UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended September 30, 2000

                                       OR

[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from                     to
Commission File Number: 333-58059

                                            Cluett American Corp.
             (Exact Name of Registrant as Specified in Its Charter)

Delaware                                                     22-2397044
(State or Other Jurisdiction of                              (IRS Employer
Incorporation or Organization)                               Identification No.)

                     48 West 38th Street New York, NY 10018
               (Address of Principal Executive Offices) (Zip code)

Registrant's Telephone Number, Including Area Code          212-984-8900


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that  registrant was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirement for the past 90 days.
Yes  X    No

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

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 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


No stock is held by any non-affiliates of the registrant as of September 30,2000




<PAGE>


                     Cluett American Corp. and Subsidiaries
                                TABLE OF CONTENTS


                  PART I - FINANCIAL INFORMATION

<TABLE>
<S>                                                                                                     <C>

                                                                                                        Page

Report of Independent Auditors'                                                                         3

Condensed Consolidated Balance Sheets as of September 30, 2000 and December 31, 1999                   F-1

Condensed Consolidated Statements of Operations for the thirteen and thirty-nine
weeks ended  September  30, 2000 and October 2, 1999 (not  covered by  Auditors'
Report) F-2

Condensed Consolidated  Statements of Cash Flows for the thirty-nine weeks ended
September 30, 2000 and October 2, 1999 (not covered by Auditors' Report) F-3

Notes to Condensed Consolidated Financial Statements                                                   F-4


Item 2.  Management's Discussion and Analysis of Financial Condition and Results of
Operations.                                                                                             4


Item 3.  Quantitative and Qualitative Disclosures About Market Risk.                                    11





                  PART II - OTHER INFORMATION



Item 1.   Legal Proceedings                                                                             12

Item 4.   Submission of Matters to a Vote of Security Holders                                           12

Item 6.   Exhibits and Reports on Form 8-K                                                              12


SIGNATURES                                                                                              17


</TABLE>
<PAGE>




                REPORT OF DELOITTE & TOUCHE, INDEPENDENT AUDITORS


Board of Directors and Stockholder
Cluett American Corp. and Subsidiaries

We have reviewed the accompanying condensed consolidated balance sheet of Cluett
American  Corp.  and  subsidiaries  as of September  30,  2000,  and the related
condensed consolidated  statements of operations and cash flows for the thirteen
and  thirty  nine-week   periods  ended  September  30,  2000.  These  financial
statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America,  the
objective  of which is the  expression  of an opinion  regarding  the  financial
statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to such condensed  consolidated  financial  statements for them to be in
conformity with accounting principles generally accepted in the United States of
America.

We have  previously  audited,  in accordance with auditing  standards  generally
accepted in the United States of America,  the consolidated balance sheet of the
Company as of December  31, 1999,  and the related  consolidated  statements  of
operations,  stockholder's  equity  and cash  flows for the year then ended (not
presented  herein);  and in our report  dated March 29,  2000,  we  expressed an
unqualified opinion on those consolidated financial statements.  In our opinion,
the information set forth in the  accompanying  condensed  consolidated  balance
sheet as of December 31, 1999 is fairly  stated,  in all material  respects,  in
relation to the consolidated balance sheet from which it has been derived.


                            /s/ Deloitte & Touche LLP


Atlanta, Georgia
November 10, 2000


<PAGE>



                                                    F-1
                      Condensed Consolidated Balance Sheets
                  (Dollars In Thousands, except per share data)

<TABLE>
<S>                                                                             <C>           <C>
                                                                                 September   December 31,
                                                                                    30,          1999
                                                                                   2000
                                                                               ----------------------------
                                                                               (Unaudited)    (Note 1)

                                   Assets

Current assets:
   Cash and cash equivalents..........................................           $  4,198     $  7,239
   Accounts receivable, net...........................................             40,434       45,519
   Inventories, net ..................................................             42,980       78,105
   Net assets held for sale ..........................................             20,134           --
   Prepaid expenses and other current assets..........................              2,578        3,129
                                                                                -----------------------
Total current assets..................................................            110,324      133,992

Property, plant and equipment, net....................................             27,844       47,794
Pension assets........................................................             26,472       32,187
Deferred financing fees...............................................             10,412       10,842
Goodwill, net.........................................................                 --        4,740
Due from Parent.......................................................                157           --
Other noncurrent assets...............................................              1,194        1,951
                                                                                -----------------------
Total assets..........................................................           $176,403     $231,506
                                                                                =======================


                  Liabilities and stockholder's deficit

Current liabilities:

   Accounts payable and accrued expenses..............................           $ 38,342    $  40,696
   Accrued interest payable...........................................              9,742        3,861
   Short-term debt and current portion of long-term debt..............             24,472       14,209
   Income taxes payable...............................................              1,795        1,970
                                                                                -----------------------
Total current liabilities.............................................             74,351       60,736
Long-term debt and capital lease obligations..........................            213,523      258,883
Dividends payable.....................................................              2,707          637
Other non-current liabilities.........................................                157          147

Senior Exchangeable Preferred Stock Due 2010, cumulative, $.01 par value:
   authorized 4,950,000, issued and outstanding 636,592 shares in 2000
   and 599,145 shares in 1999 (liquidation preference of $63,659 in 2000
   and $59,915 in 1999)                                                            62,154       58,329

Stockholder's deficit:

   Common stock, $1 par value: authorized, issued and outstanding 1,000
      shares..........................................................                  1            1
   Additional paid-in capital.........................................            129,205      135,100
   Accumulated (deficit)..............................................           (305,088)    (282,046)
   Other comprehensive (loss).........................................               (607)        (281)
                                                                                ------------------------
Total stockholder's (deficit).........................................           (176,489)    (147,226)
                                                                                ------------------------
Total liabilities and stockholder's (deficit).........................           $176,403    $ 231,506
                                                                                ========================
</TABLE>

                             See accompanying notes.



<PAGE>


           Condensed Consolidated Statements of Operations (Unaudited)
                             (Dollars In Thousands)

<TABLE>
<S>
                                                        <C>                     <C>             <C>             <C>
                                                             Thirteen weeks ended              Thirty-nine weeks ended
                                                          September 30,     October 2,       September 30,      October 2,
                                                                   2000           1999                2000            1999
                                                        ---------------- --------------     --------------- ---------------

                                                                          Not covered                        Not covered
                                                                         by Auditors'                        by Auditors'
                                                                            Report                              Report

Net sales..........................................             $47,427        $43,389            $126,109        $118,824
Cost of goods sold.................................              30,213         27,948              80,191          74,563
                                                        ---------------- --------------     --------------- ---------------
Gross profit.......................................              17,214         15,441              45,918          44,261

Selling, general and administrative expenses.......              16,192          7,485              33,811          23,950
Restructuring and impairment (income)/charges......               (221)            819               (149)             547
                                                        ---------------- --------------     --------------- ---------------
Operating income from continuing operations........               1,243          7,137              12,256          19,764
Interest expense, net..............................               6,527          6,478              21,127          18,881
Other expense, net.................................                  59              2                 114              29
                                                        ---------------- --------------     --------------- ---------------
Income (loss) from continuing operations before
   provision for income taxes......................             (5,343)            657             (8,985)             854
Provision for income taxes.........................                 301            167                 798             679
                                                        ---------------- --------------     --------------- ---------------
Income (loss) from continuing operations ..........             (5,644)            490             (9,783)             175

Discontinued operations:
     Loss from operations of discontinued segment                    --        (5,429)             (9,937)        (11,803)
     Income/(loss) on disposition of business
      segment, including provision of $1,736 and
      $(646) for phase-period operating
      income(losses) during the thirteen and
      thirty-nine week periods ended September 30,
      2000, respectively...........................                876             --              (3,322)             --
                                                        ---------------- --------------     --------------- ---------------
Net (loss).........................................            $(4,768)       $(4,939)           $(23,042)       $(11,628)
                                                        ================ ==============     =============== ===============


</TABLE>



                             See accompanying notes.



<PAGE>


           Condensed Consolidated Statements of Cash Flows (Unaudited)
                             (Dollars in Thousands)

<TABLE>
<S>                                                                             <C>             <C>
                                                                             Thirty-nine weeks ended
                                                                             September 30,  October 2,
                                                                                 2000          1999
                                                                             ----------------------------
                                                                                           Not covered
                                                                                          by Auditors'
                                                                                             Report
Operating activities
Net loss...........................................................            $(23,042)   $  (11,628)
Adjustment to reconcile net loss  to net cash and cash equivalents
   used in (provided by) operating activities:
   Depreciation....................................................               6,838         7,225
   Deferred finance amortization...................................               1,296         1,235
   Goodwill amortization...........................................                 250            --
   Write-down of property, plant and equipment.....................                  54           360
    Goodwill impairment loss.......................................               4,497            --
   Loss/(gain) on disposal of fixed assets.........................                   7           (57)
   Loss on disposition of segment..................................               2,676            --

Changes in operating  assets and  liabilities,  net of effects of
   disposition of net assets held for sale:
   Accounts receivable.............................................               4,878        (4,229)
   Inventories.....................................................             (23,306)      (13,932)
   Prepaid expenses and other current assets.......................                 718           282
   Pension and other non-current assets............................               4,046        (1,751)
    Assets held for sale...........................................               1,488            --
    Due from parent................................................                (157)           --
   Accounts payable and accrued expenses...........................              (5,584)       (1,762)
   Income taxes payable............................................                (175)          352
   Other liabilities...............................................                 354           744
   Effect of changes in foreign currency...........................                (166)          763
                                                                            ----------------------------
Net cash and cash equivalents used in operating activities.........             (25,328)      (22,398)

Investing activities
Purchase of property, plant and equipment..........................              (3,733)       (8,168)
Purchase of CAT, net of cash acquired..............................                  --        (4,954)
Proceeds on disposition of net assets held for sale................              51,180            --
Proceeds on disposal of property, plant and equipment..............                  12         1,115
                                                                            ----------------------------
Net cash and cash equivalents provided by (used in) investing
   activities......................................................              47,459       (12,007)

Financing activities
Principal payments under long-term debt ...........................             (33,076)       (2,634)
Net borrowings under line-of-credit agreement .....................               8,309        38,352
(Repayments)/Borrowings on long-term note (CAT)....................                (393)        2,881
Principal payments under capital lease obligation..................                 (12)          (11)
                                                                            ----------------------------
Net cash and cash equivalents (used in) provided by financing
   activities......................................................             (25,172)       38,588

Effect of exchange rate changes on cash............................                  --            11
                                                                            ----------------------------
Net (decrease) increase in cash and cash equivalents...............              (3,041)        4,194
Cash and cash equivalents at beginning of period...................               7,239         2,868
                                                                            ----------------------------
Cash and cash equivalents at end of period.........................             $ 4,198     $   7,062
                                                                            ============================
</TABLE>
                             See accompanying notes.


<PAGE>


        Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Cluett
American  Corp.  and  Subsidiaries,   (the  "Company")  have  been  prepared  in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulation  S-X.  Accordingly,  they do not include all of the
information and footnotes required by accounting  principles  generally accepted
in the United  States of  America  for  complete  financial  statements.  In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered  necessary  for a fair  presentation  have been  included.  Operating
results for the  thirteen-week  and thirty-nine week periods ended September 30,
2000  are not  necessarily  indicative  of the  operating  results  that  may be
expected for the year ending December 31, 2000.

The  Balance  Sheet at  December  31,  1999 has been  derived  from the  audited
financial  statements  at that date but does not include all of the  information
and footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements.

For further information,  refer to the annual consolidated  financial statements
and footnotes of the Company,  included in the Annual  Report on Form 10-K,  for
the year ended  December  31,  1999,  filed  with the  Securities  and  Exchange
Commission on March 30, 2000.

The consolidated  financial  statements include all subsidiary  companies of the
Company.   Significant   intercompany   transactions  have  been  eliminated  in
consolidation.

The Company uses a 5-4-4 week fiscal quarter  whereby the fiscal quarter ends on
the Saturday  nearest the end of the calendar  quarter,  which  accordingly  was
September 30, 2000 and October 2, 1999, respectively.

Certain  amounts in the prior year financial  statements and footnotes have been
reclassified to conform to the current year presentation.

2.  Discontinued Operations

On June 13, 2000,  Phillips-Van  Heusen  Corporation,  ("PVH"),  and the Company
announced an agreement (the  "Agreement") for PVH to license the Arrow brand for
men's and boy's dress shirts and sportswear in the United  States.  In addition,
PVH and the Company  agreed in principle  for PVH to acquire the stock of Cluett
Designer  Group,  Inc., the licensee for Kenneth Cole dress shirts  ("CDG").  In
conjunction  with the Agreement,  the Company approved a plan to discontinue the
Shirt  Group   segment's   manufacturing   and   distribution   operations  (the
"Operations").

