
               September 22, 1993, between Nicholas              Form 10-K for Fiscal Year 1993.
               P. DiPaolo and Salant Corporation. *

<PAGE>





10.17          Forms of Salant Corporation 1993                  Exhibit 10.34 to Annual
               Stock Plan Directors' Option                      Report on Form
               Agreement. *                                      10-K for Fiscal Year 1993.

10.18          Letter Agreement, dated as of                     Exhibit 10.45 to
               August 24, 1994, amending the                     Quarterly Report on
               Revolving Credit, Factoring and                   Form 10-Q for the
               Security Agreement, dated                         quarter ended October 1, 1994.
               September 20, 1993,
               between The CIT Group/Commercial
               Services, Inc. and Salant Corporation.

10.19          Letter Agreement, dated                           Exhibit 10.46 to
               October 18, 1994, amending the                    Quarterly Report on
               Employment Agreement, dated                       Form 10-Q for the
               December 31, 1990, between Herbert                quarter ended October 1, 1994.
               R. Aronson and Salant Corporation. *

10.20          Letter Agreement, dated                           Exhibit 10.47 to
               October 25, 1994, amending the                    Quarterly Report on
               Employment Agreement, dated                       Form 10-Q for the
               July 30, 1993, between Richard                    quarter ended October 1, 1994.
               Randall and Salant Corporation. *

10.21          Third Amendment to Credit Agreement,              Exhibit 10.48 to Current Report on
               dated February 28, 1995, to the                   Form 8-K, dated March 2, 1995.
               Revolving Credit, Factoring and
               Security Agreement, dated
               September 20, 1993, as amended,
               between The CIT Group/Commercial
               Services, Inc. and Salant Corporation.

10.22          Salant Corporation Retirement Plan,               Exhibit 10.23 to Annual Report on
               as amended and restated. *                        Form 10-K for Fiscal Year 1994.

10.23          Salant Corporation Pension Plan,                  Exhibit 10.24 to Annual Report on
               as amended and restated. *                        Form 10-K for Fiscal Year 1994.

10.24          Salant Corporation Long Term Savings              Exhibit 10.25 to Annual Report on
               and Investment Plan as amended                    Form 10-K for Fiscal Year 1994.
               and restated. *

10.25          Letter Agreement, dated                           Exhibit 10.26 to Annual Report on
               February 15, 1995, amending the                   Form 10-K for Fiscal Year 1994.
               Employment Agreement, dated
               July 30, 1993, between Richard
               Randall and Salant Corporation. *

10.26          Fourth Amendment to Credit                        Exhibit 10.27 to
               Agreement, dated as of March 1,                   Quarterly Report
               1995, to the Revolving Credit,                    on Form 10-Q for
               Factoring and Security Agreement,                 the quarter
               dated as of September 20, 1993,                   ended April 1,
               as amended, between Salant                        1995.
               Corporation and The CIT Group/
               Commercial Services, Inc.

10.27          Letter Agreement, dated April 12,                 Exhibit 10.28 to
               1995, amending the Employment                     Quarterly Report
               Agreement, dated June 1, 1993,                    on Form l0-Q for
               between Todd Kahn and Salant                      the quarter
               Corporation. *                                    ended April 1,
                                                                 1995.

10.28          Fifth Amendment to Credit                         Exhibit 10.29
               Agreement, dated as of                            to Quarterly
               June 28, 1995, to the                             Report on
               Revolving Credit, Factoring                       Form l0-Q for
               and Security Agreement,                           the quarter
               dated as of September 20,                         ended July 1,
               1993, as amended, between                         1995.
               Salant Corporation and The
               CIT Group/Commercial Services, Inc.

10.29          Sixth Amendment to Credit                         Exhibit 10.30
               Agreement, dated as of                            to Quarterly
               August 15, 1995, to the                           Report on
               Revolving Credit, Factoring                       Form l0-Q for
               and Security Agreement,                           the quarter
               dated as of September 20,                         ended July 1,
               1993, as amended, between                         1995.
               Salant Corporation and The
               CIT Group/Commercial Services, Inc.

10.30          Letter from The CIT Group/                        Exhibit 10.31
               Commercial Services, Inc.,                        to Quarterly
               dated as of July 11, 1995,                        Report on
               regarding the waiver of a                         Form l0-Q for
               default.                                          the quarter
                                                                 ended July 1,
                                                                 1995.

10.31          Letter Agreement between                          Exhibit 10.31
               Salant Corporation and The                        to Quarterly
               CIT Group/Commercial Services,                    Report on
               Inc. dated as of July 11, 1995,                   Form l0-Q for
               regarding the Seasonal Overadvance                the quarter
               Subfacility.                                      ended July 1,
                                                                 1995.

10.32          Letter Agreement, dated as of                     Exhibit 10.33 to
               August 31, 1995, amending the                     Quarterly Report
               Employment Agreement, dated                       on Form l0-Q for
               September 20, 1993, between                       the quarter
               Nicholas P. DiPaolo and                           ended September
               Salant Corporation. *                             30, 1995.

10.33          Letter Agreement, dated
               December 1, 1995, between
               Lubin, Delano & Company and
               Salant Corporation.

10.34          Seventh Amendment to Credit
               Agreement, dated as of
               March 27, 1996, to the
               Revolving Credit, Factoring
               and Security Agreement,
               dated as of September 20,
               1993, as amended, between
               Salant Corporation and The
               CIT Group/Commercial Services,
               Inc.

21             List of Subsidiaries of the Company

27             Financial Data Schedule

</TABLE>
* constitutes a management contract or compensatory plan or arrangement.


<PAGE>


    EXHIBIT 21


                         SUBSIDIARIES OF THE REGISTRANT


Birdhill, Limited, a Hong Kong corporation

Carrizo Manufacturing Co., S.A. de C.V., a Mexican corporation

Clantexport, Inc., a New York corporation

Denton Mills, Inc., a Delaware corporation

JJ. Farmer Clothing, Inc., a Canadian corporation

Frost Bros. Enterprises, Inc., a Texas corporation

Manhattan Industries, Inc., a Delaware corporation

Manhattan Industries, Inc., a New York corporation

Manhattan Industries (Far East) Limited, a Hong Kong corporation

Maquiladora Sur S.A. de C.V., a Mexican corporation

Salant Canada, Inc., a Canadian corporation

SLT Sourcing, Inc., a New York corporation

Vera Licensing, Inc., a Nevada corporation

Vera Linen Manufacturing, Inc., a Delaware corporation