On July 24, 2000, the transactions contemplated by the Agreement,  including the
Purchase and Sale Agreement among Cluett,  Peabody & Co., Inc.  ("CP"),  Cluett,
Peabody  Canada,  Inc. ("CP Canada"),  Arrow Factory Stores Inc.  ("AFS"),  CDG,
Consumer Direct Corporation ("CDC"),  Cluett, Peabody Holding Corp. ("Holding"),
and PVH, (the "Purchase and Sale  Agreement")  and the Share Purchase  Agreement
among CP, CDG,  Bidermann  Tailored Clothing Inc.  ("BTC"),  and PVH (the "Share
Purchase  Agreement") were closed.  Each of the parties to the Purchase and Sale
Agreement and the Share Purchase  Agreement other than PVH and CDG is, and prior
to the closing CDG was, a wholly-owned subsidiary of the Company.

Pursuant to the Purchase and Sale Agreement,  (i) all of the outstanding  shares
of capital  stock of C.A.T.  Industrial  S.A. de C.V.,  ("C.A.T") a  corporation
organized under the laws of Honduras,  were sold to PVH by CP, AFS, CDG, CDC and
Holding,  (ii) PVH purchased all of CP's and AFS's right,  title and interest in
and to certain of the other assets  (principally  inventory)  of CP and AFS used
primarily  by CP and AFS in their Arrow label and private  label men's and boy's
dress and sport shirt  businesses and their Arrow factory  outlet  operations in
the United States and (iii) PVH purchased  all of CP Canada's  right,  title and
interest  in and to Arrow  label  dress and  sport  shirt  inventory  used in CP
Canada's United States "Career Apparel" business. Pursuant to the Share Purchase
Agreement, all of the outstanding shares of capital stock of CDG were sold by CP
and BTC to PVH.

<PAGE>

  Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)

2.       Discontinued Operations (continued)

The  aggregate  purchase  price paid by PVH  pursuant to the  Purchase  and Sale
Agreement and the Share Purchase  Agreement for the stock and assets referred to
above  was  approximately  $51.2  million  in cash plus the  assumption  of $2.1
million of debt  related to C.A.T.,  calculated  as set forth in, and subject to
adjustment pursuant to, Article 3 of each of the Purchase and Sale Agreement and
the Share Purchase  Agreement.  The Company has deposited in escrow $2.0 million
of the above  noted cash  consideration,  which is  subject  to final  inventory
adjustment.  The Company has  irrevocably  and  unconditionally  guaranteed  the
payment of any amount payable by CP or BTC to PVH under each Agreement  which is
not  paid by CP or BTC  when  due,  including  pursuant  to the  purchase  price
adjustment and indemnification provisions of the Agreements.

Pursuant  to  the  Purchase  and  Sale  Agreement,  the  Trademark  License
Agreement,  dated  July  24,  2000,  by and  between  Cluett  Peabody  Resources
Corporation, a Delaware corporation and a wholly-owned subsidiary of the Company
("CPR"),  CP and PVH was  executed  and  delivered.  Pursuant  to the  Trademark
License  Agreement,  CP granted to PVH an  exclusive  license to use  trademarks
related to CP's "Arrow"  clothing line in the United States and its  territories
and  possessions in connection  with its  manufacture,  advertising,  marketing,
promotion, distribution, offer to sell and sale of men's and boys' dress shirts,
sports shirts (including knit, woven and all forms of fleece), pants, shorts and
sweaters in certain specified channels of trade, including the Internet. CP also
granted to PVH the right to operate  websites that use URLs that incorporate the
licensed  trademarks.  The Trademark  License  Agreement with PVH provides for a
$5.0 million minimum  guaranteed annual royalty fee to be paid to CP, subject to
increases based on the achievement by PVH of certain sales targets.  The initial
term of the license  expires on June 30,  2007;  however,  PVH has the option to
renew the  Trademark  License  Agreement  for two  additional  five-year  terms,
provided it meets certain conditions.

The Company used $39.3  million of the net  proceeds  from the Purchase and Sale
Agreement,  the Share  Purchase  Agreement and the Trademark  License  Agreement
(collectively referred to as the "Transactions") to repay outstanding borrowings
under its Senior Credit Facility and CP Canada's Credit Facility.

The Company  expects to complete the  disposition of the remaining net assets of
the Operations through sale by December 31, 2000 and accordingly,  has reflected
the Operations as  discontinued  in the  accompanying  statements of operations.
Additionally,  at  September  30,  2000 the net  assets  of the  Operations  are
classified as held for sale in the accompanying  balance sheet and are comprised
of the following:

                                                                      September
                                                                      30, 2000
                                                                     ----------
       Assets:
         Inventories, net                                              $10,249
         Property, plant & equipment, net                               16,066
                                                                        ------
            Total assets                                                26,315

       Liabilities:
         Canadian revolving facility                                     6,181
                                                                         -----
            Total liabilities                                            6,181

              Net assets held for sale                                 $20,134
                                                                       =======



<PAGE>


Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)

2.   Discontinued Operations (continued)

As a result of the Transactions,  the Company recorded a $4.5 million impairment
charge in June, 2000 to adjust the carrying value of goodwill to its fair market
value based upon actual  consideration  received from the Transactions (Note 6).
The  impairment  charge is included as a component  of the  Company's  loss from
operations of discontinued segment in the accompanying  Statement of Operations.
The $3.3 million loss on disposition of discontinued segment for the thirty-nine
weeks ending  September 30, 2000 consists of a $2.7 million loss on  disposition
and $0.6  million in  operating  losses  during the phase out  period.  The $0.6
million in operating  losses during the phase out period consist of $0.2 million
of operating  income  incurred  from June 13, 2000 through  September  30, 2000,
offset against $0.8 million of estimated  operating  losses from October 1, 2000
through  December 31, 2000. In  conjunction  with the  disposition,  the Company
incurred $10.3 million in restructuring charges.

Net sales of the above noted  entities for the thirteen  and  thirty-nine  weeks
ended September 30, 2000 and October 2, 1999 are as follows:

                  Thirteen weeks ended            Thirty-nine weeks ended
                September 30,   October 2,      September 30,     October 2,
                2000            1999             2000             1999
               --------------  -----------      -------------     ----------

Net sales       $ 12,256        $ 44,049        $ 108,136         $ 128,932

3. Inventories

Inventories from continuing operations consist of the following at the specified
date:

                                             September 30,       December 31,
                                             2000                1999
                                             -------------       ------------
                                                  (Dollars In Thousands)

Finished goods                                 $36,249            $60,854
Work in process                                  2,657              8,260
Raw materials and supplies                       4,557             11,613
                                             -------------       ------------
                                                43,463             80,727
Less: Allowance for obsolete and slow moving
inventory                                         (483)            (2,622)
                                             -------------       ------------
                                               $42,980            $78,105
                                             =============       ============

4. Long-Term Obligations and Financing Arrangements

As of September 30, 2000,  the Company had  outstanding  $238.0  million of debt
(excluding $6.2 million of Canadian debt classified as net assets held for sale)
consisting  of $125.0  million in senior  subordinated  notes,  a Senior  Credit
Facility consisting of a $28.6 million term A loan, a $44.0 million term B loan,
$20.6 million in revolving credit borrowings,  $19.5 million in Tranche C Loans,
and $0.3 million in Canadian Capital Lease Obligation. During the thirteen weeks
ended  September  30, 2000,  the Company had a net decrease in revolving  credit
borrowings  of $14.4  million and repaid  $18.3  million in term loans and notes
payable.  As a result of the Transactions,  the Company  permanently reduced the
Term A Loan,  the Term B Loan and the  Tranche  C Loans  by $6.8  million,  $9.4
million and $8.7 million,  respectively.  In addition, the Company made payments
on the  revolving  credit  borrowings,  without  a  permanent  reduction  in the
revolving  credit  committed  amounts  and net of  expense  associated  with the
Transactions  of $13.3  million.  Additionally,  the Company repaid $1.1 million
under  the  Canadian   revolving  credit  facility  and  extended  the  Canadian
facility's maturity date to August 8, 2001. The Canadian facility is included as
a component of net assets held for sale in the accompanying balance sheet.


<PAGE>
 Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)

4. Long-Term Obligations and Financing Arrangements (continued)

On March 29, 2000,  the Senior Credit  Facility and the  Investment  and Deposit
agreement  was amended.  The March 2000  amendment  required (i) Vestar  Capital
Partners III,  L.P.("Vestar")  to infuse up to $30.0 million of new capital into
the Company and (ii) the Company to make $20.0 million in  additional  principal
payments on the Senior  Credit  Facilities  between June 30, 2000 (or in certain
circumstances August 31, 2000) and December 31, 2000 if certain financial ratios
were not met by June 30, 2000.  Through  September 30, 2000, the Company was in
compliance  with all financial  covenants.  Additionally,  on July 24, 2000, the
Company  satisfied  all  requirements  under  the  March  2000  amendments,  and
accordingly,  Vestar's  requirement to infuse up to $30.0 million of new capital
and the Company's  requirement  to make $20.0  million in  additional  principal
payments on the Senior Credit Facilities was extinguished.

5. Comprehensive Loss

For the thirteen and  thirty-nine  week periods  ending  September  30, 2000 and
October 2, 1999,  accumulated  other  comprehensive  gain/(loss) as shown in the
consolidated  balance  sheets  was  comprised  of foreign  currency  translation
adjustments.  The  components of  comprehensive  loss, for these periods were as
follows:

<TABLE>
<S>                                                         <C>         <C>                     <C>             <C>
                                                             Thirteen weeks ended              Thirty-nine weeks ended
                                                         September 30,    October 2,        September 30,     October 2,
                                                             2000            1999                2000            1999
                                                        ---------------- --------------     --------------- ---------------
                                                                              (Dollars In Thousands)

Net (loss).........................................            $(4,768)       $(4,939)           $(23,042)       $(11,628)
Foreign currency translation adjustment............               (151)          (992)               (326)           (442)
                                                        ---------------- --------------      -------------- ---------------
Comprehensive loss.................................            $(4,919)       $(5,931)           $(23,368)       $(12,070)
                                                        ================ ==============      ============== ===============
</TABLE>

6. Restructuring and Impairment Charges

During  1999,  the  Company  approved  a plan to close its  owned  manufacturing
facility located in Enterprise,  Alabama.  The closure costs included  severance
costs of $1.6 million for 308 employees at the Enterprise facility. In addition,
special  termination  benefits of $1.7 million  related to 280  employees of the
Enterprise  facility were  provided  through the  Company's  pension  plan.  All
terminations  were  completed by December 31, 1999. The Company also recorded an
impairment charge of $0.4 million to adjust the carrying value of the Enterprise
facility to fair market value based upon the consideration to be received. These
charges are included as a component of the loss from  operations of discontinued
segment in the accompanying statement of operations.

As a result of the  Transactions,  the Company  recorded a $4.5  million  C.A.T.
goodwill impairment charge and a $ 0.05 million writedown of property, plant and
equipment  in June 2000 to adjust  the  carrying  value of these  assets to fair
market value based upon actual  consideration to be received.  These charges are
included as a component of the loss from operations of  discontinued  segment in
the  accompanying  statement of operations.  In addition,  the Company  recorded
restructuring  charges of $10.3 million in June 2000, consisting of $3.9 million
in severance  for 1,000  employees,  $3.5  million in  professional  fees,  $0.7
million in  facility  closure  costs and $2.2  million in other  costs  directly
associated with the restructuring.  These charges are included as a component of
the loss on disposition of discontinued segment in the accompanying statement of
operations.  The Company expects to complete this  restructuring by December 31,
2000.

The  following  is a  summary  of  impairment  charges  and  the  components  of
restructuring reserve for the thirty-nine weeks ended September 30, 2000.
<TABLE>
<S>                                     <C>             <C>                     <C>             <C>             <C>

                                       -------------------------Restructuring------------------------------
                                       ---------------- ------------------ --------------- ---------------- -------------
                                       Severance Costs  Facility Closure       Other            Total        Impairment
                                       ---------------- ------------------ --------------- ---------------- -------------
                                                     (Dollars in Thousands)
Balance, December 31, 1999               $    276         $   145            $   (24)        $    397          $    --
    Charges                                   --               60                 --               60               --
    Payments                                  --              (50)                --              (50)              --
                                       ---------------- ------------------ --------------- ---------------- -------------
Balance, April 1, 2000                        276             155                (24)             407               --
    Charges                                 3,914             723              5,640           10,277            4,497
    Payments                                   --             (38)                --              (38)              --
                                       ---------------- ------------------ --------------- ---------------- -------------
Balance, July 1, 2000                       4,190             840              5,616           10,646               --
                                       ---------------- ------------------ --------------- ---------------- -------------
   Payments                                (4,190)           (799)            (5,616)        $(10,605)              --
Balance, September 30, 2000              $     --         $    41            $    --         $     41          $    --
                                        ================ ================== =============== ================ =============
</TABLE>
<PAGE>

 Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


7. Segment Data

The Company  identifies its reportable  segments based on the segments'  product
offerings.  As a result of the Company's  June 13, 2000 decision to  discontinue
the Shirt Groups Operations and license the Arrow tradename,  the composition of
the Company's reportable segments changed. The licensing of the Arrow brand will
result in minimum annual license revenue of $5.0 million. Subsequent to June 13,
2000, the Company  conducted its business  through two principal  segments:  the
Sock Group and the Licensing Group. The financial results  associated with Latin
America,  Apparel On-Line LLC, Cluett American  Receivables,  LLC, Arrow Factory
Stores,  Inc.,  and  unallocated  corporate  overhead  charges  are  referred to
collectively as "All other". Segment data disclosures for the thirteen weeks and
thirty-nine  weeks  ended  September  30,  2000 and  October  2,  1999 have been
restated to reflect the above noted change.

<TABLE>
<S>                                                     <C>                     <C>             <C>                   <C>

                                                                 Thirteen weeks ended                 Thirty-nine weeks ended
                                                        September 30,           October 2,      September 30,         October 2,
                                                             2000                  1999              2000                1999
                                                      -------------------  ----------------- ------------------  -------------

                                                                                (Dollars in Thousands)
Net sales
                                      Sock                       $44,439          $42,776               $120,570       $115,685
                                      Licensing                    2,984            1,278                  6,114          4,558
                                      All Other                      304               10                    431             10
                                      Intersegment                 (300)            (675)                (1,006)        (1,429)
                                                                 -------          -------               --------       --------
                                                                 $47,427          $43,389               $126,109       $118,824
                                                                 =======          =======               ========       ========
Operating income (loss) excluding
facility closing and reengineering
costs
                                      Sock                        $5,520           $7,963                $15,585        $19,401
                                      Licensing                    2,494              848                  4,599          3,298
                                      All Other                  (6,992)            (855)                (8,077)        (2,388)
                                                                  ------           ------                -------        -------
                                                                  $1,022           $7,956                $12,107        $20,311
                                                                  ======           ======                =======        =======

Depreciation expense
                                      Sock                        $1,569           $1,511                 $4,712         $4,531
                                      Licensing                       20               17                     58             52
                                      All Other                      165              815                  2,068          2,642
                                                                  ------           ------                 ------          -----
                                                                  $1,754           $2,343                 $6,838         $7,225
                                                                  ======           ======                 ======         ======
Amortization expense
                                      Sock                             -                -                      -              -
                                      Licensing                        -                -                      -              -
                                      All Other                     $444             $444                 $1,546         $1,235
                                                                    ----             ----                 ------         ------
                                                                    $444             $444                 $1,546         $1,235
                                                                    ====             ====                 ======         ======

Identifiable assets
                                      Sock                       $96,260        $  88,561                $96,260      $  88,561
                                      Licensing                    2,445            1,875                  2,445          1,875
                                      All Other                    1,488          158,591                  1,488        158,591
                                                                --------         --------               --------       --------
                                                                $100,193         $249,027               $100,193       $249,027
                                                                ========         ========               ========       ========

</TABLE>
<PAGE>



   Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)

7. Segment Data (Continued)

Reconciliation of Reportable Segments Net sales, Operating income and
Identifiable assets

<TABLE>
<S>                                                             <C>               <C>              <C>                <C>

                                                                Thirteen weeks ended               Thirty-nine weeks ended
                                                            September 30,        October 2,      September 30,        October 2,
                                                                2000                1999              2000               1999
                                                           ----------------   -------------   -----------------  -------------

                                                                                  (Dollars In Thousands)
   Net sales
       Total net sales for reportable  segments             $47,423                $44,054            $126,684     $ 120,243
       Other net sales                                          304                     10                 431            10
       Elimination of intersegment net sales                  (300)                  (675)             (1,006)       (1,429)
                                                            -------                -------            --------       -------

       Total consolidated net sales                         $47,427                $43,389            $126,109      $118,824
                                                            =======                =======            ========      ========


   Operating profit (loss)
       Total operating profit or loss for
       reportable segments                                   $8,014                 $8,811            $ 20,184      $ 22,699

       Other operating profit or loss                         (218)                  (538)               (662)         (538)

       Unallocated amounts:
            Corporate Income/(Expense)                      (1,136)                  (817)             (3,027)       (3,350)
            Pension Income/(Expense)                        (5,638)                    500             (4,388)         1,500
            Restructuring & impairment (charges) credits        221                  (819)                 149         (547)
                                                              -----                  -----                 ---        ------
       Total operating profit                             $   1,243                 $7,137            $ 12,256      $ 19,764
                                                          =========                 ======            ========       =======


   Depreciation and amortization
   Total depreciation for reportable segments             $   1,589               $  1,528            $  4,770      $  4,583
   Other depreciation                                           165                    815               2,068         2,642
   Amortization                                                 444                    444               1,546         1,235
                                                                ---                    ---               -----         -----
   Total depreciation and amortization                    $   2,198               $  2,787            $  8,384      $  8,460
                                                          =========               ========            ========      ========


   Identifiable assets
       Total assets for reportable segments                $ 98,705               $ 90,436            $ 98,705      $ 90,436
       Other assets                                           1,488                105,416               1,488       105,416
       Net assets held for sale                              20,134                     --              20,134            --
       Unallocated amounts:
            Deferred finance costs                           10,412                 10,507              10,412        10,507
            Pension assets                                   26,472                 32,883              26,472        32,883
            Other unallocated amounts                        19,192                  9,785              19,192         9,785
                                                             ------                  -----              ------         -----
       Consolidated total                                  $176,403               $249,027            $176,403      $249,027
                                                           ========               ========            ========      ========
</TABLE>

<PAGE>


  Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)

8. Guarantor Subsidiaries

     The Company's payment  obligations under the Senior Credit Facility and the
Senior Subordinated Notes (the "Notes") are fully and unconditionally guaranteed
on a joint and several basis by its current domestic subsidiaries,  principally:
Cluett Peabody & Co.Inc.,  Great American Knitting Mills, Inc., Apparel On-Line,
LLC, Cluett Designer Group Inc.,  Consumer Direct  Corporation and Arrow Factory
Stores Inc. (collectively the "Guarantor  Subsidiaries").  Each of the Guarantor
Subsidiaries is a direct or indirect wholly-owned subsidiary of the Company. The
Company's  payment  obligations  under  the  Notes  are  not  guaranteed  by the
remaining   subsidiaries  Bidermann  Womenswear  Corp.  (formerly  Ralph  Lauren
Womenswear Inc. ) Cluett, Peabody Canada Inc., Cluett American Receivables, LLC,
Arrow de Mexico S.A. de C.V., and Arrow Inter-American & Co., Ltd. (collectively
the "Non-Guarantor  Subsidiaries").  The obligation of each Guarantor Subsidiary
under its guarantee of the Notes is subordinated to such subsidiary's obligation
under its guarantee of the Senior Credit Facility.

Presented  below  is  condensed  consolidating  financial  information  for  the
Company, the Guarantor Subsidiaries and the Non-Guarantor  Subsidiaries.  In the
Company's  opinion,   separate   financial   statements  and  other  disclosures
concerning  each of the  Guarantor  Subsidiaries  would not  provide  additional
information that is material to investors. Therefore, the Guarantor Subsidiaries
are  consolidated in the  presentation  below.  Investments in subsidiaries  are
accounted  for by the Company using the equity  method of  accounting.  Earnings
(losses)  of  subsidiaries  are  therefore  reflected  in the  Parent  Company's
investments in and advances to/from  subsidiaries account and earnings (losses).
The  elimination  entries  eliminate  investments in  subsidiaries,  the related
stockholder's deficit and other intercompany balances and transactions.





<PAGE>


  Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


8. Guarantor Subsidiaries (Continued)

                     SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                     SEPTEMBER 30, 2000
                                   (DOLLARS IN THOUSANDS)
<TABLE>
<S>                                     <C>             <C>             <C>                     <C>                <C>

                                                                            NON-
                                         PARENT        GUARANTOR         GUARANTOR
                                        COMPANY     SUBSIDIARIES        SUBSIDIARIES           ELIMINATION    CONSOLIDATED
Assets
Current assets:
   Cash and cash equivalents......     $      --      $  4,058           $       140                --        $     4,198
   Accounts receivable, net.......            --        33,652                 6,782                --             40,434
   Inventories, net...............            --        42,980                    --                --             42,980
   Assets from discontinued
      segment held for sale.......            --        14,323                 5,811                --             20,134
   Prepaid expenses and other
      current assets..............            --         2,022                   556                --              2,578
                                              --         -----                   ---                --              -----
Total current assets..............            --        97,035                13,289                --            110,324
Investment in subsidiaries........      (122,735)           --                    --           122,735                 --
Property, plant and equipment, net            --        27,836                     8                --             27,844
Pension assets....................            --        26,472                    --                --             26,472
Deferred financing fees...........            --        10,412                    --                --             10,412
Due from parent...................            --           157                    --                --                157
Other  noncurrent assets..........            --           665                   529                --              1,194
                                              --           ---                   ---                --              -----
Total assets......................     $(122,735)   $  162,577           $    13,826       $   122,735      $     176,403
                                       ==========   ==========           ===========       ===========      =============


Liabilities and stockholder's deficit Current liabilities:
   Accounts payable and accrued
      expenses....................     $      --    $   35,867           $     2,475       $        --      $      38,342
   Accrued interest payable.......            --         9,742                    --                --              9,742
   Short-term debt and current
      portion of long-term debt...            --        24,472                    --                --             24,472
   Income taxes payable...........            --         1,588                   207                --              1,795
                                              --         -----                   ---                --              -----
Total current liabilities.........            --        71,669                 2,682                --             74,351
Long-term debt and capital lease
   obligations....................            --       213,311                   212                --            213,523
Dividends payable.................         2,707            --                    --                --              2,707
Other non-current liabilities.....            --           157                    --                --                157

Commitments & Contingencies:

Senior exchangeable preferred
   stock, cumulative, $.01 par
   value: authorized 4,950,000,
   issued and outstanding 636,592
   shares (liquidation preference
   of $63,659)                            62,154            --                    --                --             62,154
Stockholder's deficit.............      (187,596)     (122,560)               10,932           122,735           (176,489)
                                        ---------     ---------               ------           -------           ---------
Total liabilities and
   stockholder's deficit..........     $(122,735)    $ 162,577           $    13,826        $  122,735       $    176,403
                                       ==========    =========           ===========        ==========       ============


</TABLE>

<PAGE>


  Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


8. Guarantor Subsidiaries (Continued)
               SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
                                DECEMBER 31, 1999
                             (DOLLARS IN THOUSANDS)

<TABLE>
<S>                                             <C>                  <C>            <C>                  <C>        <C>

                                                    PARENT          GUARANTOR     NON-GUARANTOR
                                                    COMPANY       SUBSIDIARIES    SUBSIDIARIES    ELIMINATION    CONSOLIDATED

Assets
Current assets:
   Cash and cash equivalents...............     $          --    $   7,099       $      140    $        --     $    7,239
   Accounts receivable, net................            --           40,635            4,884             --         45,519
   Inventories, net........................            --           64,608           13,497             --         78,105
   Prepaid expenses and other current
      assets...............................            --            2,422              707             --          3,129

Total current assets.......................            --          114,764           19,228             --        133,992
Investment in subsidiaries.................      (103,443)              --               --        103,443             --
Property, plant and equipment, net.........            --           45,802            1,992             --         47,794
Deferred financing fees....................            --           10,842               --             --         10,842
Pension assets.............................            --           32,187               --             --         32,187
Goodwill, net..............................            --            4,740               --             --          4,740
Other noncurrent assets....................            --            1,259              692             --          1,951
                                                       --            -----              ---             --          -----
Total assets...............................     $(103,443)        $209,594        $  21,912       $103,443       $231,506
                                                ==========        ========        =========       ========       ========

Liabilities and stockholder's deficit
 Currentliabilities:
   Accounts payable and accrued expenses...     $      --        $  38,239        $   2,457    $        --      $  40,696
   Accrued interest payable................            --            3,861               --             --          3,861
   Short-term debt and current portion of
      long-term debt.......................            --            6,405            7,804             --         14,209
   Income taxes payable....................            --            1,763              207             --          1,970
                                                       --            -----              ---             --          -----
Total current liabilities..................            --           50,268           10,468             --         60,736

Long-term debt and capital lease                       --          258,652              231             --        258,883
   obligations.............................
Other non-current liabilities..............            --              147               --             --            147
Redeemable preferred stock dividends
   payable.................................           637               --               --             --            637

Commitments and contingencies:

Senior exchangeable preferred stock due 2010
  cumulative, $.01 par value: authorized
  4,950,000 shares, issued and outstanding
  599,145 shares (liquidation preference of
  $59,915).................................        58,329               --               --             --         58,329
Stockholder's deficit......................      (162,409)         (99,473)          11,213        103,443       (147,226)
                                                 ---------         --------          ------        -------       ---------
Total liabilities and stockholder's deficit     $(103,443)        $209,594        $  21,912       $103,443       $231,506
                                                ==========        ========        =========       ========       ========
</TABLE>


<PAGE>


   Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


8. Guarantor Subsidiaries (Continued)

                  SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                            THIRTEEN WEEKS ENDED SEPTEMBER 30, 2000
                                      (DOLLARS IN THOUSANDS)
<TABLE>
<S>                                     <C>             <C>                 <C>                 <C>             <C>
                                                                            NON-
                                         PARENT        GUARANTOR         GUARANTOR
                                       COMPANY      SUBSIDIARIES        SUBSIDIARIES           ELIMINATION    CONSOLIDATED

Net sales.............................       $  --   $ 47,427        $       --                      $  --    $47,427
Cost of goods sold....................          --     30,213               --                          --     30,213
                                                --     ------               --                          --     ------
Gross profit..........................          --     17,214               --                          --     17,214

Selling, general and administrative
   expenses...........................          --     16,192               --                          --     16,192
Restructuring and impairment charges..
                                                --       (221)              --                          --       (221)
                                                --       -----              --                          --       -----
Operating income (loss) from
   continuing operations..............          --      1,243               --                          --      1,243
Loss on investments in subsidiaries ..     (1,018)         --               --                       1,018         --
Interest expense, net.................          --      6,527               --                          --      6,527
Other expense, net....................          --         59               --                          --         59
                                                --         --               --                          --         --
Income (loss) from continuing
   operations before provision for
   income taxes.......................
                                           (1,018)     (5,343)              --                       1,018     (5,343)
Provision for income taxes............          --        301               --                          --        301
                                                --        ---               --                          --        ---
Income (loss) from continuing
   operations ........................
                                           (1,018)     (5,644)              --                       1,018     (5,644)

Discontinued operations:
Estimated income on disposal of
   business segment and operating
   income during the phase out
   period................................       --         70              806                          --        876
                                                --         --              ---                          --        ---

Net loss..............................    $(1,018)    $(5,574)       $     806                      $1,018    $(4,768)
                                          ========    ========       =========                      ======    ========

</TABLE>
<PAGE>


  Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


8. Guarantor Subsidiaries (Continued)

               SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                           THIRTEEN WEEKS ENDED OCTOBER 2, 1999
                                  (DOLLARS IN THOUSANDS)

<TABLE>
<S>                                       <C>           <C>                <C>                      <C>           <C>
                                                                          NON-
                                         PARENT        GUARANTOR         GUARANTOR
                                       COMPANY      SUBSIDIARIES        SUBSIDIARIES           ELIMINATION    CONSOLIDATED

Net sales.............................    $     --     43,389        $      --                   $      --   $ 43,389
Cost of goods sold....................          --     27,948               --                          --     27,948
                                                --     ------               --                          --     ------
Gross profit..........................          --     15,441               --                          --     15,441

Selling, general and administrative
   expenses...........................          --      7,485               --                          --      7,485
Restructuring Charges                           --        819               --                          --        819
                                                          ---               --                                    ---
Operating income  from continuing
   operations.........................          --      7,137               --                          --      7,137
Loss on investments in subsidiaries ..     (4,939)         --               --                       4,939         --
Interest expense, net.................          --      6,478               --                          --      6,478
Other expense, net....................          --          2               --                          --          2
                                                --          -               --                          --          -
Income (loss) from continuing
   operations before provision for
   income taxes.......................     (4,939)        657               --                       4,939        657
Provision for income taxes............          --        167               --                          --        167
                                                --        ---               --                          --        ---
Income (loss) from continuing
   operations ........................     (4,939)        490               --                       4,939        490

Discontinued operations:
Loss from operations of discontinued
   segment............................          --      4,404            1,025                          --      5,429
                                                --      -----            -----                          --      -----

Net income (loss)..................... $   (4,939)   $ (3,914)       $  (1,025)                   $ 4,939    $ (4,939)
                                       ===========  ==========       ==========                   =======    =========
</TABLE>

<PAGE>


  Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


8. Guarantor Subsidiaries (Continued)

                SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                          THIRTY-NINE WEEKS ENDED SEPTEMBER 30, 2000
                                      (DOLLARS IN THOUSANDS)
<TABLE>
<S>                                     <C>             <C>                 <C>                <C>             <C>


                                                                            NON-
                                         PARENT        GUARANTOR         GUARANTOR
                                        COMPANY      SUBSIDIARIES       SUBSIDIARIES        ELIMINATION     CONSOLIDATED

Net sales                                 $  --      $  126,109         $     --            $      --         $ 126,109
Cost of goods sold....................       --          80,191               --                   --            80,191
                                             --          ------               --                   --            ------
Gross profit..........................       --          45,918               --                   --            45,918

Selling, general and administrative
   expenses...........................       --          33,766               45                   --            33,811
Restructuring Charges.................       --           (149)               --                   --             (149)
                                             --           -----               --                   --             -----

Operating income (loss) from
   continuing operations..............       --          12,301              (45)                  --            12,256
Loss on investment in subsidiaries....    (19,292)           --               --               19,292                --
Interest expense, net.................       --          21,025              102                   --            21,127
Other expense, net....................       --             114               --                   --               114
                                             --             ---               --                   --               ---
Loss from continuing operations
   before income taxes................    (19,292)      (8,838)               --               19,292           (8,985)

Provision for income taxes............       --             798               --                   --               798
                                             --             ---               --                   --               ---
Loss from continuing operations ......    (19,292)      (9,636)             (147)              19,292           (9,783)

Discontinued operations:
Loss from operations of discontinued
   segment............................       --        (10,634)              697                   --           (9,937)
Income/(loss) on disposition of
   business segment...................       --        ( 3,423)              101                   --           (3,322)
                                             --         -------              ---                   --           -------
Net Loss..............................   $(19,292)   $ (23,693)          $   651             $ 19,292         $(23,042)
                                         =========   ==========          =======             ========         =========

</TABLE>

<PAGE>


  Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


8. Guarantor Subsidiaries (Continued)
                SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                            THIRTY-NINE WEEKS ENDED OCTOBER 2, 1999
                                       (DOLLARS IN THOUSANDS)
<TABLE>
<S>                                     <C>              <C>                <C>             <C>                <C>


                                                                            NON-
                                         PARENT        GUARANTOR         GUARANTOR
                                       COMPANY      SUBSIDIARIES        SUBSIDIARIES     ELIMINATION       CONSOLIDATED

Net sales.............................    $     --    118,824        $        --            $   --       $   118,824
Cost of goods sold....................          --     74,563                 --                --            74,563
                                                --     ------                 --                --            ------
Gross profit..........................          --     44,261                 --                --            44,261

Selling, general and administrative
   expenses...........................          --     23,950                 --                --            23,950
Restructuring Charges.................          --        547                 --                --               547
                                                --        ---                 --                --               ---
Operating income .....................          --     19,764                 --                --            19,764
Loss on investment in subsidiaries....    (11,628)         --                 --              11,628              --

Interest expense, net.................          --     18,881                 --                --            18,881
Other expense, net....................          --         29                 --                --                29
                                                --         --                                   --                --
Income (loss) before reorganization
   costs and income taxes.............    (11,628)        854                 --              11,628             854
Bankruptcy reorganization costs.......          --         --                 --                --                --
                                                --         --                 --                --                --
Income (loss) before provision for
   income taxes.......................    (11,628)        854                 --              11,628             854
Provision for income taxes............          --        679                 --                --               679
                                                --        ---                 --                --               ---
Income (loss) from continuing
   operations ........................    (11,628)        175                 --              11,628             175

Discontinued operations:
Loss from operations of discontinued
   segment............................          --     (9,610)            (2,193)               --           (11,803)
                                                --     -------            -------               --           --------
Net income (loss)..................... $  (11,628)   $ (9,435)         $  (2,193)        $    11,628     $   (11,628)
                                       ===========   =========         ==========        ===========     ============

</TABLE>


<PAGE>


 Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)

8. Guarantor Subsidiaries (Continued)

           SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                      THIRTY-NINE WEEKS ENDED SEPTEMBER 30, 2000
                                 (DOLLARS IN THOUSANDS)

<TABLE>
<S>                                          <C>             <C>                <C>             <C>               <C>

                                                                              NON-
                                            PARENT        GUARANTOR         GUARANTOR
                                          COMPANY      SUBSIDIARIES        SUBSIDIARIES     ELIMINATION       CONSOLIDATED

Operating activities
Net loss................................    $(19,292)       $ (21,525)       $(1,517)         $ 19,292       $   (23,042)

Adjustment  to reconcile net loss to net
 cash and cash  equivalents  provided by
(used in) operating activities:
  Loss on investments in subsidiaries...      19,292                --            --           (19,292)               --
  Write-down of property, plant, and
  equipment.........................              --                54            --                --                54
  Depreciation..........................          --             6,633           205                --             6,838
  Amortization..........................          --             1,546            --                --             1,546
  Impairment and loss on disposal of
  assets..................................        --             7,180            --                --                --
  Changes in operating assets and                 --           (19,252)        1,348                --           (17,904)
  liabilities.............................       ---           --------        -----             ------          --------
Net cash and cash equivalents used in
operating activities....................          --           (25,364)           36                --           (25,328)

Investing activities
Purchase of fixed assets................          --            (3,709)          (24)               --            (3,733)
Proceeds on disposal of fixed assets....          --                12            --                --                12
Proceeds on disposal of discontinued
operations.................                       --            51,180            --                --            51,180

Net cash and cash equivalents used in
investing activities....................          --            47,483           (24)               --            49,573

Financing activities
Net borrowing under line-of-credit                --           (33,076)           --                --           (33,076)
agreements
Principal payments on long term debt....          --             8,309            --                --             8,309
Principal payments on long note (CAT)...          --              (393)           --                --              (393)
Principal payments on capital leases....          --                 -           (12)               --               (12)
                                                  --                 -           ---               ----
Net cash and cash equivalents provided
by financing activities.................          --           (25,160)          (12)               --           (25,172)
Effect of exchange rate changes on cash.          --                --            --                --                --
                                                  --                --            --                --                --

Net change in cash and cash equivalents.          --            (3,041)           --                --            (3,041)

Cash and cash equivalents at beginning
of year.................................          --             7,231             8                --             7,239

Cash and cash equivalents at end of
period..................................       $  --       $     4,190          $  8                --           $ 4,198
                                                 ===            ======             =                ==             =====

</TABLE>
<PAGE>


 Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


8. Guarantor Subsidiaries (Continued)
              SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                          THIRTY-NINE WEEKS ENDED OCTOBER 2, 1999
                                   (DOLLARS IN THOUSANDS)
<TABLE>
<S>                                          <C>             <C>                <C>               <C>                <C>
                                                                               NON-
                                            PARENT        GUARANTOR         GUARANTOR
                                           COMPANY      SUBSIDIARIES        SUBSIDIARIES        ELIMINATION      CONSOLIDATED

Operating activities
Net loss................................   $ (11,628)     $    (9,435)       $     (2,193)     $    11,628     $     (11,628)
Adjustment to reconcile net loss to net
cash and cash equivalents provided by
(used in) operating activities:
  Loss on investments in subsidiaries...       11,628               --                  --        (11,628)                 --
  Depreciation..........................           --            7,001                 224              --              7,225
  Amortization..........................           --            1,235                  --              --              1,235
  Gain on disposal of assets............           --             (57)                  --              --               (57)
  Changes in operating assets and
  liabilities.............................         --         (15,697)             (3,476)              --           (19,173)
Net cash and cash equivalents used in
operating activities....................           --         (16,953)             (5,445)              --           (22,398)

Investing activities
Purchase of fixed assets................           --          (8,083)                (85)              --            (8,168)
Purchase of CAT, net of cash acquired...           --          (4,954)                 --               --            (4,954)
Proceeds on disposal of fixed assets....           --            1,114                   1              --              1,115
                                                   --            -----                  --              --              -----
Net cash and cash equivalents used in
investing activities....................           --         (11,923)                (84)              --           (12,007)

Financing activities
Net borrowings under line-of-credit
agreement...............................           --           33,100               5,252              --             38,352
Net activity on long term debt..........           --              247                                  --                247
Principal payments on capital leases....           --               --                (11)              --               (11)
                                                   --               --                ----              --               ----
Net cash and cash equivalents provided
by financing activities.................           --           33,347               5,241              --             38,588
Effect of foreign currency translation..           --               --                  11              --                 11
                                                   --               --                  --              --                 --

Net change in cash and cash equivalents.           --            4,471               (277)              --              4,194

Cash and cash equivalents at beginning
of year.................................           --            2,396                 472              --              2,868

Cash and cash equivalents at end of
period..................................   $       --     $      6,867       $         195     $        --      $       7,062
                                                   ==     ============       =============     ===========      =============

</TABLE>



<PAGE>


 Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)


9. New Accounting Pronouncements

In June 1998, the Financial  Accounting Standard Board ("FASB") issued Statement
of Financial  Accounting  Standards No.  ("SFAS") 133 "Accounting for Derivative
Instruments  And Hedging  Activities".  This statement (as amended by SFAS No.'s
137 and 138) is effective  January 2001. This statement  establishes  accounting
and reporting standards for derivative  instruments including certain derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity  realize all  derivatives  as either assets or liabilities in the
balance sheet measured at fair value. The Combined Companies will adopt SFAS 133
on January 1, 2001.  Management does not expect the adoption of SFAS 133 to have
a significant  impact on the financial  position or results of operations of the
Company, because the Company does not have significant derivative activity.





<PAGE>


                                       10


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

On June 13, 2000, PVH and the Company  announced an agreement (the  "Agreement")
for PVH to  license  the  Arrow  brand for men's  and  boys'  dress  shirts  and
sportswear  in the United  States.  In addition,  PVH and the Company  agreed in
principle  for  PVH to  acquire  the  stock  of CDG.  In  conjunction  with  the
Agreement,  the Company approved a plan to discontinue the Shirt Group segment's
manufacturing and distribution operations (the "Operations").

On July 24, 2000, the transactions contemplated by the Agreement,  including the
Purchase and Sale Agreement  among CP, CP Canada,  AFS, CDG, CDC,  Holding,  and
PVH, (the "Purchase and Sale Agreement") and the Share Purchase  Agreement among
CP, CDG, BTC, and PVH (the "Share Purchase  Agreement") were closed. Each of the
parties to the  Purchase and Sale  Agreement  and the Share  Purchase  Agreement
other than PVH and CDG is,  and prior to the  closing  CDG was,  a wholly  owned
subsidiary of the Company.

Pursuant to the Purchase and Sale Agreement,  (i) all of the outstanding  shares
of capital  stock of C.A.T.  were sold to PVH by CP, AFS,  CDG, CDC and Holding,
(ii) PVH  purchased  all of CP's and AFS's  right,  title and interest in and to
certain of the other assets (principally inventory) of CP and AFS used primarily
by CP and AFS in their Arrow  label and private  label men's and boys' dress and
sport shirt  businesses and their Arrow factory outlet  operations in the United
States and (iii) PVH purchased all of CP Canada's  right,  title and interest in
and to Arrow label dress and sport shirt  inventory  used in CP Canada's  United
States "Career Apparel" business.  Pursuant to the Share Purchase Agreement, all
of the  outstanding  shares of  capital  stock of CDG were sold by CP and BTC to
PVH.

The  aggregate  purchase  price paid by PVH  pursuant to the  Purchase  and Sale
Agreement and the Share Purchase  Agreement for the stock and assets referred to
above  was  approximately  $51.2  million  in cash plus the  assumption  of $2.1
million of debt  related to C.A.T.,  calculated  as set forth in, and subject to
adjustment pursuant to, Article 3 of each of the Purchase and Sale Agreement and
the Share Purchase  Agreement.  The Company has deposited in escrow $2.0 million
of the above  noted cash  consideration,  which is subject to a final  inventory
adjustment.  The Company has  irrevocably  and  unconditionally  guaranteed  the
payment of any amount payable by CP or BTC to PVH under each Agreement  which is
not  paid by CP or BTC  when  due,  including  pursuant  to the  purchase  price
adjustment and indemnification provisions of the Agreements.

Pursuant  to  the  Purchase  and  Sale  Agreement,  the  Trademark  License
Agreement,  dated July 24, 2000, by and between CPR, CP and PVH was executed and
delivered.  Pursuant to the Trademark  License  Agreement,  CP granted to PVH an
exclusive license to use trademarks related to CP's "Arrow" clothing line in the
United  States  and its  territories  and  possessions  in  connection  with its
manufacture,  advertising, marketing, promotion, distribution, offer to sell and
sale of men's and boys' dress shirts,  sports shirts  (including knit, woven and
all forms of fleece),  pants,  shorts and sweaters in certain specified channels
of trade,  including the  Internet.  CP also granted to PVH the right to operate
websites that use URLs that incorporate the licensed  trademarks.  The Trademark
License Agreement with PVH provides for a $5.0 million minimum guaranteed annual
royalty fee to be paid to CP, subject to increases  based on the  achievement by
PVH of certain sales  targets.  The initial term of the license  expires on June
30, 2007;  however,  PVH has the option to renew the Trademark License Agreement
for two additional five-year terms, provided it meets certain conditions.

The Company used $39.3  million of the net  proceeds  from the Purchase and Sale
Agreement,  the Share  Purchase  Agreement and the Trademark  License  Agreement
(collectively referred to as the "Transactions") to repay outstanding borrowings
under its Senior Credit Facility and CP Canada's Credit Facility.


<PAGE>




Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)

The Company  expects to complete the  disposition of the remaining net assets of
the Operations through sale by December 31, 2000 and accordingly,  has reflected
the Operations as  discontinued  in the  accompanying  statements of operations.
Additionally,  at  September  30,  2000 the net  assets  of the  Operations  are
classified as held for sale in the accompanying  balance sheet and are comprised
of the following:


                                                                      September
                                                                      30, 2000
                                                                      ---------
       Assets:
         Inventories, net                                              $10,249
         Property, plant & equipment, net                               16,066
                                                                        ------
            Total assets                                                26,315

       Liabilities:
         Canadian revolving facility                                     6,181
                                                                         -----
            Total liabilities                                            6,181

              Net assets held for sale                                 $20,134
                                                                       =======


As a result of the Transactions,  the Company recorded a $4.5 million impairment
charge in June, 2000 to adjust the carrying value of goodwill to its fair market
value  based upon  actual  consideration  received  from the  Transactions.  The
impairment  charge  is  included  as a  component  of the  Company's  loss  from
operations of discontinued segment in the accompanying  statement of operations.
The $3.3 million loss on disposition of discontinued segment for the thirty-nine
weeks ending  September  30, 2000 consist of a $2.7 million loss on  disposition
and $0.6  million in  operating  losses  during the phase out  period.  The $0.6
million in operating  losses during the phase out period consist of $0.2 million
of  operating  income  incurred  from June 13, 2000 through  September  30, 2000
offset against $0.8 million of estimated  operating  losses from October 1, 2000
through  December 31, 2000. In  conjunction  with the  disposition,  the Company
incurred $10.3 million in restructuring charges.



<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)

Results of Operations:  Thirteen  weeks ended  September 30, 2000 vs. October 2,
1999

The  following  table is  derived  from  the  Company's  Condensed  Consolidated
Statements of Operations and sets forth,  for the period  indicated,  net sales,
gross profit,  income from  continuing  operations,  interest  expense,  loss on
discontinued operations and net loss of the Company:

<TABLE>
<S>                                                                                <C>             <C>
                                                                                  Thirteen weeks ended
                                                                                September 30,   October 2,
                                                                                    2000           1999
                                                                               ------------------------------
                                                                                   (Dollars In Thousands)

Net sales.................................................................         $47,427       $ 43,389
Gross profit..............................................................          17,214         15,441
Operating income from continuing operations ..............................           1,243          7,137
Interest expense .........................................................           6,527          6,478
Loss from operations of discontinued segment .............................              --        (5,429)
Income on disposition of business ........................................             876            --
Net loss..................................................................        $(4,768)      $ (4,939)

</TABLE>
Net Sales:  For the thirteen weeks ended September 30, 2000 (the "2000 Quarter")
net sales from  continuing  operations  increased  $4.0 million to $47.4 million
compared to $43.4  million  for the  thirteen  weeks ended  October 2, 1999 (the
"1999  Quarter").  This increase is primarily  comprised of the $1.3 million PVH
minimum license revenue and a $1.7 million increase in Sock Group revenue due to
increased volume.

Gross Profit: For the 2000 Quarter, gross profit increased $1.7 million to $17.2
million compared to the 1999 Quarter.  This increase is due primarily to the PVH
minimum license  revenue for which no related cost of sales was incurred.  Gross
profit percentage for the 2000 Quarter increased 2.0% to 36.3% compared to 35.6%
for the 1999 Quarter.  This increase is due primarily to the PVH minimum license
revenue.  Excluding  the impact of the PVH license  fee  revenue,  gross  profit
percentage  decreased  5.3% to 33.7%  in the  2000  Quarter.  This  decrease  is
primarily  due to product mix  deterioration,  or higher sales  volumes of lower
margin product.

Operating  Income  from  Continuing   Operations:   The  Company's  income  from
continuing  operations  for the 2000  Quarter  decreased  $5.9  million  to $1.2
million  compared to $7.1 million for the 1999 Quarter.  This decrease is due to
the $1.7  million  increase  in gross  profit  and a $1.0  million  decrease  in
restructuring and impairment charges, offset against an $8.7 million increase in
selling,  general and  administrative  expenses  primarily due to a $6.3 million
increase  in pension  expense  and $0.7  million in Sock Group Gold Toe  product
packaging changes initiated in 2000.

Interest expense:  Interest expense remained consistent at $6.5 million for both
the 2000 and 1999 Quarters.

Loss from operations of discontinued  segment:  In connection with the Company's
June 13, 2000 decision to discontinue  the Shirt Group  segment's  manufacturing
and distribution operations,  the Company reclassified operating income/(losses)
for  this  segment  as   discontinued   operations.   Loss  from  operations  of
discontinued segment includes the operations of the discontinued segment through
June 13,  2000.  Income from  operations  of  discontinued  segment for the 2000
Quarter  is  included  as a  component  of the  income/loss  on  disposition  of
business.  Loss from operations of discontinued segment for the 1999 Quarter was
$5.4 million.


<PAGE>



Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations (Continued)


Income/(loss)  on  disposition  of business:  Income/(loss)  on  disposition  of
business  includes  the  loss  on the  disposition  of  the  net  assets  of the
discontinued segment plus the estimate of segment operating income/(loss) during
the phase-out  period (the period from June 13, 2000 through  December 31, 2000,
the date by which Company  management  believes the plan of disposition  will be
completed). Income on disposition of business for the 2000 Quarter is the result
of  adjustments  to both  the  loss on  disposition  and the  phase  out  period
income/(loss)  as  compared  to  the  corresponding   amounts  recorded  in  the
twenty-six  weeks ended July 1, 2000 based on actual results and/or revisions to
previously  recorded estimates.  For the 2000 Quarter,  income on disposition of
$0.9 million  results from a $0.9  million  increase in the loss on  disposition
offset against a $1.8 million  decrease in estimated  phase-out period losses as
compared to the  corresponding  amounts  recorded in the twenty-six  weeks ended
July 1, 2000.

Net loss: As a result of the above, net loss for the 2000 Quarter decreased $0.1
million to $4.8 million compared to $4.9 million for the 1999 Quarter.


Results of Operations: Thirty-nine weeks ended September 30, 2000 vs. October 2,
1999

The  following  table is  derived  from  the  Company's  Condensed  Consolidated
Statements of Operations and sets forth,  for the period  indicated,  net sales,
gross profit,  income from  continuing  operations,  interest  expense,  loss on
discontinued operations and net loss of the Company:

<TABLE>
<S>                                                                                  <C>          <C>
                                                                                  Thirty-nine weeks ended
                                                                                September 30,   October 2,
                                                                                    2000           1999
                                                                               ------------------------------
                                                                                   (Dollars In Thousands)

Net sales.................................................................       $ 126,109      $ 118,824
Gross profit..............................................................          45,918         44,261
Operating income from continuing operations...............................          12,256         19,764
Interest expense .........................................................          21,127         18,881
Loss from operations of discontinued segment..............................         (9,937)       (11,803)
Loss on disposition of business ..........................................         (3,322)            --
Net loss..................................................................       $(23,042)      $(11,628)
</TABLE>

Net  Sales:  For the  thirty-nine  weeks  ended  September  30,  2000 (the "2000
Period"),  net sales from continuing operations increased $7.3 million to $126.1
million  from $118.8  million for the  thirty-nine  weeks ended  October 2, 1999
(the"1999 Period"). This increase is primarily comprised of the $1.3 million PVH
license  revenue  and a $4.9  million  increase  in Sock  Group  revenue  due to
increased volume.

Gross Profit: Gross profit for the 2000 Period,  increased $1.6 million to $45.9
million  compared to $44.3  million for the 1999  Period.  This  increase is due
primarily  to the PVH  license  revenue  for which no related  cost of sales was
incurred.  Gross profit  percentage for the 2000 Period  decreased 2.2% to 36.4%
compared to 37.2% for the 1999 Period.  Excluding  the impact of the PVH license
fee  revenue,  gross  profit  percentage  decreased  4.8% to  35.4%  in the 2000
Quarter. This decrease is primarily due to product mix deterioration,  or higher
sales volumes of lower margin product.

<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations (Continued)


Operating  Income  from  Continuing   Operations:   The  Company's  income  from
continuing operations declined $7.5 million to $12.3 million for the 2000 Period
from $19.8  million for the 1999 Period.  This  decrease is due primarily to the
$1.7  million   increase  in  gross  profit  and  a  $0.7  million  decrease  in
restructuring and impairment charges,  offset against a $9.9 million increase in
selling,  general and administrative  expenses. The increase in selling, general
and  administrative  expense is  primarily  due to a $6.3  million  increase  in
pension expense, and $1.1 million in Sock Group selling expense due to headcount
increases and $2.3 in Sock Group advertising  expense driven by Gold Toe product
packaging changes initiated in 2000.

Interest  expense:  Interest expense increased $2.2 million to $21.1 million for
the 2000  Period  compared  to $18.9  million for the 1999 Period as a result of
increased  debt  levels and higher  prevailing  interest  rates  during the 2000
Period.

Loss from operations of discontinued  segment:  In connection with the Company's
June 13, 2000 decision to discontinue  the Shirt Group  segment's  manufacturing
and distribution operations,  the Company reclassified operating income/(losses)
for  this  segment  as   discontinued   operations.   Loss  from  operations  of
discontinued segment includes the operations of the discontinued segment through
June 13, 2000.  Loss from  operations of  discontinued  segment  decreased  $1.9
million to a loss of $9.9  million  for the 2000  Period  compared  to a loss of
$11.8  million for the 1999  Period.  The  decrease is due  primarily  to a $6.4
million improvement in operations in the 2000 Period compared to the 1999 Period
as a result of the Company's  restructuring plans implemented through the end of
1999, offset against a $4.5 million C.A. T. goodwill  impairment charge recorded
in the 2000 Period.

Income/(loss)  on  disposition  of business:  Income/(loss)  on  disposition  of
business  includes  the  loss  on the  disposition  of  the  net  assets  of the
discontinued segment plus the estimate of segment operating income/(loss) during
the phase-out  period (the period from June 13, 2000 through  December 31, 2000,
the date by which Company  management  believes the plan of disposition  will be
completed). Loss on disposition of business for the 2000 Period was $3.3 million
consisting  of $2.7  million  loss on the  disposition  of the net assets of the
discontinued segment and a $0.6 million estimate of phase-out period losses. The
$0.6  million in  phase-out  period  losses  includes  $0.2 million in operating
income for the period  from June 13,  2000  through  September  30,  2000 offset
against $0.8 million in estimated  phase-out  period  losses for the period from
October 1, 2000 through December 31, 2000.

Net loss: As a result of the above, net loss for the 2000 Period increased $11.4
million to $23.0  million  compared to a net loss of $11.6  million for the 1999
Period.



<PAGE>




Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations (Continued)

Liquidity and Capital Resources

The Company broadly defines liquidity as its ability to generate sufficient cash
flow from  operating  activities to meet its  obligations  and  commitments.  In
addition,  liquidity  includes the ability to obtain appropriate debt and equity
financing and, to convert into cash, those assets that are no longer required to
meet existing strategic and financial objectives. Therefore, liquidity cannot be
considered  separately  from  capital  resources  that  consist  of  current  or
potentially  available funds for use in achieving long range business objectives
and meeting debt service commitments.

In 1999,  the Company  obtained a revolving  credit  facility ( the  "Additional
Revolver")  which was guaranteed by Vestar and bore  interest,  at the Company's
option,  at either  the  Eurodollar  rate plus 1.5% or the Prime rate plus 0.5%.
This facility was originally set to expire on December 31, 2000.

On March 29, 2000,  the  Additional  Revolver was increased to $12.0 million and
was  incorporated  into the Senior Credit  Facility as Tranche C (the "Tranche C
Loan").  During the second  quarter,  the Tranche C Loan was  increased to $28.3
million. Borrowings under the Tranche C Loan are due and payable on December 31,
2001 and are  guaranteed  by Vestar.  The  balance  of the  Tranche C Loan as of
September 30, 2000 is $19.5 million.

The  Company's  liquidity  needs  arise  primarily  from  debt  service  on  the
indebtedness and the funding of working capital and capital expenditures.  As of
September  30,  2000,  the  Company  had  outstanding  $238.0  million  of  debt
consisting  of $125.0  million in senior  subordinated  notes,  a Senior  Credit
Facility consisting of a $28.6 million term A loan, a $44.0 million term B loan,
$20.6 million in revolving credit  borrowings,  $19.5 million in Tranche C Loans
and $0.3 million in Canadian Capital Lease Obligation. During the thirteen weeks
ended  September  30, 2000,  the Company had a net decrease in revolving  credit
borrowings  of $14.4  million and repaid  $18.3  million in term loans and notes
payable.  As a result of the Transactions,  the Company  permanently reduced the
Term A Loan,  the Term B Loan and the  Tranche  C Loans  by $6.8  million,  $9.4
million and $8.7 million,  respectively.  In addition, the Company made payments
on the  revolving  credit  borrowings,  without  a  permanent  reduction  in the
revolving  credit  committed  amounts  and net of  expense  associated  with the
Transactions  of $13.3  million.  Additionally,  the Company repaid $1.1 million
under  the  Canadian   revolving  credit  facility  and  extended  the  Canadian
facility's maturity date to August 8, 2001. The Canadian facility is included as
a component of net assets held for sale in the accompanying balance sheet.

On May 12, 2000, the Company formed a special purpose  non-guarantee  subsidiary
for the purpose of accounts  receivable  sales  transactions  allowed  under the
Senior Credit Facility.  The Company had the right,  but not the obligation,  to
sell up to $24.0  million of accounts  receivable on or before June 30, 2000. On
May 12, 2000 and June 29, 2000, the Company sold  approximately $6.4 million and
$8.2  million  of  accounts  receivable,   respectively.   No  further  accounts
receivable sales are allowed under the credit agreement.

Cash Flows

Cash and cash  equivalents  decreased  $3.0 million at September 30, 2000 from $
7.2 million at December 31, 1999, as a result of $25.3 million and $25.2 million
in cash used in operations  and  financing  activities,  respectively  offset by
$47.5  million in net cash  provided by investing  activities.  Net cash used in
operating  activities  resulted  primarily from the Company's  $23.0 million net
loss,  a $23.3  million  increase in  inventories,  a $5.6  million  decrease in
accounts payable and accrued  expenses,  and non cash charges of $6.9 million in
depreciation,  $4.5 million in goodwill  impairment,  and a $2.7 million loss on
disposition  of segment.  Net cash  provided by  investing  activities  resulted
primarily from $51.2 million in proceeds  received from the Transactions  offset
against  $3.7  million  in  capital  expenditures.  Net cash  used in  financing
activities  resulted  primarily  from $33.1  million in  principle  payments  of
long-term debt and $0.4 million in C.A.T. debt repayments offset by $8.3 million
in net borrowings under the Company's line of credit agreement.

<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations (Continued)

Covenant Restrictions

The Senior  Credit  Facility  contains a number of covenants  that,  among other
things,  restrict  the ability of the Company and its  subsidiaries,  other than
pursuant  to  specified  exceptions,  to  dispose of  assets,  incur  additional
indebtedness,   incur  guarantee  obligations,  repay  other  indebtedness,  pay
dividends, create liens on assets, enter into leases, make investments, loans or
advances, make acquisitions,  engage in mergers or consolidations,  make capital
expenditures,  enter into sale and leaseback transactions,  change the nature of
their  business  or  engage  in  certain   transactions  with  subsidiaries  and
affiliates and otherwise restrict corporate activities.  In addition,  under the
Senior  Credit  Facility  the  Company  is  required  to comply  with  specified
financial ratios and tests, including minimum fixed charge coverage and interest
coverage ratios and maximum leverage  ratios,  including a senior leverage ratio
and a total leverage ratio,  and a minimum Sock Group EBITDA test, each of which
is tested  as of the last day of each  fiscal  quarter  of the  Company  and its
subsidiaries.  The amendments in December 1998,  March 1999,  September 1999 and
March 2000 revised the original  covenants.  Additionally,  the  September  1999
amendment  required  Vestar to  infuse up to $30.0  million  of new  capital  if
certain leverage ratios were not met.

On March 29, 2000,  the Senior Credit  Facility and the  Investment  and Deposit
agreement were amended.  The March 2000 amendment  required (i) Vestar to infuse
up to $30.0 million of new capital into the Company and (ii) the Company to make
$20.0 million in additional  principal  payments on the Senior Credit Facilities
between June 30, 2000 (or in certain circumstances August 31, 2000) and December
31, 2000 if certain  financial  ratios were not met by June 30, 2000. On July 1,
2000, the Company was in compliance with all financial covenants.  Additionally,
on July 24, 2000, the Company  satisfied all  requirements  under the March 2000
amendments,  and as such, Vestar's  requirement to infuse up to $30.0 million of
new capital and the  Company's  requirement  to make $20.0 million in additional
principal  payments  on the  Senior  Credit  Facilities  were  extinguished.  On
September  30, 2000,  the Company was in  compliance  with all  covenants of the
Senior Credit Facility.

Capital Expenditures

Capital  spending for the 2000 Period was $3.7 million and related  primarily to
general improvements to the Company's  manufacturing  facilities.  Total capital
spending for 2000 is expected to be $5.5  million and also relates  primarily to
general improvements to the Company's manufacturing facilities.

Financing Sources and Cash Flows

At September 30, 2000 the Company had $4.2 million in cash and cash  equivalents
and  additional  availability  of  $27.9  million  under  the  revolving  credit
facilities  included in the Senior Credit Facility,  after consideration of $1.4
million of stand-by  letters of credit.  At September 30, 2000, the Company also
had additional  availability of $2.9 million under the Canadian revolving credit
facility, after consideration of $1.0 million in open trade letters of credit.

Based upon the current level of operations,  management  believes that cash flow
from operations and available cash, together with available borrowings under the
revolving credit facilities, are adequate to meet the Company's future liquidity
needs.  The Company  may,  however,  need to  refinance  all or a portion of the
principal of the Senior Credit Facility on or prior to maturity and there can be
no assurance  that the Company will be able to effect any such  refinancing.  In
addition,  there can be no assurances that the Company's  business will generate
sufficient  cash flow from  operations,  that  anticipated  revenue  growth  and
operating  improvements  will be  realized  or that  future  borrowings  will be
available under the Senior Credit Facility in an amount sufficient to (i) enable
the Company to service its indebtedness or (ii) fund its other liquidity needs.

<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations (Continued)

Backlog and Seasonality

The amount of the Company's backlog orders at any particular time is affected by
a number of factors,  including  seasonality and scheduling of the manufacturing
and shipment of products.  In general, the Company's electronic data interchange
("EDI") system and vendor managed  inventory  systems have resulted in shortened
lead times between  submission  of purchase  orders and delivery and has lowered
the level of backlog orders. Consequently,  the Company believes that the amount
of its backlog is not an appropriate indicator of future production levels.

The industries in which the Company operates are cyclical.  Purchases of apparel
tend to decline during recessionary periods and also may decline at other times.
A recession in the general economy or  uncertainties  regarding  future economic
prospects could affect consumer spending habits and could have an adverse effect
on the  Company's  results  of  operations.  Weak sales and  resulting  markdown
requests  from  customers  could  also  have a  material  adverse  effect on the
Company's business, results of operations and financial condition.

The  Company's  business is seasonal,  with higher  sales and income  during its
third and fourth  quarters.  The third and  fourth  quarters  coincide  with the
Company's two peak retail  selling  seasons:  (i) the first season runs from the
start of the  back-to-school  and fall selling seasons,  beginning in August and
continuing through September;  and (ii) the second season runs from the start of
the Christmas selling season beginning with the weekend  following  Thanksgiving
and continuing through the week after Christmas.

Also  contributing  to the  strength of the third  quarter is the high volume of
fall shipments to wholesale  customers  which are generally more profitable than
spring  shipments.  The slower spring selling season at wholesale  combines with
retail seasonality to make the first half of the year particularly weak.


Cautionary Statement Regarding Forward-Looking Statements

The Quarterly Report on Form 10-Q contains certain statements which describe the
Company's beliefs concerning future business  conditions and the outlook for the
Company based on currently  available  information.  The preceding  Management's
Discussion  and  Analysis  contains  forward-looking  statements  regarding  the
Company's  performance,  liquidity  and the  adequacy of its capital  resources.
These forward looking  statements are subject to risks,  uncertainties and other
factors  which  could  cause  the  Company's  actual  results,   performance  or
achievement to differ  materially  from those  expressed in, or implied by these
statements.   As  a  result,  the  Company  cautions  that  the  forward-looking
statements are qualified by the financial  strength of the retail industry,  the
risks of  increased  competition  from other  manufacturers  of socks,  shifting
consumer  demand,   changing   consumer  credit  markets  and  general  economic
conditions,  hiring and retaining effective team members,  sourcing  merchandise
from  domestic and  international  vendors,  and other risks and  uncertainties.
Therefore,  while  management  believes that there is a reasonable basis for the
forward-looking  statements,  undue  reliance  should  not be  placed  on  those
statements.



<PAGE>



Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

The Company has exposure to fluctuations in interest rates and foreign  currency
exchange rates.  The Company operates under a senior credit facility at variable
interest rates.  Interest expense is primarily  affected by the general level of
U.S.  interest rates,  LIBOR and European base rates.  The Company is subject to
risk from sales and loans to its foreign subsidiary as well as sales,  purchases
from third party  customers,  suppliers and  creditors,  denominated  in foreign
currencies.  Currently,  the Company does not engage in any material  derivative
type  instruments in order to hedge against  interest rate and Canadian  foreign
currency exchange rate fluctuations. However, the Company feels it is limited in
its  exposure  of foreign  currency  exchange  rate  changes  as most  inventory
purchase contracts are denominated in US Dollars.

The Company  evaluated its market risks (floating  interest rate, fixed interest
rate and currency  risks) at the fiscal year ended  December 31, 1999,  which is
disclosed in the Company's  annual report filed on Form 10-K. There has not been
any material change (adverse or favorable) in the risk factors  identified since
the evaluation performed by the Company at December 31, 1999.




<PAGE>



                           Part II - OTHER INFORMATION


Item 1.     Legal Proceedings

The Company and its subsidiaries are involved in various legal proceedings, both
as  plaintiff  and as  defendant,  which are normal to its  business.  It is the
opinion of management that the aforementioned  actions and claims, if determined
adversely  to the  Company,  will  not have a  material  adverse  effect  on the
financial condition or operations of the Company taken as a whole.

Item 4.  Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of security holders during the quarter
ended September 30, 2000.

Item 6.  Exhibits and Reports on Form 8-K

(a)          (1)      Financial Statements

                      Included in Part I, Item 1

             (2)      Financial Statement Schedules

                      Schedule II - Valuation and Qualifying
                      Accounts

                     All  other  schedules  for which  provision  is made in the
                     applicable  accounting  regulation  of the  Securities  and
                     Exchange  Commission  are not  required  under the  related
                     instructions  or are  inapplicable  and therefore have been
                     omitted.

             (3)      List of Exhibits

(b)  The  Company  filed  reports on Form 8-K on June 13, 2000 and July 25, 2000
     and subsequently  filed  reports on Form 8-K/A on August 8, 2000.

(c)  Exhibits: See (a)(3) above for a listing of the exhibits included as part
     of this report.

(d)  Financial Statement Schedules: See (a)(1) and (a)(2) above for a listing of
     the financial statements and  schedules submitted as part of this report.


EXHIBIT
   NO.                                             DESCRIPTION OF EXHIBIT
--------------------------------------------------------------------------------
2.1 Third Amended plan of  Reorganization  of Cluett  American  Corp. and Cluett
American  Investment  Corp.  (incorporated  by  reference  to Exhibit 2.1 to the
Company's  Registration Statement on Form S-4 (Reg. No. 333-58059) filed on June
30, 1998).

2.2 Subscription Agreement dated as of March 30, 1998 among Bidermann Industries
U.S.A.,  Inc.,  Vestar  Capital  Partners III,  L.P. and Alvarez & Marsal,  Inc.
(incorporated  by  reference  to  Exhibit  2.2  to  the  Company's  Registration
Statement on Form S-4 (Reg. No. 333-58059) filed on June 30, 1998).


<PAGE>



2.3Stockholders'  Agreement  dated  as of May 18,  1998  among  Cluett  American
Investment Corp.,  Vestar Capital Partners III, L.P., A&M Investment  Associates
#7, LLC, the  Co-Investors  named  therein,  the Original  Equity  Holders named
therein and the Management Investors named therein (incorporated by reference to
Exhibit  2.3 to the  Company's  Registration  Statement  on Form S-4  (Reg.  No.
333-58059) filed on June 30, 1998).

2.4 Joinder Agreement dated as of June 30, 1998 among Cluett American Investment
Corp.,  Vestar Capital  Partners III, L.P. and each other signatory  thereto (an
"Additional  Stockholder")  (incorporated  by  reference  to Exhibit  2.4 to the
Company's  Registration Statement on Form S-4 (Reg. No. 333-58059) filed on June
30, 1998).

3.1 Restated Certificate of Incorporation of Cluett American Corp. (incorporated
by reference to Exhibit 3.1 to the Company's  Registration Statement on Form S-4
(Reg. No. 333-58059) filed on June 30, 1998).

3.2 Bylaws of Cluett American Corp. (incorporated by reference to Exhibit 3.2 to
the Company's  Registration  Statement on Form S-4 (Reg. No. 333-58059) filed on
June 30, 1998).

4.1 Indenture between Cluett American Corp. and The Bank of New York, as Trustee
(incorporated  by  reference  to  Exhibit  4.1  to  the  Company's  Registration
Statement on Form S-4 (Reg. No. 333-58059) filed on June 30, 1998).

4.2 Exchange  Debenture  Indenture between Cluett American Corp. and The Bank of
New York, as Trustee  (incorporated by reference to Exhibit 4.2 to the Company's
Registration Statement on Form S-4 (Reg. No. 333-58059) filed on June 30, 1998).

4.3  Certificate of  Designations  of the 121/2% Senior  Exchangeable  Preferred
Stock Due 2010  (incorporated  by  reference  to  Exhibit  4.3 to the  Company's
Registration Statement on Form S-4 (Reg. No. 333-58059) filed on June 30, 1998).

4.4  Form of 10  1/8%  Senior  Subordinated  Notes  Due  2008  (incorporated  by
reference  to Exhibit 4.4 to the  Company's  Registration  Statement on Form S-4
(Reg. No. 333-58059) filed on June 30, 1998).

4.5 Form of 10 1/8% Series B Senior Subordinated Notes Due 2008 (incorporated by
reference  to Exhibit 4.5 to the  Company's  Registration  Statement on Form S-4
(Reg. No. 333-58059) filed on June 30, 1998).

4.6 Form of 12 1/2% Senior  Exchangeable  Preferred Stock Due 2010 (incorporated
by reference to Exhibit 4.6 to the Company's  Registration Statement on Form S-4
(Reg. No. 333-58059) filed on June 30, 1998).

4.7 Form of 12 1/2%  Series  B  Senior  Exchangeable  Preferred  Stock  Due 2010
(incorporated  by  reference  to  Exhibit  4.7  to  the  Company's  Registration
Statement on Form S-4 (Reg. No. 333-58059) filed on June 30, 1998).

4.8 Note Registration  Rights Agreement dated May 18, 1998 among Cluett American
Corp., NationsBanc Montgomery Securities LLC and NatWest Capital Markets Limited
(incorporated  by  reference  to  Exhibit  4.8  to  the  Company's  Registration
Statement on Form S-4 (Reg. No. 333-58059) filed on June 30, 1998).

4.9  Preferred  Stock  Registration  Rights  Agreement  dated May 18, 1998 among
Cluett American Corp., NationsBanc Montgomery Securities LLC and NatWest Capital
Markets  Limited  (incorporated  by  reference  to Exhibit 4.9 to the  Company's
Registration Statement on Form S-4 (Reg. No. 333-58059) filed on June 30, 1998).



<PAGE>



10.1  $160,000,000  Credit  Agreement  dated  as of May 18,  1998  among  Cluett
American Corp., as the Borrower,  NationsBank, N.A., as Administrative Agent and
Collateral  Agent,  NationsBanc  Montgomery  Securities  LLC,  as  Arranger  and
Syndication Agent, and lenders (incorporated by reference to Exhibit 10.1 to the
Company's  Registration Statement on Form S-4 (Reg. No. 333-58059) filed on June
30, 1998).

10.2 First Amendment to the Credit  Agreement and Assignment  dated May 27, 1998
by an among Cluett American  Corp.,  Cluett American  Investment  Corp.,  Cluett
American  Group,  Inc.  and certain  subsidiaries,  the  Existing  Lenders,  New
Lenders,  and agents (incorporated by reference to Exhibit 10.2 to the Company's
Registration Statement on Form S-4 (Reg. No. 333-58059) filed on June 30, 1998).

10.2.1 Second Amendment to the Credit Agreement and Assignment dated as December
18, 1998 by an among Cluett American Corp.,  Cluett American  Investment  Corp.,
Cluett American Group, Inc. and certain subsidiaries,  the Existing Lenders, New
Lenders,  and  agents  (incorporated  by  reference  to  Exhibit  10.2.1  to the
Company's  Annual  Report on Form 10-K  (Reg No.  333-58059)  filed on March 29,
1999).

10.2.2 Third Amendment to the Credit  Agreement and Assignment dated as of March
19, 1999 by an among Cluett American Corp.,  Cluett American  Investment  Corp.,
Cluett American Group, Inc. and certain subsidiaries,  the Existing Lenders, New
Lenders,  and  agents  (incorporated  by  reference  to  Exhibit  10.2.1  to the
Company's  Annual  Report on Form 10-K  (Reg No.  333-58059)  filed on March 29,
1999).

10.2.3 Waiver to the Credit  Agreement and Assignment  dated July 28, 1999 by an
among Cluett American Corp.,  Cluett American  Investment Corp., Cluett American
Group, Inc. and certain  subsidiaries,  the Existing Lenders,  New Lenders,  and
agents  (incorporated  by reference to Exhibit  10.2.3 to the  Company's  Annual
Report on Form 10-K (Reg No. 333-58059) filed on March 29, 1999).

10.2.4 Fourth  Amendment to the Credit  Agreement and Assignment dated September
30, 1999 by an among Cluett American Corp.,  Cluett American  Investment  Corp.,
Cluett American Group, Inc. and certain  subsidiaries,  the Existing Lender, New
Lender, and agents (incorporated by reference to Exhibit 10.2.4 to the Company's
Quarterly Report on Form 10-Q (Reg No. 333-58059) filed on November 16, 1999).

10.2.5  Investment and Deposit  Agreement  between Vestar Capital  Partners III,
L.P. and Bank of America dated September 30, 1999  (incorporated by reference to
Exhibit  10.2.5  to the  Company's  Quarterly  Report  on  Form  10-Q  (Reg  No.
333-58059) filed on November 16, 1999).

10.2.6 $3.0 million Credit  Agreement  dated as of November 9, 1999 among Cluett
American Corp, as the borrower Bank of America, N.A. and Vestar Capital Partners
III,  L.P. as guarantor  (incorporated  by  reference  to Exhibit  10.2.6 to the
Company's  Quarterly  Report on Form 10-Q (Reg No.  333-58059) filed on November
16, 1999).

10.2.7 $7.5 million Amended and Restated  Credit  Agreement dated as of February
17, 2000, among Cluett American Corp, as the borrower, Bank of America, N.A. and
Vestar Capital  Partners III, L.P., as guarantor  (incorporated  by reference to
Exhibit 10.2.7 to the Company's  Annual Report on Form 10-K (Reg NO.  333-58059)
filed on March 30, 2000).

10.2.8 Fifth  Amendment to Credit  Agreement  and Waiver dated March 29, 2000 by
and among Cluett  American  Corp.,  Cluett  American  Investment  Corp.,  Cluett
American Group, Inc. and certain subsidiaries,  the Existing Lender, New Lender,
and agents  (incorporated by reference to Exhibit 10.2.8 to the Company's Annual
Report on Form 10-K (Reg NO. 333-58059) filed on March 30, 2000).


<PAGE>



10.2.9  Amended and Restated  Investment  and Deposit  Agreement  between Vestar
Capital   Partners   III,  L.P.  and  Bank  of  America  dated  March  29,  2000
((incorporated  by reference to Exhibit 10.2.9 to the Company's Annual Report on
Form 10-K (Reg NO. 333-58059) filed on March 30, 2000).

10.2.9.1 Six Amendment to Credit Agreement and Waiver dated June 30, 2000 by and
among Cluett American Corp.,  Cluett American  Investment Corp., Cluett American
Group,  Inc. and certain  subsidiaries,  the Existing  Lender,  New Lender,  and
agents filed herewith as exhibit 10.2.9.1.

10.3 Security  Agreement dated as of May 18, 1998 made by Cluett American Corp.,
Cluett  American  Investment  Corp.,  Cluett  American  Group,  Inc. and certain
Subsidiaries of Cluett American  Investment Corp. in favor of NationsBank,  N.A.
as  agent   (incorporated   by  reference  to  Exhibit  10.3  to  the  Company's
Registration Statement on Form S-4 (Reg. No. 333-58059) filed on June 30, 1998).

10.4 Pledge  Agreement  dated as of May 18, 1998 made by Cluett  American Corp.,
Cluett  American  Investment  Corp.,  Cluett  American  Group,  Inc. and certain
Subsidiaries of Cluett American Investment Corp. in favor of NationsBank,  N.A.,
as  agent   (incorporated   by  reference  to  Exhibit  10.4  to  the  Company's
Registration Statement on Form S-4 (Reg. No. 333-58059) filed on June 30, 1998).

10.5  Joinder  Agreement  dated  as of May  18,  1998 by and  between  Bidermann
Tailored Clothing,  Inc., and NationsBank,  N.A., in its capacity as Agent under
that  certain  Credit  Agreement  dated  as of May  18,  1998  (incorporated  by
reference to Exhibit 10.5 to the Company's  Registration Statement on Form S-4/A
(Reg. No. 333-58059) filed on September 3, 1998).

10.6 CDN  $15,000,000  Loan Agreement dated as of August 8, 1997 between Cluett,
Peabody  Canada  Inc.,  as the  Borrower,  and  Congress  Financial  Corporation
(Canada),  as Lender (incorporated by reference to Exhibit 10.6 to the Company's
Registration Statement on Form S-4 (Reg. No. 333-58059) filed on June 30, 1998).

+10.7  Employment  Agreement  dated March 7, 1997 by and between Great  American
Knitting Mills, Inc. and James A. Williams (incorporated by reference to Exhibit
10.7 to the Company's  Registration Statement on Form S-4/A (Reg. No. 333-58059)
filed on September 3, 1998).

+10.8  Severance  Agreement  dated as of August 8, 1997 by and  between  Cluett,
Peabody & Co., Inc. and Phil Molinari (incorporated by reference to Exhibit 10.8
to the Company's Registration Statement on Form S-4/A (Reg. No. 333-58059) filed
on September 3, 1998).

+10.9 Severance  Agreement dated as of May 5, 1997 by and between Great American
Knitting Mills,  Inc. and William Sheely  (incorporated  by reference to Exhibit
10.9 to the Company's  Registration Statement on Form S-4/A (Reg. No. 333-58059)
filed on September 3, 1998).

+10.10 Severance Agreement dated as of May 5, 1997 by and between Great American
Knitting  Mills,  Inc.  and Kathy Wilson  (incorporated  by reference to Exhibit
10.10 to the Company's Registration Statement on Form S-4/A (Reg. No. 333-58059)
filed on September 3, 1998).

+10.11 Advisory  Agreement  dated May 18, 1998 among Cluett American  Investment
Corp.,  Cluett  American  Corp.  and Vestar Capital  Partners  (incorporated  by
reference to Exhibit 10.11 to the Company's Registration Statement on Form S-4/A
(Reg. No. 333-58059) filed on September 3, 1998).

10.12  Secured  Promissory  Note  dated  May 18,  1998  made  by A&M  Investment
Associates #7, LLC in favor of Cluett American Investment Corp. (incorporated by
reference to Exhibit 10.12 to the Company's Registration Statement on Form S-4/A
(Reg. No. 333-58059) filed on September 3, 1998).


10.13 Form of Secured Promissory Note made by the Management  Investors in favor
of Cluett American Investment Corp.  (incorporated by reference to Exhibit 10.13
to the Company's Registration Statement on Form S-4/A (Reg. No. 333-58059) filed
on September 3, 1998).

+10.14  Severance  Agreement  dated as of August 8, 1997 by and between  Cluett,
Peabody & Co., Inc. and Robert  Riesbeck  (incorporated  by reference to Exhibit
10.14 to the Company's Registration Statement on Form S-4/A (Reg. No. 333-58059)
filed on October 15, 1998).

10.16 Limited Liability Company Agreement of Cluett American  Receivables,  LLC,
entered into by Great American  Knitting  Mills,  Inc. as the sole equity member
and  Dwight  Jenkins  and Lori  Rezza as the  special  members  (incorporate  by
reference to Exhibit 10.16 to the Company's  Quarterly  Report on Form 10-Q (Reg
No. 333-58059) filed on May 16, 2000).

10.16.1 Receivable  Transfer Agreement dated May 12, 2000 between Great American
Knitting  Mills,  Inc. and Cluett  American  Receivables,  LLC  (incorporate  by
reference to Exhibit 10.16.1 to the Company's Quarterly Report on Form 10-Q (Reg
No. 333-58059) filed on May 16, 2000).

10.16.2  Receivable  Purchase  Agreement  entered into between  Cluett  American
Receivable,  LLC  and  Banc of  America  Commercial  Corp.  dated  May 12,  2000
(incorporate by reference to Exhibit 10.16.2 to the Company's  Quarterly  Report
on Form 10-Q (Reg No. 333-58059) filed on May 16, 2000).

10.16.3  Partial  Release  Agreement  dated May 12,  2000,  by and among Bank of
America, N.A. f/k/a/ Nationsbank, N.A. as agent for the Lenders under the Credit
Agreement,  Great  American  Knitting  Mills,  Inc.  and Cluett  American  Corp.
(incorporate by reference to Exhibit 10.16.3 to the Company's  Quarterly  Report
on Form 10-Q (Reg No. 333-58059) filed on May 16, 2000).

10.16.4  Guarantee  Agreement  dated May 12, 2000 made by Cluett  American Corp.
(incorporate by reference to Exhibit 10.16.4 to the Company's  Quarterly  Report
on Form 10-Q (Reg No. 333-58059) filed on May 16, 2000).

10.16.5 Repurchase  Agreement dated May 12, 2000 made by Vestar Capital Partners
III, L.P. in favor of Banc of America  Commercial  Corporation  (incorporate  by
reference to Exhibit 10.16.5 to the Company's Quarterly Report on Form 10-Q (Reg
No. 333-58059) filed on May 16, 2000).

16.1 Letter from Ernst & Young LLP, former Certifying Accountants  (incorporated
by reference to Exhibit 16.1 to the Company's  Current  Report filed on Form 8-K
(Reg. No. 333-58059) filed on January 10,2000).

21 List of  Subsidiaries  (incorporated  by  reference  to  Exhibit  10.6 to the
Company's  Registration Statement on Form S-4 (Reg. No. 333-58059) filed on June
30, 1998).

24 Powers of Attorney (included on pages II-5--II-11) (incorporated by reference
to Exhibit 24 to the  Company's  Registration  Statement  on Form S-4 (Reg.  No.
333-58059) filed on June 30, 1998).

*27 Financial Data Schedule (filed herewith as Exhibit 27)



<PAGE>



99.1 Form of Note Letter of  Transmittal  (incorporated  by reference to Exhibit
99.1 to the Company's  Registration  Statement on Form S-4 (Reg. No.  333-58059)
filed on June 30, 1998).

99.2 Form of Preferred Stock Letter of Transmittal (incorporated by reference to
Exhibit  99.2 to the  Company's  Registration  Statement  on Form S-4 (Reg.  No.
333-58059) filed on June 30, 1998).

99.3 Form of Note Notice of Guaranteed  Delivery  (incorporated  by reference to
Exhibit  99.3 to the  Company's  Registration  Statement  on Form S-4 (Reg.  No.
333-58059) filed on June 30, 1998).

99.4 Form of Preferred  Stock Notice of  Guaranteed  Delivery  (incorporated  by
reference to Exhibit 99.4 to the  Company's  Registration  Statement on Form S-4
(Reg. No. 333-58059) filed on June 30, 1998).

+ This is a management contract or compensatory plan or arrangement






                                   SIGNATURES

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




                                CLUETT AMERICAN CORP.
                                (Registrant)


November 13, 2000                /s/ Bryan P. Marsal
                                 -----------------------------------------------
                                 Bryan P. Marsal
                                 Director, President and Chief Executive Officer


November 13, 2000                /s/ W. Todd Walter
                                 -----------------------------------------------
                                 W. Todd Walter
                                 Vice President and  Chief Financial Officer






<PAGE>



Item 6 (d). Financial Statement Schedules


                                   SCHEDULE II

                              CLUETT AMERICAN CORP.

                        VALUATION AND QUALIFYING ACCOUNTS

                             (DOLLARS IN THOUSANDS)

<TABLE>
<S>                                     <C>             <C>                <C>              <C>              <C>


COLUMN A                                COLUMN B                 COLUMN C                   COLUMN D        COLUMN E
                                                                 ADDITIONS

                                       BALANCE AT      CHARGED TO        CHARGED TO                          BALANCE
                                        BEGINNING       COSTS AND           OTHER                            AT END
DESCRIPTION                             OF PERIOD       EXPENSES          ACCOUNTS         DEDUCTIONS       OF PERIOD
-----------                             ---------       --------          --------         ----------       ---------

Period Ended April 1, 2000:
    Deductions from asset accounts:
     Allowance for doubtful accounts       $ 1,620             $  234            $  --       $   106 (1)        $ 1,748
     Customer allowances                     8,554              3,220               --         3,865 (1)          7,909
     Inventory reserves                      2,622              2,150               --         1,283 (1)          3,489
                                             -----              -----               --         ---------          -----
           Total                           $12,796             $5,604            $  --       $ 5,254 (1)        $13,146
                                           =======             ======            =====       ===========        =======

Period Ended July 1, 2000:
    Deductions from asset accounts:
     Allowance for doubtful accounts        $1,748             $  167            $  --       $    19 (1)        $ 1,896
     Customer Allowances                     7,909              3,832               --         1,369 (1)         10,372
     Inventory reserves                      3,489                833               --         2,539 (1)          1,783
                                             -----                ---               --        ----------          -----
           Total                           $13,146             $4,832            $  --       $ 3,927 (1)        $14,051
                                           =======             ======            =====       ===========        =======

Period Ended September 30, 2000:
    Deductions from asset accounts:
     Allowance for doubtful accounts       $ 1,896             $   18            $  --       $    56 (1)        $ 1,858
     Customer Allowances                    10,372              1,081               --         2,807 (1)          8,646
     Inventory reserves                      1,783             ( 782)               --           341 (1)            660
                                             -----             ------               --           -------            ---
           Total                           $14,051             $  317            $  --       $ 3,204 (1)        $11,164
                                           =======             ======            =====       ===========        =======



(1)      Write offs, net of recoveries.

</TABLE>